<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
KENNEDY-WILSON, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
---------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------------
(3) Filing Party:
---------------------------------------------------------------------
(4) Date Filed:
---------------------------------------------------------------------
<PAGE> 2
KENNEDY-WILSON, INC.
530 WILSHIRE BOULEVARD, SUITE 101
SANTA MONICA, CALIFORNIA 90401
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on April 29, 1998
-----------------------
The Annual Meeting of Stockholders of Kennedy-Wilson, Inc., a Delaware
corporation ("Kennedy-Wilson") will be held at The Miramar Sheraton, 101
Wilshire Boulevard, Santa Monica, California on Wednesday, April 29, 1998 at
9:00 a.m., Pacific Daylight Time, for the following purposes:
1. To elect two (2) Class III directors to serve until the 2001
Annual Meeting of Stockholders and until their successors are
elected and qualified;
2. To consider and approve an amendment to the Kennedy-Wilson 1992
Incentive and Nonstatutory Stock Option Plan to increase the
number of shares available for grant to 240,000.
3. To consider and act upon an amendment to Kennedy-Wilson's
Certificate of Incorporation to increase the authorized capital
stock.
4. To consider and act upon such other business as may properly come
before the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on
Tuesday, March 31, 1998 as the record date for determining stockholders of
Kennedy-Wilson entitled to notice of and to vote at the meeting.
STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. TO INSURE
YOUR REPRESENTATION AT THE MEETING, PLEASE COMPLETE AND PROMPTLY MAIL
YOUR PROXY IN THE ENVELOPE PROVIDED. THIS WILL NOT PREVENT YOU FROM
VOTING IN PERSON, SHOULD YOU SO DESIRE.
By Order of the Board of Directors
FREEMAN A. LYLE
Executive Vice President
Chief Financial Officer
and Secretary
Santa Monica, California
April 8, 1998
<PAGE> 3
KENNEDY-WILSON, INC.
530 WILSHIRE BOULEVARD, SUITE 101
SANTA MONICA, CALIFORNIA 90401
April 8, 1998
------------------------
PROXY STATEMENT
Annual Meeting of Stockholders
April 29, 1998
-----------------------
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Kennedy-Wilson, Inc., a Delaware
corporation ("Kennedy-Wilson" or the "Company"), for use at the Annual Meeting
of Stockholders of the Company (the "Meeting") to be held at The Miramar
Sheraton, 101 Wilshire Boulevard, Santa Monica, California on Wednesday, April
29, 1998 at 9:00 a.m. Pacific Daylight Time, and all adjournments and
postponements thereof. This Proxy Statement and the accompanying form of proxy
were first mailed to stockholders on or about April 8, 1998.
The purposes of the Annual Meeting are (1) to elect two (2) Class III
directors of the Company to serve until the 2001 Annual Meeting of Stockholders,
(2) to consider and approve an amendment (the "Amendment") to the Company's 1992
Incentive and Nonstatutory Stock Option Plan (the "Stock Option Plan") to
increase the number of shares available for grant to 240,000, (3) to consider
and act upon an amendment to the Company's Certificate of Incorporation to
increase the authorized capital stock (the "Certificate Amendment") and (4) to
transact such other business as may properly come before the Meeting or any
adjournment thereof.
The cost of preparing, assembling and mailing the Notice of Annual
Meeting of Stockholders, Proxy Statement and form of proxy and the solicitation
of proxies will be paid by Kennedy-Wilson. Proxies may be solicited by
directors, officers and other regular employees of Kennedy-Wilson, none of whom
will receive any additional compensation for such solicitation. Proxies may be
solicited in person or by telephone or telegraph. Kennedy-Wilson will pay
brokers or other persons holding stock in their names or the names of their
nominees for the expenses of forwarding soliciting material to their principals.
VOTING
The close of business on March 31, 1998 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the Meeting. On March 31, 1998 there were outstanding 1,320,344 shares of
Kennedy-Wilson Common Stock, $.01 par value ("Common Stock"). A majority of the
shares entitled to vote, present in person or represented by proxy, will
constitute a quorum at the Meeting. The affirmative vote of the majority of
shares present in person or represented by proxy at the Meeting and entitled to
vote on the subject matter will be the act of the stockholders, except with
respect to the election of two directors as to which the two nominees receiving
the highest number of votes will be elected. Abstentions and broker non-votes
(which occur if a broker or other nominee does not have discretionary authority
and has not received voting instructions from the beneficial owners with respect
to the particular item) will be counted for the purposes of determining the
presence
<PAGE> 4
or absence of a quorum for the transaction of business. For the purposes of
determining whether the directors have been elected, abstentions and broker
non-votes will have no effect. As to all other matters that may come before the
Meeting, abstentions will have the effect of a negative vote. Broker non-votes
are not taken into account for the purpose of determining whether a proposal has
been approved by the requisite stockholder vote.
Proxies will be voted in accordance with the instructions thereon. In
the absence of such instructions, proxies will be voted for management's
nominees for election as directors, to approve the Amendment, the form of
which is attached as Annex A hereto and to approve the Certificate Amendment,
the form of which is attached as Annex B hereto. As of the date hereof, the
Board of Directors of Kennedy-Wilson was not aware of any matters which would be
presented for action at the Annual Meeting other than those specifically
identified in the Notice of Annual Meeting accompanying this Proxy Statement.
However, should any other matters come before the meeting, proxies will be voted
in the discretion of the persons named as proxies thereon as to any other
business that may properly come before the Meeting or any adjournment(s)
thereof.
Any stockholder has the power to revoke his or her proxy at any time
before it is voted at the Meeting by submitting written notice of revocation to
the Secretary of Kennedy-Wilson, or by filing a duly executed proxy bearing a
later date. A proxy will not be voted if the stockholder who executed it is
present at the Meeting and elects to vote the shares represented thereby in
person.
ELECTION OF DIRECTORS
The Company has a three-tiered, classified Board of Directors with
staggered terms of office. The term of Class III directors expires at the 1997
Annual Meeting, the term of Class I directors will expire at the 1999 Annual
Meeting and the term of Class II directors expires at the 2000 Annual Meeting.
