8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 10, 2007

Morgans Hotel Group Co.
(Exact name of registrant as specified in its charter)

Delaware	000-51802	16-1736884
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

475 Tenth Avenue New York, NY	10018
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 277-4100

Not applicable

(Former name or former address if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Appointment of Fred J. Kleisner as President and Chief Executive Officer

On December 10, 2007, the Board of Directors of Morgans Hotel Group Co. (the “Company”) appointed Fred J. Kleisner as its President and Chief Executive Officer. Mr. Kleisner, age 63, had been acting as President and Chief Executive Officer in an interim capacity since September 20, 2007, and has been a member of the Company’s Board of Directors since February 2006.

Mr. Kleisner was Chairman, CEO of Rex Advisors, LLC, a hotel advisory firm, from February 2006 to September 2007. Mr. Kleisner joined Wyndham International in 1999 as President and Chief Operating Officer and in 2000 was given the additional responsibility of Chief Executive Officer and Chairman of the Board of Directors, where he continued to serve until 2006. He previously served as President and Chief Operating Officer — The Americas for Starwood Hotels & Resorts Worldwide, Inc. His more than four decades of experience in the industry also includes senior positions with Westin Hotels and Resorts, where he was President and Chief Operating Officer from 1995 through 1998; Interstate Hotels Company, where he was Executive Vice President and Group President of Operations from 1990 to 1995; ITT Sheraton Corporation, where he was Senior Vice President, Director of Operations, North America Division-East from 1985 to 1990; and Hilton Hotels, where for 16 years he served as General Manager of several landmark hotels, including The Waldorf-Astoria and The Waldorf Towers in New York, The Capital Hilton in Washington, D.C. and The Hilton Hawaiian Village in Honolulu. Mr. Kleisner, who holds a Bachelor of Arts degree in Hotel Management from Michigan State University, completed advanced studies (no degree) at the University of Virginia and Catholic University of America. Mr. Kleisner and his wife Johnna will reside in Manhattan.

There is no arrangement or understanding between Mr. Kleisner and any other persons pursuant to which he was selected as the Company’s President and Chief Executive Officer. In addition, there is no transaction between Mr. Kleisner and the Company that would require disclosure pursuant to Item 404(a) of Regulation S-K.

In connection with his service as interim President and Chief Executive Officer of the Company, Mr. Kleisner and the Company entered into an employment agreement, effective as of September 20, 2007, which agreement has been terminated effective as of December 10, 2007. For a further description of the terms of such employment agreement, see the Company’s Current Report on Form 8-K/A filed with the Securities and Exchange Commission on November 30, 2007.

In connection with Mr. Kleisner’s appointment as President and Chief Executive Officer of the Company, the Company has entered into a new employment agreement with Mr. Kleisner, effective as of December 10, 2007. Pursuant to the agreement, the Company and Mr. Kleisner have agreed to the following terms of employment:

• an annual base salary of $900,000;

• an annual cash bonus with a target payout of 75% of annual base salary and an annual equity bonus with a maximum value on the grant date of up to $2,425,000, both of which shall be determined by the Compensation Committee of the Board of Directors of the Company (the “Committee”) based 75% upon objective performance metrics established by Mr. Kleisner and the Committee and 25% upon Mr. Kleisner’s subjective performance as determined by the Committee;

• promptly after the commencement date of the employment agreement, Mr. Kleisner will be granted equity awards consisting of (i) 215,000 options to purchase shares of the Company’s common stock under the Company’s 2007 Omnibus Incentive Plan (the “Plan”), 95,000 of which shall have a strike price equal to the price of the Company’s common stock on the date of grant and 120,000 of which shall have a strike price that is 140% of the price of the Company’s common stock on the date of grant and (ii) upon the completion of the purchase by Mr. Kleisner of shares of the Company’s common stock equal to $500,000, 55,000 long-term incentive plan units under the Plan, which long-term incentive plan units are units of membership interest in Morgans Group LLC, the operating company and a subsidiary of the Company, and are structured as profits interests, provided that such equity awards shall vest one-third on each of the first three anniversaries of their respective grant dates, and provided further that if Mr. Kleisner’s employment is terminated without “cause” (as defined below) or with “good reason” (as defined below), the period of time after such termination during which Mr. Kleisner may exercise those stock options that have vested on or before the termination date shall be one year from and after Mr. Kleisner’s termination date;

• reimbursement of all reasonable and actual out-of-pocket expenses incurred by Mr. Kleisner in connection with his employment by the Company consistent with corporate policies, provided that the expenses are properly accounted for on the same basis as other similarly situated employees, and provided further that Mr. Kleisner’s travel expenses shall include first class travel and accommodations;

• reimbursement for reasonable moving expenses associated with the shipment of household goods and personal effects of Mr. Kleisner and his family to New York; and

• eligibility for benefits, including medical, dental, life insurance, 401(k) and up to five weeks paid vacation and on the same basis as other similarly situated employees.

