Exhibit 10.3

EXECUTION COPY

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”), dated May 5, 2014 (the “Execution
Date”), is entered into between Morgans Hotel Group Co., a Delaware corporation
(the “Company”), and Meredith L. Deutsch (the “Executive”) (collectively, the
“Parties” and each, a “Party”). In addition to the terms defined elsewhere
herein, initial capitalized terms have the meanings given to them in Section 28.

WHEREAS, the Company and Executive have agreed that Executive shall perform the
duties of Executive Vice President & General Counsel of the Company, subject to
the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:

 

1. Position. During the Employment Term, the Executive will serve as the
Executive Vice President & General Counsel of the Company. The employment
relationship between the Company and the Executive will be governed by the
applicable written general employment policies and practices of the Company
contained or referred to in the Morgans Hotel Group Corporate Handbook (the
“Handbook”), as well as those written general polices relating to ethics and
business conduct, confidential information, expense reimbursement and avoidance
of conflicts (together, the “Company Policies”), a copy of which has been
delivered to the Executive, except that when any express term of this Agreement
is in conflict with the Company Policies, such term of this Agreement will
control.

 

2. Term. Subject to Section 6, the Executive’s employment will be for an initial
term of two (2) years, deemed to be effective from March 10, 2014 to March 10,
2016 (the “Initial Employment Term”). At the end of the Initial Employment Term
and on each succeeding March 10th, the Employment Term will be automatically
extended by one additional year (each, a “Renewal Term”), unless, not less than
60 days prior to the end of the Initial Employment Term or any Renewal Term,
either the Executive or the Company has given the other written notice of
nonrenewal. Without limiting the generality or effect of the foregoing, the
Executive will, if applicable, provide the Company with written notice of the
Executive’s intent to terminate employment with the Company at least 60 days
prior to the effective date of such termination.

 

3. Duties of the Executive. The Executive will report directly to the Company’s
Chief Executive Officer or the President or Chairman of the Company if the CEO
so designates either the President or Chairman to serve in this role (the
“Supervisor”), and have duties, responsibilities and authorities commensurate
with the Executive’s title and position.

 

  3.1 During the Employment Term, the Executive will devote the Executive’s best
efforts, full attention and energies during business hours to the business of
the Company and the performance of any of the Executive’s duties as set forth
herein.

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  3.2 So long as such activities do not involve a breach of this Agreement and
do not interfere with the performance of the Executive’s duties hereunder, the
Executive may participate in any governmental, educational, charitable or other
community affairs during the Employment Term and, subject to the prior approval
of the Supervisor in the Supervisor’s discretion, serve as a member of the
governing board of any such organization. The Executive may retain all fees and
other compensation from any such service, and the Company will not reduce the
Executive’s compensation by the amount of such fees. Notwithstanding anything
herein to the contrary, the Executive may not accept any position during the
Employment Term with a for-profit enterprise without the prior written approval
of the Supervisor in the Supervisor’s discretion.

 

4. Compensation.

 

  4.1 Base Salary. During the Employment Term, the Company will pay to the
Executive a base salary per annum equal to $360,000, which will be reviewed
annually, but may not be decreased except in the event of a reduction in
salaries of all Company C-suite senior executives and at a percentage reduction
being applied to all C-suite senior executives; provided, however, that in no
event shall the Executive’s base salary be reduced to less than $360,000 (as in
effect from time to time, the “Base Salary”). The Base Salary will be payable at
the times and in the manner consistent with the Company’s policies regarding
compensation of the Company’s executives generally, but in no event less
frequently than monthly.

 

  4.2 Signing Bonus. The Company will pay to the Executive a one-time lump sum
signing bonus of $72,000, subject to applicable tax withholding, to be paid no
later than May 31, 2014.

 

  4.3 Annual Discretionary Bonus. With respect to each calendar year during the
Employment Term, the Executive will be eligible to receive an annual incentive
bonus in accordance with, and subject to, the terms and conditions of the
Company’s applicable annual incentive bonus program applicable to similarly
situated senior executive officers, in the sole discretion of the Company (the
“Annual Discretionary Bonus”). During the Employment Term, the Executive’s
target Annual Discretionary Bonus will be 20% of the Executive’s Base Salary
(the “Target Bonus”), subject to the achievement of applicable performance
objectives delivered to the Executive in written form at the commencement of the
applicable fiscal year. Notwithstanding the foregoing, with respect to the 2014
fiscal calendar year, the Executive shall be entitled to a guaranteed bonus (the
“2014 Bonus”) in an amount equal to the greater of (i) 50% of the Target Bonus
or (ii) the amount payable pursuant to the Annual Discretionary Bonus. The
Company shall pay the Annual Discretionary Bonus within 90 days of the end of
the applicable fiscal year. Subject to Sections 6.2 and 6.3 below, Executive
must be employed by the Company on the date bonuses are paid to Company
employees to be eligible to receive any such discretionary bonus.

 

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  4.4 Equity. Executive will be eligible to participate in the Company’s
equity-based incentive plan applicable to similarly situated executive officers
in amounts and on terms and conditions determined by the Company in its sole
discretion and in accordance with the various plan documents and award
agreements governing these awards. In addition, subject to approval by the
Morgans Hotel Group Co. Board of Directors (the “Board”), or applicable
committee thereof, within 30 days of both Parties executing this Agreement,
Executive will receive a one-time grant of Morgans Hotel Group Co. restricted
stock units (“RSUs”), having a grant date value of $54,000, which RSUs will vest
1/3 on December 31, 2014, 1/3 on December 31, 2015 and 1/3 on the third
anniversary of the grant date.

 

5. Benefits

 

  5.1 Employee Benefit Plans. Beginning on May 1, 2014 and for remainder of the
Employment Term, subject to the terms and conditions of the applicable plans,
the Executive will be eligible to participate in the Company-sponsored group
health, major medical, dental, vision, life insurance, 401(k) and other employee
welfare benefit plans applicable to similarly situated executive officers (the
“Employee Benefit Plans”). The Executive acknowledges that the Company reserves
the right to amend or terminate any Employee Benefit Plan(s) at any time in its
discretion, subject to the terms of such Employee Benefit Plan(s) and applicable
law.

 

  5.2 Paid Time Off. Beginning on May 1, 2014 and for remainder of the
Employment Term, the Executive will be eligible to participate in the Company’s
vacation, holiday and sick, personal and other leave policies as are provided
under the Handbook applicable to similarly situated executive officers. During
each full fiscal year during the Employment Term, the Executive will be eligible
to take five (5) weeks of paid vacation, three (3) personal days and six
(6) sick days. Paid time off will not carry over from one fiscal year to the
next, other than as permitted in accordance with Company Policies.
Notwithstanding the forgoing, with respect to 2014, all vacation, personal and
sick days shall be deemed to have commenced accruing and credited as of
January 1, 2014.

 

  5.3 Expenses. During the Employment Term, the Company will pay or reimburse
the Executive for reasonable and necessary business expenses incurred by the
Executive during the Employment Term in connection with the Executive’s duties
on behalf of the Company in accordance with the Company’s travel and expense
policy, as it may be amended from time to time, or other applicable Company
Polices, following submission by the Executive of reimbursement expense forms in
a form consistent with such expense policies. The Executive shall also be
entitled to reimbursement of fees and expenses incurred in connection with
maintaining Executive’s professional law license in the State of New York or any
other State in the United States where the Company may relocate.

 

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6. Termination.

