UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM 8-K
_____________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
November 21, 2017
_____________
KENNEDY-WILSON HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
_____________
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Delaware
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001-33824
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26-0508760
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(State or other jurisdiction
of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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151 S. El Camino Drive Beverly Hills, California 90212
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (310) 887-6400
N/A
(Former name or former address, if changed since last report.)
_____________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2.):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Item 5.02.
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
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On November 21, 2017, the Compensation Committee of the Board of Directors (the “Compensation Committee”) of Kennedy-Wilson Holdings, Inc. (the “Company”) approved the grant of performance-based restricted shares of Company common stock subject to vesting based on the Company’s total shareholder return (the “TSR restricted shares”), performance-based restricted shares of Company common stock subject to vesting based on the Company’s return on equity (the “ROE restricted shares”), and time-based restricted shares of Company common stock (the “time-based restricted shares”) (collectively, the “awards”), under the Company’s Second Amended and Restated 2009 Equity Participation Plan (the “Plan”) to each of the Company’s named executive officers (the “executives”). The following is a brief description of the material terms and conditions of the awards.
TSR Restricted Shares
General
. Pursuant to the TSR restricted share awards, each executive is eligible to vest in a number of restricted shares ranging from 0% to 100% of the total number of TSR restricted shares granted, based on the Company’s total shareholder return during the three-year performance period commencing January 1, 2018 and ending December 31, 2020 relative to the total shareholder return of the MSCI World Real Estate Index (the “MSCI Index Relative Performance”), subject to the executive’s continued employment with the Company and its affiliates through the TSR vesting date (as defined below).
Vesting
. Up to 100% of the TSR restricted shares will be eligible to vest based on the MSCI Index Relative Performance during the performance period, with the actual number of TSR restricted shares that vest and cease to be subject to restrictions with respect to the performance period determined by multiplying (i) the total number of TSR restricted shares subject to the award by (ii) the applicable vesting percentage, as set forth below:
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MSCI Index Relative Performance
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Vesting Percentage
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Less than -1,200 basis points
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0%
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Threshold Level
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-1,200 basis points
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33.3%
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Target Level
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0 basis points
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66.7%
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Maximum Level
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1,200 basis points or greater
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100%
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In the event that the MSCI Index Relative Performance for the performance period falls between the levels specified above, the percentage of TSR restricted shares that vest will be determined using straight line linear interpolation between such levels.
Following the completion of the performance period, the Compensation Committee will determine the MSCI Index Relative Performance and the number of TSR restricted shares that have become vested with respect to such performance period (the date of such determination by the Compensation Committee, the “TSR vesting date”). Any TSR restricted shares that have not become vested as of the TSR vesting date will be forfeited without consideration therefor and the executive will have no further right or interest in or with respect to such TSR restricted shares.
Dividends
. Any dividends declared on the Company’s common stock with respect to the TSR restricted shares will not be paid to the executive on a current basis, but will instead accumulate and be paid to the executive in a lump sum on the date (if any), and only to the extent, that the underlying restricted shares vest.
Certain Terminations of Employment
. If the applicable executive’s employment terminates due to the executive’s death or total and permanent disability, any then-unvested TSR restricted shares will remain outstanding and eligible to vest on the TSR vesting date based on the MSCI Index Relative Performance for the performance period (without regard to the requirement that the executive continue in employment with the Company and/or its affiliates through such TSR vesting date).
Except as otherwise described above or as otherwise provided in a written agreement between the executive and the Company, any TSR restricted shares that have not vested as of the date on which the applicable executive’s
employment terminates for any reason will be cancelled and forfeited by the executive without consideration therefor, and the executive will have no further right or interest in or with respect such restricted shares.
Change of Control
. In the event of a change of control of the Company, all then-unvested TSR restricted shares (calculated assuming the MSCI Index Relative Performance for the performance period is attained at target level) will vest in full as of the date of the change in control, subject to the executive’s continued employed until at least immediately prior to the change of control.
Awards
. The following amounts represent the number of TSR restricted shares that would vest at “target level” for each of the awards granted to the executives: William J. McMorrow – 85,000 shares; Mary Ricks – 50,000 shares; Justin Enbody – 22,500 shares; Kent Mouton – 22,500 shares; and Matt Windisch – 30,000 shares. At “maximum level” performance, the executives would vest with respect to the following number of TSR restricted shares (which represents the number of shares granted): William J. McMorrow – 127,500 shares; Mary Ricks – 75,000 shares; Justin Enbody – 33,750 shares; Kent Mouton – 33,750 shares; and Matt Windisch – 45,000 shares.
The foregoing summary is qualified in its entirety by reference to the full text of the Total Shareholder Return Performance-Based Employee Restricted Stock Award Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated by reference herein.
ROE Restricted Shares
General
. Pursuant to the ROE restricted share awards, each executive is eligible to vest in a number of restricted shares ranging from 0% to 100% of the total ROE restricted shares granted, based on the Company’s “return on equity” (as defined in the applicable award agreement) during the three-year performance period commencing January 1, 2018 and ending December 31, 2020 (the “performance period”).
Vesting
. Up to one-third of the total ROE restricted shares will be eligible to vest with respect to each Company fiscal year of the performance period (each, a “performance year”) to the extent that the Company satisfies the return on equity goals described below for such performance year, subject to the executive’s continued employment with the Company and its affiliates through the applicable ROE vesting date (as defined below), with the actual number of ROE restricted shares that vest and cease to be subject to restrictions with respect to any performance year determined by multiplying (i) one-third of the total ROE restricted shares subject to the award by (ii) the applicable “vesting percentage,” as set forth below:
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Return on Equity
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Vesting Percentage
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Less than 7.5%
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0%
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Threshold Level
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7.5%
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33.3%
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Target Level
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10%
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66.7%
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Maximum Level
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12.5% or greater
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100%
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In the event that the Company’s return on equity for any performance year falls between the levels specified above, the percentage of ROE restricted shares that vest with respect to such performance year will be determined using straight line linear interpolation between such levels.
