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                                                                    Exhibit 10.9

               1989 STOCK COMPENSATION PLAN AND PREDECESSOR PLANS
                            OF U.S. TRUST CORPORATION

                  AS AMENDED AND RESTATED THROUGH JULY 1, 1997


                             SECTION 1. INTRODUCTION

1.1      PURPOSE

         The Plan hereinafter set forth represents a continuation of certain
stock-based compensation plans maintained by U.S. Trust Corporation before its
merger with The Chase Manhattan Corporation ("Chase") pursuant to the Agreement
and Plan of Merger dated as of November 18, 1994 between Chase and U.S. Trust
Corporation (the "Merger Agreement"). The plans so continued are (i) all
portions of the 1989 Stock Compensation Plan of U.S. Trust Corporation other
than Section 2 thereof and any other provisions of such plan to the extent they
relate to stock options (such continued portions are referred to herein as the
"Prior Plan"), (ii) the 1988 Long-Term Performance Plan of U.S. Trust
Corporation, and (iii) the Long-Term Performance Plan of U.S. Trust Corporation
(the plans described in (ii) and (iii) are referred to herein as the
"Predecessor Plans").

         As set forth herein, the Prior Plan and the Predecessor Plans were
amended, restated and renamed effective as of September 1, 1995 (a) to reflect
the transfer of the Prior Plan and the Predecessor Plans to and their adoption
by the Corporation, and the Corporation's assumption of and becoming solely
responsible for all liabilities and obligations of U.S. Trust Corporation under
the Prior Plan and the Predecessor Plans, effective immediately before the "New
Holdings Distribution", as defined in the Merger Agreement, (b) to consolidate
the Prior Plan and the Predecessor Plans, as so transferred and adopted, into a
single plan, and (c) to reflect the "Distribution" and the "Merger", as defined
in the Merger Agreement. The Plan has been further amended to make certain
changes in the Plan's Earnings Crediting Options effective as of July 1, 1996,
and to make certain changes in the provisions of Section 4.6 effective as of
July 1, 1997.

         The purpose of this Plan is to set forth the terms under which payment
will be made with respect to Restricted Common Shares, Performance Share Units
and Benefit Equalization Units awarded to Participants under the Prior Plan and
Predecessor Plans. No new Restricted Common Shares, Performance Share Units or
Benefit Equalization Units shall be awarded to any Participant under this Plan.
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1.2      DEFINITIONS

         As used herein, the following terms shall have the following meanings:

         "Adjusted Number" shall mean, with respect to the Phantom Share Units
and Benefit Equalization Units standing to a Participant's credit under the Plan
immediately prior to the Effective Time, an adjusted number of such units
determined by dividing (i) the product of (A) the number of such Phantom Share
Units, or Benefit Equalization Units, as the case may be, multiplied by (B) the
Average Market Value of one Common Share of U.S. Trust Corporation during the
30-day period ending on the day immediately preceding the Chase Merger Closing
Date, by (ii) the Average When-Issued Market Value of one common share of the
Corporation.

         "AFFILIATED COMPANIES" shall mean (i) with respect to U.S. Trust
Corporation, each of its direct or indirect subsidiaries, and (ii) with respect
to the Corporation, each of its direct or indirect subsidiaries.

         "AVERAGE MARKET VALUE" shall mean, with respect to one Common Share as
of any date or with respect to any period, the mean between the per-share high
and low prices for the Common Shares on such date, or on each trading day during
such period, as quoted on the NASDAQ National Market System, or, if the Common
Shares are not traded on such system, on such other securities market or
securities exchange on which such shares are traded as the Committee shall
determine.

         "AVERAGE WHEN-ISSUED MARKET VALUE" shall mean, with respect to one
common share of the Corporation, the amount representing the 10-day average of
the daily average of the high bid and low asked prices for such share in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated on a "when-issued" basis on each of the 10 trading days immediately
preceding the Chase Merger Closing Date.

         "AWARD" shall mean the award of Performance Share Units made to a
Participant for an Open Cycle pursuant to Section 4.1 of the Prior Plan.

         "BENEFICIARY" shall mean the person or persons designated by a
Participant in accordance with Section 6.9 to receive any amount, or any Common
Shares, payable under the Plan upon the Participant's death.

         "BENEFIT EQUALIZATION UNIT," "PERFORMANCE SHARE UNIT" and "PHANTOM
SHARE UNIT" shall mean a unit of measurement equivalent to one Common Share,
with none of the attendant rights of a shareholder of such share, including,
without limitation, the right to vote such share and the right to receive
dividends thereon, except to the extent otherwise specifically provided herein.

         "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Corporation.

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         "BUSINESS DAY" shall mean any day on which Common Shares are traded on
the Nasdaq National Market System or, if Common Shares are not traded on such
system, on such other securities market or securities exchange on which such
shares are traded as the Committee shall determine.

         "CHANGE IN CONTROL" shall mean that any of the following events has
occurred after the Chase Merger Closing Date:

                   (i) 20% or more of the Common Shares has been acquired by any
         person (as defined by Section 3(a)(9) of the Securities Exchange Act of
         1934) other than directly from the Corporation;

                  (ii) there has been a merger or equivalent combination after
         which 49% or more of the voting shares of the surviving corporation is
         held by persons other than former shareholders of the Corporation; or

                  (iii) 20% or more of the directors elected by shareholders to
         the Board of Directors are persons who were not nominated by the Board
         of Directors or the Executive Committee of the Board of Directors in
         the most recent proxy statement of the Corporation;

provided, however, that notwithstanding anything in the Plan to the contrary, no
Change in Control shall be deemed to have occurred, and no rights arising upon a
Change in Control as provided in Sections 3.6, 4.7 and 5.4 shall exist, to the
extent that the Board of Directors so directs by resolution adopted prior to the
Change in Control, or not later than 45 days after the Change in Control if the
percentage of Common Shares acquired or directors elected under clause (i) or
(iii) of the foregoing definition of Change in Control shall be at least 20% but
less than 25%. Any resolution of the Board of Directors adopted in accordance
with the provisions of this definition directing that a Change in Control shall
be deemed not to have occurred for purposes of this Plan and that Sections 3.6,
4.7 and 5.4, or any of such Sections shall not become effective, may be
rescinded or countermanded at any time with or without retroactive effect.

