EXHIBIT 10.56

October 24, 2008

Morgan Stanley

1585 Broadway

New York, NY 10036

To Whom This May Concern

In consideration for the benefits I will receive as a result of the
participation of Morgan Stanley (together with its subsidiaries and affiliates,
the “Company”) in the United States Department of the Treasury’s TARP Capital
Purchase Program and any other economic stabilization program implemented by the
Department of the Treasury under the Emergency Economic Stabilization Act of
2008 (the “Act”) either prior to or subsequent to the date of this letter from
me (any such program, including the TARP Capital Purchase Program, an “EESA
Program”), I hereby voluntarily waive any claim against any of the Company, the
Company’s Board of Directors, any individual member of the Company’s Board of
Directors and the Company’s officers, employees, representatives and agents for
any changes to my compensation or benefits that are required to comply with the
regulations issued by the Department of the Treasury in connection with an EESA
Program.

I acknowledge that the aforementioned regulations may require modification of
the compensation, bonus, incentive and other benefit plans, arrangements,
policies and agreements (including so-called “golden parachute” agreements),
whether or not in writing, that I may have with the Company or in which I may
participate as they relate to the period the United States holds any equity or
debt securities of the Company acquired through an EESA Program, including
without limitation the TARP Capital Purchase Program, or for any other period
applicable under such EESA Program.

This waiver includes all claims I may have under the laws of the United States
or any state related to the requirements imposed by the aforementioned
regulations, including without limitation a claim for any compensation or other
payments or benefits I would otherwise receive, any challenge to the process by
which the aforementioned regulations are or were adopted and any tort or
constitutional claim about the effect of these regulations on my employment
relationship.

I agree that, in the event and to the extent Morgan Stanley’s Compensation,
Management Development and Succession Committee (the “Committee”) reasonably
determines that any compensatory payment and benefit provided to me, including
any bonus or incentive compensation based on materially inaccurate financial
statements or performance criteria, would cause the Company to fail to be in
compliance with the terms and conditions of any EESA Program in which the
Company is a participant (such payment or benefit, an “Excess Payment”), upon
notification from the Company, I shall promptly repay such Excess Payment to the
Company. In addition, I agree that the Company shall have the right to postpone
any such payment or benefit for a reasonable period of time to enable the
Committee to determine whether such payment or benefit would constitute an
Excess Payment.

--------------------------------------------------------------------------------

I understand that any determination by the Committee as to whether or not,
including the manner in which, a payment or benefit needs to be modified,
terminated or repaid in order for the Company to be in compliance with
Section 111 of the Act and/or the aforementioned regulations shall be final,
conclusive and binding. I further understand that the Company is relying on this
letter from me in connection with its participation in any EESA Program,
including without limitation the TARP Capital Purchase Program.

Very truly yours,

 

2