Following the completion of each performance year, the Compensation Committee will determine the extent to which the Company’s return on equity goals were satisfied and the number of ROE restricted shares that have become vested with respect to such performance year (the date of any such determination by the Compensation Committee, the “ROE vesting date”). To the extent that the vesting requirements described above are not satisfied with respect to any performance year, the ROE restricted shares subject to vesting with respect to such performance year will be forfeited as of the applicable ROE vesting date without consideration therefor and the executive will have no further right or interest in or with respect to such ROE restricted shares.
Dividends
. Any dividends declared on the Company’s common stock with respect to the ROE restricted shares will not be paid to the executive on a current basis, but will instead accumulate and be paid to the executive in a lump sum on the date (if any), and only to the extent, that the underlying restricted shares vest.
No-Sale Period; Transferability
. The ROE restricted shares generally will not be transferable unless and until such shares vest. In addition, notwithstanding the foregoing, the applicable executive may not, without the consent of the Compensation Committee (which may be withheld in its sole discretion), transfer, sell or otherwise dispose of any vested ROE restricted shares prior to the earlier to occur of (i) the third anniversary of the date on which such shares vest, or (ii) the occurrence of a change of control of the Company. The transfer restrictions described in the preceding sentence will not apply to any transfer of shares to the Company, any transfer of shares in satisfaction of applicable withholding obligations with respect to the restricted shares, or any transfer following the termination of the executive’s employment with the Company and its affiliates (including by will or pursuant to the laws of descent and distribution).
Certain Terminations of Employment
. If the applicable executive’s employment terminates due to the executive’s death or total and permanent disability, any then-unvested ROE restricted shares will remain outstanding and eligible to vest on each subsequent ROE vesting date to the extent that the Company satisfies the return on equity goals described above for the applicable performance year (without regard to the requirement that the executive continue in employment with the Company and/or its affiliates through such ROE vesting date).
Except as described above or as otherwise provided in a written agreement between the executive and the Company, any ROE restricted shares that have not vested as of the date on which the applicable executive’s employment terminates for any reason will be cancelled and forfeited by the executive without consideration therefor, and the executive will have no further right or interest in or with respect such restricted shares.
Change of Control
. In the event of a change of control of the Company, all then-unvested ROE restricted shares (calculated assuming the Company’s return on equity for each remaining performance year of the performance period is attained at target level) will vest in full as of the date of the change of control, subject to the executive’s continued employed until at least immediately prior to the change of control.
Awards
. The following amounts represent the number of ROE restricted shares that would vest at “target level” for each of the awards granted to the executives: William J. McMorrow – 85,000 shares; Mary Ricks – 50,000 shares; Justin Enbody – 22,500 shares; Kent Mouton – 22,500 shares; and Matt Windisch – 30,000 shares. At “maximum level” performance, the executives would vest with respect to the following number of ROE restricted shares (which represents the number of shares granted): William J. McMorrow – 127,500 shares; Mary Ricks – 75,000 shares; Justin Enbody – 33,750 shares; Kent Mouton – 33,750 shares; and Matt Windisch – 45,000 shares.
The foregoing summary is qualified in its entirety by reference to the full text of the Return on Equity Performance-Based Employee Restricted Stock Award Agreement, a copy of which is attached hereto as Exhibit 10.2 and incorporated by reference herein.
Time-Based Restricted Shares
General
. Pursuant to the time-based restricted share awards, each executive is eligible to vest in a number of restricted shares based on the executive’s continued service.
Vesting
. One-third of the time-based restricted shares will vest on each of the first three anniversaries of November 21, 2017, subject to the executive’s continued employment with the Company and its affiliates through the applicable vesting date.
Dividends
. Any dividends declared on the Company’s common stock with respect to the time-based restricted shares will not be paid to the executive on a current basis, but will instead accumulate and be paid to the executive in a lump sum on the date (if any), and only to the extent, that the underlying restricted shares vest.
No-Sale Period; Transferability
. The time-based restricted shares generally will not be transferable unless and until such shares vest. In addition, notwithstanding the foregoing, the applicable executive may not, without the consent of the Compensation Committee (which may be withheld in its sole discretion), transfer, sell or otherwise dispose of any vested time-based restricted shares prior to the earlier to occur of (i) the third anniversary of the date on which such shares vest, or (ii) the occurrence of a change of control of the Company. The transfer restrictions described in the preceding sentence will not apply to any transfer of shares to the Company, any transfer of shares in satisfaction of applicable withholding obligations with respect to the restricted shares, or any transfer following the termination of the executive’s employment with the Company and its affiliates (including by will or pursuant to the laws of descent and distribution).
Certain Terminations of Employment
. If the applicable executive’s employment terminates due to the executive’s death or “total and permanent disability” (as defined in the Plan), any then-unvested time-based restricted shares will become fully vested as of the date of such death or disability.
Except as described above or as otherwise provided in a written agreement between the executive and the Company, any time-based restricted shares that have not vested as of the date on which the executive’s employment terminates for any reason will be cancelled and forfeited by the executive without consideration therefor, and the executive will have no further right or interest in or with respect such restricted shares.
Change of Control
. In the event of a change of control of the Company (as defined in the Plan), all then-unvested time-based restricted shares will vest in full as of the date of the change of control, subject to the executive’s continued employed with the Company and its affiliates until at least immediately prior to the change of control.
Awards
. The executives were awarded the following number of time-based restricted shares: William J. McMorrow – 85,000 shares; Mary Ricks – 50,000 shares; Justin Enbody – 22,500 shares; Kent Mouton – 22,500 shares; and Matt Windisch – 30,000 shares.