The nominees of management for election as Class III directors (all of whom are
presently directors) are set forth below along with certain information
regarding these nominees. See "Management." Should any nominee become
unavailable to serve as a director before the election (which event is not
anticipated), the proxies may be voted for a substitute nominee selected by the
Board of Directors or the authorized number of directors may be reduced. If for
any reason the authorized number of directors is reduced, the proxies will be
voted, in the absence of instructions to the contrary, for the election of the
remaining nominees named in this Proxy Statement. To the best of
Kennedy-Wilson's knowledge, all nominees are and will be available to serve.
NAME AGE PRESENT TITLE WITH COMPANY
- ---- --- --------------------------
William J. McMorrow 50 Chairman of the Board of Directors,
Chief Executive Officer and Director
Donald B. Prell 73 Director
Messrs. McMorrow and Prell have been directors of the Company since 1987 and
1992, respectively. Neither of the proposed nominees is related by blood or
marriage to one another or to an executive officer of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE
FOR THE NOMINEES NAMED ABOVE.
2
<PAGE> 5
MANAGEMENT
The Directors (including the nominees for reelection) and the executive
officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE PRESENT TITLE
- ---- --- -------------
<S> <C> <C>
William J. McMorrow 50 Chairman of the Board of Directors, Chief
Executive Officer and Director (Class III)
Freeman A. Lyle 44 Executive Vice President, Chief Financial
Officer and Secretary
Lewis A. Halpert 46 Executive Managing Director, President K-W
Properties and Director (Class I)
Richard Mandel 35 Managing Director, President Commercial
Brokerage Division and Director (Class II)
Goodwin Gaw 29 Director (Class I)
Donald B. Prell 73 Director (Class III), and Chairman of the Audit
Committee
Kent Y. Mouton 44 Director (Class I), and Chairman of the
Compensation Committee
</TABLE>
William J. McMorrow has served as Chairman of the Board of Directors,
Chief Executive Officer and Director of the Company and its predecessor since
1987.
Freeman A. Lyle has served as Executive Vice President, Chief Financial
Officer and Secretary since joining the Company in April, 1996. Previously Mr.
Lyle was President of Lyle Realty Group Inc., a real estate investment brokerage
and consulting firm, since January, 1994. From June, 1981 to December, 1993, Mr.
Lyle was an executive with R & B Realty Group, an international investment and
management company and served as Vice President-Finance and Vice President-Asset
Management.
Lewis A. Halpert has served as Executive Managing Director since June,
1997, as a Managing Director since March 1992 and as a Director since joining
the Company in December, 1987. From December, 1987 to March, 1992, Mr. Halpert
was an Executive Vice President of the Company.
Richard A. Mandel has served as a Managing Director since October, 1993,
and as a Director since December, 1995. In February, 1997, he was promoted to
President of the Commercial Brokerage Division. Previously he served as Managing
Director of Kennedy-Wilson Hong Kong Ltd., and Kennedy-Wilson Japan K.K. since
October, 1993. Prior to joining Kennedy-Wilson, Mr. Mandel was a partner of
Jones Lang Wooten USA, a commercial real estate firm, since 1990.
3
<PAGE> 6
Goodwin Gaw is President of Fortune Far East, Ltd., a Hong Kong based
investment company. He has served as a director since July, 1996. From 1992 to
1995 he was the General Manager of Pioneer Estates in Hong Kong, directing all
aspects of real estate investment in the United States. From February, 1996
until September, 1997, he served as a Managing Director of the Company.
Donald B. Prell has been a Director of the Company since March, 1992.
From 1980 to 1990, Mr. Prell was employed by Imperial Bancorp, a bank holding
company, in various positions, most recently as Chief Credit Officer of Imperial
Bancorp and President of Imperial International Bank.
Kent Y. Mouton has been a Director of the Company since December, 1995.
Mr. Mouton has been a partner in the law firm of Kulik, Gottesman & Mouton, LLP
in Los Angeles, California since 1991.
None of the Directors or executive officers of the Company are related to one
another by blood or marriage.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company maintains an Audit Committee and a Compensation Committee.
The Audit Committee is composed of Donald B. Prell (Chairman) and Kent
Y. Mouton. The Audit Committee held two meetings in 1997. The Audit Committee is
responsible for reviewing the Company's financial policies and objectives,
monitoring the Company's financial condition and its requirements for funds in
conjunction with management, and meeting with the Company's independent auditors
to understand their audit report and any recommendations.
The Compensation Committee is composed of Kent Y. Mouton (Chairman) and
Donald B. Prell. The Compensation Committee held four meetings in 1997. The
Compensation Committee establishes the general compensation policies of the
Company and determines the compensation levels for the CEO and other Company
officers. The Compensation Committee also has oversight responsibility for
administering the Company's 1992 Incentive and Nonstatutory Stock Option Plan.
In 1997, the Board of Directors held nine meetings. Each director
attended at least 75 percent of the meetings of the Board of Directors and the
committees of the Board on which the director served in 1997.
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, certain officers and persons who beneficially own more than
10% of the Company's Common Stock, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC"). Such directors,
officers and stockholders must furnish the Company with copies of all Section
16(a) reports that they file with the SEC.
Based solely on a review of copies of such reports and written
representations from the reporting persons, the Company believes that, during
the period from January 1, 1997 through December 31, 1997,
4
<PAGE> 7
its executive officers, directors and greater than 10% stockholders have filed
on a timely basis all reports required under Section 16(a).
EXECUTIVE COMPENSATION
SUMMARY OF EXECUTIVE COMPENSATION
The following table sets forth the total compensation paid or accrued by
the Company to the Chief Executive Officer and the four most highly compensated
executive officers of the Company who served in such capacities during fiscal
1997 (the "Named Executive Officers") for services rendered during each of the
last three fiscal years.