 

  6.1 Termination by the Company for Cause or Resignation by the Executive
Without Good Reason. If, during the Employment Term, the Executive’s employment
is terminated by the Company for Cause or the Executive resigns without Good
Reason, the Executive will not be eligible to receive Base Salary, to receive an
Annual Discretionary Bonus or the 2014 Bonus or to participate in any Employee
Plans with respect to future periods after the date of such termination or
resignation, except for the right to receive: (i) accrued but unpaid Base Salary
through the date of termination of employment, to be paid in accordance with the
Company’s normal payroll practice; (ii) up to four (4) weeks of accrued unused
vacation time, to be paid in accordance with the Company’s normal payroll
practice; (iii) any unreimbursed business expenses incurred by the Executive
prior to the date of termination, to be paid in accordance with the provisions
of Section 5.3; and (iv) all compensation and benefits payable to the Executive
under the terms of the Employee Benefit Plans in which the Executive
participated prior to the date of termination of employment, in accordance with
the terms of such Employee Plans (together, the “Accrued Compensation and
Benefits”).

 

  6.2 Termination by the Company Without Cause or Resignation by the Executive
for Good Reason. If during the Employment Term, the Executive’s employment is
terminated by the Company without Cause or the Executive terminates employment
for Good Reason (in each case other than due to the Executive’s death or
Disability), the Executive will be entitled to receive from the Company, in full
satisfaction of the Executive’s rights and any benefits the Executive is
entitled to under this Agreement, any other employment arrangement with the
Company Group or otherwise, subject to Section 6.7 for the benefits described in
clauses (ii) through (v) below, the following: (i) the Accrued Compensation and
Benefits; (ii) twelve (12) months of salary continuance at the same rate as the
Base Salary at the time of termination, less applicable withholdings and
deductions, for any termination that occurs on or before March 10, 2015, which
salary continuance period shall be reduced to six (6) months of salary
continuance for any termination that occurs after March 10, 2015; (iii) a
one-time lump sum payment in an amount equivalent to the number of months of
salary continuance provided by Section 6.2(ii) times the amount that the Company
contributes to the health insurance premiums of the Executive per month at the
time of the Executive’s termination, less applicable withholdings and
deductions; (iv) accelerated vesting of any portion of the RSUs described in
Section 4.4 that remain unvested and outstanding as of the Executive’s
termination date (which RSUs thereafter will be settled and payable); and (v) in
the event that the effective date of Executive’s termination occurs after the
end of a calendar year worked by Executive and prior to payment of bonuses for
that calendar year, the Company will pay Executive her bonus for such calendar
year (if any) calculated based upon application of the performance metrics
determined by the Company in its sole discretion with respect to such bonus. For
the avoidance of doubt, if the Company provides notice of non-renewal of the
Initial Employment Term or any Renewal Term as provided in Section 2, such
non-renewal shall not constitute a Termination by the Company without Cause for
purposes of this Section 6.2.

 

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  6.3 Change in Control. In the event that there is a Change in Control of the
Company and the Company or its successor terminates Executive’s employment
without Cause, or Executive resigns for Good Reason, in either case within
twelve (12) months following the Change in Control, then the Executive will be
entitled to receive from the Company, in full satisfaction of the Executive’s
rights and any benefits the Executive is entitled to under this Agreement, any
other employment arrangement with the Company Group or otherwise, subject to
preconditions set forth in Section 6.7 (except for the Accrued Compensation and
Benefits, which are not subject to these preconditions), the following: the
amounts and items set forth in clauses (i)-(v) in Section 6.2 above. For the
avoidance of doubt, if the Company or its successor provides notice of
non-renewal of the Initial Employment Term or any Renewal Term as provided in
Section 2 during the twelve (12) month period following a Change in Control,
such non-renewal shall not constitute a Termination by the Company or its
successor without Cause for purposes of this Section 6.3.

 

  6.4 Termination by Death. If the Executive dies during the Employment Term,
the Executive’s employment and this Agreement will terminate upon the
Executive’s death and the Executive’s beneficiary or, if none, the Executive’s
estate, will be entitled to receive the Accrued Compensation and Benefits from
the Company.

 

  6.5 Termination by Disability. If the Executive becomes Disabled during the
Employment Term, the Executive’s employment will terminate upon receipt by the
Executive of a notice to terminate for Disability setting forth in reasonable
detail the facts and circumstances for the termination for Disability. The
Executive will be entitled to receive from the Company the following: (i) the
Accrued Compensation and Benefits; and (ii) six (6) months of salary continuance
at the same rate as the Base Salary then in effect, less applicable withholdings
and deductions.

 

  6.6 Termination upon Non-Renewal. If the Executive’s employment is terminated
in conjunction with non-renewal of the Initial Employment Term or any Renewal
Term as provided in Section 2 of this Agreement, Executive shall receive the
Accrued Compensation and Benefits. In the event that the effective date of
Executive’s termination occurs after the end of a calendar year worked by
Executive and prior to payment of bonuses for that calendar year, the Company
will pay Executive her bonus for such calendar year (if any) calculated based
upon application of the performance metrics determined by the Company in its
sole discretion with respect to such, provided that Executive complies with the
release provisions in Section 6.7.

 

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  6.7 Payment Timing & Release Requirement. Continued payment of Base Salary
amounts pursuant to Sections 6.2, 6.3 or 6.5 will be made in equal installments
during the salary continuance period set forth in Sections 6.2, 6.3 and 6.5
above commencing on the date of the Executive’s termination of employment at
such times as Base Salary is customarily paid to the Company’s employees,
provided that no salary continuance installment will be paid prior to the first
payroll date that is coincident with or next following the 60th day following
Executive’s termination date and any installment that otherwise would have been
paid during such 60 day period will instead be paid with the first installment
paid to the Executive, and provided further that the Company’s obligation to
make any such payments is conditioned upon the Executive first executing and
delivering to the Company an effective release, substantially in the form
attached hereto as Exhibit A (the “Release”), within 59 days after the date of
termination of employment, with all periods for revocation therein having
expired. Subject to the effectiveness of a timely Release as provided in this
Section 6.7, any lump-sum cash payment to be made pursuant to Section 6.2, 6.3,
or 6.6 will be made on the first payroll date that occurs on or immediately
following the 60th day following the Executive’s termination date, provided that
any unpaid bonus amount will be paid when annual bonuses are paid to Company
employees if later, but in no event will any such bonus payment be made later
than the end of the calendar year in which Executive’s termination of employment
occurs.

 

  6.8 Forfeiture. Notwithstanding the foregoing, any right of the Executive to
receive termination payments and benefits hereunder will be forfeited if the
Executive breaches Sections 8, 9, or 10; provided that, before invoking this
paragraph, the Company will provide the Executive a reasonable time (not to
exceed 30 days) to respond to such assertion and, to the extent curable, a right
to cure such breach within such time. For the avoidance of doubt, any reasonable
time to cure a breach referenced as provided in this Section 6.8 shall not
extend the payment dates referenced in Section 6.7.

 

7. Duty of Loyalty. During the course, and as a result, of the Executive’s
employment with the Company, the Executive will have access to Confidential
Information; the opportunity to gain close knowledge of, and possible influence
over, customers, suppliers, independent contractors and employees of the Company
Group; possess in some measure the goodwill of the Company Group; and come to
possess an intimate knowledge of the business of the Company Group, including
all of its policies, methods, personnel and operations.