The foregoing summary is qualified in its entirety by reference to the full text of the Time-Based Employee Restricted Stock Award Agreement, a copy of which is attached hereto as Exhibit 10.3 and incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: November 21, 2017
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Kennedy-Wilson Holdings, Inc.
By:
/S/ JUSTIN ENBODY
Justin Enbody
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit Number
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Description
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10.1
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Form of Total Shareholder Return Performance-Based Employee Restricted Stock Award Agreement.
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10.2
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Form of Return on Equity Performance-Based Employee Restricted Stock Award Agreement.
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10.3
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Form of Time-Based Employee Restricted Stock Award Agreement.
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KENNEDY-WILSON HOLDINGS, INC.
SECOND AMENDED AND RESTATED 2009 EQUITY PARTICIPATION PLAN
EMPLOYEE RESTRICTED STOCK AWARD AGREEMENT
THIS AGREEMENT (this “
Agreement
”), is made effective as of _________, 2017 (the “
Effective Date
”), by and between Kennedy-Wilson Holdings, Inc., a Delaware corporation (the “
Company
”), and ____________ (the “
Awardee
”).
WITNESSETH:
WHEREAS, the Company has adopted the Kennedy-Wilson Holdings, Inc. Second Amended and Restated 2009 Equity Participation Plan (as may be amended from time to time, the “
Plan
”) for the benefit of its employees, nonemployee directors and consultants and the employees, nonemployee directors and consultants of its affiliates, and
WHEREAS, the Committee has authorized the award to the Awardee of shares of Restricted Stock (“
Restricted Shares
”) under the Plan, on the terms and conditions set forth in the Plan and as hereinafter provided.
NOW, THEREFORE, in consideration of the premises contained herein, the Company and the Awardee hereby agree as follows:
1.
Definitions
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To the extent not defined herein, terms used in this Agreement which are defined in the Plan shall have the same meanings as set forth in the Plan.
2.
Award of Restricted Shares
.
The Committee hereby awards to the Awardee ______ Restricted Shares. All such Restricted Shares shall be subject to the restrictions and forfeiture provisions contained in Sections 4, 5 and 6, such restrictions and forfeiture provisions to become effective immediately upon execution of this Agreement by the parties hereto.
3.
Stock Issuance
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The Awardee hereby acknowledges that the Restricted Shares are issued in book entry form on the books and records as kept by the Company’s transfer agent, shall be registered in the name of the Awardee and a stock certificate evidencing the Restricted Shares shall not be delivered to the Awardee until the Awardee satisfies the vesting requirements contained in Sections 4 or 5. In the event that a stock certificate is delivered to the Awardee before the vesting requirements are satisfied and all Restrictions imposed pursuant to this Agreement have lapsed, the Awardee hereby acknowledges that such stock certificate shall bear the following legend:
“The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of an Agreement entered into between the registered owner and Kennedy-Wilson Holdings, Inc., effective as of __________, 2017. Copies of such Agreement are on file in the offices of the Secretary, Kennedy-Wilson Holdings, Inc., 151 S. El Camino Drive, Beverly Hills, CA 90212.”
4.
Vesting
.
Subject to Sections 5 and 6 below, and pursuant to the terms of this Agreement and the Plan (and as summarized on
Exhibit A
attached hereto), the Restricted Shares shall be eligible to vest and no longer be subject to Restrictions as of the Vesting Date to the extent that the MSCI Index Relative Performance goals set forth on
Exhibit A
attached hereto are satisfied for the Performance Period (each such term as defined below), subject to the Awardee being an employee of the Company or an Affiliate thereof through the Vesting Date. As soon as reasonably practicable following the end of the Performance Period (but in no event later than thirty (30) days after the end of the Performance Period), the Committee shall determine (such date of determination by the Committee, the “
Vesting Date
”) the Company TSR Percentage, the MSCI Index TSR Percentage, the MSCI Index Relative Performance, the Vesting Percentage and the number of Restricted Shares subject hereto that have become vested and no longer subject to Restrictions as of the Vesting Date (with any fractional Restricted Share rounded as determined by the Company). Any Restricted Shares subject hereto that have not become vested and no longer subject to Restrictions as of the Vesting Date for any reason shall immediately be forfeited as of such date without consideration therefor, and the Awardee shall have no further right or interest in or with respect to such Restricted Shares.
Notwithstanding the foregoing, in the event that a Change of Control occurs prior to the end of the Performance Period and the Awardee remains in continued employment with the Company or an Affiliate thereof until at least immediately prior to the Change of Control, a number of Restricted Shares equal to the product of (x) the number of then-outstanding Restricted Shares multiplied by (y) the Vesting Percentage calculated assuming that the MSCI Index Relative Performance for the Performance Period is attained at Target Level (as set forth on
Exhibit A
) (with any fractional Restricted Share rounded as determined by the Company) shall automatically become fully vested and no longer subject to Restrictions as of the date of such Change of Control.
For purposes of this Agreement, the following terms shall have their respective meanings set forth below:
(a) “
Company TSR Percentage
” means the growth rate, expressed as a percentage (rounded to the nearest tenth of a percent (0.1%)), in the value per share of Common Stock during the Performance Period, calculated in accordance with the total shareholder return calculation methodology used in the MSCI Real Estate Index (and, for the avoidance of doubt, assuming the reinvestment of all dividends paid on Common Stock); provided, however, that for purposes of calculating total shareholder return for the Performance Period, the initial share price shall equal the closing price of a share of Common Stock on the principal securities exchange on which such shares are then traded on the day immediately preceding the first day of the Performance Period, and the final share price as of any given date shall be equal to the Share Value.