5
<PAGE> 8
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------- ----------------------
==============================================================================================================
Other
All
Other Annual Options/SAR Compen-
NAME AND POSITION Year Salary Bonus Compensation1 (# of Shares) sation
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
William J. McMorrow 1997 300,000 1,270,754 120,607 20,000 0
Chairman of the Board 1996 300,000 450,000 0 0 0
Chief Executive Officer 1995 400,000 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
Lewis A. Halpert 1997 150,000 396,800 31,083 10,000 0
Executive Managing 1996 125,000 325,000 0 0 0
Director 1995 200,000 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
Richard Mandel 1997 225,000 284,267 35,917 42,000 0
Managing Director 1996 188,000 100,000 89,000 12,000 0
1995 175,000 50,000 93,000 12,000 0
- --------------------------------------------------------------------------------------------------------------
Freeman A. Lyle 1997 150,000 100,000 15,020 0 0
Executive V.P., Chief 1996 94,000 37,500 0 12,000 0
Financial Officer and
Secretary2
- --------------------------------------------------------------------------------------------------------------
Goodwin Gaw 1997 145,790 0 0 10,000 0
Managing Director3 1996 137,000 0 0 6,000 0
==============================================================================================================
</TABLE>
EMPLOYMENT AGREEMENTS
Each of the Named Executive Officers (other than Goodwin Gaw) has
entered into an employment contract for 1998 with the Company. Mr. McMorrow's
contract, as amended, provides for a term expiring December 31, 1999, base
salary of $300,000 per annum, plus a bonus advance of $100,000, payable against
his annual incentive bonus of 0% to 20% of year end profits. Mr. Halpert's
contract provides for a base salary of $150,000 per annum plus an advance of
$175,000, payable against an annual incentive bonus of 15% to 25% of the net
profit of K-W Properties. Mr. Mandel's contract provides for a base salary of
$225,000 plus an incentive bonus of 0% to 20% of the profits of the Commercial
Brokerage Division. Mr. Lyle's contract, as amended, provides for a base salary
of $150,000 plus a
- -------------
(1) Excludes compensation in the form of other personal benefits which, for
each of the Named Executive Officers other than Mr. Mandel, did not
exceed the lesser of $50,000 or 10% of the total annual salary and bonus
reported for each year. Mr. Mandel received a foreign cost of living and
housing allowance while based in Hong Kong and then Tokyo.
(2) Mr. Lyle joined the Company in April, 1996.
(3) Mr. Gaw joined the Company in February, 1996 and resigned as an
executive officer in September, 1997. He continues to serve as a
consultant to the Company and as a director.
.
6
<PAGE> 9
performance bonus of 0% to 100% of base salary.
In addition to compensation as noted above, each contract sets forth the
employee services provided to the Company; benefits and expense reimbursements,
if applicable, provided to the employee; a non-competition covenant and
confidentiality agreement; and terms for termination. None of the contracts
provide for any severance, change-in-control or related payments upon
termination of the agreement, except for Mr. McMorrow's. Mr. McMorrow's
employment agreement provides for a severance payment equal to two times his
annual compensation as determined by the arithmetic average of his salary and
bonus for the prior three years in the event his agreement is not renewed.
DEFERRED COMPENSATION PLAN
In 1997, the Company established a nonqualified deferred compensation
plan to provide specific benefits to a select group of management or highly
compensated employees who contribute materially to the continued growth,
development and future business success of the Company. Under such plan,
participants are able to defer up to 100% of their annual total compensation,
consisting of salary and bonus. The Company is authorized to make discretionary
matching contributions under certain circumstances pursuant to the terms of the
plan. In 1997, the Company contributed $314,000, including the amounts
disclosed in the Summary Compensation Table, as applicable, for the Named
Executive Officers in the column labelled Other Annual Compensation.
STOCK OPTIONS
The following table provides information with respect to stock option
grants made to each of the Named Executive Officers in fiscal 1997.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value
Number of % of Total at Assumed Annual Rates of
Securities Options Exercise Stock Price Appreciation
Underlying Granted to or Base for Option Term
Options Employees Price Expiration --------------------------
Name Granted(#) in FY ($/sh) Date 5%($) (10%)($)
---- ---------- ---------- --------- ---------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
W. McMorrow 20,000 16.9 16.75 10/28/02 92,554 204,521
L. Halpert 10,000 8.5 16.75 10/28/02 46,277 102,260
R. Mandel 12,000 10.2 8.13 1/1/02 26,954 59,561
R. Mandel 42,000 35.6 9.58 5/19/02 111,164 245,645
G. Gaw 10,000 8.5 16.75 10/28/02 46,277 102,260
F. Lyle -- -- -- -- -- --
</TABLE>
The following table furnishes information with respect to stock options
held by the Named Executive Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at FY-End at FY-End
Shares Acquired Value --------------------------- ---------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
W. McMorrow --- --- --- 20,000 --- ---
L. Halpert --- --- --- 10,000 --- ---
R. Mandel --- --- 12,000 66,000 135,760 501,440
G. Gaw --- --- 2,000 14,000 23,460 46,920
F. Lyle --- --- 4,000 8,000 39,210 78,420
</TABLE>
7
<PAGE> 10
DIRECTOR COMPENSATION
Each director who is not an employee of the Company receives a quarterly
retainer of $4,000 plus a fee of $1,000 for each board meeting attended and $500
for each Board Committee meeting attended. In addition, the Company maintains a
non-Employee Director Stock Option Plan, which is designed to provide
non-employee directors with the opportunity to obtain equity ownership interest
in the Company through the exercise of stock options. Company executive officers
who also are directors receive no additional compensation for services as
members of the Board of Directors or any Board Committee.
See also "Certain Transactions."
COMPENSATION COMMITTEE REPORT
The Compensation Committee Report shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such act.
OVERVIEW AND PHILOSOPHY
The Compensation Committee of the Board of Directors establishes the
general compensation policies of the Company, determines the compensation levels
for the Chief Executive Officer ("CEO") and other senior Company officers, and
administers and/or provides oversight on all short-term (annual) incentive
plans, all long-term incentive plans, including the Incentive and Non-Statutory
Stock Option Plan, and approves any grants of stock options, stock and/or stock
warrants to Company officers.