 

8. Confidentiality.

 

  8.1 The Executive acknowledges that, in the course of the Executive’s
employment, the Executive will become familiar with the trade secrets,
confidential information and other proprietary information concerning the
Company Group, including projects, promotions, marketing plans and strategies,
business plans or practices, business operations, employees, employment pay
information and data, research and development, intellectual property,
trademarks, customer lists, pricing information, cost data, compensation and fee
information, accounting and financing data, and methods of design, marketing,
service or procurement, regardless of whether such information has been reduced
to documentary form, which the Company and/or an Affiliate treats as
confidential or proprietary (collectively, the “Confidential Information”).

 

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  8.2 The Executive acknowledges and agrees that any and all Confidential
Information will be received and held by the Executive in a confidential
capacity. The Executive will not, during the Employment Term and/or at any time
thereafter, in any manner, whether directly or indirectly, knowingly use for the
Executive’s own benefit or the benefit of any other Person, or disclose,
divulge, render or offer, any Confidential Information, except on behalf of the
Company in the course of the proper performance of the Executive’s duties
hereunder.

 

  8.3 The Executive’s obligation of confidentiality will survive, regardless of
any other breach of this Agreement or any other agreement, by any Party, until
and unless such Confidential Information has become, through no fault of the
Executive, generally known to the public. For purposes of this paragraph,
“generally known” means known throughout the domestic U.S. industry or the
appropriate foreign country’s or countries’ industry. In the event that the
Executive is required by law, regulation, or court order to disclose any of the
Confidential Information, the Executive will promptly notify the Company prior
to making any such disclosure to facilitate the Company Group seeking a
protective order or other appropriate remedy from the proper authority at its
sole cost and expense. The Executive further agrees to cooperate with the
Company Group in seeking such order or other remedy (at the Company Group’s sole
cost and expense) and that, if the Company is not successful in precluding the
requesting legal body from requiring the disclosure of the Confidential
Information, the Executive will furnish only that portion of the Confidential
Information that is legally required, and the Executive will exercise all
reasonable legal efforts (at the Company Group’s sole cost and expense) to
obtain reliable assurances that confidential treatment will be accorded to the
Confidential Information.

 

  8.4 The Executive’s obligations under this Section 8 are in addition to, and
not in limitation of, all other obligations of confidentiality under the Company
Group’s policies and applicable law and regulatory guidance.

 

9. Restrictive Covenants.

 

  9.1 Non-Interference with Business Relationships.

 

  9.1.1. The Executive acknowledges that (A) the Executive’s services are of
special, unique and extraordinary value to the Company Group and (B) the Company
Group’s ability to accomplish its purposes and to successfully compete in the
marketplace depends substantially on the skills and expertise of the Executive.
The Executive acknowledges and agrees that the Company Group would be
irreparably damaged if the Executive were to not devote substantially all of the
Executive’s business time and efforts to the business and affairs of the Company
Group during the Employment Term.

 

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  9.1.2. The Executive agrees that, during the Employment Term, and for a period
12 months after the termination date of employment (the “Restricted Period”),
the Executive will not interfere with, or attempt to interfere with, any
business relationships (whether formed before, on or after the date of this
Agreement) between the Company Group and any of the Company Group’s customers,
suppliers or partners.

 

  9.2 Non-Solicitation. The Executive agrees that, during the Restricted Period,
the Executive will not:

 

  9.2.1. hire, solicit, encourage or otherwise induce any employee, consultant
or independent contractor of any member of the Company Group, who provided
services to any member of the Company Group within the preceding six months, to
terminate his or her employment or other contractual relationship with any
member of the Company Group; or

 

  9.2.2. induce or attempt to induce any Person or entity which is a supplier,
distributor, guest, travel agent, vendor, customer or otherwise a contracting
party of any member of the Company Group at any time during the applicable
Restricted Period, to terminate or modify any written or oral agreement or
understanding with any member of the Company Group.

 

  9.3 The Executive acknowledges that a violation of the foregoing provisions of
Sections 8 and 9 would cause irreparable harm to the Company Group, and that the
Company Group’s remedy at law for any such violation would be inadequate. In
recognition of the foregoing, in addition to any other relief afforded by law or
this Agreement, including damages sustained by a breach of this Agreement and
any forfeitures under Section 6.7, and without the necessity or proof of actual
damages or the posting of a bond, the Company Group will have the right to
enforce this Agreement by specific equitable remedies, which will include
temporary and permanent injunctions, it being the understanding of the Parties
that damages, the forfeitures described above and injunctions will all be proper
modes of relief and are not to be considered as alternative remedies.

 

  9.4 If a court at any time determines that any restriction or limitation in
this Section 9 is unreasonable or unenforceable, it will be deemed amended so as
to provide the maximum protection to the Company Group and be deemed reasonable
and enforceable by the court.

 

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10. Developments.

 

  10.1 The Executive will make full and prompt disclosure to the Company Group
of all inventions, improvements, discoveries, methods, developments, software,
mask works and works of authorship, whether patentable or copyrightable or not,
(i) which relate to the business(es) of the Company Group and have heretofore
been created, made, conceived or reduced to practice by the Executive or under
the Executive’s direction or jointly with others, and not assigned to prior
employers, or (ii) which have utility in or relate to the Company Group’s
business(es) and are created, made, conceived or reduced to practice by the
Executive or under the Executive’s direction or jointly with others during the
Executive’s employment with the Company Group, whether or not during normal
working hours or on the premises of the Company Group (all of the foregoing of
which are collectively referred to in this Agreement as “Developments”).

 

  10.2 The Executive agrees to assign and hereby assigns to the Company Group
(or any Person designated by the Company Group) all of the Executive’s rights,
title and interest worldwide in and to all Developments and all related patents,
patent applications, copyrights and copyright applications, and any other
applications for registration of a proprietary right. This paragraph will not
apply to Developments that the Executive developed entirely on the Executive’s
own time without using the Company Group’s equipment, supplies, facilities or
Confidential Information and that does not, at the time of conception or
reduction to practice, have utility in or relate to the Company Group’s
business(es), or actual or demonstrably anticipated research or development. To
the extent this Agreement is construed in accordance with the laws of any
jurisdiction which precludes a requirement in an employee agreement to assign
certain classes of inventions made by an employee, this paragraph will be
interpreted not to apply to any invention which a court rules or the Company
agrees falls within such classes but will be interpreted to apply thereto to the
maximum extent legally permissible.

 

  10.3 The Executive will cooperate fully with the Company Group, both during
and after the Executive’s employment with the Company Group, with respect to the
procurement, maintenance and enforcement of copyrights, patents and other
intellectual property rights (both in the United States and other countries)
relating to Developments. The Executive will not be required to incur or pay any
costs or expenses in connection with the rendering of such cooperation. The
Executive will sign all papers, including copyright applications, patent
applications, declarations, oaths, formal assignments, assignments of priority
rights, and powers of attorney, and do all things that the Company Group may
deem necessary or desirable in order to protect its rights and interests in any
Development. If any member of the Company Group is unable, after reasonable
effort, to secure the Executive’s signature on any such papers, any executive
officer of the Company is expressly authorized to execute any such papers as the
Executive’s agent and attorney-in-fact, coupled with interest, and the Executive
hereby irrevocably designates and appoints each executive officer of the Company
as the Executive’s agent and attorney-in-fact to execute any such papers on the
Executive’s behalf and to take any and all other actions as the Company Group
may deem necessary or desirable in order to protect its rights and interests in
any Development, under the conditions described in this sentence.