         "CHASE MERGER CLOSING DATE" shall mean the "Closing Date", as defined
in Section 1.2 of the Merger Agreement.

         "COMMITTEE" shall mean the Compensation and Benefits Committee of the
Board of Directors.

         "COMMON SHARES" shall mean (i) prior to the Chase Merger Closing Date,
the common shares ($1.00 par value per share) of U.S. Trust Corporation, and
(ii) after the Chase Merger Closing Date, the common shares ($1.00 par value per
share) of the Corporation.

         "CORPORATION" shall mean New USTC Holdings Corporation, which will
assume the name of "U.S. Trust Corporation" as of the time the New Holdings
Distribution is effective.

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         "DETERMINED VALUE" shall mean the higher of (i) the highest bid price
per Common Share during the twelve months immediately preceding the date of a
Change in Control, or (ii) the highest price per Common Share actually paid in
connection with any Change in Control (including, without limitation, prices
paid in any subsequent merger or combination with any entity that acquires
control of the Corporation).

         "DIVIDEND PAYMENT DATE" shall mean the date on which a dividend is paid
on Common Shares.

         "EFFECTIVE TIME" shall mean "Effective Time" as defined in Section 1.3
of the Merger Agreement.

         "401(k) PLAN" shall mean the 401(k) Plan and ESOP of United States
Trust Company of New York and Affiliated Companies.

         "OPEN CYCLES" shall mean the Performance Cycles (as defined in the
Prior Plan) established under Section 4 of the Prior Plan for the periods
ending, respectively, on December 31, 1995, and on December 31, 1996.

         "PARTICIPANT" shall mean any employee or former employee of the
Corporation, U.S. Trust Corporation, or any of their Affiliated Companies who,
immediately prior to the Chase Merger Closing Date, had any unpaid amount,
Phantom Share Unit, Benefit Equalization Unit, or any Performance Share Unit for
any Open Cycle standing to his or her credit under the Prior Plan or any of the
Predecessor Plans.

         "PRIME RATE" shall mean, with respect to any calendar month, the prime
rate as quoted by United States Trust Company of New York on the last business
day of such month.

         "RESTRICTED COMMON SHARES" shall mean Common Shares which are subject
to Restrictions, and any new, additional or different securities a Participant
may become entitled to receive with respect to such shares by virtue of a stock
split or stock dividend or any other change in corporate or capital structure of
U.S. Trust Corporation or the Corporation.

         "RESTRICTED PERIOD" shall mean the period of time during which
Restricted Common Shares are subject to Restrictions as provided in Section 3.

         "RESTRICTIONS" shall mean the restrictions applicable to Restricted
Common Shares as provided in Section 3.

1.3      ADMINISTRATION

         The Plan shall be administered by the Committee. A majority of the
members of the Committee shall constitute a quorum. The Committee may act at a
meeting, including a telephone

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meeting, by action of a majority of the members present, or without a meeting by
unanimous written consent. The Committee shall have the authority, in its
discretion, to establish from time to time guidelines or regulations for the
administration of the Plan, interpret the Plan, cause appropriate records to be
established, and make all determinations and take all other actions considered
necessary or advisable for the administration of the Plan.

         All decisions, actions or interpretations of the Committee under the
Plan shall be final, conclusive and binding upon all parties.


                          SECTION 2. AUTHORIZED SHARES

2.1      MAXIMUM NUMBER OF COMMON SHARES AVAILABLE FOR AWARDS

         Subject to Section 2.2 but notwithstanding any other provision of the
Plan, the number of Common Shares that may be distributed to Participants
pursuant to this Plan shall be limited to (i) 400,000 Common Shares, plus (ii) a
number of Common Shares equal to the total number of additional Phantom Share
Units and Benefit Equalization Units credited to Participants with respect to
dividends paid on Common Shares pursuant to Sections 4.5 and 5.2.

2.2      ADJUSTMENT IN MAXIMUM NUMBER OF SHARES

         As of the Effective Time, the number of Common Shares that may be
distributed to Participants pursuant to this Plan, as specified in clause (i) of
Section 2.1, shall be adjusted so as to equal the sum of (w) the aggregate
number of Phantom Share Units to be credited to Participants pursuant to the
first sentence of Section 4.2(d) and the first sentence of Section 4.2(e)(iv),
(x) the aggregate Adjusted Number of Phantom Share Units determined for
Participants under Section 4.3(d), (y) the aggregate Adjusted Number of Benefit
Equalization Units determined for Participants under Section 5.1, and (z) 4,500
Common Shares.

2.3      SOURCE OF SHARES

         The Common Shares distributed under the Plan may be authorized and
unissued shares, shares held in the treasury of the Corporation, or shares
purchased on the open market by the Corporation (at such time or times and in
such manner as it may determine); provided, however, that Restricted Common
Shares (other than any such shares that are shares of Chase common stock) shall
be distributed from shares held in the treasury of the Corporation. The
Corporation shall be under no obligation to acquire Common Shares for
distribution to Participants before payment in Common Shares is due.

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                       SECTION 3. RESTRICTED COMMON SHARES

3.1      AWARDS OF RESTRICTED COMMON SHARES

         Restricted Common Shares awarded to a Participant under the Prior Plan
shall remain subject to the same Restrictions, for the same Restricted Period,
as applied with respect to such shares under Section 3.2 of the Prior Plan. Such
Restrictions shall be binding on the Corporation and on the Participants and
their Beneficiaries.

3.2      RESTRICTIONS AND RESTRICTED PERIOD

         All Common Shares of the Corporation and all shares of Chase common
stock received with respect to a Participant's Restricted Common Shares pursuant
to the Distribution and the Merger shall be treated as Restricted Common Shares
for purposes of this Plan, and shall be subject to the same Restrictions, for
the same Restricted Period, as applied to the shares with respect to which they
were received.