The Compensation Committee is comprised of non-employee directors who
have no interlocking relationships as defined by the Securities and Exchange
Commission. The Committee has available to it an external compensation
consultant and access to independent compensation data.
The Company applies a consistent philosophy to compensation for all
employees, including the officers. This philosophy is based upon the premise
that the achievements of the Company result from the coordinated efforts of all
individuals working toward common, defined objectives. The Company strives to
attain these objectives through team work that is focused upon meeting the
expectations of customers and stockholders.
COMPENSATION POLICY
The Company's compensation policy is to ensure that a substantial
portion of potential aggregate annual compensation be contingent upon the
performance of the Company. The goals of the compensation programs are to align
compensation with performance and to enable the Company to attract, retain and
reward personnel who contribute to the success of the Company. The Company's
compensation program for officers is based on the same guidelines that apply to
all Company employees.
The Company is committed to providing sales commission and/or incentive
opportunities that, together with base salaries (where appropriate), provide for
competitive and equitable total cash compensation opportunities. Aggregate base
salaries, where appropriate, are set relative to average market pay practices,
while target incentives opportunities are set somewhat above average market pay
8
<PAGE> 11
practices. Additionally, future base salary increases and commission or
incentive pay opportunities are directly linked to the achievement of key
financial objectives.
The variable compensation plans focus respective employees on the
immediate objectives of the business and their job; encourage employees to work
together as a team to achieve Company success; and, recognize and reward the
sustained contribution of outstanding performers within the Company.
COMPONENTS OF COMPENSATION
The Company has compensation programs that include both cash and equity
components. The Compensation Committee has established base salary, short and
long-term incentive compensation mix targets for each officer and for all
employees, where applicable, of the Company. The compensation mix targets,
define the desired percentage for each component of total compensation.
With respect to cash compensation for officers, the Company sets base
salaries and target incentive opportunities for each officer by reviewing the
cash compensation provided to comparable positions and through assessing the
internal equity of cash compensation opportunities based on position
responsibilities, the performance of each incumbent, and overall levels of
contribution to the Company. When considering competitive pay practices, the
Committee reviews compensation levels in both the real estate industry and
general industry at firms comparable in size and revenue to the Company. For
1998, target incentive compensation opportunities will be funded as stipulated
levels of net profit are achieved. Some officers with defined divisional
business development responsibilities also receive a temporary salary draw, with
additional opportunity to earn a proportionate share of their responsible net
profits or revenue.
With regard to equity-based compensation for officers, the Company
considered and granted stock options for the reported year, including certain of
those officers who already have a substantial equity stake in the Company. Stock
option grants were based on relative position responsibilities and/or historical
and expected contribution to the Company, including grants to recruit officers
to join the Company.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. McMorrow has been CEO of the Company and its predecessor since 1987.
Based on a thorough review, it was determined that Mr. McMorrow's base salary
was within a competitive range of pay, as compared with companies of similar
size and scope as Kennedy-Wilson. Incentive compensation has been linked to
Company performance. In determining Mr. McMorrow's incentive compensation for
1997, the Compensation Committee considered various factors particularly Mr.
McMorrow's guidance in the Company's acquisition and disposition of real estate.
For 1998, the Compensation Committee has determined Mr. McMorrow's compensation
will be based upon a potential target compensation mix whereby approximately one
third of his total compensation will be in the form of base salary, derived in
part from competitive pay practices, and approximately two-thirds of his
compensation will be in the form of incentives, based upon attainment of net
profits and other business factors.
9
<PAGE> 12
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS:
Kent Y. Mouton, Chair
Donald B. Prell
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee of the Board of Directors was,
during the fiscal year, or formerly, an officer or employee of the Company or
any of its subsidiaries.
10
<PAGE> 13
PERFORMANCE GRAPH
Comparison of Cumulative Total Return Among Kennedy-Wilson, Inc.,
The Nasdaq Stock Market Index and a Peer Group Index
Measurement Period Kennedy-Wilson, Peer Group Nasdaq
(Fiscal Year Covered) Inc. Index Index
- --------------------- -------------- ---------- ------
1992 100 100 100
1993 80 120 120
1994 32 115 125
1995 120 123 160
1996 23 175 205
1997 45 195 245
11
<PAGE> 14
AMENDMENT TO THE COMPANY'S
1992 INCENTIVE AND NONSTATUTORY
STOCK OPTION PLAN
GENERAL
The Company's 1992 Incentive and Nonstatutory Stock Option Plan (the
"Plan") is designed to help the Company attract and retain the best available
persons for positions with substantial responsibility and to provide certain key
employees and consultants with an additional incentive to contribute to the
success of the Company. The following is a summary of the principal provisions
of the Plan together with a description of the Amendment to increase the number
of shares available for grant under the Plan to 240,000.
The Plan, without giving effect to the Amendment, provides for the grant
of options to purchase up to an aggregate of 168,000 shares of the Common Stock
of the Company (subject to an antidilution provision providing for adjustment in
the event of certain changes in the Company's capitalization as described more
fully below.) At August 19, 1997, the Company had options to acquire 138,960
shares outstanding and 29,040 shares remained available for future grant. On
August 19, 1997, the Board of Directors adopted the Amendment, subject to
stockholder approval, increasing the number of shares available for grant to
240,000. (All of the above numbers are adjusted for the Company's 20% stock
dividend effected October 27, 1997.) Since such date, 68,500 options have been
granted, including 39,460 in excess of 168,000 shares, all of which excess
options are expressly conditioned upon stockholder approval of the Amendment.
As of March 1, 1998, assuming stockholder approval of the Amendment is
granted, options to acquire 207,460 shares were outstanding. Pursuant to the
Amendment, the 168,000 share limitation on the number of shares of Common Stock
as to which options could be granted under the Plan would be increased to
240,000, thereby making additional shares available so that (i) options may be
granted in the future and (ii) the 39,460 options granted in excess of the
168,000 are effective.