(b) “
MSCI Real Estate Index
” means the total return version of the MSCI World Real Estate Index, or, in the event such index is discontinued or its methodology is significantly changed, a comparable index selected by the Committee in good faith.
(c) “
MSCI Index Relative Performance
” means the Company TSR Percentage less the MSCI Index TSR Percentage, expressed in basis points.
(d) “
MSCI Index TSR Percentage
” means the growth rate, expressed as a percentage (rounded to the nearest tenth of a percent (0.1%)), in the value of the MSCI Real Estate Index during the Performance Period, calculated in a manner consistent with the calculation of Company TSR Percentage (as defined above).
(e) “
Performance Period
” means the period commencing on January 1, 2018 and ending on December 31, 2020.
(f) “
Share Value
,” as of any given date, means the average of the closing trading prices of a share of Common Stock on the principal exchange on which such shares are then traded for each trading day during the thirty (30) consecutive calendar days ending on such date.
(g) “
Vesting Percentage
” means the “Vesting Percentage” determined in accordance with
Exhibit A
attached hereto, which is a function of the MSCI Index Relative Performance during the Performance Period.
5.
Termination of Employment
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Notwithstanding the foregoing, the following provisions shall apply in the event that the Awardee’s employment with the Company and its Affiliates terminates prior to the Awardee’s fully satisfying any of the vesting requirements set forth in Section 4:
(a)
Subject to Section 5(b) below, if the Awardee’s employment with the Company and its Affiliates shall be terminated by reason of the Awardee’s death or Total and Permanent Disability, in any such event, all then-unforfeited Restricted Shares subject to vesting thereafter shall remain outstanding and be eligible to become vested and no longer subject to Restrictions as of the Vesting Date to the extent that the MSCI Index Relative Performance goals set forth on
Exhibit A
attached hereto are satisfied for the Performance Period (as determined in accordance with
Exhibit A
and Section 4 above) and without regard to the requirement the Awardee be an employee of the Company and/or its Affiliates as of the Vesting Date. To the extent that any Restricted Shares subject to vesting on the Vesting Date do not become vested and no longer subject to Restrictions as of the Vesting Date for any reason, such Restricted Shares shall immediately be forfeited as of such date without consideration therefor, and the Awardee shall have no further right or interest in or with respect to such Restricted Shares.
(b)
Notwithstanding anything to the contrary in this Section 5, if (i) the Awardee’s employment with the Company and its Affiliates terminates due to the Awardee’s death or Total and Permanent Disability and (ii) a Change of Control occurs following such termination of employment but prior to the end of the Performance Period, a number of Restricted Shares equal to the product of (x) the number of then-outstanding Restricted Shares multiplied by (y) the Vesting Percentage calculated assuming that the MSCI Index Relative Performance for the Performance Period is attained at Target Level (as set forth on
Exhibit A
) (with any fractional Restricted Share rounded as determined by the Company) shall automatically become fully vested and no longer subject to Restrictions, as of the date of such Change of Control.
(c)
If the Awardee’s employment with the Company and its Affiliates shall be terminated for any reason other than as set forth in Section 5(a), then except as otherwise set forth in a written agreement between the Awardee and the Company or an Affiliate thereof, all of the Awardee’s then-unforfeited Restricted Shares shall thereupon be cancelled and forfeited as of the date of such termination of employment without consideration therefor, and the Awardee shall have no further right or interest in or with respect to such Restricted Shares.
6.
Restriction on Transferability
.
Except as otherwise provided in the Plan and subject to Section 5,
the Restricted Shares shall not be transferable unless and until (and solely to the extent) the Awardee satisfies the vesting requirements contained in Section 4.
Any Transfer of the Restricted Shares which is not made in compliance with the Plan and this Agreement shall be null and void and of no effect.
7.
Voting and Dividend Rights
.
The Awardee shall have the voting rights of a stockholder of Common Stock with respect to the Restricted Shares. Any dividends declared on the Common Stock with respect to unvested Restricted Shares shall not be paid to the Awardee on a current basis, but shall instead accumulate and be paid to the Awardee in a lump sum on the date (if any), and only to the extent, that the underlying Restricted Shares vest. The Awardee’s right to any unpaid dividends with respect to unvested Restricted Shares that are forfeited, cancelled or otherwise terminate without having vested shall be forfeited, cancelled and shall terminate upon the forfeiture, cancellation or termination of the underlying Restricted Shares. Any amounts that may become distributable in respect of dividends declared or paid on the Common Stock shall be treated separately from the Restricted Shares and the rights arising in connection therewith for purposes of Section 409A of the Code (including for purposes of the designation of time and form of payments required by Section 409A of the Code).
8.
Regulation by the Committee
.
This Agreement and the Restricted Shares shall be subject to the administrative procedures and rules as the Committee shall adopt. All decisions of the Committee upon any question arising under the Plan or under this Agreement, shall be conclusive and binding upon the Awardee, including, without limitation, any question relating to the vesting conditions set forth in Section 4.
9.
Withholding
.
The Company and its Affiliates shall be entitled to deduct and withhold the minimum amount necessary in connection with the Awardee’s Restricted Shares to satisfy its withholding obligations under any and all federal, state and/or local tax rules or regulations.
10.
Amendment
.
The Committee may amend this Agreement at any time and from time to time;
provided
,
however
, that no amendment of this Agreement that would impair the Awardee’s rights or entitlements with respect to the Restricted Shares shall be effective without the prior written consent of the Awardee.
11.
Plan Terms
.
The terms of the Plan are hereby incorporated herein by reference.
12.
Effective Date of Award
.
The award of each Restricted Share under this Agreement shall be effective as of the Effective Date.
13.
Awardee Acknowledgment
.
By executing this Agreement, the Awardee hereby acknowledges that he or she has received and read the Plan and this Agreement and that he or she agrees to be bound by all of the terms of both the Plan and this Agreement.