The employment agreement shall terminate on December 10, 2010, unless earlier terminated by either party as described below. If the parties have failed to extend the term of the agreement or enter into a new agreement on or before the end of the employment period, and Mr. Kleisner’s employment terminates, for any reason, at the end of the employment period, the Company’s only obligation to Mr. Kleisner upon such termination will be to accelerate the vesting of the stock options and long-term incentive plan units granted under the employment agreement prior to December 10, 2010 and to pay any remaining earned but unpaid base salary. Mr. Kleisner may terminate the agreement by providing the Company with written notice 90 days in advance of the date of such termination. In addition, if he terminates the agreement for “good reason,” the Company has agreed to (i) pay Mr. Kleisner his pro rata annual cash bonus, if any, through the date of termination, (ii) continue to pay Mr. Kleisner his base salary for 24 months after the date of termination and (iii) continue paying Mr. Kleisner’s health insurance benefits for a period of 24 months after the date of termination. “Good reason” is defined in the agreement to mean (i) any failure by the Company to comply with the compensation provisions of the employment agreement (other than insubstantial or inadvertent failures not in bad faith which are remedied by the Company promptly after receipt of notice thereof), (ii) the assignment to Mr. Kleisner, or the removal from Mr. Kleisner, of any duties or responsibilities that result in a material diminution of Mr. Kleisner’s authority, (iii) a material diminution of the budget over which Mr. Kleisner has responsibility, other than for a bona fide business reason, (iv) any failure by the Company to require any successor entity to assume and agree to perform the employment agreement, (v) the imposition of any requirement that Mr. Kleisner 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 Mr. Kleisner. Mr. Kleisner must give the Company notice of the event that constitutes “good reason” within 60 days of its occurrence and the Company has 30 days in which to cure the same.

The Company may terminate Mr. Kleisner’s employment at any time for “cause” and the Company will have no further obligations to Mr. Kleisner other than to pay his base salary through the date of termination. The Company may also terminate Mr. Kleisner’s employment without “cause,” and in such case the Company will provide Mr. Kleisner with the same payments and benefits as he would be entitled to receive if he were to terminate the agreement for “good reason” as described above. “Cause” is defined in the agreement to mean Mr. Kleisner’s (i) repeated failure to perform his duties commensurate with his position as determined in the sole discretion of the Board of Directors, (ii) refusal to follow the lawful policies and directives of the Board of Directors, (iii) material breach of the provisions of the agreement, (iv) 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) breach of any fiduciary duty owed to the Company, or (vi) 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. However, no termination pursuant to clause (i), (ii) or (iii) in the immediately preceding sentence shall be effective unless the conduct providing “cause” to terminate continues without being cured for 30 days after Mr. Kleisner has been given notice thereof.

If, at the time of or during the one-year period following a “change in control,” the Company terminates Mr. Kleisner’s employment or Mr. Kleisner resigns for “good reason,” the Company will provide Mr. Kleisner with the same payments and benefits as he would be entitled to receive if he were to terminate the agreement for “good reason” as described above. In addition, all equity awards granted to Mr. Kleisner by the Company and held by Mr. Kleisner on the closing date of the “change in control” which have not previously vested shall become immediately vested and exercisable as of such closing date. “Change in control” is defined in the agreement to mean a “Corporate Transaction” as set forth in the Plan.

Mr. Kleisner’s employment will terminate automatically upon his death. Mr. Kleisner may be terminated on 30 days written notice by the Company if the Company determines in good faith that Mr. Kleisner is unable to perform his essential duties on a full-time basis as a result of incapacity due to mental or physical illness. Upon termination as a result of death or disability, the Company shall pay Mr. Kleisner or his estate his pro rata annual cash bonus through the last day on which he performed services for the Company prior to his death or disability.

The agreement provides that during his employment with the Company and for a period of two years thereafter, Mr. Kleisner will not solicit any present or future employee of the Company to leave the Company or to become employed or associated with a competitor of the Company. The agreement also provides that Mr. Kleisner shall not compete with the business activities conducted by the Company by providing any services to any other entity or individual engaged in the business of owning and/or operating hotels as an employee, officer, director, agent, independent contractor, consultant, joint venturer, shareholder (other than owning less than 1% of the stock of a public company), partner, proprietor or any other type of principal in any person, firm or business entity during the period Mr. Kleisner is employed by the Company, and for a period of two years after Mr. Kleisner’s employment with the Company terminates, for any reason.

A copy of Mr. Kleisner’s employment agreement is attached to this report as Exhibit 10.1 and incorporated herein by reference. The description above is a summary of the agreement and is qualified in its entirety by the complete text of the agreement.

A copy of the Company’s press release announcing the appointment of Mr. Kleisner as the Company’s President and Chief Executive Officer is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The information furnished in Exhibit 99.1 shall not be deemed “filed” with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended.

