EXHIBIT 10.51

 

Philip J. Purcell

  1585 Broadway

Chairman &

Chief Executive Officer

  New York, NY 10036  

 

[COMPANY LOGO] Morgan Stanley

 

October 13, 2003

 

Mr. Robert G. Scott

President

Morgan Stanley

1585 Broadway

New York, New York 10036

 

Dear Bob:

 

This letter will confirm our discussions with respect to your decision to retire
from Morgan Stanley effective November 30, 2003. You have had a long and
distinguished career at Morgan Stanley. While I am disappointed with your
decision to retire at this time, I certainly understand and respect it, and I am
delighted that you have agreed to remain with us as an Advisory Director.

 

The arrangements we have agreed to are described below. Because you are an
executive officer, certain of the provisions in this agreement are subject to
the approval of the Morgan Stanley Compensation Committee, and I plan to
recommend to the Committee that they approve them.

 

1. Your retirement will be effective as of 5:30 p.m on November 30, 2003 (the
“Retirement Date”). At that time, your employment with the firm will end, except
as otherwise provided in this letter. At my request, you have agreed to continue
to serve on our Board of Directors until the Spring of 2004 annual meeting. In
view of your continued affiliation with Morgan Stanley, you will not be eligible
for Morgan Stanley board compensation. The amount of your total compensation for
the firm’s fiscal year 2003 will equal 95.8% of my own total compensation for
that year, and (to the extent not previously paid to you) will be paid to you in
cash no later than the MD Payment Date for that year.

 

2. Effective December 1, 2003, you will become an Advisory Director. In that
capacity, you will receive consulting fees of $500,000 per year for 5 years. In
addition, you will receive an annual bonus of $1 million per year for each of
the first 3 years; for the remaining 2 years, any annual bonus will be at the
firm’s discretion. Each of the foregoing annual bonuses will be paid to you in
cash no later than Managing Directors for the firm receive their bonuses for the
corresponding year (the “MD Payment Date”). The foregoing payments will be made
unless you resign voluntarily or are terminated by me as provided in paragraph 3
below, in which event you will receive all base consulting fee amounts earned
through the date of termination.

 

3. During your service as an Advisory Director over the next 5 years, you will
have an appropriate office and one secretary. Your services as an Advisory
Director may require significant time, but will be subject to your other
personal and professional commitments. While you are serving as an Advisory
Director and until we agree otherwise, you will lead a comprehensive review of
the Advisory Director program, focusing on ways in which the Advisory Director
program can be more efficient and productive; continue to serve as Chairman of
the firm’s Diversity Committee; be responsible for the Diversity Speaker series;
and serve as principal liaison to New York-Presbyterian Hospital. Your service
as an Advisory Director may be terminated at my option in the event that you
establish a commercial affiliation that I conclude conflicts with your
responsibilities as an Advisory Director.

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[COMPANY LOGO] Morgan Stanley

 

4. Enclosed with this letter is a listing of compensatory, savings and
retirement awards and accounts that are currently outstanding in your name. For
purposes of such awards and accounts, the company will not claim forfeiture for
“cause” unless you have engaged, or engage in the future, in willful or
intentional misconduct, including violation of any securities, commodities or
banking laws or any rules or regulations issued pursuant to such laws, that
cause or may reasonably be expected to cause significant harm to the company, in
each case to the extent that forfeiture is then otherwise authorized under the
applicable award documents. Starting with the opening of the first window period
after you cease to be a board member, you will be subject to the Advisory
Director policies that deal with purchases and sales of Morgan Stanley
securities. Your shares will also be subject to any restrictions imposed by law
or regulations and the restrictions imposed under the applicable terms of
governing plan and award documents.

 

5. You will be indemnified (including advancement of attorneys’ fees) to the
fullest extent authorized by applicable law and receive continued D&O) insurance
coverage for at least six years to the extent that such coverage is then
provided for any officer or board member of the firm, in each case in connection
with any claim that arises out of, or relates to, your service at the firm’s
request for the firm or any of its affiliates. Nothing in this letter will
diminish any indemnification, advancement, contribution or comparable right that
you may have under any arrangement of the firm or any of its affiliates (“MS
Arrangement”) or otherwise.

 

6. Any dispute relating to this letter or your employment with the firm will be
resolved through binding confidential arbitration in Manhattan, before a
three-arbitrator panel, under the Commercial Arbitration Rules in the American
Arbitration Association and in accordance with the laws of the State of New
York. In the event of any inconsistency between the terms of this letter and the
terms of the MS Arrangement, the terms of this letter will control. Upon your
death or a judicial determination of your incapacity, all references to you in
this letter will be deemed (as appropriate) to be references to your
beneficiaries, estate, or other legal representatives, it being understood that
there will be no continuing right to compensation as an Advisory Director, an
office, a secretary or any other perquisites. All references in this letter to
me will be deemed to refer to me or my successor as CEO of Morgan Stanley.

 

In closing, let me congratulate you again on a long and distinguished career at
Morgan Stanley during which you have contributed a great deal to the success of
the firm.

 

Cordially,

/s/ PHILIP J. PURCELL

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Philip J. Purcell

 

Agreed:

/s/ ROBERT G. SCOTT

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Robert G. Scott

 

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