profit boards, provided that the foregoing does not, in the aggregate, materially interfere with Executive’s responsibilities hereunder.  The Board hereby approves Executive’s service on the boards set forth in Exhibit A hereto.

(b)           Compensation .

(i)            Annual Base Salary .  During the Employment Period, the Executive shall receive an annual base salary (“ Annual Base Salary ”) of at least $750,000, which shall be subject to annual review and increase.  No increase in Annual Base Salary shall limit or reduce any other right of or obligation to the Executive under this Agreement.  Annual Base Salary shall not be reduced at any time (including after any such increase) without the Executive’s written consent and the term Annual Base Salary as utilized in this Agreement shall refer to Annual Base Salary as so increased.

(ii)           Annual Bonus .  During the Employment Period, the Executive shall be paid an annual cash bonus (“ Annual Bonus ”) with a target level of 100% of Annual Base Salary and a maximum level of 200% of Annual Base Salary.  The applicable corporate and individual performance targets shall be determined by the Compensation Committee of the Board (the “ Compensation Committee ”), after consultation with the Executive, within the first 90 days of each calendar year or within 30 days after the IPO if later.  The actual Annual Bonus for each calendar year shall be determined in good faith by the Compensation Committee based upon actual corporate and individual performance for such year and shall be payable in accordance with the procedures specified by the Compensation Committee; provided that the Annual Bonus shall be paid no later than March 15 of the following year.  To the extent the Annual Bonus would exceed 100 percent of Annual Base Salary, the Compensation Committee may in its discretion pay such excess in the form of fully vested equity compensation awards under Section 2(b)(v) (which may be subject to other conditions that the Compensation Committee may determine).

(iii)          IPO Stock Options .  On the Effective Date, the Executive shall be granted options under the Company’s 2006 Omnibus Stock Incentive Plan (the “ SIP ”) to purchase $6,000,000 worth of shares of the Common Stock (using the offering price shown on the cover of the Company’s IPO Form S-1) at an exercise price equal to the offering price shown on the cover of the Company’s IPO Form S-1 (the “ IPO Stock Options ”).  Such IPO Stock Options shall be evidenced by, and subject to, the stock option agreement attached hereto as Exhibit B.

(iv)          IPO Units .  On the Effective Date, the Executive shall be granted $6,500,000 worth of LTIP Units in Morgans Group LLC (for this purpose each unit shall be valued at the offering price of a share of Common Stock shown on the cover of the Company’s IPO Form S-1) in accordance with the Company’s SIP (the “ IPO Units ”).  Such IPO Units shall be evidenced by, and subject to, the unit agreement attached hereto as Exhibit C.

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(v)           Subsequent Annual Equity Grants .  The Company may grant the Executive at the end of each year equity awards under the Company’s SIP, in an amount determined, and on terms and conditions specified, by the Compensation Committee in its sole discretion, which terms and conditions shall be no less favorable than the terms and conditions of equity awards granted to other senior executives of the Company.

(c)           Benefits .

(i)            Employee Benefits .  During the Employment Period, the Executive shall be entitled to participate in all employee benefit and other plans, practices, policies and programs and fringe benefits and perquisites on a basis no less favorable than that provided to other executives of the Company.  The Executive shall be entitled to a car and driver, financial advisory and tax preparation assistance and travel arrangements to the same extent currently provided by NorthStar Capital Investment Corp.

(ii)           Indemnification .  To the fullest extent permitted by law, the Company will indemnify the Executive against any actual or threatened action, suit or proceeding, whether civil, criminal, administrative or investigative, arising by reason of the Executive’s status as a current or former director, officer, employee and/or agent of the Company.  The Executive shall be covered under any director and officer insurance policy obtained by the Company, if any, and shall be entitled to benefit from any officer indemnification arrangements adopted by the Company, if any, to the same extent as other directors or senior executive officers of the Company (including the right to such coverage or benefit following the Executive’s employment to the extent liability continues to exist).  However, the Executive agrees to repay any expenses paid or reimbursed by the Company if it is ultimately determined that the Executive is not legally entitled to be indemnified by the Company.

(iii)          Vacations .  The Executive shall be eligible for up to five weeks of annual vacation to be accrued in accordance with the Company’s policy for its other executives.