Appointment of Jeffrey M. Gault as Director

On December 10, 2007, the Board of Directors of the Company appointed Jeffrey M. Gault to its Board of Directors. Since August 2007, Mr. Gault has served as the Chief Executive Officer of LandCap Partners, a national residential land company. He previously served as Division President of KB Urban, a division of KB Home, from September 2005 to June 2007. His more than 30 years of experience in real estate development and investment activities also includes senior positions with Empire Companies, a Southern California land developer, where he was President and Chief Operating Officer from May 2002 to March 2005; Helios Partners, an affiliate of the Pritzker family interests of Chicago, where he was managing partner from 1994 to 1998; Sun America Realty Partners, an affiliate of Sun America, Inc., where he was managing principal from 1990 to 1994; and Home Savings of America, F.A., where he was Executive Vice President and Director of Real Estate from 1985 to 1990. Mr. Gault earned a Bachelor’s Degree in Architecture from the University of California at Berkeley and has a Master’s Degree in Environmental Design from Yale University’s School of Architecture. Mr. Gault is a licensed architect and general building contractor in the State of California, a member of the American Institute of Architects, American Institute of Certified Planners, and Urban Land Institute, and the Chairman of the University of California at Berkeley Fisher Center for Urban Economics and Real Estate Policy Advisory Board.

As of the date of this filing, Mr. Gault has not been appointed to a committee of the Company’s Board of Directors, nor has it been determined when, if at all, any such appointment would be made. There is no arrangement or understanding between Mr. Gault and any other persons pursuant to which he was selected as a director of the Company. In addition, there is no transaction between Mr. Gault and the Company that would require disclosure pursuant to Item 404(a) of Regulation S-K.

Item 8.01. Other Events.

On December 10, 2007, the Company issued a press release announcing that its Board of Directors has authorized the repurchase of up to $25 million worth of the Company’s common stock, or approximately 4% of its outstanding shares based on the current market price.

A copy of the Company’s press release announcing the repurchase program is furnished as Exhibit 99.2 to this Current Report on Form 8-K. The information furnished in Exhibit 99.2 shall not be deemed “filed” with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
10.1	Employment Agreement, effective as of December 10, 2007, by and between Morgans Hotel Group Co. and Fred J. Kleisner
99.1	Press release announcing appointment of Fred J. Kleisner as President and Chief Executive Officer, dated December 10, 2007
99.2	Press release announcing adoption of stock repurchase program, dated December 10, 2007

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MORGANS HOTEL GROUP CO.
Date: December 14, 2007	By:	/s/ Richard Szymanski
		Richard Szymanski
		Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
10.1	Employment Agreement, effective as of December 10, 2007, by and between Morgans Hotel Group Co. and Fred J. Kleisner
99.1	Press release announcing appointment of Fred J. Kleisner as President and Chief Executive Officer, dated December 10, 2007
99.2	Press release announcing adoption of stock repurchase program, dated December 10, 2007

EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is made and entered into intending to be effective on December 10, 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 Fred J. Kleisner (“Employee”).

WHEREAS, the Company employed the Employee as its interim Chief Executive Officer effective September 20, 2007 pursuant to an employment agreement dated as of that date (the “Interim Employment Agreement”) ;

WHEREAS, the Company now desires to employ Employee as its full time Chief Executive Officer, and Employee desires to be employed by the Company in that capacity on the terms and conditions stated below;

WHEREAS, the Interim Employment Agreement will be terminated effective as of the Commencement Date, subject to the final performance of payment and other obligations accrued thereunder through the Commencement Date.

NOW, THEREFORE, the Parties agree as follows:

1.       Employment.

a.       Company hereby agrees to employ Employee and Employee hereby accepts such employment, upon the terms and conditions contained in this Agreement.

b.       Employee will perform the job duties of Chief Executive Officer, or such other duties as the Board of Directors of the Company (the “Board”) may assign Employee from time to time, in its sole discretion, consistent with the duties and responsibilities of a Chief Executive Officer. 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.

c.       During the term of this Agreement, Employee shall report to the Board, and he shall serve as a member of the Board, for so long as he is so elected by the shareholders. Employee’s office shall be located in Manhattan.