3.3       RIGHTS AS SHAREHOLDERS

         Except for the Restrictions referred to in Sections 3.1 and 3.2, and
subject to the forfeiture provisions described in Section 3.5, each Participant
shall have, with respect to his or her Restricted Common Shares, all rights of a
holder of Common Shares including the right to receive all dividends or other
distributions made or paid in respect of such shares and the right to vote such
shares at regular or special meetings of the shareholders of the Corporation.

3.4      DELIVERY OF SHARES

         A Participant's Restricted Common Shares shall be held in the
Participant's name in a book entry account maintained by the Corporation. At the
conclusion of the Restricted Period imposed with respect to a Participant s
Restricted Common Shares, or upon the prior approval of the Committee as
provided in Section 3.5, and subject to the satisfaction of the applicable tax
withholding requirements provided in Section 6.8, certificates representing such
Restricted Common Shares will be delivered to the Participant or, if the
Participant has died, to the Participant's Beneficiary, free of all
Restrictions.

3.5      TERMINATION OF EMPLOYMENT

         In the event of any Participant's termination of employment with the
Corporation and its Affiliated Companies, all of the Participant's Restricted
Common Shares which are then still subject to Restrictions will be forfeited by
the Participant and become the property of the Corporation. However, the
Committee may, if the Committee in its sole discretion determines that the
circum-

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stances warrant such action, approve the delivery to the Participant of all or
any part of the Restricted Common Shares which would otherwise be forfeited
pursuant to this Section, upon such conditions as it shall determine.

3.6      CHANGE IN CONTROL

          Upon the occurrence of a Change in Control, all Restricted Periods
shall end, the Restrictions applicable to all Restricted Common Shares shall
lapse, and in lieu of delivery of such shares to the Participants free from such
Restrictions as provided in Section 3.4, the Corporation's obligation in respect
of such shares shall be discharged by payment to each of the applicable
Participants of a single cash lump sum. The amount of such cash lump sum shall
be determined by multiplying the number of Restricted Common Shares held in the
Participant's name by the Determined Value of one Common Share. The single cash
lump sum amount so determined, reduced by any taxes withheld pursuant to Section
6.8, shall be paid to the Participant as soon as practicable following the
Change in Control.


                       SECTION 4. PERFORMANCE SHARE UNITS

4.1      PERFORMANCE SHARE UNIT AWARDS FOR OPEN CYCLES

         At the Effective Time, all Performance Goals (as defined in the Prior
Plan) determined for each of the Open Cycles pursuant to Section 4.1 of the
Prior Plan shall be deemed to have been fully met, and all Performance Share
Units awarded to each Participant for each of the Open Cycles pursuant to
Section 4.1 of the Prior Plan shall be deemed to have been fully earned.

4.2       PAYMENT OF AWARDS FOR OPEN CYCLES

         Payment with respect to a Participant's Award for an Open Cycle shall
be made in accordance with the following provisions:

         (a) The total amount payable with respect to a Participant's Award for
an Open Cycle shall be equal to the product of (i) the sum of (A) the number of
Performance Share Units awarded to the Participant for such cycle and (B) the
number of additional Performance Share Units credited to the Participant with
respect to such Award pursuant to Section 4.1 of the Prior Plan on account of
dividends paid on Common Shares after the start of such cycle and before the
Chase Merger Closing Date, multiplied by (ii) the Average Market Value of one
Common Share during the 30-day period ending on the day immediately preceding
the Chase Merger Closing Date.

         (b) The portion of the total amount payable with respect to a
Participant's Award for an Open Cycle which the Participant has not elected to
defer pursuant to an election made by the Participant under Section 4.4 of the
Prior Plan (the "Non-Deferred Portion of the Participant's Award") shall be paid
to the Participant as soon as practicable after the close of such cycle. In the

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case of a Participant whose employment with the Corporation and its Affiliated
Companies terminates after the Chase Merger Closing Date but before the end of
the cycle by reason of death, disability or retirement, payment of the
Non-Deferred Portion of the Participant's Award for such cycle shall be made as
of the first day of the month following the date of such termination of the
Participant's employment (the Participant's "Termination Date").

         (c) Payment with respect to 50% of the Non-Deferred Portion of a
Participant's Award for an Open Cycle shall be made in the form of a single
lump-sum cash payment. Such payment shall include interest on 50% of the
Non-Deferred Portion of the Participant's Award, which shall be credited at the
Prime Rate for each calendar month or portion thereof in the period from the
Chase Merger Closing Date to the end of the cycle or, if earlier, the last day
of the month in which the Participant's Termination Date occurs.

         (d) With respect to the remaining 50% of the Non-Deferred Portion of a
Participant's Award for an Open Cycle, the Participant shall be credited, as of
the Chase Merger Closing Date, with a number of Phantom Share Units ("PSU's")
determined by dividing (i) the dollar value of 50% of the Non-Deferred Portion
of the Participant's Award, by (ii) the Average When-Issued Market Value of one
common share of the Corporation. As of each Dividend Payment Date occurring
after the Chase Merger Closing Date but before the end of such cycle or, if
earlier, the last day of the month in which the Participant's Termination Date
occurs, the Participant shall also be credited hereunder with a number of
additional PSU's determined by first (x) multiplying (A) the number of PSU's
standing to the Participant's credit under this Section 4.2(d) on the date such
dividend was declared, by (B) the per-share dollar amount of the dividend so
paid, and then (y) dividing the resulting amount by the Average Market Value of
one Common Share on the Dividend Payment Date. Payment with respect to such
remaining 50% of the Non-Deferred Portion of the Participant's Award shall be
made in the form of (1) a number of Common Shares equal to the number of whole
PSU's standing to the Participant's credit under this Section 4.2(d) as of the
last day of the month preceding the month in which such payment is made, and (2)
a cash payment in an amount determined by multiplying (A) any fractional part of
a PSU standing to the Participant's credit as of such last day, by (B) the
Average Market Value of one Common Share on the business day immediately
preceding the date on which such payment is made.