The Plan is administered by the Compensation Committee of the Board of
Directors. All key employees (including officers and other key employees who are
also directors) of, and consultants to, the Company are eligible to participate
in the Plan. The Compensation Committee determines which persons shall be
granted options, the extent of such grants and, consistent with the Plan, the
terms and conditions thereof. As of March 1, 1998, approximately 62 employees of
the Company, and no directors of the Company who are not also employees of the
Company, are eligible to receive option grants under the Plan.
Options granted under the Plan may be either incentive stock options or
options which are not intended to qualify as incentive stock options, except
that incentive stock options may only be granted to employees of the Company. No
options may be granted under the Plan after May 11, 2002.
The exercise price for shares under options granted pursuant to the Plan
must be at least equal to the fair market value per share of Common Stock at the
time of grant. The exercise price per share for grant of an incentive stock
option to a greater than 10% stockholder must be at least equal to 110% of such
fair market value per share of Common Stock. The exercise price for options
granted must be paid at the time of exercise in cash or by certified bank check
or, in certain circumstances, with previously acquired shares of Common Stock.
The aggregate fair market value (determined on the date of
12
<PAGE> 15
grant) of the shares of Common Stock for which incentive stock options may be
granted to any participant under the Plan (and any other plans by the Company or
its affiliates) which are exercisable for the first time by such participant
during any calendar year may not exceed $100,000.
Options granted under the Plan become exercisable on such dates as the
Compensation Committee determines in the terms of each individual option.
Options become immediately exercisable in full in the event of a disposition of
all or substantially all of the assets or capital stock of the Company by means
of a sale, merger, consolidation, reorganization, liquidation or otherwise,
unless the Compensation Committee arranges for the optionee to receive new
options covering shares of the corporation purchasing or acquiring the assets or
stock of the Company, in substitution of the options granted under the Plan
(which options shall thereupon terminate). The Compensation Committee in any
event may, on such terms and conditions as it deems appropriate, accelerate the
exerciseability of options granted under the Plan. An incentive stock option
must expire no later than five years from the date of the grant. A non-statutory
stock option must expire no later than 10 years from the date of grant.
The options granted under the Plan are not transferrable other than by
will or the laws of descent and distribution. Unexercised options generally
lapse 90 days after termination of employment other than by reason of disability
or death and in the case of death or disability, upon the earlier of the option
expiration date or one year after the date of death.
The Plan provides for antidilution adjustments which are applicable in
the event of a reorganization, recapitalization, reclassification, stock
dividend, stock split or reverse stock split; however, no such adjustment need
be made if it is determined that the adjustment may result in the receipt of
federally taxable income due optionees or the holders of Common Stock or other
classes of the Company's securities.
The Plan provides that the Board of Directors of the Company may amend
the Plan at any time; provided, however, that no amendment can operate to affect
adversely an optionee's rights under the Plan with respect to any option granted
prior to the adoption of such amendment except with the written consent of the
optionee or as may be necessary to comply with any applicable law. Additionally,
any amendment which would increase the maximum number of shares issuable (such
as the Amendment), change the classes of eligible persons or require stockholder
approval under any applicable law, rule or regulation is subject to stockholder
approval.
FEDERAL INCOME TAX CONSEQUENCES
The Company believes that, under present law, the following is a summary
of the federal tax consequences generally arising with respect to options
granted under the Plan. Such summary is not intended to be exhaustive and does
not describe state, local or foreign tax consequences. The grant of an option
will create no tax consequences for an optionee or the Company. Optionees will
have no taxable income upon exercising an incentive stock option (except that
the alternative minimum tax may apply), and the Company will receive no
deduction when an incentive stock option is exercised. Upon exercising an option
that is not an incentive stock option, the optionee must recognize ordinary
income equal to the difference between the exercise price and the fair market
value of the stock on the date of exercise; the Company will be entitled to a
deduction for the same amount.
The treatment to an optionee of a disposition of shares acquired through
the exercise of an option depends on how long the shares have been held and if
such shares were acquired by exercising an
13
<PAGE> 16
incentive stock option or by exercising an option other than an incentive stock
option. If no disposition of the stock acquired upon exercise of an incentive
stock option is made within two years of the date the option was granted and one
year after the option is exercised, any gain realized by the optionee will be
taxed as a long-term capital gain. Generally there will be no tax consequence to
the Company in connection with a disposition of shares acquired under an option
except that the Company may be entitled to a deduction in the case of a
disposition of shares acquired under an incentive stock option before the
applicable incentive stock option holding periods described above have been
satisfied.
FUTURE PLAN AWARDS
As described above, the Amendment increases the number of shares of
Common Stock available for grant under the existing Plan. Reference is made to
the Summary Compensation Table and Stock Option Tables on pages 6 and 7 to
assess the level of awards made under the Plan.
REQUIRED VOTE
The approval of the Amendment requires the affirmative vote of a
majority of the shares present in person or represented by proxy at the Meeting.
The Board recommends a vote FOR approval of the Amendment. Management
stockholders of the Company own more than 50% of the Company's outstanding
Common Stock and intend to vote in favor of the Amendment thereby assuring
stockholder approval.
THE CERTIFICATE AMENDMENT
SUMMARY
At the Meeting, the Company's stockholders will consider and take action
upon management's proposal to increase the authorized capital stock of the
Company from an aggregate of 5 million shares of Common Stock and 1 million
shares of Preferred Stock to 10 million shares of Common Stock and 2 million
shares of Preferred Stock. The increase in authorized capital stock would be
effected by an amendment to the Company's Certificate of Incorporation in the
form set forth on Annex B to this Proxy Statement. The approval and effecting of
the Certificate Amendment will have no effect on the outstanding Common Stock
and the Company has no outstanding Preferred Stock.
The Board of Directors has unanimously approved the Certificate
Amendment and recommends approval of the Certificate Amendment by the
stockholders. If the Certificate Amendment is approved by the stockholders of
the Company at the Meeting, the Certificate Amendment will be effected unless
there is a subsequent determination by the Board that the Certificate Amendment
is not in the best interests of the Company and its stockholders. Although
management and the Board believe that as of the date of this Proxy Statement
that the Certificate Amendment is advisable, the Certificate Amendment may be
abandoned by the Board at any time before, during or after the Meeting and
prior to filing the proposed amendment to the Company's Certificate of
Incorporation as set forth in Annex B to this Proxy Statement.
