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                                                                    EXHIBIT 10.2

                               September 19, 2001


CONFIDENTIAL
------------

Mr. Charles R. Tomb
c/o Interstate Hotels Corporation
680 Andersen Drive, Foster Plaza 10
Pittsburgh, PA  15220


RE:  EMPLOYMENT AGREEMENT

Dear Chuck:

It is my pleasure to confirm to you in this Employment Agreement ("Agreement")
the terms of your employment with Interstate Hotels Corporation ("Interstate"),
a Maryland corporation (the "Company") as Senior Vice President, Development &
Acquisitions - Southeast/Central Region (such region is described on Exhibit A
attached hereto and made a part hereof). The terms of this Agreement shall
become effective as of the first pay period following the signing of this
Agreement.

                                TERM OF AGREEMENT

This Employment Agreement commences as of the date that you execute this letter
and shall continue at the will of the Company in accordance with the section of
this Agreement captioned Termination.

                           DUTIES AND RESPONSIBILITIES

As Senior Vice President, Development & Acquisitions - Southeast/Central Region,
you will report to the Executive Vice President, Business Development and
Acquisitions ("Executive Vice President of Development"). You will perform such
duties assigned to you by the Executive Vice President of Development or other
executive officers of the Company. The Company may change or modify your duties
and responsibilities at its sole discretion; provided however, that if such
change results in a significant change or decrease in your responsibilities or a
change in location outside of the greater Pittsburgh area, you have the right to
declare any such change or modification to constitute a termination without
cause as described in this Agreement.

While employed by the Company, you shall faithfully and diligently perform your
duties. At all times you shall exhibit the highest level of professional loyalty
for the Company, its shareholders, directors, officers, and employees.


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Mr. Charles R. Tomb
September 19, 2001
Page 2

                                  COMPENSATION

Your compensation shall consist of the following:

1.       Base Salary. Effective as of the first pay period following the signing
         of this Agreement, your Base Salary will be Six Thousand Nine Hundred
         Twenty-three and 08/100 Dollars ($6,923.08) bi-weekly. At the Company's
         discretion, the Base Salary may be adjusted to reflect merit increases
         based on your performance and other relevant circumstances. Consistent
         with past practices, the Company will continue to recognize a review
         date on the annual anniversary of your original employment with the
         Company, which will be a review of performance and/or merit.

2.       Incentive Plan. While you are employed by Interstate, you shall
         participate in the Interstate Business Development Incentive Plan
         attached hereto as Exhibit B.

                                    BENEFITS

1.       Health and Welfare. While employed by The Company, you shall be
         eligible to participate in any of The Company's health, dental and
         other insurance programs applicable to salaried employees. The Company
         shall pay a portion of the health care premium and you shall pay the
         remainder. If you are currently enrolled in any of The Company's health
         care plans, your current benefits will remain in effect with no lapse
         in coverage. If you are currently employed by The Company and are not
         enrolled in any of The Company's health care plans, you may apply as a
         late entrant in November each year. If you apply as a Late Entrant
         prior to the deadline in November, your coverage would become effective
         on the subsequent January 1. You may also apply as a Special Enrollee
         if you apply within thirty (30) days of either the involuntary loss of
         other health care coverage or within thirty (30) days of acquiring a
         new dependent as a result of marriage, birth, adoption or placement for
         adoption.

         For all new enrollees, the plan imposes a preexisting condition
         limitation. For New Enrollees and Special Enrollees, expenses related
         to a preexisting condition will not be considered if they are incurred
         within the first consecutive twelve (12) months beginning with the
         earlier of the first day of your waiting period or the first day of
         participation on the plan. For Late Entrants, expenses related to a
         pre-existing condition will not be considered if the expenses are
         incurred within the first consecutive eighteen (18) months beginning
         with the first day of your participation on the plan. The period of any
         preexisting exclusion that would otherwise apply to you or your
         dependents under the health care plan is reduced by the number of days
         of creditable coverage you or your dependants have as of the enrollment
         date in the plan.