[Signature page follows]
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto as of the date first above written.
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AWARDEE:
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KENNEDY-WILSON HOLDINGS, INC.
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________________________________
____________
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By:
Its:
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EXHIBIT A
Vesting Criteria for the
Kennedy Wilson Second Amended and Restated 2009 Equity Participation Plan
for Restricted Stock Awards to Employees
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I.
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All calculations will be reviewed and approved by the Compensation Committee of the Board and their decisions will be final and conclusive and set forth in the minutes of their meetings.
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II.
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Vesting of award – Except as provided in the Restricted Stock Award Agreement with respect to a Change of Control, the Restricted Shares will vest on the Vesting Date (as defined in the Restricted Stock Award Agreement), subject to an employment requirement and the MSCI Index Relative Performance over the Performance Period, as described in Section III below and in the Restricted Stock Award Agreement. Dividends declared with respect to unvested Restricted Shares will be held by the Company and paid as and when (and only to the extent that) such shares vest as set forth in the Restricted Stock Award Agreement.
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III.
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The Vesting Percentage for the Performance Period will be determined as follows:
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MSCI Index Relative Performance
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Vesting Percentage
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Less than -1,200 basis points
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0%
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Threshold Level
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-1,200 basis points
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33.3%
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Target Level
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0 basis points
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66.7%
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Maximum Level
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1,200 basis points or greater
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100%
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In the event that the MSCI Index Relative Performance falls between the Threshold Level and the Target Level, the Vesting Percentage shall be determined using straight line linear interpolation between the Threshold Level and Target Level Vesting Percentages specified above, and in the event that the MSCI Index Relative Performance falls between the Target Level and the Maximum Level, the Vesting Percentage shall be determined using straight line linear interpolation between the Target Level and Maximum Level Vesting Percentages specified above.
KENNEDY-WILSON HOLDINGS, INC.
SECOND AMENDED AND RESTATED 2009 EQUITY PARTICIPATION PLAN
EMPLOYEE RESTRICTED STOCK AWARD AGREEMENT
THIS AGREEMENT (this “
Agreement
”), is made effective as of _________, 2017 (the “
Effective Date
”), by and between Kennedy-Wilson Holdings, Inc., a Delaware corporation (the “
Company
”), and ____________ (the “
Awardee
”).
WITNESSETH:
WHEREAS, the Company has adopted the Kennedy-Wilson Holdings, Inc. Second Amended and Restated 2009 Equity Participation Plan (as may be amended from time to time, the “
Plan
”) for the benefit of its employees, nonemployee directors and consultants and the employees, nonemployee directors and consultants of its affiliates, and
WHEREAS, the Committee has authorized the award to the Awardee of shares of Restricted Stock (“
Restricted Shares
”) under the Plan, on the terms and conditions set forth in the Plan and as hereinafter provided.
NOW, THEREFORE, in consideration of the premises contained herein, the Company and the Awardee hereby agree as follows:
1.
Definitions
.
To the extent not defined herein, terms used in this Agreement which are defined in the Plan shall have the same meanings as set forth in the Plan.
2.
Award of Restricted Shares
.
The Committee hereby awards to the Awardee ______ Restricted Shares. All such Restricted Shares shall be subject to the restrictions and forfeiture provisions contained in Sections 4, 5 and 6, such restrictions and forfeiture provisions to become effective immediately upon execution of this Agreement by the parties hereto.
3.
Stock Issuance
.
The Awardee hereby acknowledges that the Restricted Shares are issued in book entry form on the books and records as kept by the Company’s transfer agent, shall be registered in the name of the Awardee and a stock certificate evidencing the Restricted Shares shall not be delivered to the Awardee until the Awardee satisfies the vesting requirements contained in Sections 4 or 5. In the event that a stock certificate is delivered to the Awardee before the vesting requirements are satisfied and all Restrictions imposed pursuant to this Agreement have lapsed, the Awardee hereby acknowledges that such stock certificate shall bear the following legend:
“The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of an Agreement entered into between the registered owner and Kennedy-Wilson Holdings, Inc., effective as of __________, 2017. Copies of such Agreement are on file in the offices of the Secretary, Kennedy-Wilson Holdings, Inc., 151 S. El Camino Drive, Beverly Hills, CA 90212.”
4.
Vesting
.
Subject to Sections 5 and 6 below, and pursuant to the terms of this Agreement and the Plan (and as summarized on
Exhibit A
attached hereto), up to one-third (1/3
rd
) of the Restricted Shares subject hereto shall be eligible to vest and no longer be subject to Restrictions on each Vesting Date to the extent that the Company’s Return on Equity goals set forth on
Exhibit A
attached hereto are satisfied for the applicable Performance Year (each such term as defined below), subject to the Awardee being an employee of the Company or an Affiliate thereof through the applicable Vesting Date. As soon as reasonably practicable following the end of each Performance Year (but in no event later than thirty (30) days after the end of the Performance Year), the Committee shall determine (each such date of determination by the Committee, a “
Vesting Date
”) the Company’s Return on Equity for the applicable Performance Year, the Vesting Percentage with respect to such Performance Year and the number of Restricted Shares subject hereto that have become vested and no longer subject to Restrictions as of the Vesting Date (which shall be determined by multiplying one-third (1/3
rd
) of the total Restricted Shares subject hereto by the applicable Vesting Percentage, with any fractional Restricted Share rounded as determined by the Company). To the extent that any Restricted Shares subject to vesting on a particular Vesting Date do not become vested and no longer subject to Restrictions as of such Vesting Date for any reason, such Restricted Shares shall immediately be forfeited as of such date without consideration therefor, and the Awardee shall have no further right or interest in or with respect to such Restricted Shares.