 

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11. Remedies. The Executive and the Company acknowledge that the covenants
contained in Sections 8, 9 and 10 are reasonable under the circumstances.
Accordingly, if, in the opinion of any court of competent jurisdiction, any such
covenant is not reasonable in any respect, such court will have the right, power
and authority to sever or modify any provision or provisions of such covenants
as to the court will appear not reasonable and to enforce the remainder of the
covenants as so amended. The Executive further acknowledges that the remedy at
law available to the Company Group for breach of any of the Executive’s
obligations under Sections 8, 9 and 10 would be inadequate and that damages
flowing from such a breach may not readily be susceptible to being measured in
monetary terms. Accordingly, in addition to any other rights or remedies that
the Company Group may have at law, in equity or under this Agreement, upon proof
of the Executive’s violation of any such provision of this Agreement, the
Company Group will be entitled to immediate injunctive relief and may obtain a
temporary order restraining any threatened or further breach, without the
necessity of proof of actual damage or the posting of any bond.

 

12. Company Property. All notes, lists, records, files, documents and other
papers and other like items (and all copies, extracts and summaries thereof),
advertising, sales, manufacturers’ and other materials or articles or
information, including data processing reports, computer programs, software,
customer information and records, business records, price lists or information,
samples, or any other materials or data of any kind furnished to the Executive
by the Company Group or developed, made or compiled by the Executive on behalf
of the Company Group or at the Company Group’s direction or for the Company
Group’s use or otherwise in connection with the Executive’s employment
hereunder, are and will remain the sole property of the Company Group, including
in each case all copies thereof in any medium, including computer tapes and
other forms of information storage, but excluding materials relating directly to
the terms and conditions of the Executive’s employment and the Executive’s
performance as an employee of the Company Group (the “Company Property”). If any
member of the Company Group requests the return of any Company Property at any
time during or at or after the date of termination of employment, the Executive
will deliver, at the Company’s sole cost and expense, all such Company Property,
including all copies of the same, to the Company as soon as practicable. The
provisions of this paragraph apply during and after the period when the
Executive is an employee of the Company Group and will be in addition to (and
not a limitation of) any legally applicable protections of the Company Group’s
interest in Confidential Information, trade secrets and the like.

 

13. Continued Availability and Cooperation. Following termination of the
Executive’s employment, the Executive will reasonably cooperate, at the
Company’s sole expense, with the Company Group and with the Company Group
members’ counsel in connection with any present or future actual or threatened
litigation, administrative proceeding or investigation involving any member of
the Company Group that relates to events, occurrences or conduct occurring (or
claimed to have occurred) during the period of the Executive’s employment by the
Company Group. Cooperation will include:

 

  13.1 Being reasonably available for interviews and discussions with the
Company Group members’ counsel, as well as for depositions and trial testimony;

 

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  13.2 If depositions or trial testimony are to occur, being reasonably
available and cooperating in the preparation therefore, as and to the extent
that the Company Group or any Company Group member’s counsel reasonably
requests;

 

  13.3 Refraining from impeding in any way the Company Group’s prosecution or
defense of such litigation or administrative proceeding; and

 

  13.4 Reasonably cooperating fully in the development and presentation of the
Company Group’s prosecution or defense of such litigation or administrative
proceeding.

 

  13.5 The Company will reimburse the Executive for reasonable travel, lodging,
telephone and similar expenses, as well as reasonable attorneys’ fees (if
independent legal counsel is authorized in advance in writing by the Company,
such authorization not to be unreasonably withheld), incurred in connection with
any such cooperation, consultation and advice rendered under this Agreement
after the Executive’s termination of employment. However, the Executive will not
be entitled to any separate compensation for any matter referred to in this
Section 13.

 

14. Dispute Resolution. In the event that the Parties are unable to resolve any
controversy or claim arising out of or in connection with this Agreement or
breach thereof, any Party may refer the dispute to binding arbitration, which,
except as expressly provided hereafter, will be the exclusive forum for
resolving such claims. Such arbitration will be administered by the American
Arbitration Association (the “AAA”) and governed by New York law. The
arbitration will be conducted by a single arbitrator selected by the Executive
and the Company according to the rules of the AAA. In the event that the Parties
fail to agree on the selection of the arbitrator within 30 days after either the
Executive’s or the Company’s request for arbitration, the arbitrator will be
chosen by the AAA. The arbitration proceeding will commence on a mutually
agreeable date within 90 days after the request for arbitration. The forum for
arbitration will be agreed on by the Parties or, in the absence of any
agreement, will be in a venue located in New York, New York.

 

  14.1 The Parties agree that each will bear its own costs and attorneys’ fees
in any arbitration hereunder. The arbitrator will not have authority to award
attorneys’ fees or costs to any Party, except as provided by statute or
ordinance.

 

  14.2 The arbitrator will have no power or authority to make awards or orders
granting relief that would not be available to a Party in a court of law. The
arbitrator’s award is limited by and must comply with this Agreement and
applicable federal, state and local laws. The decision of the arbitrator will be
final and binding on the Parties.

 

  14.3 Notwithstanding the foregoing, no claim or controversy for injunctive or
equitable relief contemplated by or allowed under applicable law pursuant to
Sections 8, 9 and 10 will be subject to arbitration under this Section 14, but
will instead be subject to determination as provided in Section 19.

 

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15. Entire Agreement. No agreements or representations or warranties, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by any Party which are not expressly set forth in this Agreement. This
Agreement contains the entire agreement of the Parties with respect to the
subject matter hereof and supersedes all prior agreements and understandings
relating to the subject matter hereof.

 

16. Withholding of Taxes. The Company will have the right to withhold from any
amount payable hereunder any federal, state, city, local or other taxes in order
for the Company Group to satisfy any withholding tax obligation it may have
under any applicable law, regulation or ruling.

 

17. Successors and Binding Agreement.

 

  17.1 The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation, reorganization or otherwise) to all or
substantially all of the business or assets of the Company expressly to assume
in writing and agree to perform this Agreement in the same manner and to the
same extent the Company would be required to perform if no such succession had
taken place. This Agreement will be binding upon and inure to the benefit of the
Company and any successor to the Company, including any Person acquiring
directly or indirectly all or substantially all of the business or assets of the
Company whether by purchase, merger, consolidation, reorganization or otherwise
(and such successor will thereafter be deemed “the Company” for purposes of this
Agreement), but will not otherwise be assignable or delegable by the Company,
except that the Company may assign this Agreement, or may assign its rights and
delegate its duties hereunder, to any Person who acquires all of the voting
stock of the Company (or to any parent entity thereof) subject to the first
sentence of this Section 17.1.

 

  17.2 This Agreement will inure to the benefit of and be enforceable by the
Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees and legatees. If the Executive dies while any
amount would still be payable to the Executive hereunder (other than amounts
which, by their terms, terminate upon the death of the Executive) if the
Executive had continued to live, all such amounts, unless otherwise provided
herein, will be paid in accordance with the terms of this Agreement to the
executors, personal representatives or administrators of the Executive’s estate.

 

  17.3 This Agreement is personal in nature and neither the Company nor the
Executive may, without the consent of the other, assign or delegate this
Agreement or any rights or obligations hereunder, except as expressly provided
in Sections 17.1 and 17.2. Without limiting the generality or effect of the
foregoing, the Executive’s right to receive payments hereunder will not be
assignable, transferable or delegable, whether by pledge, creation of a security
interest, or otherwise, other than by a transfer by the Executive’s will or by
the laws of descent and distribution and, in the event of any attempted
assignment or transfer contrary to this paragraph, the Company will have no
liability to pay any amount so attempted to be assigned, transferred or
delegated.