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Mr. Charles R. Tomb
September 19, 2001
Page 3

         The current rate for employee contributions for family coverage under
         the highest level plan is approximately Fifty Five Dollars and Seventy
         Five Cents ($55.75) per week. Associate coverage under the highest
         level plan is approximately Twenty-Eight Dollars and Sixty Cents
         ($28.60) per week. For associates covering themselves plus one or two
         children, the highest level plan is approximately Forty-Five Dollars
         and Thirty Cents ($45.30) per week.

2.       Life and Accidental Death and Dismemberment Insurance. You
         automatically receive Life and Accidental Death and Dismemberment
         Insurance at no additional cost upon commencement of, and for so long
         as you continue, your participation in one of the Company's health
         plans. Both Life and Accidental Death and Dismemberment Insurance are
         in the amount of $500,000.

3.       Long-Term Disability (LTD) Insurance. You are eligible to continue to
         purchase Long-Term Disability Insurance. You shall pay the premium for
         Long-Term Disability Insurance in accordance with the terms and
         provisions of the applicable policies.

4.       Salary Continuance. If you become medically disabled, you will receive
         Salary Continuance in accordance with the terms and provisions of the
         applicable policies. No additional cost will be incurred upon
         commencement of your participation in the Long-Term Disability Plan.

5.       Travel Accident Insurance. You are eligible to receive Travel Accident
         Insurance in accordance with the terms and provisions of the applicable
         policies. Your position entitles you to additional optional air travel
         benefits (for a nominal personal cost). You must complete an enrollment
         form, even if it is just to decline this additional coverage.

6.       Car Allowance. You shall receive a bi-weekly car allowance of Three
         Hundred Thirty-six Dollars and Ninety-two Cents ($336.92). This
         allowance shall be processed through payroll and subject to all
         applicable taxes.

7.       Executive Retirement Plan. Your position entitles you to participate in
         the Interstate Hotels Executive Retirement Plan. Under the current
         Plan, the annual contribution to your account will equal 8% of your
         Base Salary earned during each fiscal year plus any discretionary
         contributions to your Plan account made by the Company. All aspects of
         the contribution, vesting, distribution, and administration of the Plan
         will be governed by the terms of the Plan then in effect.

8.       Additional Benefits. With the approval of the Board of Directors, new
         or enhanced programs such as Stock Options Stock Purchase Programs may
         be made available. At such time, you will be eligible to participate at
         the Senior Vice President level. All aspects of the contributions,
         vesting distribution, and administration of such plans will be governed
         by the terms of the plans if and when in effect.

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Mr. Charles R. Tomb
September 19, 2001
Page 4

9.       Vacation. You will be entitled to not less than twenty days of paid
         vacation per year plus paid holidays in accordance with the Company's
         then current holiday schedule. However, you may take a reasonable
         amount of paid vacation in addition to that provided by the foregoing,
         consistent with your personal needs, and the requirements of your job
         subject to the approval of the Executive Vice President of Development.

10.      Severance Compensation. The terms and conditions of Section 5(b)(i)
         (and any Sections referenced in such Section 5(b)(i) to the extent
         required for the interpretation of Section 5(b)(i)) of that certain
         Employment Agreement, dated as of June 2, 1998 by and between you and
         Interstate Hotels, LLC are deemed incorporated herein by reference.

                                 CONFIDENTIALITY

You acknowledge and agree that any and all Intellectual Property and Proprietary
Information of the Company or which relates to, directly or indirectly, the
business or operations of the Company, is and shall be the exclusive property of
the Company. You shall not disclose such Proprietary Information or any other
confidential information to anyone not employed by the Company without the
express written permission of the Company. You agree that this obligation will
continue after the expiration of this Agreement until such Proprietary
Information becomes public information as a result of having been publicized by
the Company. Proprietary Information is defined as all papers, books and records
of every kind and description relating to the business affairs of the Company,
whether or not prepared by you, shall be the sole and exclusive property of the
Company, and you shall surrender them to the Company at any time upon request of
the Company.

For the purposes of the Agreement, the term "Intellectual Property" shall be
defined as suggestions, patents, plans, proposals, inventions, improvements,
processes, designs, logos, symbols, trademarks, service marks, trade names,
writings, documents, notes, sketches, manuals, graphics, marketing materials,
and any copyrighted materials.