Notwithstanding the foregoing, in the event that a Change of Control occurs prior to the end of any Performance Year and the Awardee remains in continued employment with the Company or an Affiliate thereof until at least immediately prior to the Change of Control, a number of Restricted Shares equal to the product of (x) the number of then-outstanding Restricted Shares multiplied by (y) the Vesting Percentage calculated assuming that the Company’s Return on Equity for each remaining applicable Performance Year is attained at Target Level (as set forth on
Exhibit A
) (with any fractional Restricted Share rounded as determined by the Company) shall automatically become fully vested and no longer subject to Restrictions as of the date of such Change of Control.
For purposes of this Agreement, the following terms shall have their respective meanings set forth below:
(a) “
Adjusted Net Income
” (after subtraction of the Bonus Pool for the applicable Performance Year) equals, for any Performance Year, net income before depreciation and amortization, the Company’s share of depreciation and amortization included in income from unconsolidated investments, share-based compensation, merger related expenses, loss on early extinguishment of corporate debt and after net income attributable to noncontrolling interests before depreciation and amortization.
(b) “
Average Book Equity
” equals, with respect to any Performance Year, the average of the beginning balances (of each calendar quarter during such year, i.e., January 1, April 1, July 1, October 1) of the Company’s shareholders’ equity less goodwill, determined in accordance with generally accepted accounting principles.
(c) “
Bonus Pool
” means, with respect to any Performance Year, the Company’s cash bonus pool for such year, as determined by the Committee.
(d) “
Performance Year
” shall mean each of the Company’s fiscal year ending December 31, 2018, the Company’s fiscal year ending December 31, 2019 and the Company’s fiscal year ending December 31, 2020.
(e) “
Return on Equity
” means, for any Performance Year, the ratio of Adjusted Net Income (after subtraction of the Bonus Pool for the applicable year) for such Performance Year to the Company’s Average Book Equity for such Performance Year.
(f) “
Vesting Percentage
” means, with respect to any Performance Year, the “Vesting Percentage” determined in accordance with
Exhibit A
attached hereto, which is a function of the Company’s Return on Equity for such fiscal year.
5.
Termination of Employment
.
Notwithstanding the foregoing, the following provisions shall apply in the event that the Awardee’s employment with the Company and its Affiliates terminates prior to the Awardee’s fully satisfying any of the vesting requirements set forth in Section 4:
(a)
Subject to Section 5(b) below, if the Awardee’s employment with the Company and its Affiliates shall be terminated by reason of the Awardee’s death or Total and Permanent Disability, in any such event, all then-unforfeited Restricted Shares subject to vesting thereafter shall remain outstanding and be eligible to become vested and no longer subject to Restrictions on each subsequent Vesting Date to the extent that the Company’s Return on Equity goals set forth on
Exhibit A
attached hereto are satisfied for the applicable Performance Year (as determined in accordance with
Exhibit A
and Section 4 above) and without regard to the requirement the Awardee be an employee of the Company and/or its Affiliates as of the Vesting Date. To the extent that any Restricted Shares subject to vesting on such Vesting Date do not become vested and no longer subject to Restrictions as of such Vesting Date for any reason, such Restricted Shares shall immediately be forfeited as of such date without consideration therefor and the Awardee shall have no further right or interest in or with respect to such Restricted Shares.
(b)
Notwithstanding anything to the contrary in this Section 5, if (i) the Awardee’s employment with the Company and its Affiliates terminates due to the Awardee’s death or Total and Permanent Disability and (ii) a Change of Control occurs following such termination of employment but prior to the end of any Performance Year ending after the date of such termination of employment, a number of Restricted Shares equal to the product of (x) the number of then-outstanding Restricted Shares multiplied by (y) the Vesting Percentage calculated assuming that the Company’s Return on Equity for each applicable Performance Year is attained at Target Level (as set forth on
Exhibit A
) (with any fractional Restricted Share rounded as determined by the Company) shall automatically become fully vested and no longer subject to Restrictions, as of the date of such Change of Control.
(c)
If the Awardee’s employment with the Company and its Affiliates shall be terminated for any reason other than as set forth in Section 5(a), then except as otherwise set forth in a written agreement between the Awardee and the Company or an Affiliate thereof, all of the Awardee’s then-unforfeited Restricted Shares shall thereupon be cancelled and forfeited as of the date of such termination of employment without consideration therefor and the Awardee shall have no further right or interest in or with respect to such Restricted Shares.
6.
Restriction on Transferability
.
Except as otherwise provided in the Plan and subject to Section 5,
the Restricted Shares shall not be transferable unless and until (and solely to the extent) the Awardee satisfies the vesting requirements contained in Section 4.
In addition, notwithstanding anything herein or in the Plan to the contrary, the Awardee shall not, without the consent of the Committee (which may be withheld in its sole discretion), sell, pledge, assign, hypothecate, transfer, or otherwise dispose of (collectively, “
Transfer
”) any vested Restricted Shares prior to the earlier to occur of (a) the third (3rd) anniversary of the date on which such Restricted Shares become vested under Section 4 or 5 and such shares are no longer subject to Restrictions and (b) the occurrence of a Change of Control (the “
Transfer Restrictions
”);
provided
,
however
, that the Transfer Restrictions shall not apply to (i) any Transfer of shares to the Company, (ii) any Transfer of shares in satisfaction of any withholding obligations with respect to the Restricted Shares, or (iii) any Transfer following the termination of the Awardee’s employment with the Company and its Affiliates, including without limitation by will or pursuant to the laws of descent and distribution. Any Transfer of the Restricted Shares which is not made in compliance with the Plan and this Agreement shall be null and void and of no effect.
7.
Voting and Dividend Rights
.