         (e) The portion of a Participant's Award for an Open Cycle which the
Participant has elected to defer pursuant to an election made by the Participant
under Section 4.4 of the Prior Plan (the "Deferred Portion" of the Participant's
Award) shall be credited to the "Account" established for the Participant under
Section 4.3, in accordance with the following provisions:

                   (i) The Deferred Portion of a Participant's Award for an Open
         Cycle shall be credited to the Participant's Account as of the first
         day of the month following the close of such cycle or, if earlier, on
         the first day of the month following the Participant's Termination
         Date.

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                  (ii) The Deferred Portion of a Participant's Award shall be
         credited to the "Interest Portion" and to the "PSU Portion" (as
         defined in Section 4.3) of the Participant's Account in such
         percentages as the Participant specified in the deferral election made
         by the Participant with respect to such Award pursuant to Section 4.4
         of the Prior Plan.

                  (iii) That part of the Deferred Portion of a Participant's
         Award for an Open Cycle which the Participant elected to have credited
         to the Interest Portion of his or her Account shall be credited to the
         Interest Portion together with interest on the amount to be so
         credited, calculated at the Prime Rate, for each calendar month or
         portion thereof in the period from the Chase Merger Closing Date to the
         end of the cycle or, if earlier, the last day of the month in which the
         Participant's Termination Date occurs.

                  (iv) With respect to that part of the Deferred Portion of a
         Participant's Award for an Open Cycle which the Participant elected to
         have credited to the PSU Portion of his or her Account, the Participant
         shall be credited, as of the Chase Merger Closing Date, with a number
         of PSU's determined by dividing (A) the dollar value of that part of
         the Deferred Portion by (B) the Average When-Issued Market Value of one
         common share of the Corporation. As of each Dividend Payment Date
         occurring after the Chase Merger Closing Date but before the end of
         such cycle or, if earlier, the last day of the month in which the
         Participant's Termination Date occurs, the Participant shall be
         credited hereunder with a number of additional PSU's determined by
         first (x) multiplying (A) the number of PSU's standing to the
         Participant's credit under this Section 4.2(e)(iv) on the date such
         dividend was declared, by (B) the per-share dollar amount of the
         dividend so paid, and then (y) dividing the resulting amount by the
         Average Market Value of one Common Share on the Dividend Payment Date.
         That part of the Deferred Portion of a Participant's Award for an Open
         Cycle that is to be credited to the PSU Portion of the Participant's
         Account shall be credited thereto in the form of a number of PSU s
         equal to the total number of PSU's standing to the Participant's credit
         under this Section 4.2(e)(iv) as of the time the Deferred Portion of
         the Participant's Award is to be credited to the Participant's Account
         as provided in clause (i) above.

         (f) Notwithstanding any other provisions in Section 4.1 or in this
Section 4.2 to the contrary, a Participant whose employment terminates prior to
the end of any Open Cycle for any reason other than death, disability or
retirement shall not be entitled to receive any payment with respect to the
Participant's Award for such cycle, or to have any portion of such Award
deferred pursuant to any election the Participant may have made under Section
4.4 of the Prior Plan, except to the extent that the Committee, in its sole
discretion, otherwise determines.

4.3      ACCOUNTS FOR DEFERRED AWARDS

         As of the time this Plan is adopted by the Corporation, there shall be
established on the books and records of the Corporation, for bookkeeping
purposes only, a separate account ("Account") for each Participant, to reflect
the Participant's interest in the Deferred Portion of the Participant's

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Awards for Open Cycles, and in all amounts which the Participant elected to
defer under the Prior Plan and the Predecessor Plans that remained unpaid or
that had not yet become payable as of the time of the adoption of this Plan. The
Account so established for each Participant shall be maintained in accordance
with the following provisions:

         (a) The Account established for each Participant shall consist of two
sub-accounts referred to herein, respectively, as the "Interest Portion" and the
"PSU Portion".

         (b) As of the time this Plan is adopted by the Corporation, the
Interest Portion of each Participant's Account shall be credited with an amount
equal to the aggregate amount of the balances, determined as of the close of
business on the day preceding the Chase Merger Closing Date, of the Interest
Portion of the Accounts maintained for the Participant under the Prior Plan and
the Predecessor Plans. For purposes of the foregoing, the balance of the
Interest Portion of a Participant's Account under the Long-Term Performance
Plan of U.S. Trust Corporation, as determined as of the close of business on
such preceding day, shall reflect the crediting of interest to the "R.O.E.
Balance" (as defined in Section 7F of such plan) of the Interest Portion of the
Participant's Account (i) for the fiscal year 1994, based on a deemed "R.O.E."
(as defined in Section 7F of such plan) for U.S. Trust Corporation for such
year of 20%; and (ii) for all periods beginning on January 1, 1995 and ending
at the close of business on the day preceding the Chase Merger Closing Date,
based on the "Earnings Crediting Options" (as defined in Section 7G(iii) of
such plan) in effect for the R.O.E. Balance for such periods pursuant to the
election made by the Participant under such plan.

         (c) As of the time this Plan is adopted by the Corporation, the PSU
Portion of each Participant's Account shall be credited with a number of PSU s
equal to the aggregate number of PSU's included in the balances, determined as
of the close of business on the day preceding the Chase Merger Closing Date, of
the PSU Portion of the Participant's Accounts under the Prior Plan and the
Predecessor Plans.

         (d) As of the Effective Time, the number of PSU's credited to the PSU
Portion of a Participant's Account hereunder pursuant to (c) above shall be
adjusted so as to equal the Adjusted Number of such PSU s.

         (e) The Interest Portion and the PSU Portion of a Participant's Account
shall be credited with amounts in respect of the Deferred Portion of a
Participant's Award for any Open Cycle, at the time and in the manner provided
in Section 4.2(e).

         (f) The Interest Portion and the PSU Portion of a Participant's Account
shall be adjusted from time to time to reflect all interest or Earnings (as
defined in Section 4.4), and all additional PSU's, to be credited to such
Portions pursuant to Sections 4.4 and 4.5, and all payments made with respect to
such Portions pursuant to Section 4.6.