 

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18. Notices. Any notice, demand, claim or other communication under this
Agreement will be in writing and will be deemed to have been given (a) on
delivery if delivered personally; (b) on the date on which delivery thereof is
guaranteed by the carrier if delivered by a national courier guaranteeing
delivery within a fixed number of days of sending; or (c) on the date of
transmission thereof if delivery is confirmed, but, in each case, only if
addressed to the Parties in the following manner at the following addresses (or
at the other address as a Party may specify by notice to the other) to the
Company, to the attention of the Chief Executive Officer at its principal
executive offices, and to the Executive, at the Executive’s principal residence
as set forth in the employment records of the Company.

 

19. Governing Law and Choice of Forum.

 

  19.1 This Agreement will be construed and enforced according to the laws of
the State of New York, other than the choice of law provisions thereof.

 

  19.2 To the extent not otherwise provided for by Section 14, the Parties
consent to the exclusive jurisdiction of all state and federal courts located in
New York, as well as to the jurisdiction of all courts of which an appeal may be
taken from such courts, for the purpose of any suit, action or other proceeding
arising out of, or in connection with, this Agreement or that otherwise arise
out of the employment relationship. Each Party hereby expressly waives (i) any
and all rights to bring any suit, action or other proceeding in or before any
court or tribunal other than the courts described above, and covenants that it
will not seek in any manner to resolve any dispute other than as set forth in
this paragraph, and (ii) any and all objections either may have to venue,
including the inconvenience of such forum, in any of such courts. In addition,
each Party consents to the service of process by personal service or any manner
in which notices may be delivered hereunder in accordance with this Agreement.

 

20. Validity/Severability. The Parties agree that (a) the provisions of this
Agreement will be severable in the event that for any reason whatsoever any of
the provisions hereof are invalid, void or otherwise unenforceable, (b) any such
invalid, void or otherwise unenforceable provisions will be replaced by other
provisions which are as similar as possible in terms to such invalid, void or
otherwise unenforceable provisions but are valid and enforceable, and (c) the
remaining provisions will remain valid and enforceable to the fullest extent
permitted by applicable law.

 

21. Survival. The obligations of the Company and the Executive under this
Agreement which by their nature may require either partial or total performance
after the expiration or termination of the Employment Term or this Agreement
(including those under Sections 6 (to the extent applicable), 8, 9, 10, 11, 12,
13 and 33) will survive any termination or expiration of this Agreement.

 

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22. Subsequent Employment. During the Restricted Period, if the Executive is
offered employment or the opportunity to enter into any business activity,
whether as owner, investor, executive, manager, employee, independent
consultant, contractor, advisor or otherwise, the Executive will inform the
offeror of the existence of Sections 8, 9, 10, 11, 12, and 13 of this Agreement
and provide the offeror a copy thereof. The Executive authorizes the Company to
provide a copy of the relevant provisions of this Agreement to any of the
Persons described in this paragraph and to make such Persons aware of the
Executive’s obligations under this Agreement.

 

23. Excise Tax.

 

  23.1 Notwithstanding any other provisions in this Agreement, in the event that
any payment or benefit received or to be received by the Executive (including
any payment or benefit received in connection with a change in control of the
Company or the termination of the Executive’s employment, whether pursuant to
the terms of this Agreement or any other plan, program, arrangement or
agreement) (all such payments and benefits, together, the “Total Payments”)
would be subject (in whole or part), to any excise tax imposed under
Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or
any successor provision thereto (the “Excise Tax”), then, after taking into
account any reduction in the Total Payments provided by reason of Section 280G
of the Code in such other plan, program, arrangement or agreement, the Company
will reduce the Total Payments to the extent necessary (as defined by the
Auditor (as hereinafter defined)) so that no portion of the Total Payments is
subject to the Excise Tax (but in no event to less than zero); provided,
however, that the Total Payments will only be reduced if (i) the amount of such
Total Payments, as so reduced (and after subtracting the amount of federal,
state, municipal and local income taxes on such reduced Total Payments and after
taking into account the phase out of itemized deductions and personal exemptions
attributable to such reduced Total Payments), is greater than or equal to
(ii) the amount of such Total Payments without such reduction (but after
subtracting the amount of federal, state, municipal and local income taxes on
such Total Payments and the amount of Excise Tax to which the Executive would be
subject in respect of such unreduced Total Payments and after taking into
account the phase out of itemized deductions and personal exemptions
attributable to such unreduced Total Payments).

 

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  23.2 In the case of a reduction in the Total Payments, the Total Payments will
be reduced in the following order: (i) payments that are payable in cash that
are valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a)
will be reduced (if necessary, to zero), with amounts that are payable last
reduced first; (ii) payments and benefits due in respect of any equity valued at
full value under Treasury Regulation Section 1.280G-1, Q&A 24(a), with the
highest values reduced first (as such values are determined under Treasury
Regulation Section 1.280G-1, Q&A 24) will next be reduced; (iii) payments that
are payable in cash that are valued at less than full value under Treasury
Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced
first, will next be reduced; (iv) payments and benefits due in respect of any
equity valued at less than full value under Treasury Regulation
Section 1.280G-1, Q&A 24, with the highest values reduced first (as such values
are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be
reduced; and (v) all other non-cash benefits not otherwise described in clauses
(ii) or (iv) will be next reduced pro-rata. Any reductions made pursuant to each
of clauses (i)-(v) above will be made in the following manner: first, a pro-rata
reduction of cash payment and payments and benefits due in respect of any equity
not subject to Section 409A, and second, a pro-rata reduction of cash payments
and payments and benefits due in respect of any equity subject to Section 409A
as deferred compensation.

 

  23.3 For purposes of determining whether and the extent to which the Total
Payments will be subject to the Excise Tax: (i) no portion of the Total Payments
the receipt or enjoyment of which the Executive shall have waived at such time
and in such manner as not to constitute a “payment” within the meaning of
Section 280G(b) of the Code will be taken into account; (ii) no portion of the
Total Payments will be taken into account which, in the opinion of tax counsel
(“Tax Counsel”) reasonably acceptable to the Executive and selected by the
accounting firm which was, immediately prior to the change in control, the
Company’s independent auditor (the “Auditor”), does not constitute a “parachute
payment” within the meaning of Section 280G(b)(2) of the Code (including without
limitation by reason of Section 280G(b)(4)(A) of the Code) and, in calculating
the Excise Tax, no portion of such Total Payments will be taken into account
which, in the opinion of Tax Counsel, constitutes reasonable compensation for
services actually rendered by Executive, within the meaning of
Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as set forth
in Section 280G(b)(3) of the Code) that is allocable to such reasonable
compensation; and (iii) the value of any non-cash benefit or any deferred
payment or benefit included in the Total Payments will be determined by the
Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the
Code.

 

  23.4 Prior to the time that relevant payments subject to this Section 23 are
made under this Agreement, the Company will provide the Executive with a written
statement setting forth the manner in which such payments were calculated for
the purposes of this Section 23 and the basis for such calculations, including
any opinions or other advice the Company received from Tax Counsel, the Auditor,
or other advisors or consultants (and any such opinions or advice which are in
writing will be attached to the statement). If the Executive objects to the
Company’s calculations, the Company will pay to the Executive such portion of
the Total Payments (up to 100% thereof) as the Executive determines is necessary
to result in the proper application of this Section 23. All determinations
required by this Section 23 (or requested by either the Executive or the Company
in connection with this Section 23) will be at the expense of the Company. The
fact that the Executive’s right to payments or benefits may be reduced by reason
of the limitations contained in this Section 23 will not of itself limit or
otherwise affect any other rights of the Executive under this Agreement.

 

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24. Compliance with Section 409A.