The Awardee shall have the voting rights of a stockholder of Common Stock with respect to the Restricted Shares. Any dividends declared on the Common Stock with respect to unvested Restricted Shares shall not be paid to the Awardee on a current basis, but shall instead accumulate and be paid to the Awardee in a lump sum on the date (if any), and only to the extent, that the underlying Restricted Shares vest. The Awardee’s right to any unpaid dividends with respect to unvested Restricted Shares that are forfeited, cancelled or otherwise terminate without having vested shall be forfeited, cancelled and shall terminate upon the forfeiture, cancellation or termination of the underlying Restricted Shares. Any amounts that may become distributable in respect of dividends declared or paid on the Common Stock shall be treated separately from the Restricted Shares and the rights arising in connection therewith for purposes of Section 409A of the Code (including for purposes of the designation of time and form of payments required by Section 409A of the Code).
8.
Regulation by the Committee
.
This Agreement and the Restricted Shares shall be subject to the administrative procedures and rules as the Committee shall adopt. All decisions of the Committee upon any question arising under the Plan or under this Agreement, shall be conclusive and binding upon the Awardee, including, without limitation, any question relating to the vesting conditions set forth in Section 4.
9.
Withholding
.
The Company and its Affiliates shall be entitled to deduct and withhold the minimum amount necessary in connection with the Awardee’s Restricted Shares to satisfy its withholding obligations under any and all federal, state and/or local tax rules or regulations.
10.
Amendment
.
The Committee may amend this Agreement at any time and from time to time;
provided
,
however
, that no amendment of this Agreement that would impair the Awardee’s rights or entitlements with respect to the Restricted Shares shall be effective without the prior written consent of the Awardee.
11.
Plan Terms
.
The terms of the Plan are hereby incorporated herein by reference.
12.
Effective Date of Award
.
The award of each Restricted Share under this Agreement shall be effective as of the Effective Date.
13.
Awardee Acknowledgment
.
By executing this Agreement, the Awardee hereby acknowledges that he or she has received and read the Plan and this Agreement and that he or she agrees to be bound by all of the terms of both the Plan and this Agreement.
[Signature page follows]
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto as of the date first above written.
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AWARDEE:
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KENNEDY-WILSON HOLDINGS, INC.
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________________________________
____________
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By:
Its:
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EXHIBIT A
Vesting Criteria for the
Kennedy Wilson Second Amended and Restated 2009 Equity Participation Plan
for Restricted Stock Awards to Employees
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I.
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All calculations will be reviewed and approved by the Compensation Committee of the Board and their decisions will be final and conclusive and set forth in the minutes of their meetings.
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II.
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Vesting of award: Except as provided in the Restricted Stock Award Agreement with respect to a Change of Control, one-third (1/3
rd
) of the Restricted Shares will be eligible to vest in annual installments over three (3) years, subject to an employment requirement and the Company’s Return on Equity for the applicable Performance Year, as described in Section III below and in the Restricted Stock Agreement. Dividends declared with respect to unvested Restricted Shares will be held by the Company and paid as and when (and only to the extent that) such shares vest as set forth in the Restricted Stock Award Agreement.
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III.
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The Vesting Percentage for any Performance Year will be determined as follows:
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Return on Equity
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Vesting Percentage
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Less than 7.5%
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0%
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Threshold Level
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7.5%
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33.3%
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Target Level
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10%
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66.7%
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Maximum Level
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12.5% or greater
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100%
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In the event that Return on Equity falls between the Threshold Level and the Target Level, the Vesting Percentage shall be determined using straight line linear interpolation between the Threshold Level and Target Level Vesting Percentages specified above, and in the event that Return on Equity falls between the Target Level and the Maximum Level, the Vesting Percentage shall be determined using straight line linear interpolation between the Target Level and Maximum Level Vesting Percentages specified above.
KENNEDY-WILSON HOLDINGS, INC.
SECOND AMENDED AND RESTATED 2009 EQUITY PARTICIPATION PLAN
EMPLOYEE RESTRICTED STOCK AWARD AGREEMENT
THIS AGREEMENT (this “
Agreement
”), is made effective as of _________, 2017 (the “
Effective Date
”), by and between Kennedy-Wilson Holdings, Inc., a Delaware corporation (the “
Company
”), and ____________ (the “
Awardee
”).
WITNESSETH:
WHEREAS, the Company has adopted the Kennedy-Wilson Holdings, Inc. Second Amended and Restated 2009 Equity Participation Plan (as may be amended from time to time, the “
Plan
”) for the benefit of its employees, nonemployee directors and consultants and the employees, nonemployee directors and consultants of its affiliates, and
WHEREAS, the Committee has authorized the award to the Awardee of shares of Restricted Stock (“
Restricted Shares
”) under the Plan, on the terms and conditions set forth in the Plan and as hereinafter provided.
NOW, THEREFORE, in consideration of the premises contained herein, the Company and the Awardee hereby agree as follows:
1.
Definitions
.
To the extent not defined herein, terms used in this Agreement which are defined in the Plan shall have the same meanings as set forth in the Plan.
2.
Award of Restricted Shares
.
The Committee hereby awards to the Awardee ______ Restricted Shares. All such Restricted Shares shall be subject to the restrictions and forfeiture provisions contained in Sections 4, 5 and 6, such restrictions and forfeiture provisions to become effective immediately upon execution of this Agreement by the parties hereto.
3.
Stock Issuance
.
The Awardee hereby acknowledges that the Restricted Shares are issued in book entry form on the books and records as kept by the Company’s transfer agent, shall be registered in the name of the Awardee and a stock certificate evidencing the Restricted Shares shall not be delivered to the Awardee until the Awardee satisfies the vesting requirements contained in Sections 4 or 5. In the event that a stock certificate is delivered to the Awardee before the vesting requirements are satisfied and all Restrictions imposed pursuant to this Agreement have lapsed, the Awardee hereby acknowledges that such stock certificate shall bear the following legend:
“The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of an Agreement entered into between the registered owner and Kennedy-Wilson Holdings, Inc., effective as of __________, 2017. Copies of such Agreement are on file in the offices of the Secretary, Kennedy-Wilson Holdings, Inc., 151 S. El Camino Drive, Beverly Hills, CA 90212.”