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         (g) A Participant's interest in his or her Account shall be fully
vested and nonforfeitable at all times.

4.4      CREDITS TO INTEREST PORTION

         In the case of any Participant whose employment with U.S. Trust
Corporation and its Affiliated Companies terminated prior to January 1, 1994,
interest shall continue to be credited to the Interest Portion of such
Participant's Account hereunder in accordance with the applicable provisions of
the Prior Plan and the Predecessor Plans as in effect at the time of such
Participant's termination of employment, for all periods ending after the Chase
Merger Closing Date, until payment with respect to the Interest Portion of such
Participant's Account has been made in full; provided, however, that interest on
the R.O.E. Balance of the Interest Portion of any such Participant's Account
under the Long-Term Performance Plan of U.S. Trust Corporation shall be credited
at the Prime Rate for all periods ending after the Chase Merger Closing Date. In
the case of each other Participant, the Interest Portion of the Participant's
Account shall be credited with Earnings for periods beginning on and after July
1, 1996 in accordance with the following provisions:

         (a) As of the last day of each calendar month, each part of the balance
of the Interest Portion of a Participant's Account for which a separate Earnings
Crediting Option (as hereinafter defined) is in effect under this Section 4.4
shall be credited with an amount determined by multiplying such part of the
balance by a percentage corresponding to the Applicable Rate of Return (as
hereinafter defined) for such month under such Earnings Crediting Option. The
amount so credited (which may be positive or negative depending on whether the
Applicable Rate of Return for the month is positive or negative) is referred to
herein as "Earnings".

         (b) For purposes of this Section 4.4, the term "Earnings Crediting
Option" shall mean, as of any date of reference on or after July 1, 1996, any
one of the following: the S&P 500 Index, the Lehman Bros. Government/Corporate
Bond Index, the IBC's Money Fund Report First Tier Average, and the Prime Rate.

         Notwithstanding the foregoing, the Committee may at any time, in its
sole discretion, determine (i) that any option referred to in the preceding
paragraph shall cease to constitute an Earnings Crediting Option for purposes of
this Section 4.4, or (ii) that any other index or hypothetical investment fund
or referenced rate of return shall constitute an Earnings Crediting Option for
purposes of this Plan. Participants shall be notified in writing, at least 45
days in advance, of any change in the Plan's Earnings Crediting Options.

         (c) The "Applicable Rate of Return" for any month shall mean (i) in the
case of the S&P 500 Index, the percentage, as determined by the Committee, by
which (A) the value of such Index as of the last business day of such month, as
adjusted to reflect all income earned for such month on the securities included
in such Index, exceeds, or is less than, (B) the value of such Index as of the
last business day of the immediately preceding month, determined without taking
such adjustment into 

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account; (ii) in the case of the Lehman Bros. Government/Corporate Bond Index,
the percentage, as determined by the Committee, by which the value of such Index
as of the last business day of such month exceeds, or is less than, the value of
such Index as of the last business day of the immediately preceding month; (iii)
in the case of the IBC's Money Fund Report First Tier Average, the rate of
return corresponding to the 7-day compounded yield for such Average, for the
period ending on, or most recently prior to, the last day of such month; (iv) in
the case of the Prime Rate Option, the rate of return corresponding to the Prime
Rate for such month; and (v) in the case of any other Earnings Crediting Option,
the rate of return applicable for such month, as determined by the Committee in
its sole discretion.

         (d) Each Participant for whom an Account was being maintained on May
15, 1996 shall make an initial election as to the Earnings Crediting Options
that are to apply with respect to the Interest Portion of his or her Account on
and after July 1, 1996. Such election shall be made in writing, on a form
provided by the Committee for such purpose, and such form shall be filed with
the Committee by no later than June 14, 1996. In such election form, the
Participant shall specify, by percentages (which must be even multiples of 5%)
the respective parts of the balance of the Interest Portion that are to be
credited with Earnings under each of the Earnings Crediting Options designated
by the Participant in such form. If a Participant fails to make such election
by June 14, 1996, the Participant shall be deemed to have selected the Prime
Rate as the Earnings Crediting Option to apply to the entire balance of the
Interest Portion. The Earnings Crediting Options selected in the initial
election made by a Participant (or deemed to have been selected by a
Participant) pursuant to the preceding sentence shall remain in effect for the
Interest Portion of the Participant's Account until the Participant makes an
election in accordance with (e) below to change such Earnings Crediting
Options.

         (e) A Participant may change the Earnings Crediting Options that are to
apply with respect to the Interest Portion of his or her Account by making a new
election hereunder. Such new election shall be made in writing, on a form which
is provided by the Committee for this purpose and which the Participant files
with the Committee. In such form, the Participant shall specify, by percentages
(which must be even multiples of 5%), the respective parts of the balance of the
Interest Portion that are to be credited with Earnings under each of the
Earnings Crediting Options designated by the Participant in such form. The
Participant's new election shall become effective as of the first day of the
calendar month following the date on which such election is filed with the
Committee, provided that it is so filed at least 15 days prior to such first
day. The Earnings Crediting Options selected by the Participant in such new
election shall remain in effect until the Participant again changes his election
with respect to the Interest Portion of his or her Account in accordance with
this Section 4.4(e).

         (f) The Interest Portion of a Participant's Account shall continue to
be credited with Earnings in accordance with the provisions of this Section 4.4
until all payments required to be made with respect to the Interest Portion
under Section 4.6 have been made. For this purpose, any payments made under
Section 4.6 with respect to the Interest Portion of the Participant's Account
will be      

                                      -12-
<PAGE>   13
deemed to have been made pro rata from the respective parts of the balance of
the Interest Portion that are subject to separate Earnings Crediting Options.

