Document:

QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.26    
    

 
 

MORGANS HOTEL GROUP    
    

July 25,
2005 

Mr. Richard
Szymanski

133 Smoke Rise Drive

Warren, NJ 07059 

Dear
Rich, 

        I
am pleased to confirm your appointment and acceptance of our offer of employment as Chief Financial Officer (CFO) for Morgans Hotel Group ("MHG"). This position will report directly to
me. In this role you will work closely with Marc Gordon and other senior executives of the company. Although your start date hasn't been confirmed, it is expected to be within the next few weeks.
Between now and then, it was discussed that you will provide your time to us on a reasonable and mutually agreed upon basis as directed by Ed and/or Marc. 

        Your
annual base salary is $350,000 ($6730.77/wkly; paid in accordance with our regular bi-monthly pay cycles with appropriate withholdings). It is customary that we conduct
annual performance reviews and at that time a reevaluation of your salary is usual. 

        We've
agreed to grant you a guarantee cash bonus of $100,000 prorated for 2005 to be paid out in early 2006 and a minimum bonus of $100,000 for the year 2006 to be paid out in early
2007, as long as you are actively employed at the time of any payout. 

        The
company is currently considering the implementation of an equity-based incentive program and evaluating all bonus plans for possible redesign. To the extent that such program(s) is
implemented, you shall be eligible to participate on the same terms and conditions as similarly situated executives, including with respect to any change of control provisions. 

        A
full range of comprehensive health and dental care coverage will be provided. Due to your executive position you will not be asked to contribute toward the base coverage. If you choose
to participate in a premium offering—a "buy-up" plan—then you will be responsible to contribute to such plan. You will be eligible to participate in the plan on the
date of hire. The company also provides short and long term disability as well as life insurance. You will also be eligible to participate in the company's 401(k) plan after six months of continuous
service. 

        You
requested and we agreed to grant you four (4) weeks paid vacation per year which will begin accruing upon your start date. The vacation time is on a "use it or lose it" basis.
If you do not use the granted time off in a given year, you will forfeit all accrued but unused vacation and no balance will rollover to the next year. In addition, you will be eligible for the
employee sick program on a pro-rated basis for the first year of employment. 

        The
Immigration Reform and Control Act of 1986 requires us to verify that all newly hired employees are legally eligible to work in the United States and you will need to provide us on
your first day of employment with the appropriate required documents. 

        Your
employment with MHG will be "at will". No Company employee can agree, on behalf of the company, to alter your status as an at-will employee, except an officer of the
company who must do so in writing. 

        This
letter describes in full the offer which has been extended to you and supersedes any previous verbal offer that may have been made. 

 

        Rich,
we are very excited about having you join our company. This is an exciting time for us and we know you will make a significant contribution and be an integral part of our future
success. 

	Sincerely,	 	 	 	Read, agreed and accepted
	

/s/  ED SCHEETZ      
 Ed Scheetz

Chairman and CEO

Morgans Hotel Group	
 	

 	
 	

/s/  RICHARD SZYMANSKI      
 Richard Szymanski

2

QuickLinks

Exhibit 10.26

MORGANS HOTEL GROUPExhibit 10.27

 

 

AMENDENT NO. 1 TO THE

FORMATION
AND STRUCTURING AGREEMENT

THIS
AMENDMENT NO. 1 (this
“Amendment”)
to THE FORMATION AND STRUCTURING AGREEMENT (the “Agreement”) is made as of January 26, 2005, by and
among Morgans Group LLC, a Delaware limited liability company (“Morgans Group LLC”), Morgans Hotel Group LLC, a Delaware
limited liability company (“Morgans Hotel Group LLC”),
NorthStar Hospitality LLC, a Delaware limited liability company (“NorthStar Hospitality”), NorthStar Partnership, L.P., a Delaware
limited partnership (“NorthStar LP”
and, together with NorthStar Hospitality, “NorthStar”),
RSA Associates, L.P., a Delaware limited partnership (“RSA
Associates”), Michael Overington (“Overington”),
and Anda Andrei (“Andrei”) (Morgans
Hotel Group LLC, NorthStar, RSA Associates, Overington and Andrei, each, an “Interested
Party” and
collectively, the “Interested Parties”).

WHEREAS, on October 25,
2005, Morgans Group LLC and the Interested Parties executed and delivered the
Agreement;

WHEREAS,
the Morgans Group LLC and the Interested Parties desire to amend the Agreement
to provide for the waiver by each of the Interested Parties of any claim that
the issuances of Morgans Group LLC Units (as defined in the Agreement) and
shares of Common Stock (as defined in the Agreement) were not exempt from
registration or qualification under federal and state securities laws; and

WHEREAS,
capitalized terms used herein and not otherwise defined herein shall have the
meanings set forth in the Agreement.