Principal Purposes of Amendment
The Board of Directors believes an increase in the authorized capital
stock is in the best interests of the Company and its stockholders so that
additional shares are available for, among other purposes, stock dividends,
stock option and other employee benefit plans, prospective issuance in public or
private offerings for cash and other proper business purposes. Except for the
200% Common Stock dividend payable on April 10, 1998 to stockholders of record
on March 30, 1998, which Common Stock dividend was previously announced, the
Company has no current plans to issue additional shares of Common Stock or any
Preferred Stock in public or private transactions.
Although the purpose of seeking an increase in the number of authorized
shares of Common Stock is not intended for anti-takeover purposes, Securities
and Exchange Commission rules require disclosure of charter and bylaw provisions
that could have an anti-takeover effect. For the Company, provisions that have
existed under its Certificate of Incorporation since formation include: (i) a
classified Board of Directors with staggered terms, (ii) Board authority to
issue one or more series of Preferred Stock up to a maximum of 1,000,000 shares
that is now proposed to be increased to 2,000,000 shares, (iii) a special
meeting of stockholders may only be called by the Board of Directors (or a
specially designated committee thereof), (iv) certain business combination
transactions require a greater than majority stockholder approval, (v) directors
can be removed only for cause, (vi) amendments to certain articles of the
Certificate of Incorporation may require, under certain circumstances, a greater
than majority stockholder approval and (vii) amendment of the Bylaws may
require, under certain circumstances, greater than majority stockholder
approval.
Certificate of Incorporation
The Certificate Amendment would be effected on the date of filing of a
Certificate of Amendment to the Company's Certificate of Incorporation with the
Delaware Secretary of State. The Company's Board of Directors has authorized
and approved the Certificate Amendment and the text of the proposed change to
the Company's Certificate of Incorporation is provided in its entirety on Annex
B to this Proxy Statement. If approved by the holders of a majority of the
outstanding Common Stock, a Certificate of Amendment to the Company's
Certificate of Incorporation would be filed immediately following the Meeting,
unless the Board determines that the Certificate Amendment is not in the best
interests of the Company and its stockholders.
Required Vote
The approval of the Certificate Amendment requires the affirmative vote
of a majority of the outstanding shares of the Company's Common Stock. The
Board recommends a vote FOR approval of the Certificate Amendment. Management
stockholders of the Company own more than 50% of the Company's outstanding
Common Stock and intend to vote in favor of the Certificate Amendment, thereby
assuring stockholder approval.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of March 31, 1998 the total number of
shares beneficially owned and the percentage of the outstanding shares so owned
by (i) each beneficial owner known to the Company of more than five percent (5%)
of the outstanding shares of Common Stock, (ii) each director, (iii) the
executive officers, and (iv) all directors and executive officers as a group.
<TABLE>
<CAPTION>
Number of
Shares Beneficially Percent
Name Owned (*) of Class (**)
- ---- ------------------- -------------
<S> <C> <C>
William J. McMorrow 319,377 (1) 24.2%
Lewis A. Halpert 300,567 (2) 22.8%
Richard A. Mandel 37,628 (3) 2.8%
Goodwin Gaw 110,980 (4) 8.4%
Freeman A. Lyle 18,471 (5) 1.4%
Donald B. Prell 3,240 (6) --
Kent Y. Mouton 3,120 (7) --
All executive officers and 793,383 58.4%
directors as a group (7 Persons)
Kenneth V. Stevens 206,250 (8) 15.6%
Fortune Far East Ltd. 106,980 (9) 8.1%
FMR Corp. 112,200 (10) 8.5%
</TABLE>
14
<PAGE> 17
(*) Except as otherwise indicated in the following notes, such person or
persons are the beneficial owner of such shares with sole voting and
investment power over such shares.
(**) Percentage information is omitted for those individuals whose holdings
represent less than one percent of the outstanding Common Stock.
(1) Includes approximately 930 shares held for Mr. McMorrow's account as
well as approximately 61 shares held for the account of Mr. McMorrow's
spouse in the Company's 401(k) Profit Sharing Plan and Trust of which
Mr. McMorrow expressly disclaims beneficial ownership.
(2) Includes approximately 302 shares held for Mr. Halpert's account in
the Company's 401(k) Profit Sharing Plan and Trust.
(3) Includes beneficial ownership of 22,000 shares which may be acquired
pursuant to exercise of outstanding stock options that are presently
exercisable or exercisable within 60 days.
(4) Includes 106,980 shares owned by Fortune Far East, Ltd. for which
corporation Mr. Gaw serves as President and a Director and thereby
shares voting and investment power. Also includes beneficial ownership
of 4,000 shares which may be acquired pursuant to exercise of
outstanding stock options that are presently exercisable or exercisable
within 60 days.
(5) Includes beneficial ownership of 6,000 shares which may be acquired
pursuant to exercise of outstanding stock options that are presently
exercisable or exercisable within 60 days.
(6) Includes beneficial ownership of 3,240 shares which may be acquired
pursuant to exercise of outstanding stock options that are presently
exercisable.
(7) Includes beneficial ownership of 3,120 shares which may be acquired
pursuant to exercise of outstanding stock options that are presently
exercisable.
(8) Includes approximately 302 shares held for Mr. Stevens' account in the
Company's 401(k) Profit Sharing Plan and Trust. Pursuant to an existing
agreement that expires in May, 1998, the Company has the right of
first refusal to acquire Mr. Stevens' shares, and management has the
right to vote all of his shares. Mr. Stevens' address is 88 El Nido
Place, Diablo, California 94528.
(9) Based solely on information contained in Schedule 13D as filed with the
Securities and Exchange Commission. The address of such entity, as
indicated in the Schedule 13D, is 7000 Hollywood Boulevard, Los Angeles,
California 90028. Goodwin Gaw, a director of the Company is also
President of Fortune Far East Ltd.
(10) Based solely on information contained in Schedule 13G filed with the
Securities and Exchange Commission. The address of such entity, as
indicated in the Schedule 13G is 82 Devonshire Street, Boston,
Massachusetts 02109-3614.