4.5      CREDITS TO PSU PORTION

         As of each Dividend Payment Date, the PSU Portion of each Participant's
Account shall be credited with additional PSU's the number of which shall be
determined by first (i) multiplying the number of PSU's standing to the
Participant's credit in the PSU Portion of the Participant's Account on the date
such dividend was declared by the per-share dollar amount of the dividend so
paid, and then (ii) dividing the resulting amount by the Average Market Value of
one Common Share on the Dividend Payment Date.

4.6      PAYMENT OF DEFERRED AWARDS

         In the case of any Participant whose employment with U.S. Trust
Corporation and its Affiliated Companies terminated prior to July 1, 1997, any
amounts remaining to be paid with respect to such Participant's Account as of
such date shall be paid in accordance with the applicable provisions of the
Plan, the Prior Plan or the Predecessor Plans in effect at the time of such
Participant's termination of employment. In the case of each other Participant,
payment with respect to the Participant's Account shall be made in accordance
with the following provisions:

         (a) The balances of the Interest Portion and the PSU Portion of a
Participant's Account shall become payable upon the Participant's termination of
employment with the Corporation and all of its Affiliated Companies for any
reason. For this purpose, a Participant who ceases active employment by reason
of disability but who becomes entitled to receive benefit payments under the
long-term disability plan maintained by the Corporation or any of its Affiliated
Companies shall be treated as continuing to be employed with the Corporation and
its Affiliated Companies during all periods for which he or she continues to
receive benefit payments under such plan.

         (b) Unless at the time a Participant's Account becomes payable there is
in effect for the Participant an election under (c) below, payment with respect
to the Interest Portion and the PSU Portion of the Participant's Account shall
be made in the form of a series of 10 annual installments, payable in accordance
with the following provisions:

                    (i) the first such installment payment shall be made on the
         last Business Day of February of the calendar year following the year
         in which the Participant's employment with the Corporation and all of
         its Affiliated Companies terminates, and the remaining installment
         payments shall be made on the last Business Day of February of each
         succeeding year.

                   (ii) each installment payment to be made with respect to the
         Interest Portion of a Participant's Account shall be made in cash, in
         an amount determined by dividing (A) the balance of the Interest
         Portion determined as of the last day of the calendar year preceding
         the year in which such payment is to be made, by (B) the number of
         installment payments

                                      -13-
<PAGE>   14
         remaining to be made. The last such installment payment shall include
         Earnings credited to the Interest Portion for the month preceding the
         month in which such payment is made.

                  (iii) each installment payment to be made with respect to the
         PSU Portion of a Participant's Account shall be made partly in Common
         Shares, and partly in cash. The number of shares to be included in each
         such installment payment shall be equal to the number of whole PSU's
         included in the quotient resulting from dividing (A) the total number
         of PSU's included in the balance of the PSU Portion of the
         Participant's Account as of the last day of the calendar year preceding
         the year in which such payment is to be made, by (B) the number of
         installment payments remaining to be made; and the amount of cash to be
         included in each such installment payment shall be determined by
         multiplying (C) the fractional part of a PSU included in the
         aforementioned quotient by (D) the Average Market Value of one Common
         Share on the Business Day immediately preceding the date on which such
         installment payment is to be made. The last such installment payment
         shall include a number of Common Shares equal to the whole number of
         any additional PSU's that are credited to the PSU Portion of the
         Participant's Account under Section 4.5 during the month preceding the
         month in which such payment is made, together with cash (in an amount
         determined in the same manner as described in the preceding sentence)
         for any fractional part of a PSU that is so credited.

                   (iv) if a Participant should die before receiving all
         installment payments required to be made with respect to his or her
         Account, any installment payments remaining to be made at the date of
         the Participant's death shall be made to the Participant's Beneficiary
         in the same form, at the same times and in the same amounts, as such
         payments would have been made to the Participant (A) if he or she had
         not died, and (B) if the Participant died while still employed, if the
         Participant's employment had otherwise terminated on the date of his or
         her death.

         (c) A Participant may elect to have payment with respect to the
Interest Portion and the PSU Portion of his or her Account made in the form of
a single lump sum payment. Such payment shall consist of (i) a number of Common
Shares equal to the number of whole PSU's included in the balance of the PSU
Portion of the Participant's Account, and (ii) cash in an amount equal to the
sum of (A) the balance of the Interest Portion of the Participant's Account and
(B) an amount determined by multiplying the fractional part, if any, of a PSU
included in the balance of the PSU Portion of the Participant's Account by the
Average Market Value of one Common Share on the Business Day immediately
preceding the date on which such payment is to be made. Such payment shall be
made to the Participant or, if the Participant's Account becomes payable by
reason of his or her death, to the Participant's Beneficiary. Payment shall be
made on the last Business Day of February of the Plan Year following the year
in which the Participant's employment with the Corporation and all of its
Affiliated Companies terminates. An election under this Section 4.7(c) shall be
made in writing, on a form that is provided by the Committee for such purpose
and that is filed by the Participant with the Committee at least one year prior
to the date on which the Participant's employment with the Corporation and all
of its Affiliated Companies terminates. Any election so 

                                      -14-
<PAGE>   15
made may be revoked, and a new election may be made hereunder after such
revocation. Any such revocation or new election shall be made in the same
manner, and by the same date, as described in the second preceding sentence. No
election or revocation of an election made hereunder shall be given effect
unless it is made within the time prescribed herein.

         (d) Notwithstanding any other provision in this Section 4.6 to the
contrary, payment with respect to any part or all of the Participant's Account
balances may be made to the Participant or, if the Participant has died, to the
Participant's Beneficiary, on any date earlier than the date on which such
payment is to be made pursuant to such other provisions of this Section 4.6 if
(i) the Participant, or his or her Beneficiary, requests such early payment and
(ii) the Committee, in its sole discretion, determines that such early payment
is necessary to help the Participant, or his or her Beneficiary, meet an
"unforeseeable emergency" within the meaning of Section 1.457-2(h)(4) of the
federal Income Tax Regulations. The amount that may be so paid may not exceed
the amount necessary to meet such emergency.