 

  24.1 The Parties intend that any amounts payable under this Agreement, and the
Company’s and the Executive’s exercise of authority or discretion hereunder, be
exempt from or comply, as applicable, with the provisions of Section 409A of the
Code, along with the rules, regulations and guidance promulgated thereunder by
the Department of the Treasury or the Internal Revenue Service (collectively,
“Section 409A”) so as not to subject the Executive to the payment of the
additional tax, interest or penalty which may be imposed under Section 409A. In
furtherance thereof, to the extent that any provision of this Agreement would
result in the Executive being subject to payment of additional tax, interest or
penalty under Section 409A, the Parties agree to interpret and apply and amend
this Agreement if permitted under Section 409A in a manner which does not impose
any additional taxes, interest or penalties on Executive in order to bring this
Agreement into compliance with Section 409A, without materially changing the
economic value of the arrangements under this Agreement to any Party, and
thereafter the Parties will interpret its provisions in a manner that complies
with Section 409A. Notwithstanding the foregoing, no particular tax result for
the Executive with respect to any income recognized by the Executive in
connection with this Agreement is guaranteed.

 

  24.2 Notwithstanding any provisions of this Agreement to the contrary, if the
Executive is a “specified employee” (within the meaning of Section 409A and
determined pursuant to any policies adopted by the Company consistent with
Section 409A), at the time of the Executive’s “Separation From Service” (within
the meaning of Section 409A) and if any portion of the payments or benefits to
be received by the Executive upon Separation From Service would be considered
deferred compensation under Section 409A and cannot be paid or provided to the
Executive without the Executive incurring taxes, interest or penalties under
Section 409A, amounts that would otherwise be payable pursuant to this Agreement
and benefits that would otherwise be provided pursuant to this Agreement and by
subject to tax under Section 409A, in each case, during the six-month period
immediately following the Executive’s Separation From Service, will instead be
paid or made available to Executive or her estate on the earlier of (i) the
first business day of the seventh month following the date of Executive’s
Separation From Service or (ii) the Executive’s death.

 

  24.3 With respect to any amount of expenses eligible for reimbursement or the
provision of any in-kind benefits under this Agreement, to the extent such
payment or benefit would be considered deferred compensation under Section 409A
or is required to be included in the Executive’s gross income for federal income
tax purposes, such expenses (including expenses associated with in-kind
benefits) will be reimbursed by the Executive no later than December 31st of the
year following the year in which the Executive incurs the related expenses. In
no event will the reimbursements or in-kind benefits to be provided by the
Company in one taxable year affect the amount of reimbursements or in-kind
benefits to be provided in any other taxable year, nor will the Executive’s
right to reimbursement or in-kind benefits be subject to liquidation or exchange
for another benefit.

 

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  24.4 Each payment under this Agreement is intended to be a “separate payment”
and not one of a series of payments for purposes of Section 409A.

 

  24.5 A termination of employment will not be deemed to have occurred for
purposes of any provision of this Agreement providing for the payment of any
amounts or benefits subject to Section 409A upon or following a termination of
employment unless such termination is also a Separation From Service, and
notwithstanding anything contained herein to the contrary, the date on which
such Separation From Service takes place will be the termination date.

 

25. Amendment; Waiver.

 

  25.1 This Agreement may be amended and any provision of this Agreement may be
waived only if such amendment or waiver is set forth in a writing executed by
the Parties hereto. No course of dealing between the Parties will be deemed
effective to modify, amend or discharge any part of this Agreement or any rights
or obligations of any Party under or by reason of this Agreement.

 

  25.2 No delay or failure in exercising any right, power or remedy hereunder
will affect or operate as a waiver thereof; nor will any single or partial
exercise thereof or any abandonment or discontinuance of steps to enforce such a
right, power or remedy preclude any further exercise thereof or of any other
right, power or remedy.

 

26. Counterparts. This Agreement may be executed in multiple counterparts (any
one of which need not contain the signatures of more than one Party), each of
which will be deemed to be an original but all of which taken together will
constitute one and the same agreement. This Agreement, and any amendments
hereto, to the extent signed and delivered by means of a facsimile machine or
other electronic transmission, will be treated in all manner and respects as an
original agreement and will be considered to have the same binding legal effects
as if it were the original signed version thereof delivered in person. No Party
will raise the use of a facsimile machine or other electronic means to deliver a
signature or the fact that any signature was transmitted or communicated through
the use of facsimile machine or other electronic means as a defense to the
formation of a contract and each Party forever waives any such defense.

 

27. Headings; Interpretation.

 

  27.1 The descriptive headings herein are inserted for convenience of reference
only and are not intended to be a substantive part of or to affect the meaning
or interpretation of this Agreement.

 

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  27.2 Reference to any agreement, document, or instrument means such agreement,
document, or instrument as amended or otherwise modified from time to time in
accordance with the terms thereof, and if applicable hereof. Unless otherwise
indicated, any reference to a “Section” means a Section of this Agreement.

 

  27.3 In the event an ambiguity or question of intent or interpretation arises,
this Agreement will be construed as if drafted jointly by the Parties, and no
presumption or burden of proof will arise favoring or disfavoring any Party by
virtue of the authorship of any of the provisions of this Agreement.

 

  27.4 The word “including” (in its various forms) means including without
limitation. All references in this Agreement to “days” refer to “calendar days”
unless otherwise specified.

 

28. Defined Terms. In addition to the terms defined elsewhere herein, the
following terms will have the following meanings when used herein with initial
capital letters:

 

  28.1 “Affiliate” means, as to any Person, any other Person that directly or
indirectly controls, or is controlled by, or is under common control with, such
Person. For this purpose, “control” (including, with its correlative meanings,
“controlled by” and “under common control with”) will mean the possession,
directly or indirectly, of the power to direct or cause the direction of
management or policies of a Person, whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise. Unless
otherwise indicated, an Affiliate refers to an Affiliate of the Company.

 

  28.2 “Cause” means:

 

  28.2.1. Any act or omission constituting a material breach by the Executive of
any provisions of this Agreement; after written notice is delivered to the
Executive by the Company that identifies in reasonable detail the manner in
which the Company believes the Executive has breached the Agreement, if, within
thirty (30) days of such demand, the Executive fails to cure any such breach
that is capable of being cured;

 

  28.2.2. The willful failure by the Executive to perform the Executive’s duties
hereunder (other than any such failure resulting from the Executive’s
Disability), after written demand for performance is delivered by the Company
that identifies in reasonable detail the manner in which the Company believes
the Executive has not performed the Executive’s duties, if, within 30 days of
such demand, the Executive fails to cure any such failure that is capable of
being cured;

 

  28.2.3. Any misconduct by the Executive that is materially injurious to any
member of the Company Group, financial or otherwise, or any act of
misappropriation, fraud including with respect to any member of the Company
Group’s accounting and financial statements, embezzlement or conversion by the
Executive of the property of any member of the Company Group;

 

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  28.2.4. The conviction (or plea of no contest) of the Executive for any felony
or the indictment of the Executive for any felony;

 

  28.2.5. The Executive’s gross negligence, gross neglect of duties or gross
insubordination;

 

  28.2.6. The Executive’s commission of any violation of any antifraud provision
of federal or state securities laws;

 

  28.2.7. The Executive’s alcohol or prescription or other drug abuse
substantially affecting work performance;

 

  28.2.8. The Executive’s violation of the Company’s policies regarding
harassment or discrimination; or

 

  28.2.9. The Executive’s material violation of the Company Policies.

 

  28.3 “Change in Control” means the occurrence of a “change in control event”
(within the meaning of Section 409A and the Regulations thereunder) with respect
to Morgans Hotel Group Co.