15
<PAGE> 18
The address of each 5% stockholder, other than Kenneth V. Stevens,
Fortune Far East Ltd., and FMR corp. is in care of the Company, 530 Wilshire
Boulevard, Suite 101, Santa Monica, California 90401.
CERTAIN TRANSACTIONS
TRANSACTIONS WITH EXECUTIVE OFFICERS, DIRECTORS AND 10% STOCKHOLDERS
The Company has in the past been retained, and anticipates that from
time to time in the future it will be retained, to perform auction or brokerage
services for entities controlled by certain of its executive officers and/or
directors. The Company believes that the terms of such transactions have been
substantially comparable to those that would have been obtainable in similar
transactions with unaffiliated parties. For the year ended December 31, 1997,
the Company received $156,000 in commissions from the sale of properties owned
by partnerships controlled by William J. McMorrow and Lewis A. Halpert.
The Company was also reimbursed $210,000 for marketing expenses.
INDEBTEDNESS OF MANAGEMENT
In December, 1997, the Company loaned an aggregate of $1,319,652 to 18
key employees, including William J. McMorrow, the Company's Chairman and Chief
Executive Officer, Lewis Halpert, Executive Managing Director and a Director,
Richard Mandel, Managing Director and a Director and Freeman A. Lyle, Executive
Vice President and Chief Financial Officer. Such funds were provided to enable
the key employees to acquire in a private unsolicited transaction approximately
73,314 shares of Common Stock from an institutional investor which sought to
liquidate its shares in the Company. The terms of the Company's loans to each
key employee are identical. Each loan is unsecured, bears interest at an annual
rate equal to the commercial prime rate of Bank of America in effect from time
to time plus 1% with interest payable semiannually on August 31 and January 31,
and is payable in a single lump sum of principal on the earlier of three years
following issuance or six months following the termination of employment with
the Company for any reason. Mr. McMorrow acquired 12,473 shares and is indebted
to the Company in the amount of $224,514. Mr. Halpert purchased 12,472 shares
and is indebted to the Company in the amount of $224,496. Mr. Lyle acquired
12,471 shares and is indebted to the Company in the amount of $224,478.
Mr. Mandel acquired 9,000 shares and is indebted to the Company in the amount
of $162,000.
OTHER TRANSACTIONS
In September, 1997 the Company entered into a joint venture with related
parties who are affiliated with Goodwin Gaw, a member of the Board of Directors
and a significant stockholder. The Company acquired a 50% interest for
approximately $1.4 million in a joint venture that purchased an office building
with approximately 500,000 square feet in downtown Los Angeles for $14.6
million.
In the first calendar quarter of 1998, the Company entered into two
further joint ventures with related parties who are affiliated with Goodwin Gaw.
During January, 1998, the Company acquired a 15% interest for $3.8 million in a
joint venture that purchased a commercial building in New York with more than
975,000 square feet for approximately $64 million. In March, 1998, the Company
purchased a 40% interest for about $300,000 in a joint venture that acquired a
note collateralized by a hotel in Beverly Hills, California for approximately
$2.2 million.
16
<PAGE> 19
In 1997, the firm of Kulik, Gottesman & Mouton was paid a total of
$470,000 in legal fees. In addition, Kent Y. Mouton, a partner in the firm and a
member of the Company's Board of directors, was paid a total of $21,000 in
directors' fees for 1997.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon recommendation of the Audit Committee,
reappointed the firm of Deloitte & Touche LLP ("Deloitte & Touche") to serve as
the Company's independent certified public accountants for 1998. Representatives
of Deloitte & Touche are expected to be present at the Annual Meeting of
Stockholders to make a statement should they desire to do so and will be
available to respond to appropriate questions that may be asked by stockholders.
ANNUAL REPORT
The Company's 1997 Annual Report to Stockholders has been mailed to all
stockholders. Any stockholder who has not received a copy may obtain one by
writing to the Company at 530 Wilshire Blvd., Suite 101, Santa Monica,
California 90401, Attention: Investor Relations Department.
STOCKHOLDER PROPOSALS
FOR THE 1999 ANNUAL MEETING OF STOCKHOLDERS
Any eligible stockholder of Kennedy-Wilson wishing to have a proposal
considered for inclusion in Kennedy-Wilson's 1999 proxy solicitation materials
must set forth such proposal in writing and file it with the Secretary of
Kennedy-Wilson on or before November 26, 1998. The Board of Directors of
Kennedy-Wilson will review new proposals received from eligible stockholders by
that date and will determine whether such proposals will be included in its 1998
proxy solicitation materials. Generally, a stockholder is eligible to present
proposals if he or she has been for at least one year the record of beneficial
owner of at least one percent or $1,000 in market value of securities entitled
to be voted at the 1998 Annual Meeting of Stockholders and he or she continues
to own such securities through the date on which the meeting is held.
OTHER MATTERS
Management of the Company does not intend to bring any other matters
before the meeting and knows of no other matters which are likely to come before
the meeting. In the event any other matters
17
<PAGE> 20
property come before the meeting, the persons named in the accompanying Proxy
will vote the shares represented by such Proxy in accordance with their best
judgment on such matters.
YOU ARE URGED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE
ACCOMPANYING RETURN ENVELOPE AT YOUR EARLIEST CONVENIENCE, WHETHER OR NOT YOU
PRESENTLY PLAN TO ATTEND THE MEETING IN PERSON.
By Order of the Board of Directors,
Freeman A. Lyle
Executive Vice President
Chief Financial Officer
and Secretary
Santa Monica, California
April 8, 1998
18
<PAGE> 21
ANNEX A
AMENDMENT TO THE
KENNEDY-WILSON, INC. 1992 INCENTIVE
AND NONSTATUTORY STOCK OPTION PLAN
WHEREAS, Kennedy-Wilson, Inc. (the "Company") has adopted the
Kennedy-Wilson, Inc. 1992 Incentive and Nonstatutory Stock Option Plan (the
"Plan"); and
WHEREAS, Section 17 of the Plan permits the Board of Directors of the
Company to amend the Plan, subject to certain limitations; and
WHEREAS, the Board of Directors of the Company now desires to amend the
Plan to increase the number of shares of Common Stock under the Plan (the
"Amendment");
NOW, THEREFORE, the Plan is hereby amended as follows:
1. Subsection (a) of Section 4 of the Plan is hereby amended by deleting
the number "140,000" wherever it appears and by inserting the number "200,000"
in its stead.
