Exhibit 10.1
EMPLOYMENT
AGREEMENT
This
Employment Agreement (this “Agreement”) is made and
entered into intending to be effective on October 1, 2007 (the
“Commencement Date”) by and between Morgans Hotel Group
Co., with a principal place of business at 475 Tenth Avenue, New
York, NY 10018 (the “Company” or
“Employer”) and Richard Szymanski
(“Employee”).
WHEREAS, the Company desires to continue to employ Employee as the
Chief Financial Officer, and Employee desires to continue to be
employed by the Company on the terms and conditions stated
below;
NOW,
THEREFORE, the Parties agree as follows:
1. Employment.
a. Company hereby agrees to continue to employ Employee and
Employee hereby accepts such continued employment, upon the terms
and conditions contained in this Agreement.
b. Employee will perform the job duties of Chief Financial
Officer, or such other duties as the Company may assign Employee
from time to time, in its sole discretion, consistent with the
duties and responsibilities of an executive at Employee’s
level. Employee agrees to continue to devote substantially his full
time, energies and best efforts to the performance of his duties
for the Company, to the exclusion of all other business or
employment activities. In the performance of his duties hereunder,
Employee shall report to the Chief Executive Officer.
2. Compensation.
The
Company shall pay to the Employee, and the Employee hereby accepts,
as payment for the services Employee renders to the Company
remuneration in the following amounts and forms:
a. Salary . The Company will pay Employee a base
salary equal to $450,000 per year, ($18,750 semi-monthly), which
may be increased at the Company’s sole discretion from time
to time (the “Base Salary”). The Company customarily
conducts annual performance reviews and at that time a reevaluation
of Employee’s Base Salary is usual, provided, however, that
Employee’s Base Salary shall not be less than $450,000 per
year.
c. Bonus. Subject to Employee’s continued
employment with the Company, the Company shall pay Employee an
annual bonus commensurate with the bonuses paid to other similarly
situated employees of the Company. The exact amount of
Employee’s bonus shall be determined in the Company’s
sole discretion. Employee’s bonus will be paid annually,
usually within two months after the end of the calendar year.
Employee must be employed by the Company on the date bonuses are
paid to Company employees in order to be entitled to receive a
bonus.
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d. Expenses . During the term of this Agreement,
Employee shall be entitled to reimbursement of all reasonable and
actual out-of-pocket expenses incurred by him in the performance of
his services to the Company consistent with corporate policies,
provided that the expenses are properly accounted for, on the same
basis as other, similarly situated employees.
e. Fringe Benefits . Employee will be eligible for
benefits, including medical, dental, life insurance and 401(k),
paid vacation, and equity grants on the same basis as other,
similarly situated employees and in accordance with the terms of
the various plans governing these benefits.
a. Term. This Agreement shall commence on the
Commencement Date and may be terminated by either party as provided
below.
b. Termination by Employee without Good Reason.
Employee may terminate this Agreement by providing the Company with
written notice of his intent to terminate employment 30 days
in advance of the date of such termination.
c. Termination by Employee with Good Reason. 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 bonus, if any, for the current calendar year
through the date of 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 (3) continue paying
for Employee’s health insurance benefits for a period of
twenty four (24) months after such termination. Employee must
notify the Company, in writing, within sixty (60) days after
Employee has knowledge that an event constituting Good Reason has
occurred, in order for such event to constitute Good Reason. The
term Good Reason shall mean the occurrence of one or more of the
following without Employee’s written consent: (i) any
failure by the Company to comply with any of the provisions of
paragraph 2 of this Agreement, 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
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 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; provided,
however, that no termination for Good Reason shall be effective
unless the acts or omissions providing Good Reason to terminate
continue after Employee has given the Company notice thereof and
30 days in which to cure the same.
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d. Termination Upon Death or Disability. The
Employee’s employment shall terminate automatically upon the
Employee’s death. If the Company determines in good
faith that the Disability of the Employee, as defined below, has
occurred during the term of this Agreement, it may give to the
Employee written notice of its intention to terminate the
Employee’s employment. In such event, the
Employee’s employment with the Company shall terminate
effective on the 30th day after receipt of such notice to the
Employee (the “Disability Effective Date”), provided
that, within the 30 days after such receipt, the Employee
shall not have returned to full-time performance of the
Employee’s duties. For purposes of this Agreement,
“Disability” shall mean the inability of the Employee
to perform his essential duties for the Company on a full-time
basis for 180 calendar days during any consecutive twelve
month period as a result of incapacity due to mental or physical
illness. Upon termination as the result of Disability, Employer
shall have no further obligations to Employee.
e. Termination by the Company for Cause . The Company
may terminate Employee’s employment at any time during the
term of this Agreement for Cause, as defined below, and the Company
shall have no obligations to Employee other than to pay
Employee’s Base Salary through the date of termination. As
used in this Agreement, “Cause” shall mean:
(i) Employee’s repeated failure to perform his duties
commensurate with his position as determined in the sole discretion
of the Company; (ii) Employee’s refusal to follow the
lawful policies and directives of his supervisors;
(iii) Employee’s material breach of the provisions of
this Agreement; (iv) Employee’s engagement in any act of
dishonesty, gross negligence or willful misconduct that may have an
adverse effect on the Company, its business operations, financial
condition, assets, prospects or reputation;
(v) Employee’s breach of any fiduciary duty owed to the
Company or (vi) Employee’s knowing violation of any law,
rule or regulation that affects his performance of or ability to
perform any of his duties or responsibilities with the Company;
provided, however, that no termination pursuant to clause (i),
(ii) or (iii) shall be effective unless the conduct
providing Cause to terminate continues after Employee has been
given notice thereof and 30 days in which to cure the
same.
f. Termination by the Company without Cause. The
Company may terminate Employee’s employment at any time
during the term of this Agreement without Cause (as defined above)
by notifying the Employee in writing of its intent to terminate
Employee’s employment, and, thereafter, the Employer shall:
(1) pay Employee his pro-rata bonus, if any, for the current
calendar year through the date of 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
(3) continue paying for Employee’s health insurance
benefits for a period of twenty four (24) months after such
termination.
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g. Termination as the Result of a Change in Control .
If, at the time of or during the one-
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