3.             Termination of Employment.

(a)           Death or Disability .  The Executive’s employment shall terminate automatically upon the Executive’s death during the Employment Period.  If the Company determines in good faith that the Disability of the Executive has occurred during the Employment Period (pursuant to the definition of Disability set forth below), it may give to the Executive written notice in accordance with Section 10(b) of its intention to terminate the Executive’s employment.  In such event, the Executive’s employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the “ Disability Effective Date ”), provided that, within the 30 days after such receipt, the Executive shall not

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have returned to full-time performance of the Executive’s duties.  For purposes of this Agreement, “ Disability ” shall mean the inability of the Executive to perform the Executive’s duties with the Company on a full-time basis for 180 business days during any consecutive twelve month period as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company and acceptable to the Executive or the Executive’s legal representative or by the insurance company which insures the Company’s long-term disability plan in which the Executive is eligible to participate.

(b)           Cause .  The Company may terminate the Executive’s employment during the Employment Period with or without Cause.  For purposes of this Agreement, “ Cause ” shall mean that the Executive:

(i)            willfully and continually refuses to substantially perform the Executive’s responsibilities under this Agreement, after demand for substantial performance has been given by the Board that specifically identifies how the Executive has refused to perform such responsibilities;

(ii)           willfully engages in misconduct (including violations of Sections 7(a), (b) or (c) of this Agreement) which is materially and demonstrably injurious to the Company; or

(iii)          is convicted of a felony or pleads guilty or nolo contendere to a felony.

For purposes of this provision, no act or omission on the part of the Executive shall be considered “ willful ” unless it is done or omitted in bad faith or without reasonable belief that the act or omission was in the best interests of the Company.  Any act or omission based upon a resolution duly adopted by the Board or advice of counsel for the Company shall be conclusively presumed to have been done or omitted in good faith and in the best interests of the Company.  The cessation of employment of the Executive shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than 75% of the entire membership of the Board (excluding the Executive) at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive is guilty of the conduct described above, and specifying the particulars thereof in detail.  Notwithstanding the foregoing, if the Board reasonably believes in good faith that facts exist that may justify a termination for Cause, the Board retains the right to (i) immediately terminate the Executive’s employment (without any obligation to pay or provide any benefits described in Section 4) and (ii) call the Board meeting and comply with the other requirements described in the preceding sentence within 30 days thereafter (the “ Determination Period ”); provided that promptly following the Determination Period, the Executive shall be paid or provided the applicable benefits described in Section 4.  If the Company does not deliver to the Executive a

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Notice of Termination within 90   days after the Board has knowledge that an event constituting Cause has occurred, the event will no longer constitute Cause.

(c)           Good Reason .  The Executive’s employment may be terminated by the Executive with or without Good Reason.  For purposes of this Agreement, “ Good Reason ” shall mean in the absence of a written consent of the Executive:

(i)            the assignment to the Executive of duties materially inconsistent with the Executive’s title, position, status, reporting relationships, authority, duties or responsibilities as contemplated by Section 2(a)(i), or any other action by the Company which results in a diminution in the Executive’s title, position, status, reporting relationships, authority, duties or responsibilities, other than insubstantial or inadvertent actions not taken in bad faith which are remedied by the Company promptly after receipt of notice thereof given by the Executive;

(ii)           any failure by the Company to comply with any of the provisions of Section 2(b) or 2(c), other than insubstantial or inadvertent failures not in bad faith which are remedied by the Company promptly after receipt of notice thereof given by the Executive;

(iii)          any purported termination by the Company of the Executive’s employment otherwise than as expressly permitted by this Agreement;

(iv)          any failure by the Company to comply with and satisfy Section 8(c);

(v)           following a Change in Control (as defined in the SIP), any requirement that the Executive’s principal place of employment be at a location more than 50 miles from New York, New York;

(vi)          if Executive is not re-elected to the Board; or

(vii)         any material failure by the Company to comply with any other material provision of this Agreement (including the equity award agreements).

Notwithstanding the foregoing, placing the Executive on a paid leave for up to 30   days, pending the determination of whether there is a basis to terminate the Executive for Cause, shall not constitute a “Good Reason” event; provided, further, that, if the Executive is subsequently terminated for Cause, then the Executive shall repay any amounts paid by the Company to the Executive during such paid leave period.  If the Executive does not deliver to the Company a Notice of Termination (as defined below) within 90 days after the Executive has knowledge that an event constituting Good Reason has occurred, the event will no longer constitute Good Reason.