 

  28.4 “Company Group” means Morgans Hotel Group Co. and its respective
Affiliates.

 

  28.5 “Disability” or “Disabled” means:

 

  28.5.1. The Executive’s incapacity due to physical or mental illness to
substantially perform the Executive’s duties and the essential functions of the
Executive’s position, with reasonable accommodation, on a full-time basis for 12
months; or

 

  28.5.2. The Executive becomes eligible to receive benefits under the Company’s
applicable long-term disability plan;

 

  28.5.3. Except that, if the Executive does not agree with a determination to
terminate the Executive’s employment because of Disability, the question of the
Executive’s Disability will be subject to the certification of a qualified
medical doctor reasonably agreed upon by the Company and the Executive. The
costs of such qualified medical doctor will be paid by the Company.

 

  28.6 “Employment Term” means the Initial Employment Term and any Renewal
Term(s).

 

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  28.7 “Good Reason” means, without the Executive’s consent:

 

  28.7.1. A material diminution in the Executive’s Base Salary or Target Bonus,
other than a reduction in Base Salary that affects all similarly situated
Company executives in substantially the same proportions as provided for in
Section 4.3 hereof;

 

  28.7.2. A material diminution in the Executive’s authority, duties, or
responsibilities (other than temporarily while the Executive is physically or
mentally incapacitated or as required by applicable law);

 

  28.7.3. A relocation of the Executive’s principal place of employment by more
than 50 miles from the Executive’s principal place of employment as of the
signing of this Agreement; or

 

  28.7.4. Any material breach by the Company of this Agreement;

provided, however, that the foregoing conditions will constitute Good Reason
only if (A) the Executive provides written notice to the Company within 90 days
of the initial existence of the condition(s) constituting Good Reason and
(2) the Company fails to cure such condition(s) within 30 days after receipt
from the Executive of such notice; and provided further, that Good Reason will
cease to exist with respect to a condition one year following the initial
existence of such condition.

 

  28.8 “Person” means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture or an unincorporated organization.

 

29. Certain Costs. Each Party will pay and be fully responsible for its own
costs and expenses (including costs of professional advisors) incurred in
connection with the negotiation, execution, interpretation and enforcement of
this Agreement.

 

30. Clawback Provisions. Notwithstanding any other provisions in this Agreement
to the contrary, any incentive-based compensation, or any other compensation,
paid to the Executive pursuant to this Agreement or any other agreement or
arrangement with any member of the Company Group, which is subject to recovery
under any law, government regulation or stock exchange listing requirement, will
be subject to such deductions and clawback as may be required to be made
pursuant to such law, government regulation or stock exchange listing
requirement (or any policy adopted by any member of the Company Group pursuant
to any such law, government regulation or stock exchange listing requirement).

 

31. Acknowledgements. The Executive acknowledges and agrees that (i) the
Executive has read this Agreement carefully and in its entirety, (ii) the
Executive understands the terms and conditions contained herein, (iii) the
Executive has had the opportunity to review this Agreement with legal counsel of
the Executive’s own choosing and has not relied on any statements made by the
Company or its legal counsel as to the meaning of any term or condition
contained herein or in deciding whether to enter into this Agreement, and
(iv) the Executive is entering into this Agreement knowingly and voluntarily.
The Executive acknowledges and agrees that each member of the Company Group is
an intended third party beneficiary of this Agreement and, as such, will be
entitled to all of the benefits, and will be permitted to enforce its rights,
under this Agreement as if such third party were an original party hereto. As an
inducement to enter into this Agreement, the Executive represents and warrants
as follows: (A) the Executive is not a party to any other agreement or
obligation for personal services; (B) there exist no impediments or restraints,
contractual or otherwise on the Executive’s power, right or ability to enter
into this Agreement and to perform the Executive’s duties and obligations
hereunder; and (C) the performance of the Executive’s obligations under this
Agreement do not and will not violate or conflict with any agreement relating to
confidentiality, non-competition or exclusive employment to which the Executive
is or was subject.

 

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32. Resignations. Following the termination of the Executive’s employment for
any reason, if and to the extent requested by the Board, the Executive agrees to
resign from the Board, all fiduciary positions (including as trustee) and all
other offices and positions the Executive holds with the Company Group;
provided, however, that if the Executive refuses to tender the Executive’s
resignation after the Board has made such request, then the Board will be
empowered to tender the Executive’s resignation from such offices and positions.

 

33. Indemnification. If the Executive is made a party, is threatened to be made
a party, or reasonably anticipates being made a party, to any Proceeding (as
defined below) by reason of the fact that the Executive is or was a director,
officer, executive, agent, manager, trustee, consultant or representative of the
Company or any of its affiliates or is or was serving at the request of the
Company or any of its affiliates, or in connection with the Executive’s service
hereunder, as a director, officer, member, executive, agent, manager, trustee,
consultant or representative of another person or entity, or if any Claim (as
defined below) is made, is threatened to be made, or is reasonably anticipated
to be made, that arises out of or relates to the Executive’s service in any of
the foregoing capacities, then the Executive shall promptly be indemnified and
held harmless to the fullest extent permitted or authorized by the Certificate
of Incorporation or Bylaws of the Company, or if greater, by applicable law,
against any and all costs, expenses, liabilities and losses (including, without
limitation, attorneys’ and other fees, judgments, interest, expenses of
investigation, penalties, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) incurred or suffered by the Executive in
connection therewith or in connection with seeking to enforce the Executive’s
rights under this Section 33, and such indemnification shall continue as to the
Executive even if the Executive has ceased to be a director, member, executive,
agent, manager, trustee, consultant or representative of the Company or other
person or entity and shall inure to the benefit of the Executive’s heirs,
executors and administrators. The Executive shall be entitled to prompt
advancement of any and all costs and expenses (including, without limitation,
attorneys’ and other professional fees and other charges) incurred by the
Executive in connection with any such Proceeding or Claim, or in connection with
seeking to enforce Executive’s rights under this Section 33, any such
advancement to be made within 15 days after Executive gives written notice,
supported by reasonable documentation, requesting such advancement. Such notice
shall include, to the extent required by applicable law, an undertaking by the
Executive to repay the amount advanced if Executive is ultimately determined not
to be entitled to indemnification against such costs and expenses. Nothing in
this Agreement shall operate to limit or extinguish any right to
indemnification, advancement of expenses, or contribution that the Executive
would otherwise have (including, without limitation, by agreement or under
applicable law). For purposes of this Agreement, “Claim” shall include, without
limitation, any claim, demand, request, investigation, dispute, controversy,
threat, discovery request, or request for testimony or information and
“Proceeding” shall include, without limitation, any actual, threatened, or
reasonably anticipated, action, suit or proceeding, whether civil, criminal,
administrative, investigative, appellate, formal, informal or other.

 

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A directors’ and officers’ liability insurance policy (or policies) shall be
kept in place, during the Employment Term and thereafter until the later of
(x) the sixth anniversary of the date on which the Executive’s employment with
the Company terminates and (y) the date on which all claims against the
Executive that would otherwise be covered by the policy (or policies) would
become fully time barred, providing coverage to the Executive that is no less
favorable to Executive in any respect (including, without limitation, with
respect to scope, exclusions, amounts, and deductibles) than the coverage then
being provided to any other present or former executive or director of the
Company

IN WITNESS WHEREOF, this Agreement is duly executed as of the Execution Date
listed on the first page.