2. The provisions of this Amendment shall be effective as of the date of
execution hereof; provided, however, that if this Amendment is not approved by
the stockholders of the Company in accordance with applicable Federal and state
law (and the rules and regulations thereunder), this amendment and any options
granted pursuant to the provisions hereof shall be void and of no force or
effect.
3. Except to the extent set forth above, the Plan is not otherwise
modified and shall remain in full force and effect.
IN WITNESS WHEREOF, the Board of Directors of the Company has caused
this Amendment to be authorized and adopted by the Company on the 19th day of
August, 1997.
KENNEDY-WILSON, INC.
Note: On October 27, 1997, the Company paid a 20% stock dividend. Pursuant to
the antidilution provisions of the Plan, the number of shares of Common
Stock reserved for issuance under the Plan increased to 240,000.
19
<PAGE> 22
ANNEX B
FORM OF AMENDMENT TO
CERTIFICATE OF INCORPORATION
Section 1 of Article V of the Certificate of Incorporation of Kennedy-Wilson,
Inc. presently reads as follows:
SECTION 1. Number of Authorized Shares. The Corporation shall be
authorized to issue two classes of shares of stock to be designated,
respectively, "Common Stock" and "Preferred Stock"; the total number of
shares of all classes of stock that the Corporation shall have
authority to issue is Six Million (6,000,000) shares consisting of Five
Million (5,000,000) shares of Common Stock, par value $.01 per share,
and One Million (1,000,000) shares of Preferred Stock, par value $.01
per share.
Following approval of the proposed amendment to increase the authorized
Common Stock, $0.01 par value, Section 1 of Article V of the Certificate of
Incorporation will be amended to read as follows:
SECTION 1. Number of Authorized Shares. The Corporation shall be
authorized to issue two classes of shares of stock to be designated,
respectively, "Common Stock" and "Preferred Stock;" the total number of
shares of all classes of stock that the Corporation shall have
authority to issue is Twelve Million (12,000,000) shares consisting of
Ten Million (10,000,000) shares of Common Stock, par value $.01 per
share, and Two Million (2,000,000) shares of Preferred Stock, par value
$.01 per share.
20
<PAGE> 23
PROXY
KENNEDY-WILSON, INC.
530 Wilshire Boulevard, Suite 101
Santa Monica, California 90401
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
KENNEDY-WILSON, INC.
The undersigned hereby appoints William J. McMorrow and Freeman A. Lyle,
and each of them, as Proxies, each with the power to appoint his substitute, and
hereby authorizes each of them to represent and to vote as designated below, all
the shares of Common Stock of Kennedy-Wilson, Inc. held of record by the
undersigned on March 31, 1998 at the Annual Meeting of Stockholders to be held
on April 29, 1998 at the Miramar Sheraton Hotel, 101 Wilshire Boulevard, Santa
Monica, California, and any postponements or adjournments thereof.
PLEASE DATE, SIGN ON REVERSE SIDE AND RETURN IN THE ACCOMPANYING
ENVELOPE. THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS
INDICATED. HOWEVER, IF NO INSTRUCTIONS ARE GIVEN, THE PROXIES WILL VOTE THE
SHARES IN FAVOR OF THE NOMINEES FOR DIRECTOR, FOR PROPOSALS TWO AND THREE AND IN
THEIR DISCRETION ON MATTERS DESCRIBED IN ITEM 4.
(continued on reverse side)
FOLD AND DETACH HERE
<PAGE> 24
<TABLE>
<S> <C> <C> <C> <C> <C>
Please mark
your votes as
indicated in / X /
this example.
FOR
ALL NOMINEES WITHHOLD
LISTED BELOW AUTHORITY
(EXCEPT AS TO VOTE FOR
MARKED TO THE ALL NOMINEES
CONTRARY BELOW). LISTED BELOW.
1. ELECTION OF DIRECTORS 4. In their discretion, the Proxies are authorized
INSTRUCTION: TO WITHHOLD AUTHORITY to vote upon such other business as may properly
TO VOTE FOR ANY INDIVIDUAL NOMINEE, / / / / come before such meeting and any and all post-
STRIKE A LINE THROUGH THE NOMINEE'S ponements or adjournments thereof.
NAME IN THE LIST BELOW. YES NO
Do you plan to attend the meeting? / / / /
Nominees: William J. McMorrow Donald B. Prell
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD
2. APPROVAL OF THE PROPOSAL TO AMEND THE KENNEDY- PROMPTLY USING THE ENCLOSED ENVELOPE.
WILSON, INC. 1992 INCENTIVE AND NONSTATUTORY
STOCK OPTION PLAN TO INCREASE THE NUMBER OF ____ THIS PROXY when properly executed will be
SHARES AVAILABLE FOR GRANT TO 240,000. | voted in the manner directed herein by the
| undersigned shareholder. If no direction
FOR AGAINST ABSTAIN is made, this proxy will be voted for the
[ ] [ ] [ ] nominees listed above, for proposals 2 and 3
and in their discretion on matters
3. APPROVAL OF THE PROPOSAL TO INCREASE THE described in Item 4.
AUTHORIZED CAPITAL STOCK OF KENNEDY-WILSON, INC.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Signature(s) Dated: , 1998
-------------------------------------------------------------------------------------- -------------------
Please sign exactly as your name appears on the stock certificate(s). When shares are held by joint tenants, both should sign.
When signing as attorney, executor, administrator, trustee or guardian, please give your full title as such. If a corporation,
please sign in full corporate name by the president or other authorized officer. If a partnership, please sign in the partnership's
name by an authorized person.
FOLD AND DETACH HERE
</TABLE>