4.7      CHANGE IN CONTROL

         In the event of a Change in Control, the provisions of this Section 4.7
shall apply notwithstanding any other provision herein to the contrary (but
subject to the proviso contained in the definition of "Change in Control" in
Section 1.2). Upon the occurrence of a Change in Control, the balance of each
Participant's Account shall become immediately payable in full. Payment with
respect to each Participant's Account balance shall be made to the Participant
or, if the Participant has died, to his or her Beneficiary, in the form of a
single lump sum cash payment. The amount so payable with respect to each
Participant's Account shall be equal to the sum of (i) the balance of the
Interest Portion of the Participant's Account, plus (ii) an amount determined by
multiplying the aggregate number of PSU's then included in the balance of the
PSU Portion of the Participant's Account by the Determined Value of one Common
Share.

         All amounts payable to Participants pursuant to this Section 4.7,
reduced by any taxes withheld pursuant to Section 6.8, shall be paid to such
Participants as soon as practicable following the Change in Control.


                      SECTION 5. BENEFIT EQUALIZATION UNITS

5.1      ACCOUNTS FOR BENEFIT EQUALIZATION UNITS

         As of the time this Plan is adopted by the Corporation, there shall be
established on the books and records of the Corporation, for bookkeeping
purposes only, an account ("BEU Account") for each Participant, to reflect the
Participant's interest in the Benefit Equalization Units awarded to the
Participant under the Prior Plan. Upon adoption of the Plan, each Participant's
BEU Account shall be credited with a number of Benefit Equalization Units equal
to the total number of Benefit 

                                      -15-
<PAGE>   16
Equalization Units standing to the Participant's credit under Section 5 of the
Prior Plan as of the close of business on the day preceding the Chase Merger
Closing Date.

         As of the Effective Time, the number of Benefit Equalization Units so
credited to each Participant's BEU Account shall be adjusted so as to equal the
Adjusted Number of such Benefit Equalization Units.

         A Participant's interest in his or her BEU Account shall be fully
vested and nonforfeitable at all times.

5.2      DIVIDEND EQUIVALENTS

         As of each Dividend Payment Date, each Participant's BEU Account shall
be credited with additional Benefit Equalization Units, the number of which
shall be determined by first (i) multiplying the number of Benefit Equalization
Units standing to the Participant's credit in the Participant's BEU Account on
the date such dividend was declared by the per-share dollar amount of the
dividend so paid, and then (ii) dividing the resulting amount by the Average
Market Value of one Common Share on the Dividend Payment Date.

5.3      PAYMENT OF BENEFIT EQUALIZATION UNITS

         Payment with respect to a Participant's Benefit Equalization Units
shall be made as soon as practicable after the termination of the Participant's
employment with the Corporation and its Affiliated Companies, for any reason.
Payment shall be made in the form of (i) a number of Common Shares equal to the
number of whole Benefit Equalization Units included in the balance of the
Participant's BEU Account as of the last day of the month preceding the month in
which such payment is made, and (ii) a cash payment in an amount determined by
multiplying (A) the fractional part of the Benefit Equalization Unit included in
such balance as of such last day, by (B) the Average Market Value of one Common
Share on the business day immediately preceding the date on which such payment
is made.

5.4      CHANGE IN CONTROL

         Notwithstanding any other provision herein to the contrary (but subject
to the proviso contained in the definition of "Change in Control" in Section
1.2), payment with respect to a Participant's Benefit Equalization Units shall
be made in accordance with the provisions of this Section 5.4 in the event of a
Change in Control. Upon the occurrence of a Change in Control, the balance of
each Participant's BEU Account shall become immediately payable in full. Payment
with respect to each Participant's BEU Account balance shall be made in the form
of a single cash lump sum payment. The amount so payable with respect to each
Participant's BEU Account shall be determined by multiplying the number of
Benefit Equalization Units then standing to the Participant's credit in his or
her BEU Account, by the Determined Value of one Common Share. All amounts
payable to Participants pursuant to this Section 5.4, reduced by taxes withheld
pursuant to 

                                      -16-
<PAGE>   17
Section 6.8, shall be paid to such Participants as soon as practicable following
the Change in Control.


                          SECTION 6. GENERAL PROVISIONS

6.1      CERTAIN ADJUSTMENTS TO PLAN SHARES

         In the event of any change in the Common Shares occurring after the
Chase Merger Closing Date by reason of any stock dividend, recapitalization,
reorganization, merger, consolidation, split-up, combination or exchange of
shares, or any rights offering to purchase Common Shares at a price
substantially below fair market value, or any similar change affecting the
Common Shares, the number and kind of shares represented by Phantom Share Units
or Benefit Equalization Units and the number and kind of shares subject to
Restrictions shall be appropriately adjusted consistent with such change in such
manner as the Committee, in its sole discretion, may deem equitable to prevent
substantial dilution or enlargement of the rights granted to, or available for,
the Participants hereunder. The Committee shall give notice to each Participant
of any adjustment made pursuant to this Section and, upon such notice, such
adjustment shall be effective and binding for all purposes.

6.2      SUCCESSOR CORPORATION

         The obligations of the Corporation under the Plan shall be binding upon
any successor corporation or organization resulting from the merger,
consolidation or other reorganization of the Corporation, or upon any successor
corporation or organization succeeding to substantially all of the assets and
business of the Corporation. The Corporation agrees that it will make
appropriate provision for the preservation of Participants' rights under the
Plan in any agreement or plan which it may enter into or adopt to effect any
such merger, consolidation, reorganization or transfer of assets.

6.3      NON-ALIENATION OF BENEFITS

         A Participant's rights to payments under the Plan shall not be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by creditors of the Participant or his
or her Beneficiary.