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.        Initial Stock Option Grant. Promptly after the Commencement Date, the Company shall grant Employee 215,000 options (“Stock Options”) to purchase shares of Common Stock under the Company’s 2007 Omnibus Stock Incentive Plan (the “2007 SIP”) 95,000 of which shall have a strike price equal to the share price of the grant date and 120,000 of which shall have a strike price that is 140 percent of the share price on the grant date.

b.        Initial Matching Grant. Promptly after the Commencement Date, Employee will purchase shares of the Company’s Common Stock equal to Five Hundred Thousand ($500,000) Dollars. Upon completion of such purchase, the Company will grant Employee 55,000 LTIP Units (as defined in the 2007 SIP) under the 2007 SIP.

c.        Salary. The Company will pay Employee a base salary equal to $900,000 per year, ($37,500 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 the Compensation Committee may reevaluate Employee’s Base Salary, provided, however, that Employee’s Base Salary shall not be less than $900,000 per year.

d.        Annual Bonus and Annual Grant. Employee will be eligible for an annual cash bonus each calendar year (the “Annual Bonus”) with a target payout of 75% of Base Salary, and an annual equity bonus with a maximum value on the grant date (determined in accordance with the Black-Scholes valuation model or other customary equity valuation models) of up to Two Million Four Hundred Twenty Five Thousand ($2,425,000) Dollars (the “Annual Grant”). Before the last day of February of each calendar year, Employee and the Compensation Committee of the Board (the “Compensation Committee”) shall, in good faith, set objective performance metrics (the “Performance Metrics”) against which the Compensation Committee will evaluate Employee’s performance in determining the amount, if any, of the Annual Bonus and Annual Grant. The exact amount of Employee’s Annual Bonus and the exact value of the Annual Grant and type of Equity Award that comprises the Annual Grant shall be determined by the Compensation Committee in its sole discretion, provided, however, that the Compensation Committee will base 75 percent of the Annual Bonus and Annual Grant on the Performance Metrics, and it will base 25 percent on Employee’s subjective performance as determined by the Compensation Committee. Employee’s Annual Bonus will be paid and certificates or other evidence of the Equity Award delivered annually, no later than four months after the end of the calendar year. Except as provided in paragraph 3 of this Agreement, 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. Employee shall remain eligible to receive the prorata annual bonus provided for in the Interim Employment Agreement for the period of September 20, 2007 through December 10, 2007 in accordance with its terms.

e.        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, and provide further that Employee’s travel expenses shall include first class travel and accommodations. The Company will reimburse Employee for such other reasonable and necessary business expenses as the Compensation Committee specifically approves.

f.        Relocation Expenses. The Company will reimburse Employee for reasonable moving expenses associated with the shipment of household goods and personal effects of Employee and his family to New York. Employee shall obtain at least two bids with regard to such expenses and shall accept the lower of such bids. Employee shall provide copies of invoices or other appropriate documentation with respect to such expenses. The Company agrees to use its reasonable best efforts to cooperate with the Executive in minimizing the tax on such amount.

g.        Fringe Benefits. Employee will be eligible for benefits, including medical, dental, life insurance and 401(k), and paid vacation on the same basis as other, similarly situated employees and in accordance with the terms of the various plans governing these benefits.

h.        Equity Agreements. The Stock Options and LTIP Units awarded pursuant to this paragraph 2 (the “Equity Awards”) shall be evidenced by award agreements (the “Equity Agreements”) in the form approved by the Board and which have been signed by the Employee and the Company from time to time. The Equity Awards shall vest one-third on each of the first three anniversaries of the effective date of grant. The terms of the Equity Agreements will govern the Equity Awards, provided, however, that notwithstanding the foregoing or anything else contained in this Agreement or in the Equity Agreements to the contrary, if Employee’s employment is terminated without Cause (as defined below) or with Good Reason (as defined below), the period of time after such termination during which the Employee may exercise those Stock Options that have vested on or before the termination date shall be one year from and after the Employee’s termination date. To the extent of any conflict between the terms of this Agreement and the terms of any Equity Agreement with respect to the definitions of Cause, Good Reason or otherwise, the terms of this Agreement shall prevail. In addition to the Equity Agreements, this paragraph 2.g. and paragraph 3.g. of this Agreement shall be deemed an Award Agreement as such term is defined in the 2007 SIP. All corporate actions necessary for the authorization and approval of the Equity Agreements and this Agreement by the Board or any Committee thereof have been taken or will be taken promptly after the execution of this Agreement.

i.        Vacations. Employee shall be eligible for up to five weeks vacation per calendar year accrued in accordance with Employer’s policy for other senior executives.

3.        Term and Termination.

a.        Term. This Agreement shall commence on the Commencement Date and shall terminate on December 31, 2010 (the “Employment Period”), unless earlier terminated by either party as provided below. If the parties have failed to extend this Agreement or enter into a new agreement on or before the end of the Employment Period, and Employee’s employment terminates, for any reason, at the end of the Employment Period, the Company’s only obligation to Employee upon such termination will be to accelerate the vesting of all Equity Awards granted prior to December 31, 2010 and to pay any remaining earned but unpaid Base Salary. Notwithstanding the foregoing or anything else contained in this Agreement to the contrary, if Employee is employed through December 31, 2010, the Board shall determine the amount of any Annual Bonus and/or Annual Grant, if any, to award Employee for calendar year 2010 based on the criteria set forth in paragraph 2. d. of this Agreement, and shall pay such award or make such grant, if any, on the date in 2011 on which the Company’s other Employees receive bonuses, regardless of whether Employee in employed by the Company on that date.