                  NONSOLICITATION, NONPIRACY AND NONCOMPETITION

During a period which ends six (6) months after the termination of this
Agreement, you shall not (i) directly or indirectly, either yourself or anyone
else solicit any customer of the Company or any hotel managed or owned by the
Company for the purpose of selling to such customer any services provided by the
Company or any hotel managed or owned by the Company or (ii) solicit or endeavor
to cause any employee of the Company or any affiliated or related entity to
leave his/her employment with the Company or induce or attempt to induce any
such employee to breach any employment agreement with the Company or any
affiliated or related entity or otherwise interfere with the employment of any
such employee or (iii) work for any company that competes with the Company.

<PAGE>

                                   TERMINATION

1.       Termination Provisions. Notwithstanding anything herein to the
         contrary, both you and the Company have the right to terminate your
         employment at any time, with or without cause, and with or without
         notice during the term of this Employment Agreement. The term "Cause"
         shall include, but is not limited to: breach of this Agreement; theft;
         drunkenness; drug use; fraud; harassment; conflict of interest; gross
         negligence; willful misconduct; insubordination; or any other act
         constituting "gross misconduct" as defined from time to time in the
         Company's Associate Handbook.

2.       No-Fault Separation. If the Company separates your employment without
         Cause, including as a result of change of control (as defined below in
         Section 3 hereof), you will receive no-fault separation pay ("No-Fault
         Separation Pay"), as a full settlement of any and all of the Company's
         obligations to you. However, you will not receive No-Fault Separation
         pay if your employment ends with the Company due to cause or as a
         result of the progressive discipline policy contained within the
         Company's Associate Handbook. The provisions of your No-Fault
         Separation Pay are described as follows:


         (a)      Commencing the week following the date of termination, the
                  Company will pay to you a lump sum equal to your Base Salary
                  for a period of six (6) months.

         (b)      The Company will reimburse you the cost of your COBRA coverage
                  for a period of six (6) months.

         (c)      The Company will pay to you your car allowance for a period of
                  six (6) months.

         (d)      In no event will you be reimbursed for any of your vested or
                  unvested sick days or vacation.

         (e)      You will receive your bonus payable in accordance with the
                  terms and conditions of the Business Development Incentive
                  Plan relating to previously completed transactions.

You agree to accept your No-Fault Separation Pay as your complete and exclusive
relief for a breach or termination of this Employment Agreement by the Company.

<PAGE>
Mr. Charles R. Tomb
September 19, 2001
Page 5

3.       Change of Control. In the event that a change of control of the Company
         results in the termination of your employment, without cause, and such
         termination occurs within one year after such change of control, you
         shall receive from the Company a lump sum payment equal to your Base
         Salary for the six month period immediately preceding such termination
         of employment.

         "Change of Control" shall mean the occurrence of any one of the
         following events:

                  (i) any Person, as such term is used in Sections 13(d) and
         14(d) of the Securities Exchange Act of 1934, as amended (the "Act")
         (other than the Company, any of its subsidiaries, or any trustee,
         fiduciary or other person or entity holding securities under any
         employee benefit plan or trust of the Company or any of its
         subsidiaries), together with all "affiliates" and "associates" (as such
         terms are defined in Rule 12b-2 under the Act) of such person, shall
         become the "beneficial owner" (as such term is defined in Rule 13d-3
         under the Act), directly or indirectly, of securities of the Company
         representing fifty percent (50%) or more of the combined voting power
         of the Company's then outstanding securities having the right to vote
         in an election of the Company's Board of Directors ("Voting
         Securities") (in such case other than as a result of an acquisition of
         securities directly from the Company); or

                  (ii) the stockholders of the Company shall approve (A) any
         consolidation or merger of the Company where the stockholders of the
         Company, immediately prior to the consolidation or merger, would not,
         immediately after the consolidation or merger, beneficially own (as
         such term is defined in Rule 13d-3 under the Act), directly or
         indirectly, shares representing in the aggregate more than 50 percent
         of the voting shares of the corporation issuing cash or securities in
         the consolidation or merger (or of its ultimate parent corporation, if
         any), (B) any sale, lease, exchange or other transfer (in one
         transaction or a series of transactions contemplated or arranged by any
         party as a single plan) of all or substantially all of the assets of
         the Company or (C) any plan or proposal for the liquidation or
         dissolution of the Company.

         Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (i) solely as the
result of an acquisition of securities by the Company which, by reducing the
number of shares of Voting Securities outstanding, increases the proportionate
number of shares of Voting Securities beneficially owned by any person to 50
percent or more of the combined voting power of all then outstanding Voting
Securities; provided, however, that if any person referred to in this sentence
shall thereafter become the beneficial owner of any additional shares of Voting
Securities (other than pursuant to a stock split, stock dividend, or similar
transaction or as a result of an acquisition of securities directly from the
Company), then a "Change of Control" shall be deemed to have occurred for
purposes of the foregoing clause (i).

<PAGE>
Mr. Charles R. Tomb
September 19, 2001
Page 7

                                   ARBITRATION

If a dispute arises between you and the Company regarding your employment, you
and the Company agree that the dispute shall be submitted to arbitration by the
American Arbitration Association according to the following procedures:

1.       Selection of an Arbitrator. The Company shall request from the American
         Arbitration Association a list of the names of five (5) impartial
         arbitrators. The arbitrator shall be chosen by the Company and you, in
         turn, striking a name from the list until one name remains. The
         expenses of the arbitrator shall be borne equally by the Company and
         you, and each party shall bear its own preparation and presentation
         expenses.

2.       Arbitrator Limited to Terms of the Agreement. The arbitrator shall not
         have the power to add to, ignore, or modify any of the terms or
         conditions of this Employment Agreement.

         The arbitrator's decisions shall not go beyond what is necessary for
         the interpretation and application of this Agreement in the case of the
         specific termination at issue. The arbitrator shall not substitute
         his/her judgment for that of the parties in the exercise of rights
         granted or retained by this Agreement. An award by the arbitrator shall
         not exceed the specific provisions for No-Fault Separation Pay. The
         arbitrator's written decision shall be rendered within sixty (60) days
         of the hearing.

3.       Final and Binding. The decision reached by the arbitrator concerning
         the termination shall be final and binding upon the parties as to the
         matter in dispute. The parties agree that the decision shall be
         enforceable in a court of law, and that this arbitration procedure
         shall be the exclusive procedure for challenging the exercise of the
         termination section of this Agreement.

4.       Locale. The arbitration shall take place in Pittsburgh, Pennsylvania.


                               NO VESTED INTEREST

You shall acquire no vested interest in any rights or benefits granted in this
Employment Agreement which are not subject to being changed, revised, or
divested in accordance with this Employment Agreement, the rules of the Board of
Directors of the Company or the decision of the shareholders of the Company. All
rights or benefits which you acquire under the terms of this Employment
Agreement shall extend only for the duration of this Employment Agreement.


<PAGE>
Mr. Charles R. Tomb
September 19, 2001
Page 8


                            CITIZENSHIP VERIFICATION

You will provide to the Company verification of your eligibility to work in the
United States in accordance with the Immigration Reform and Control Act of 1986.

                                ENTIRE AGREEMENT

This Employment Agreement represents the entire agreement between you and the
Company and shall supersede any and all previous verbal or written contracts,
arrangements or understandings between the parties. Your acceptance of this
Agreement will confirm your acknowledgement that no representations or
commitments regarding the terms of your employment by the Company have been made
by or on behalf of the Company except as expressly provided in this Employment
Agreement. The terms of your employment may only be modified by me or another
executive officer of the Company in writing.

Please acknowledge your acceptance of the foregoing by executing the enclosed
copy of this Agreement at the place indicated below and returning it in the
enclosed envelope no later than five (5) days upon receipt of this Agreement.

                                            Sincerely,

                                            INTERSTATE HOTELS CORPORATION

                                            /s/ Glyn F. Aeppel
                                            ----------------------------------
                                            Glyn F. Aeppel
                                            Executive Vice President, Business
                                            Development and Acquisitions

/khp/Attachment

cc:      Tom Hewitt
         Bill Richardson
         Tim Hudak
         Sandy Streily
         Erin Meyers




ACCEPTED AND AGREED TO:


By:      /s/  Charles R. Tomb               Dated:  September 25, 2001
   -------------------------------
              Charles R. Tomb