4.
Vesting
.
Subject to Sections 5 and 6 below, one-third (1/3
rd
) of the Restricted Shares (with any fractional Restricted Share rounded as determined by the Company) shall vest and no longer be subject to Restrictions pursuant to the terms of this Agreement and the Plan on each of the first three (3) anniversaries of the Vesting Commencement Date (defined below) (each such date, a “
Vesting Date
”), subject to the Awardee’s continued employment with the Company or an Affiliate through the applicable Vesting Date. For purposes of this Agreement, “
Vesting Commencement Date
” shall mean ______.
Notwithstanding the foregoing, in the event that a Change of Control occurs and the Awardee remains in continued employment with the Company or an Affiliate thereof until at least immediately prior to the Change of Control, all of the then-unforfeited Restricted Shares shall automatically become fully vested and no longer subject to Restrictions as of the date of such Change of Control.
5.
Termination of Employment
.
Notwithstanding the foregoing, the following provisions shall apply in the event that the Awardee’s employment with the Company and its Affiliates terminates prior to the Awardee’s fully satisfying any of the vesting requirements set forth in Section 4:
(a)
If the Awardee’s employment with the Company and its Affiliates shall be terminated by reason of the Awardee’s death or Total and Permanent Disability, in any such event, all then-unforfeited Restricted Shares subject to vesting thereafter shall automatically become fully vested and no longer subject to Restrictions as of the date of such termination of employment; or
(b)
If the Awardee’s employment with the Company and its Affiliates shall be terminated for any reason other than as set forth in Section 5(a), then except as otherwise set forth in a written agreement between the Awardee and the Company or an Affiliate thereof, all of the Awardee’s then-unforfeited Restricted Shares shall thereupon be cancelled and forfeited as of the date of such termination of employment without consideration therefor, and the Awardee shall have no further right or interest in or with respect to such Restricted Shares.
6.
Restriction on Transferability
.
Except as otherwise provided in the Plan and subject to Section 5,
the Restricted Shares shall not be transferable unless and until (and solely to the extent) the Awardee satisfies the vesting requirements contained in Section 4.
In addition, notwithstanding anything herein or in the Plan to the contrary, the Awardee shall not, without the consent of the Committee (which may be withheld in its sole discretion), sell, pledge, assign, hypothecate, transfer, or otherwise dispose of (collectively, “
Transfer
”) any vested Restricted Shares prior to the earlier to occur of (a) the third (3rd) anniversary of the date on which such Restricted Shares become vested under Section 4 or 5 and such shares are no longer subject to Restrictions and (b) the occurrence of a Change of Control (the “
Transfer Restrictions
”);
provided
,
however
, that the Transfer Restrictions shall not apply to (i) any Transfer of shares to the Company, (ii) any Transfer of shares in satisfaction of any withholding obligations with respect to the Restricted Shares, or (iii) any Transfer following the termination of the Awardee’s employment with the Company and its Affiliates, including without limitation by will or pursuant to the laws of descent and distribution. Any Transfer of the Restricted Shares which is not made in compliance with the Plan and this Agreement shall be null and void and of no effect.
7.
Voting and Dividend Rights
.
The Awardee shall have the voting rights of a stockholder of Common Stock with respect to the Restricted Shares. Any dividends declared on the Common Stock with respect to unvested Restricted Shares shall not be paid to the Awardee on a current basis, but shall instead accumulate and be paid to the Awardee in a lump sum on the date (if any), and only to the extent, that the underlying Restricted Shares vest. The Awardee’s right to any unpaid dividends with respect to unvested Restricted Shares that are forfeited, cancelled or otherwise terminate without having vested shall be forfeited, cancelled and shall terminate upon the forfeiture, cancellation or termination of the underlying Restricted Shares. Any amounts that may become distributable in respect of dividends declared or paid on the Common Stock shall be treated separately from the Restricted Shares and the rights arising in connection therewith for purposes of Section 409A of the Code (including for purposes of the designation of time and form of payments required by Section 409A of the Code).
8.
Regulation by the Committee
.
This Agreement and the Restricted Shares shall be subject to the administrative procedures and rules as the Committee shall adopt. All decisions of the Committee upon any question arising under the Plan or under this Agreement, shall be conclusive and binding upon the Awardee, including, without limitation, any question relating to the vesting conditions set forth in Section 4.
9.
Withholding
.
The Company and its Affiliates shall be entitled to deduct and withhold the minimum amount necessary in connection with the Awardee’s Restricted Shares to satisfy its withholding obligations under any and all federal, state and/or local tax rules or regulations.
10.
Amendment
.
The Committee may amend this Agreement at any time and from time to time;
provided
,
however
, that no amendment of this Agreement that would impair the Awardee’s rights or entitlements with respect to the Restricted Shares shall be effective without the prior written consent of the Awardee.
11.
Plan Terms
.
The terms of the Plan are hereby incorporated herein by reference.
12.
Effective Date of Award
.
The award of each Restricted Share under this Agreement shall be effective as of the Effective Date.
13.
Awardee Acknowledgment
.
By executing this Agreement, the Awardee hereby acknowledges that he or she has received and read the Plan and this Agreement and that he or she agrees to be bound by all of the terms of both the Plan and this Agreement.
[Signature page follows]
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto as of the date first above written.
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AWARDEE:
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KENNEDY-WILSON HOLDINGS, INC.
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________________________________
____________
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By:
Its:
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