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 90 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 Annual 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; 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 are capable of being cured and such acts or omissions continue after Employee has given the Company notice thereof and 30 days in which to cure the same.

d.        Termination Upon Death or Disability. The Employee’s employment shall terminate automatically upon the Employee’s death. If the Board 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 or death, Employer shall pay Employee his pro-rata Annual Bonus through the last day on which he performed services for Employer prior to his Disability or death, and Employer shall have no further obligations to Employee hereunder.

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 Board; (ii) Employee’s refusal to follow the lawful policies and directives of the Board; (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 Annual 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; and (3) continue paying for Employee’s health insurance benefits for a period of twenty four (24) months after such termination.

g.        Termination as the Result of a Change in Control. If, at the time of or during the one-year period following a Change in Control, the Company terminates Employee’s employment or Employee resigns for Good Reason: (1) pay Employee his pro-rata Annual Bonus, if any, for the current calendar year through the date of termination; (2) the Company shall pay Employee an amount equal to two times his then Base Salary; (3) the Company shall continue to pay his health insurance benefits for a period of Twenty Four (24) months after the date of his termination; and (4) all equity awards granted to Employee by the Employer and held by Employee on the closing date of the Change in Control (the “Closing Date”), which have not previously vested, shall become immediately vested and exercisable as of the Closing Date. As used in this Agreement, a “Change in Control” shall mean a “Corporate Transaction” as set forth in the 2007 SIP.

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 4, and as a condition to such payments, Employee shall sign a customary general release of all potential claims he may have against the Company. The Company shall have no obligation to provide Employee with any of the payments or benefits set forth in such clauses of this paragraph 4 until Employee delivers such release.

4.        Treatment of Confidential Information.

As a Company employee, Employee will acquire Confidential Information in the course of Employee’s employment. Employee agrees that, in consideration of employment with the Company, Employee will treat such Confidential Information as strictly confidential. Employee will not, directly or indirectly, at any time during employment with the Company or any time thereafter, and without regard to when or for what reason, if any, such employment shall terminate, use or cause to be used any such Confidential Information, in connection with any activity or business except in the normal course of performing his designated duties for the Company. Employee shall not disclose or cause to be disclosed any such Confidential Information to any third parties unless such disclosure has been authorized in writing by the Company or except as may be required by regulatory body or governmental body. “Confidential Information” is any Company confidential information not generally known to the public, including but not limited to trade secrets, mailing lists, financial information, business plans and/or policies, methods of operations, customer lists and information, sales and marketing plans, research and development plans, strategic plans, and any other information Employee acquires in the course of employment with the Company that is not readily available to the public.

5.        Non-solicitation.

During the period that Employee is employed by the Company, and for a period of two (2) years thereafter, regardless of the reason Employee’s employment with the Company terminates, Employee will not directly or indirectly, either individually or through any entity with which Employee may become associated, cause, solicit, entice or induce any present or future employee of the Company to leave the employ of the Company and/or directly hire or directly or indirectly cause, solicit, entice or induce any present or future employee of the Company to become employed or associated in any capacity with a competitor of the Company.

6.        Non-compete.

Employee shall not directly or indirectly compete with the business activities conducted by the Company by providing any services to any other company, entity or individual engaged in the business of owning and/or operating hotels, as an employee, officer, director, agent, independent contractor, consultant, joint venturer, shareholder (other than owning less than 1% of the stock of a public company), partner, proprietor or any other type of principal in any person, firm or business entity during the period Employee is employed by the Company, and for a period of two (2) years after Employee’s employment with the Company terminates, for any reason.

7.        Remedies.

Employee acknowledges that the breach or threatened breach of this Agreement will cause the Company irreparable harm to its business and good will, for which there may be no adequate remedy at law. Consequently, in the event that Employee breaches or threatens to breach the Agreement, the Company shall be entitled to both: (i) the issuance by a court of competent jurisdiction of an injunction, restraining order, or other equitable relief in favor of itself, without the necessity of posting a bond, restraining Employee from committing or continuing to commit any violation; and (ii) monetary damages insofar as they can be determined. Any right to obtain an injunction, restraining order or other equitable relief under this paragraph 6 shall not be deemed a waiver of any right to assert any other remedy the Company may have at law or in equity.

