Exhibit 10.1


[Morgan Stanley] [Logo Omitted]

December 13, 2005

Mr. John J. Mack
c/o Morgan Stanley
1585 Broadway
New York, New York 10036

Dear John,

         This letter agreement clarifies certain provisions of the amended and
restated employment agreement dated as of September 20, 2005 (the "Employment
Agreement") by and between you and Morgan Stanley (the "Company") in light of
your (i) requesting that your bonus in respect of fiscal year 2005 be prorated
for the period you were employed by the Company during the year and
recommending that it be awarded 100% in the form of equity compensation (i.e.,
zero cash) and (ii) entering into an agreement dated November 22, 2005
relating to the notice period and restrictive covenants applicable to you (the
"Restrictive Covenant Agreement"). In connection with the foregoing, you and
we agree as follows:

              1.     Your receipt of 100% of your bonus in respect of fiscal
                     year 2005 in the form of equity compensation under the
                     Company's Equity Incentive Compensation Plan shall not
                     constitute Good Reason under the Employment Agreement.

              2.     Should there be any inconsistency between the provisions
                     in the Employment Agreement (including any provisions
                     incorporated by reference) and the provisions in the
                     Restrictive Covenant Agreement as such provisions relate
                     to the time period for the provision of advance written
                     notice of termination by either the Company or by you or
                     the duration of any non-solicitation covenant, the
                     provisions of the Restrictive Covenant Agreement shall
                     prevail and, notwithstanding any provision of Section
                     3(b)(iii) of the Employment Agreement, said provisions of
                     the Restrictive Covenant Agreement may be incorporated
                     into equity-based awards under the Company's equity
                     compensation plans in respect of fiscal year 2005 or
                     granted at any time in the future; provided, however,
                     that if you terminate your employment for Good Reason
                     under the Employment Agreement, then you will not be
                     required for any purpose to provide 180 days advance
                     written notice (provided that you otherwise comply with
                     the provisions of Sections 4(c), 4(e) and 4(f) of the
                     Employment Agreement).


<PAGE>

              3.     Should there be any inconsistency between the provisions
                     in the Employment Agreement and the provisions in the
                     Restrictive Covenant Agreement as such provisions relate
                     to the definition of "Cause" and the consequences of the
                     termination of your employment without "Cause", the
                     provisions of the Employment Agreement shall prevail.

              4.     References to "Total Compensation" in Section 5(a) of the
                     Employment Agreement shall mean Total Compensation on an
                     annualized basis.

              5.     Except as specifically amended above, all of the terms
                     and provisions of the Employment Agreement and the
                     Restrictive Covenant Agreement shall remain in full force
                     and effect.

         We ask that you confirm your willingness to accept the foregoing by
signing and dating this letter in the area designated below and returning the
letter agreement to me.

/s/ Karen C. Jamesley
-------------------------------
By:      Karen C. Jamesley
Title:   H.R. Director


Confirmed and Agreed to:


/s/ John J. Mack
---------------------------------
John J. Mack



                                      2