Filed by Bowne Pure Compliance





Exhibit 10.2


EMPLOYMENT AGREEMENT FOR RICHARD
SZYMANSKI

AMENDMENT NO. 1


This Amendment
No. 1 to the Employment Agreement for Richard Szymanski (“Amendment
No. 1”) is made, effective as of December 31, 2008, by and
between Morgans Hotel Group Co., a Delaware corporation (the
“Company”), and Richard Szymanski (“Executive”).


Recitals:


WHEREAS,
Executive and the Company previously entered into an Employment Agreement,
effective as of October 1, 2007; and


WHEREAS,
Executive and the Company desire to further amend the Employment Agreement
to comply with the requirements of Section 409A of the Internal Revenue
Code of 1986, as amended.


Agreement:


NOW, THEREFORE,
in consideration of the agreements contained herein and of such other good
and valuable consideration, the sufficiency of which Executive acknowledges,
the Company and Executive, intending to be legally bound, agree as follows:


1. Section 3(c) of the Employment Agreement is hereby
amended to read as follows:


“(c)
Termination by Employee with Good Reason.


(i) Employee may
terminate this Agreement for Good Reason, as defined below, by notifying the
Company of his intent to terminate his employment with Good Reason, and,
thereafter, the Employer shall: (1) pay Employee his pro-rata Annual
Bonus, if any, for the current calendar year through the date of his
termination; (2) continue to pay Employee his Base Salary for twenty-four
(24) months after his date of termination; (3) pay Employee a bonus
equal to the greater of (i) the bonus he actually received for the prior
two years or (ii) twice his annual target bonus; and (4) continue paying
for Employee’s health insurance benefits for a period of twenty-four
(24) months after such termination.


 


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(ii) The term
Good Reason shall mean, subject to the conditions described in
Section 3(a)(iii), the occurrence of one or more of the following without
Employee’s written consent: (i) any material failure by the Company
to comply with any of the provisions of paragraph 2 of this Agreement, other
than insubstantial and inadvertent failures not in bad faith which are remedied
by the Company promptly after receipt of notice thereof given by the Employee;
(ii) the assignment to Employee, or the removal from Employee, of any
duties or responsibilities that result in a material diminution of
Employee’s authority; (iii) a material diminution of the budget over
which Employee has responsibility, other than for a bona fide business reason;
(iv) any material failure by the Company to comply with and satisfy
Section 8(c) of this Agreement; (v) the imposition of any requirement that
Employee relocate his office to a location other than Manhattan; or (vi) a
material breach by the Company of any written agreement between the Company and
Employee.


(iii) For an act
or omission described in Section 3(c)(ii) to constitute Good Reason,
(i) Employee must notify the Company in writing within sixty
(60) days after Employee has knowledge that an event constituting Good
Reason has occurred; (ii) such act or omission must be capable of being
cured and continue after Employee has given the Company notice thereof beyond
thirty (30) days following Company’s receipt of the required notice;
and (iii) Employee actually terminates employment within thirty
(30) days of the end of the 30-day cure period.”


2. Section 3(h) of the Employment Agreement is hereby
amended to read as follows:


“(h) Release
of Claims. Notwithstanding the foregoing or anything else contained in this
Agreement to the contrary, prior to the payment by Employer of the termination
payments and benefits provided for in clause (c), (f), or (g) of this
paragraph 3, to the extent that such payments or benefits are conditioned upon
the execution and delivery by the Executive of a release of claims, the
Executive shall forfeit all rights to such payments and benefits unless such
release is signed and delivered (and no longer subject to revocation). Within
three (3) days of such a termination, the Company shall provide a general
customary release to Employee, which Employee must sign within thirty
(30) days following the termination.”


3. Section 7
of the Employment Agreement is hereby amended by adding the following
paragraphs as a new Section 7(c):


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“(c) To the
extent that any benefits to be provided during the six month period commencing
on a separation from service (the “Delay Period”) are considered
deferred compensation under Code Section 409A provided on account of a
“separation from service,” and such benefits are not otherwise
exempt from Section 409A, the Executive shall pay the cost of such
benefits during the Delay Period, and the Company shall reimburse the
Executive, to the extent that such costs would otherwise have been paid by the
Company or to the extent that such benefits would otherwise have been provided
by the Company at no cost to the Executive, the Company’s share of the
cost of such benefits upon expiration of the Delay Period, and any remaining
benefits shall be reimbursed or provided by the Company in accordance with the
procedures specified herein.


In addition, other
provisions of this Agreement or any other such plan notwithstanding, the
Company shall have no right to accelerate any such payment or to make any such
payment as the result of any specific event except to the extent permitted
under Section 409A.


For purposes of
Section 409A, each payment made after termination of employment, including
COBRA continuation reimbursement payment, will be considered one of a series of
separate payments.


A termination of
employment shall not be deemed to have occurred for purposes of any provision
of this Agreement providing for the payment of any amounts or benefits upon or
following a termination of employment unless such termination is also a
“separation from service” within the meaning of Section 409A
and, for purposes of any such provision of this Agreement, references to a
“termination,” “termination of employment” or like
terms shall mean “separation from service.”


Any amount that
Executive is entitled to be reimbursed under this Agreement that may be treated
as taxable compensation, including any gross-up payment, will be reimbursed to
Executive as promptly as practical and in any event not later than sixty
(60) days after the end of the calendar year in which the expenses are
incurred; provided that Executive shall have provided a reimbursement request
to the Company no later than thirty (30) days prior to the date the
reimbursement is due. The amount of the expenses eligible for reimbursement
during any calendar year will not affect the amount of expenses for
reimbursement in any other calendar year, except as may be required pursuant to
an arrangement providing for the reimbursement of expenses referred to in
Section 105(b) of the Code.



The Company shall not
be obligated to reimburse Executive for any tax penalty or interest or provide
a gross-up in connection with any tax liability of Executive under
Section 409A.


Any annual bonus that
is earned pursuant to Section 2 shall be paid, whether is cash or equity
as provided above, between January 1 and March 15 of the year following
the year for which such annual bonus was earned; provided, however, that if the
Board shall determine that it is administratively impracticable, which may
include inability of the Company to gain certification of its financial
statements, to make such annual bonus payment by March 15, any such
payment shall be made as soon as reasonably practicable after such period and
in no event later than December 31 of the year following the year for
which such annual bonus was earned.



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Whenever a payment
under this Agreement specifies a payment period with reference to a number of
days (e.g., “payment shall be made within thirty (30) days following
the date of termination”), the actual date of payment within the
specified period shall be within the sole discretion of the Company.


Unless this Agreement
provides a specified and objectively determinable payment schedule to the
contrary, to the extent that any payment of base salary or other compensation
is to be paid for a specified continuing period of time beyond the date of
termination of Executive’s employment in accordance with the
Company’s payroll practices (or other similar term), the payments of such
base salary or other compensation shall be made on a monthly basis.”


4. The provisions
of this Amendment No. 1 may be amended and waived only with the prior
written consent of the parties hereto. This Amendment No. 1 may be
executed and delivered in one or more counterparts, each of which shall be
deemed an original and together shall constitute one and the same instrument.


5. Except as set
forth in this Amendment No. 1, the Employment Agreement shall remain
unchanged and shall continue in full force and effect.


IN WITNESS
WHEREOF, the parties hereto have executed and delivered this Amendment
No. 1 on the date first written above.


MORGANS HOTEL GROUP
CO.



By: /s/ Fred J.
Kleisner            

Name:
Fred J. Kleisner

Title: Chief Executive Officer




EXECUTIVE


/s/ Richard
Szymanski          

Richard Szymanski


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