8.        Tax Liability

a.        Anything in this Agreement to the contrary notwithstanding, if (A) on the date of termination of Employee’s employment with the Company, any of the Company’s stock is publicly traded on an established securities market or otherwise (within the meaning of Section 409A(a)(2)(B)(i) of the Code, (B) if it is determined that Employee is a “specified employee” within the meaning of Section 409A(a)(2)(B) of the Code, (C) the payments exceed the amounts permitted to be paid pursuant to Treasury Regulations section 1.409A-1(b)(9)(iii) and (D) such delay is required to avoid the imposition of the tax set forth in Section 409A(a)(1) of the Code as a result of such termination, Employee would receive any payment that, absent the application of this Section 7, would be subject to interest and additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(2)(B)(i) of the Code, then no such payment shall be payable prior to the date that is the earliest of (1) 6 months after Employee’s termination date, (2) Employee’s death or (3) such other date as will cause such payment not to be subject to such interest and additional tax (with a catch-up payment equal to the sum of all amounts that have been delayed to be made as of the date of the initial payment).

b.        It is the intention of the parties that payments or benefits payable under this Agreement not be subject to the additional tax imposed pursuant to Section 409A of the Code. To the extent such potential payments or benefits could become subject to such Section, the parties shall cooperate to amend this Agreement with the goal of giving Employee the economic benefits described herein in a manner that does not result in such tax being imposed.

9.        Successors.

a.        This Agreement is personal to the Employee and without the prior written consent of the Company shall not be assignable by the Employee otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Employee’s legal representatives.

b.        This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns, provided that the Company may not assign this Agreement other than as described in Section 8(c) below.

c.        The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid.

10.        Indemnification.

a.        If the Employee is made a party, is threatened to be made a party, or reasonably anticipates being made a party, to any Proceeding (as defined below) by reason of the fact that he is or was a director, officer, employee, agent, manager, trustee, consultant or representative of the Company or any of its affiliates or is or was serving at the request of the Company or any of its affiliates, or in connection with his service hereunder, as a director, officer, member, employee, agent, manager, trustee, consultant or representative of another person or entity, or if any Claim (as defined below) is made, is threatened to be made, or is reasonably anticipated to be made, that arises out of or relates to the Employee’s service in any of the foregoing capacities, then the Employee shall promptly be indemnified and held harmless to the fullest extent permitted or authorized by the Certificate of Incorporation or Bylaws of the Company, or if greater, by applicable law, against any and all costs, expenses, liabilities and losses (including, without limitation, attorneys’ and other professional fees, judgments, interest, expenses of investigation, penalties, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) incurred or suffered by the Employee in connection therewith or in connection with seeking to enforce his rights under this paragraph 9, and such indemnification shall continue as to the Employee even if he has ceased to be a director, member, employee, agent, manager, trustee, consultant or representative of the Company or other person or entity and shall inure to the benefit of the Employee’s heirs, executors and administrators. The Employee shall be entitled to prompt advancement of any and all costs and expenses (including, without limitation, attorneys’ and other professional fees and other charges) incurred by him in connection with any such Proceeding or Claim, or in connection with seeking to enforce his rights under this paragraph 9, any such advancement to be made within 15 days after he gives written notice, supported by reasonable documentation, requesting such advancement. Such notice shall include, to the extent required by applicable law, an undertaking by the Employee to repay the amount advanced if he is ultimately determined not to be entitled to indemnification against such costs and expenses. Nothing in this Agreement shall operate to limit or extinguish any right to indemnification, advancement of expenses, or contribution that the Employee would otherwise have (including, without limitation, by agreement or under applicable law). For purposes of this Agreement, “Claim” shall include, without limitation, any claim, demand, request, investigation, dispute, controversy, threat, discovery request, or request for testimony or information and “Proceeding” shall include, without limitation, any actual, threatened, or reasonably anticipated, action, suit or proceeding, whether civil, criminal, administrative, investigative, appellate, formal, informal or other.

b.        A directors’ and officers’ liability insurance policy (or policies) shall be kept in place, during the Employment Period and thereafter until the later of (x) the sixth anniversary of the date on which the Employee’s employment with the Company terminates and (y) the date on which all claims against the Employee that would otherwise be covered by the policy (or policies) would become fully time barred, providing coverage to the Employee that is no less favorable to him in any respect (including, without limitation, with respect to scope, exclusions, amounts, and deductibles) than the coverage then being provided to any other present or former senior executive or director of the Company.

11.        Severability.

If a court of competent jurisdiction holds any provision of this Agreement to be illegal, invalid or unenforceable, the remainder of the provisions of this Agreement shall continue in full force and effect. Further, if any court of competent jurisdiction construes any portion of any of the covenants contained in this Agreement to be unenforceable or unreasonable as to scope, the court may and is requested by the Parties to modify and enforce the covenants to the extent reasonable.

12.        Entire Agreement; Amendment.

This Agreement expresses the entire and exclusive understanding of the parties to this Agreement only with respect to the matters covered by this Agreement and incorporates any and all prior agreements, understandings, negotiations and discussions relating hereto, whether written or oral, all of which are hereby terminated and canceled. This Agreement may be modified or amended only by a written instrument manually signed by all parties to this Agreement.

13.        Applicable Law.

This Agreement has been made under and shall be construed and enforced in accordance with the laws of the State of New York, notwithstanding its choice of law rules to the contrary.