6.4      GENERAL CREDITOR STATUS

         Participants shall have no right, title, or interest whatsoever in or
to any investments which the Corporation may make to aid it in meeting its
obligations under the Plan. Nothing contained in the Plan, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of
any kind, or a fiduciary relationship between the Corporation and any
Participant, Beneficiary, or any other person. To the extent that any person
acquires a right to receive payments from the Corporation under the Plan, such
right shall be no greater than the right of a general unsecured

                                      -17-
<PAGE>   18
creditor of the Corporation. The Plan shall constitute a mere promise by the
Corporation to make payments in the future of the benefits provided for herein.
It is intended that the arrangements reflected in this Plan be treated as
unfunded for tax purposes, as well as for purposes of Title I of ERISA. All
payments to be made hereunder shall be paid from the general funds of the
Corporation and no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of such amounts except as
expressly set forth in the Plan. In its sole discretion, the Corporation may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Common Shares or pay cash; provided, however,
that, unless the Committee otherwise determines with the consent of the affected
Participant, the existence of such trusts or other arrangements shall be
consistent with the "unfunded" status of the Plan.

6.5      NO RIGHT TO CONTINUED EMPLOYMENT

         Neither the Plan nor any action taken thereunder shall be construed as
giving any employee any right to be retained in the employ of the Corporation or
any of its Affiliated Companies.

6.6      AWARDS NOT TREATED AS COMPENSATION UNDER BENEFIT PLANS

         No Award shall be considered as compensation under any employee benefit
plan of U.S. Trust Corporation, the Corporation, or any of their Affiliated
Companies, except as specifically provided in any such plan or as otherwise
determined by the Board of Directors.

6.7      LISTING AND QUALIFICATION OF COMMON SHARES

         The Corporation, in its discretion, may postpone the issuance,
delivery, distribution or release of Common Shares pursuant to an Award of
Restricted Stock, Performance Share Units or Benefit Equalization Units until
completion of such stock exchange listing or other qualification of such shares
under any state or federal law, rule or regulation as the Corporation may
consider appropriate, and may require any Participant or Beneficiary to make
such representations and furnish such information as it may consider appropriate
in connection with the issuance or delivery of the shares in compliance with
applicable laws, rules and regulations.

6.8      TAXES

         The Corporation or any of its Affiliated Companies may make such
provisions and take such steps as it may deem necessary or appropriate for the
withholding of all federal, state and local taxes required by law to be withheld
with respect to amounts payable under the Plan including, but not limited to (i)
deducting the amount so required to be withheld from any other amount then or
thereafter payable to a Participant or Beneficiary, (ii) reducing the amount of
any Award of Performance Share Units otherwise required to be deferred pursuant
to a Participant's election under Section 4.4 of the Prior Plan, by the amount
so required to be withheld with respect to such deferred amount, and/or (iii)
requiring a Participant or Beneficiary to pay to the Corporation or any of its


                                      -18-
<PAGE>   19
Affiliated Companies the amount so required to be withheld as a condition of the
issuance, delivery, distribution or release of any Common Shares.

6.9      DESIGNATION AND CHANGE OF BENEFICIARY

         Each Participant shall file with the Committee a written designation of
one or more persons as the Beneficiary who shall be entitled to receive any
amount, or any Common Shares, payable under the Plan upon his or her death. A
Participant may, from time to time, revoke or change his or her Beneficiary
designation without the consent of any previously designated Beneficiary by
filing a new designation with the Committee. The last such designation received
by the Committee shall be controlling; provided, however, that no designation,
or change or revocation thereof, shall be effective unless received by the
Committee prior to the Participant's death, and in no event shall it be
effective as of a date prior to such receipt. If at the date of a Participant's
death, there is no designation of a Beneficiary in effect for the Participant
pursuant to the provisions of this Section 6.9, or if no Beneficiary designated
by the Participant in accordance with the provisions hereof survives to receive
any amount or Common Shares that becomes payable under the Plan by reason of the
Participant's death, the Participant's estate shall be treated as the
Participant's Beneficiary for purposes of the Plan.

6.10     PAYMENTS TO PERSONS OTHER THAN PARTICIPANT

         If the Committee shall find that any Participant or Beneficiary to whom
any amount, or any Common Shares, is payable under the Plan is unable to care
for his or her affairs because of illness, accident or legal incapacity, then if
the Committee so directs, such amount, or such Common Shares, may be paid to
such Participant's or Beneficiary's spouse, child or other relative, an
institution maintaining or having custody of such person, or any other person
deemed by the Committee to be a proper recipient on behalf of such Participant
or Beneficiary, unless a prior claim therefor has been made by a duly appointed
legal representative of the Participant or Beneficiary. Any payment made under
this Section 6.10 shall be a complete discharge of the liability of the
Corporation with respect to such payment.

6.11     NO LIABILITY OF COMMITTEE MEMBERS

         No member of the Committee shall be personally liable by reason of any
contract or other instrument executed by such member or on his or her behalf in
his or her capacity as a member of the Committee nor for any mistake of judgment
made in good faith, and the Corporation shall indemnify and hold harmless each
member of the Committee, and each employee, officer, director or trustee of the
Corporation or any of its Affiliated Companies to whom any duty or power
relating to the administration or interpretation of the Plan may be allocated or
delegated, against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim with the approval of the Board
of Directors) arising out of any act or omission to act in connection with the
Plan unless arising out of such person's own fraud or bad faith.

                                      -19-
<PAGE>   20
6.12     AMENDMENT OR TERMINATION

         Except as to matters that in the opinion of the Corporation's legal
counsel require shareholder approval, any provision of the Plan may be modified
as to a Participant by an individual agreement approved by the Board of
Directors. The Board of Directors may, with prospective or retroactive effect,
amend, suspend or terminate the Plan or any portion thereof at any time;
provided, however, that (i) no amendment that would materially increase the cost
of the Plan to the Corporation may be made by the Board of Directors without the
approval of the shareholders of the Corporation and (ii) no amendment,
suspension or termination of the Plan shall deprive any Participant of any
rights under the Plan without his or her written consent. Any amendment that the
Board of Directors would be permitted to make pursuant to the preceding sentence
may also be made by the Committee where appropriate to facilitate the
administration of the Plan or to comply with applicable law or any applicable
rules and regulations of government authorities.

6.13     GOVERNING LAW

         The Plan shall be governed by and construed in accordance with the laws
of the State of New York, without reference to the principles of conflicts of
law thereof.

                                      -20-