 

MORGANS HOTEL GROUP CO. By:   /s/ Jason Taubman Kalisman Name: Jason Taubman
Kalisman Title: Interim Chief Executive Officer

 

EXECUTIVE

/s/ Meredith L. Deutsch

Meredith L. Deutsch

 

 

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Exhibit A

WAIVER AND RELEASE OF CLAIMS AGREEMENT

                     (“Employee”) hereby acknowledges that
                    (“Employer”) is offering Employee certain payments in
connection with Employee’s termination of employment pursuant to the employment
agreement entered into between Employer and Employee, as amended (the
“Employment Agreement”), in exchange for Employee’s promises in this Waiver and
Release of Claims Agreement (this “Agreement”).

Severance Payments

1. Employee agrees that Employee will be entitled to receive the applicable
severance payments and benefits set forth under Section 6 of the Employment
Agreement (the “Severance Payments”) only if Employee accepts and does not
revoke this Agreement, which requires Employee to release both known and unknown
claims.

2. Employee agrees that the Severance Payments tendered under the Employment
Agreement constitute fair and adequate consideration for the execution of this
Agreement. Employee further agrees that Employee has been fully compensated for
all wages and fringe benefits, including, but not limited to, paid and unpaid
leave, due and owing, and that the Severance Payments are in addition to
payments and benefits to which Employee is otherwise entitled.

Claims That Are Being Released

3. Employee agrees that this Agreement constitutes a full and final release by
Employee and Employee’s descendants, dependents, heirs, executors,
administrators, assigns, and successors, of any and all claims, charges, and
complaints, whether known or unknown, that Employee has or may have to date
against Employer and any of its parents, subsidiaries, or affiliated entities
and their respective officers, directors, shareholders, partners, joint
venturers, employees, consultants, insurers, agents, predecessors, successors,
and assigns, arising out of or related to Employee’s employment or the
termination thereof, or otherwise based upon acts or events that occurred on or
before the date on which Employee signs this Agreement. To the fullest extent
allowed by law, Employee hereby waives and releases any and all such claims,
charges, and complaints in return for the Severance Payments. This release of
claims is intended to be as broad as the law allows, and includes, but is not
limited to, rights arising out of alleged violations of any contracts, express
or implied, any covenant of good faith or fair dealing, express or implied, any
tort or common law claims, any legal restrictions on Employer’s right to
terminate employees, and any claims under any federal, state, municipal, local,
or other governmental statute, regulation, or ordinance, including, without
limitation:

(a) claims of discrimination, harassment, or retaliation under equal employment
laws such as Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, the Age Discrimination in Employment Act, the Older Workers
Benefit Protection Act, the Rehabilitation Act of 1973, and any and all other
federal, state, municipal, local, or foreign equal opportunity laws;

 

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(b) if applicable, claims of wrongful termination of employment; statutory,
regulatory, and common law “whistleblower” claims, and claims for wrongful
termination in violation of public policy;

(c) claims arising under the Employee Retirement Income Security Act of 1974,
except for any claims relating to vested benefits under Employer’s employee
benefit plans;

(d) claims of violation of wage and hour laws, including, but not limited to,
claims for overtime pay, meal and rest period violations, and recordkeeping
violations; and

(e) claims of violation of federal, state, municipal, local, or foreign laws
concerning leaves of absence, such as the Family and Medical Leave Act, New York
State Human Rights Law, and New York City Human Rights Law.

Claims That Are Not Being Released

4. This release does not include any claims that may not be released as a matter
of law, and this release does not waive claims or rights that arise after
Employee signs this Agreement. Further, this release will not prevent Employee
from doing any of the following:

(a) obtaining unemployment compensation, state disability insurance, or workers’
compensation benefits from the appropriate agency of the state in which Employee
lives and works, provided Employee satisfies the legal requirements for such
benefits (nothing in this Agreement, however, guarantees or otherwise
constitutes a representation of any kind that Employee is entitled to such
benefits);

(b) asserting any right that is created or preserved by this Agreement, such as
Employee’s right to receive the Severance Payments and the enforcement of the
terms of the Employment Agreement that survive termination of employment as set
forth in Section 20 of the Employment Agreement;

(c) filing a charge, giving testimony or participating in any investigation
conducted by the Equal Employment Opportunity Commission (the “EEOC”) or any
duly authorized agency of the United States or any state (however, Employee is
hereby waiving the right to any personal monetary recovery or other personal
relief should the EEOC (or any similarly authorized agency) pursue any class or
individual charges in part or entirely on Employee’s behalf); or

(d) challenging or seeking determination in good faith of the validity of this
waiver under the Age Discrimination in Employment Act (nor does this release
impose any condition precedent, penalties, or costs for doing so, unless
specifically authorized by federal law); or

(e) the enforcement of any of the terms or conditions of this Agreement.

 

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Additional Employee Covenants

5. To the extent applicable, Employee confirms and agrees to Employee’s
continuing obligations under the Employment Agreement, including, without
limitation, following termination of Employee’s employment with Employer. This
includes, without limitation, Employee’s continuing obligations under Sections
8-13 of the Employment Agreement.

Voluntary Agreement And Effective Date

6. Employee understands and acknowledges that, by signing this Agreement,
Employee is agreeing to all of the provisions stated in this Agreement, and has
read and understood each provision.

7. The parties understand and agree that:

(a) Employee will have a period of 21 calendar days in which to decide whether
or not to sign this Agreement, and an additional period of seven calendar days
after signing in which to revoke this Agreement. If Employee signs this
Agreement before the end of such 21-day period, Employee certifies and agrees
that the decision is knowing and voluntary and is not induced by Employer
through (i) fraud, misrepresentation, or a threat to withdraw or alter the offer
before the end of such 21-day period or (ii) an offer to provide different terms
in exchange for signing this Agreement before the end of such 21-day period.

(b) In order to exercise this revocation right, Employee must deliver written
notice of revocation to [INSERT COMPANY CONTACT] on or before the seventh
calendar day after Employee executes this Agreement. Employee understands that,
upon delivery of such notice, this Agreement will terminate and become null and
void.

(c) The terms of this Agreement will not take effect or become binding, and
Employee will not become entitled to receive the Severance Payments, until that
seven-day period has lapsed without revocation by Employee. If Employee elects
not to sign this Agreement or revokes it within seven calendar days of signing,
Employee will not receive the Severance Payments.

(d) All amounts payable hereunder will be paid in accordance with the applicable
terms of the Employment Agreement.

Governing Law

8. This Agreement will be governed by the substantive laws of the State of New
York, without regard to conflicts of law, and by federal law where applicable.

9. If any part of this Agreement is held to be invalid or unenforceable, the
remaining provisions of this Agreement will not be affected in any way.

 

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Consultation With Attorney

10. Employee is hereby encouraged and advised to confer with an attorney
regarding this Agreement. By signing this Agreement, Employee acknowledges that
Employee has consulted, or had an opportunity to consult with, an attorney or a
representative of Employee’s choosing, if any, and that Employee is not relying
on any advice from Employer or its agents or attorneys in executing this
Agreement.

(a) This Agreement was provided to Employee for consideration on [INSERT DATE
THIS AGREEMENT PROVIDED TO EMPLOYEE].

PLEASE READ THIS AGREEMENT CAREFULLY; IT CONTAINS A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.

Employee certifies that Employee has read this Agreement and fully and
completely understands and comprehends its meaning, purpose, and effect.
Employee further states and confirms that Employee has signed this Agreement
knowingly and voluntarily and of Employee’s own free will, and not as a result
of any threat, intimidation or coercion on the part of Employer or its
representatives or agents.

 

 

     EMPLOYEE Date:       

 

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