14.        Notice.

Any notice, statement or demand required to be given under this Agreement shall be in writing and shall be sent by hand delivery against receipt, certified mail, return receipt requested or by a nationally recognized overnight carrier to the address of the parties first listed above.

15.        Waiver.

The failure of either party to insist upon strict performance of any of the terms or provisions of this Agreement or to exercise any option, right or remedy contained in this Agreement, shall not be construed as a waiver or as a relinquishment for the future of such term, provision, option, right or remedy, but the same shall continue and remain in full force and effect. No waiver by either party of any term or provision of this Agreement shall be deemed to have been made unless expressed in writing and signed by such party.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

EMPLOYER:		EMPLOYEE:
MORGANS HOTEL GROUP CO.
By:	/s/ David Hamamoto	/s/ Fred J. Kleisner
	David Hamamoto,	Fred J. Kleisner
	Chairman, Board of Directors

EX-99.1

Exhibit 99.1

MORGANS HOTEL GROUP NAMES FRED J. KLEISNER AS PRESIDENT AND CEO

New York, NY — December 10, 2007 — Morgans Hotel Group Co. (NASDAQ: MHGC) (“MHG”) today announced that Fred J. Kleisner has been appointed President and Chief Executive Officer of the Company. Mr. Kleisner has served as MHG’s interim President and CEO since September and has been a member of the Company’s Board of Directors since its initial public offering in February 2006.

Robert Friedman, Chairman of the Search Committee of the MHG Board of Directors, said, “We conducted a thorough search process with the assistance of Spencer Stuart, and considered a number of highly qualified internal and external candidates. The Board unanimously concluded that Fred has the right combination of experience in our space and passion to lead MHG ahead. We are extremely pleased to announce his new role.”

“Fred took the helm as interim CEO in September and has done an extraordinary job, quickly gaining the confidence of investors, customers, and MHG’s employees,” said David T. Hamamoto, Chairman of MHG. “Fred has extensive experience and great depth in the hotel industry where he has worked for four decades, as well as substantial expertise in the luxury boutique hotel sector. The Board and I have no doubt that his detailed knowledge of both the company and our markets — with the support of MHG’s strong management team — will allow Morgans Hotel Group to continue to be an innovative leader in the boutique hotel sector. Fred’s continued leadership will provide the direction, support and continuity to drive MHG’s future success.”

Mr. Kleisner said, “I am delighted to continue leading MHG. My experience over the last two months reinforces my confidence in our assets, our people, and our prospects. MHG sits in the sweet spot of the most desirable sector in the industry. Our portfolio of iconic hotels has an enduring appeal. We will continue to reinvigorate our brands and expand into new markets where we can best serve our loyal, sophisticated guests.”

Mr. Kleisner joined Wyndham International in 1999 as President and Chief Operating Officer and then in 2000 was given the additional responsibility of Chief Executive Officer. He continued to serve as President and CEO until 2006. He was also named Chairman of the Board of Directors in October of 2000. He previously served as President and Chief Operating Officer of The Americas for Starwood Hotels & Resorts Worldwide, Inc. His more than four decades of experience in the industry also includes senior positions with Westin Hotels and Resorts, where he was President and Chief Operating Officer from 1995 to 1998; Interstate Hotels Company, where he was Executive Vice President and Group President of Operations from 1990 to 1995; The Sheraton Corporation, where he was Senior Vice President, Director of Operations, North America Division-East from 1985 to 1990; and Hilton Hotels, where for 16 years he served as General Manager of several landmark hotels, including The Waldorf=Astoria and The Waldorf Towers in New York, The Capital Hilton in Washington, D.C. and The Hilton Hawaiian Village in Honolulu.

About Morgans Hotel Group

Morgans Hotel Group Co. (NASDAQ: MHGC), which is widely credited with establishing and developing the rapidly expanding boutique hotel sector, operates and owns, or has an ownership interest in, Morgans, Royalton and Hudson in New York, Delano and The Shore Club in Miami, Mondrian in Los Angeles and Scottsdale, Clift in San Francisco, and Sanderson and St Martins Lane in London. In February 2007, MHG and an equity partner acquired the Hard Rock Hotel & Casino in Las Vegas and related assets. MHG has other property transactions in various stages of completion including projects in Miami Beach, Florida, Chicago, Illinois, SoHo, New York and Las Vegas, Nevada, and continues to vigorously pursue its strategy of developing unique properties at various price points in international gateway cities and select resort destinations. For more information please visit www.morganshotelgroup.com.