NOW, THEREFORE, in
consideration of the mutual covenants and conditions set forth herein and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Morgans Group LLC and the Interested Parties agree as
follows:

ARTICLE I. 

AMENDMENT TO ARTICLE I

Article I of the
Agreement is hereby amended by adding the following new Section 1.6:

                1.6           Waiver and Release. Each of the Interested Parties hereby (i)
waives and releases any claim (whether for rescission, damages or otherwise) against
Morgans Hotel Group Co., Morgans Group LLC, any of the other Interested
Parties, any affiliate of any of the foregoing or any director, officer or
agent of the foregoing arising out of or based on any aspect of the Formation
and Structuring Transactions, including any issuances of  Morgans Group LLC Units and Common Stock in
connection with the Formation and Structuring Transactions, being not exempt
from registration or qualification under federal or state securities laws, (ii)
agrees not, under any circumstances, to exercise any right of rescsission
arising out of the Formation and Structuring Transactions, and (iii) irrevocably
agrees to contribute to Morgans Group LLC any proceeds received by such

 

 

Interested
Party as a result of any rescission action arising out of the Formation and
Structuring Transactions if it is ultimately determined that such agreements
and waivers are not enforceable.

ARTICLE II.

MISCELLANEOUS

2.1           Governing Law.  This Amendment shall be governed by and construed
in accordance with the laws of the State of New York.

2.2           Severability.  In case any one or more of the
provisions contained in this Amendment shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, such invalidity, illegality,
or unenforceability shall not affect any other provision hereof, and this Amendment
shall be construed as if such invalid, illegal, or unenforceable provision had
never been contained herein.

2.3           Successors and
Assigns.  This Amendment shall
be binding upon, and inure to the benefit of, Morgans Group LLC, the Interested
Parties, and their respective legal representatives, successors, and permitted
assigns.

2.4            Headings.  Article headings and article and
section numbers are inserted herein only as a matter of convenience and in no
way define, limit, or prescribe the scope or intent of this Amendment or any
part hereof and shall not be considered in interpreting or construing this Amendment.

2.5           Recitals.  The recital and introductory
paragraphs hereof are a part hereof, form a basis for this Amendment and shall
be considered prima facie evidence of the facts and documents referred to
therein.

2.6           Counterparts. This
Amendment may be executed in any number of counterparts and by any party hereto
on a separate counterpart, each of which when so executed and delivered shall
be deemed an original and all of which taken together shall constitute but one
and the same instrument.  Copies of
executed counterparts transmitted by telecopy, telefax or other electronic
transmission service shall be considered original executed counterparts.

 

[Signature pages follow.]

 

2

 

IN WITNESS
WHEREOF, the parties hereto have executed this Amendment as of the date first
above written.

	
   

  	
  MORGANS GROUP
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Morgans Hotel
  Group LLC,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ W. EDWARD
  SCHEETZ

  
	
   

  	
   

  	
   

  	
  Name: W. Edward
  Scheetz

  
	
   

  	
   

  	
   

  	
  Title:
    Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  MORGANS HOTEL
  GROUP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. EDWARD
  SCHEETZ

  
	
   

  	
   

  	
  Name: W. Edward
  Scheetz

  
	
   

  	
   

  	
  Title:
    Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  NORTHSTAR
  HOSPITALITY LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ RICHARD
  MCCREADY

  
	
   

  	
   

  	
  Name: Richard
  McCready

  
	
   

  	
   

  	
  Title:   Authorized
  Person

  
	
   

  	
   

  	
   

  
	
   

  	
  NORTHSTAR
  PARTNERSHIP, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  NorthStar
  Capital Investment Corp.,

  
	
   

  	
   

  	
  its general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ RICHARD
  MCCREADY

  
	
   

  	
   

  	
   

  	
  Name: Richard
  McCready

  
	
   

  	
   

  	
   

  	
  Title:
   Chief Operating Officer

  
	
   

  	
   

  	
   

  

 

 

 

	
   

  	
  RSA ASSOCIATES,
  L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  RSA GP Corp.,

  
	
   

  	
   

  	
  its General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ IAN SCHRAGER

  
	
   

  	
   

  	
   

  	
  Name: Ian
  Schrager

  
	
   

  	
   

  	
   

  	
  Title:  President

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ MICHAEL
  OVERINGTON

  
	
   

  	
  Michael
  Overington

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ ANDA ANDREI

  
	
   

  	
  Anda Andrei

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00096-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00096-of-00352.parquet"}]]