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(d)           Notice of Termination .  Any termination by the Company or by the Executive shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 10(b).  For purposes of this Agreement, a “ Notice of Termination ” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the Date of Termination.  The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

(e)           Date of Termination .  “ Date of Termination ” means (i) if the Executive’s employment is terminated by the Company other than for Disability, the date of receipt of the Notice of Termination or any later date specified therein within 30 days of such notice, (ii) if the Executive’s employment is terminated by the Executive, 30 days after receipt of the Notice of Termination (provided, that, the Company may accelerate the Date of Termination to an earlier date by providing the Executive with notice of such action, or, alternatively, the Company may place the Executive on paid leave during such period) and (iii) if the Executive’s employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be.

4.             Obligations of the Company upon Termination.

(a)           Other Than for Cause; For Good Reason.   If, during the Employment Period, the Company shall terminate the Executive’s employment other than for Cause or Disability, or the Executive shall terminate employment for Good Reason (or the Executive dies after delivery of a valid Notice of Termination for Good Reason or without Cause) (each, a “ Qualifying Termination ”), except as provided in Sections 2(c)(ii) and 6 of this Agreement, the Company shall have no further obligations to the Executive other than:

(i)            the Company shall pay to the Executive in a lump sum in cash within 30 days after the Date of Termination an amount equal to the sum of (A) the amount equal to the Executive’s Annual Base Salary through the Date of Termination to the extent theretofore unpaid plus (B) a pro-rated bonus based upon the number of days in the year of termination through the Date of Termination relative to 365 and the greater of (i) the target Annual Bonus in the year the Date of Termination occurs and (ii) the average of the Annual Bonuses earned for the two years prior to the year the Date of Termination occurs (the higher of (i) and (ii), the “ Applicable Bonus Amount ”) plus (C) 2.5 times the sum of the Annual Base Salary plus the Applicable Bonus Amount;

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(ii)           for 30   months following the Date of Termination, the Company shall continue to provide medical and dental and life insurance benefits to the Executive, his spouse and his eligible dependents on the same basis and at the same cost as such benefits are then currently provided to the Executive (the “ Welfare Benefits ”); provided that such benefits shall be secondary to any other coverage obtained by the Executive; provided, however, that if the Company’s welfare plans do not permit such coverage, the Company will provide the Executive the Welfare Benefits with the same after tax effect;

(iii)          if applicable, the Executive shall be deemed to have an additional 30 months of service credit under the Company’s retirement plans, programs, practices and policies;

(iv)          all Company equity awards (including, without limitation, the IPO Stock Options and IPO Units) shall fully vest and all stock options and stock appreciation rights shall remain exercisable for the lesser of (x) 30 months after the Date of Termination or (y) the remainder of their term; and

(v)           to the extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy or practice or other contract or agreement of the Company and its affiliated companies through the Date of Termination, including, but not limited to, any accrued but unused vacation, any unreimbursed business expenses and the percentage of target bonus payable to other senior executives of the Company with respect to any unpaid bonus for any completed fiscal year prior to the Date of Termination (such other amounts and benefits shall be hereinafter referred to as the “ Other Benefits ”).

(b)           Death; Disability .  If, during the Employment Period, the Executive’s employment shall terminate on account of death (other than via death after delivery of a valid Notice of Termination for Good Reason or without Cause) or Disability, except as provided in Sections 2(c)(ii) and 6 of this Agreement, the Company shall have no further obligations to the Executive other than to provide the Executive (or his estate):  (i) the Annual Base Salary through the Date of Termination to the extent theretofore unpaid, (ii) a pro-rated bonus as set forth in Section 4(a)(i)(B), (iii) the Other Benefits and (iv) all Company equity awards shall be treated as set forth in Section 4(a)(iv).

(c)           For Cause; Other than For Good Reason; End of Employment Period .  If, during the Employment Period, the Company shall terminate the Executive’s employment for Cause or the Executive terminates his employment without Good Reason, except as provided in Sections 2(c)(ii) and 6 of this Agreement, the Company shall have