Forward-Looking and Cautionary Statements

Statements contained in this press release which are not historical facts are forward-looking statements as the term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of words such as “expects,” “plans,” “estimates,” “projects,” “intends,” “believes,” “guidance,” and similar expressions that do not relate to historical matters. These forward-looking statements are subject to risks and uncertainties which can cause actual results to differ materially from those currently anticipated, due to a number of factors which include, but are not limited to, risks related to obtaining financing on favorable terms, if at all, construction delays, complications in obtaining necessary zoning, occupancy and other governmental permits and cost overruns; downturns in economic and market conditions, particularly levels of spending in the business, travel and leisure industries; hostilities, including future terrorist attacks, or fear of hostilities that affect travel; risks related to natural disasters, such as earthquakes and hurricanes; risks associated with the acquisition, development and integration of properties; the seasonal nature of the hospitality business; changes in the tastes of our customers; increases in real property tax rates; increases in interest rates and operating costs; the impact of any material litigation; the loss of key members of our senior management; general volatility of the capital markets and our ability to access the capital markets; and changes in the competitive environment in our industry and the markets where we invest, and other risk factors discussed in MHG’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006, and other documents filed by MHG with the Securities and Exchange Commission from time to time. All forward-looking statements in this press release are made as of the date hereof, based upon information known to management as of the date hereof, and MHG assumes no obligations to update or revise any of its forward-looking statements even if experience or future changes show that indicated results or events will not be realized.

Contacts

Jennifer Foley
Morgans Hotel Group
212.277.4166

Eric Brielmann / Andi Salas
Joele Frank, Wilkinson Brimmer Katcher
212.355.4449

EX-99.2

Exhibit 99.2

MORGANS HOTEL GROUP ANNOUNCES ADDITIONAL $25 MILLION
STOCK REPURCHASE PROGRAM

New York, NY — December 10, 2007 — Morgans Hotel Group Co. (NASDAQ: MHGC) (“MHG”) today announced that after the recent completion of its $50 million stock repurchase program, announced in December 2006, the Company’s Board of Directors has authorized an additional repurchase of up to $25 million of MHG common stock, or approximately 4% of its outstanding shares based on the current market price.

“We have had a record year, both in terms of financial performance and achieving our strategic goals,” said Fred J. Kleisner, President and Chief Executive Officer. “This additional repurchase program reflects our Board of Directors’ continued confidence in MHG and its prospects, and demonstrates the Company’s commitment to enhancing shareholder value. We believe MHG is well-positioned to capitalize on its market leadership to deliver continued growth and profitability.”

Stock repurchases under this program will be made from time to time through the open market or in privately negotiated transactions. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions, and other corporate liquidity requirements and priorities. The stock repurchase program may be suspended or terminated at any time without prior notice, and will expire on December 10, 2008.

Under the Company’s earlier $50 million stock repurchase program, MHG repurchased 2.8 million shares, including 1.2 million shares at an average price of $18.29 in the fourth quarter of 2007.

About Morgans Hotel Group
Morgans Hotel Group Co. (NASDAQ: MHGC), which is widely credited with establishing and developing the rapidly expanding boutique hotel sector, operates and owns, or has an ownership interest in, Morgans, Royalton and Hudson in New York, Delano and The Shore Club in Miami, Mondrian in Los Angeles and Scottsdale, Clift in San Francisco, and Sanderson and St Martins Lane in London. In February 2007, MHG and an equity partner acquired the Hard Rock Hotel & Casino in Las Vegas and related assets. MHG has other property transactions in various stages of completion including projects in Miami Beach, Florida, Chicago, Illinois, SoHo, New York and Las Vegas, Nevada, and continues to vigorously pursue its strategy of developing unique properties at various price points in international gateway cities and select resort destinations. For more information please visit www.morganshotelgroup.com.

Forward-Looking and Cautionary Statements
Statements contained in this press release which are not historical facts are forward-looking statements as the term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of words such as “expects,” “plans,” “estimates,” “projects,” “intends,” “believes,” “guidance,” and similar expressions that do not relate to historical matters. These forward-looking statements are subject to risks and uncertainties which can cause actual results to differ materially from those currently anticipated, due to a number of factors which include, but are not limited to, risks related to obtaining financing on favorable terms, if at all, construction delays, complications in obtaining necessary zoning, occupancy and other governmental permits and cost overruns; downturns in economic and market conditions, particularly levels of spending in the business, travel and leisure industries; hostilities, including future terrorist attacks, or fear of hostilities that affect travel; risks related to natural disasters, such as earthquakes and hurricanes; risks associated with the acquisition, development and integration of properties; the seasonal nature of the hospitality business; changes in the tastes of our customers; increases in real property tax rates; increases in interest rates and operating costs; the impact of any material litigation; the loss of key members of our senior management; general volatility of the capital markets and our ability to access the capital markets; and changes in the competitive environment in our industry and the markets where we invest, and other risk factors discussed in MHG’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006, and other documents filed by MHG with the Securities and Exchange Commission from time to time. All forward-looking statements in this press release are made as of the date hereof, based upon information known to management as of the date hereof, and MHG assumes no obligations to update or revise any of its forward-looking statements even if experience or future changes show that indicated results or events will not be realized.

Contacts
Eric Brielmann / Andi Salas
Joele Frank, Wilkinson Brimmer Katcher
212.355.4449