Exhibit
10.2

      


      Execution
Version

       

      EMPLOYEE
MATTERS AGREEMENT

       

      by and
between

      


      MORGAN
STANLEY

      


      and

      


      MSCI
INC.

      


      Dated as
of May 22, 2009

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      TABLE
OF CONTENTS

      
        
          

        

      

      
         

        
          
            	 
      	
                    PAGE

                  
	 
      	 
      
	
                    ARTICLE
      1

                  	 
      
	
                    DEFINITIONS

                  	 
      
	 
      	 
      
	
                    Section
      1.01.  Definitions

                  	
                    3

                  
	
                    Section
      1.02. Interpretation

                  	
                    5

                  
	 
      	 
      
	
                    ARTICLE
      2

                  	 
      
	
                    AGREEMENTS
      BY MORGAN STANLEY

                  	 
      
	 
      	 
      
	
                    Section
      2.01.  Systems Infrastructure

                  	
                    7

                  
	
                    Section
      2.02.  Morgan Stanley Funds

                  	
                    7

                  
	
                    Section
      2.03.  Employee Discounts

                  	
                    7

                  
	
                    Section
      2.04.  Trading

                  	
                    7

                  
	 
      	 
      
	
                    ARTICLE
      3

                  	 
      
	
                    EQUITY
      COMPENSATION AWARDS

                  	 
      
	 
      	 
      
	
                    Section
      3.01.  Stock Options and Restricted Stock Units

                  	
                    7

                  
	
                    Section
      3.02.  Responsibility For Dividend Equivalent Payments, Tax
      Deduction, Tax Withholding and Reporting Obligations

                  	
                    7

                  
	 
      	 
      
	
                    ARTICLE
      4

                  	 
      
	
                    GENERAL
      PRINCIPLES FOR ALLOCATION OF LIABILITIES

                  	 
      
	 
      	 
      
	
                    Section
      4.01. General Principle

                  	
                    10

                  
	 
      	 
      
	
                    ARTICLE
      5

                  	 
      
	
                    GENERAL
      PROVISIONS

                  	 
      
	 
      	 
      
	
                    Section
      5.01.  Restrictive Covenants

                  	
                    12

                  
	
                    Section
      5.02.  Preservation of Rights to Amend

                  	
                    12

                  
	
                    Section
      5.03.  Confidentiality

                  	
                    12

                  
	
                    Section
      5.04.  Administrative Complaints/Litigation

                  	
                    12

                  
	
                    Section
      5.05.  Costs of Compliance with Agreement

                  	
                    13

                  
	 
      	 
      
	
                    ARTICLE
      6

                  	 
      
	
                    INDEMNIFICATION

                  	 
      
	 
      	 
      
	
                    Section
      6.01.  Indemnification

                  	
                    13

                  
	
                    Section
      6.02.  Notice of Claims

                  	
                    13

                  


          

           

           

          
            
              
              

            

            
              1

              
                

              

            

            
              
              

            

          

           

           

          
            	 
      	 
      

                    PAGE

                  
	 	 
	
                    ARTICLE
      7

                  	 
      
	
                    MISCELLANEOUS

                  	 
      
	 
      	 
      
	
                    Section
      7.01.  Notices

                  	
                    13

                  
	
                    Section
      7.02.  Amendments; No Waivers.

                  	
                    14

                  
	
                    Section
      7.03.  Successors and Assigns

                  	
                    14

                  
	
                    Section
      7.04.  Governing Law

                  	
                    15

                  
	
                    Section
      7.05.  Counterparts; Effectiveness; Third-Party
      Beneficiaries

                  	
                    15

                  
	
                    Section
      7.06.  Entire Agreement

                  	
                    15

                  
	
                    Section
      7.07.  Jurisdiction

                  	
                    16

                  
	
                    Section
      7.08.  WAIVER OF JURY TRIAL

                  	
                    16

                  
	
                    Section
      7.09.  Severability

                  	
                    16

                  
	
                    Section
      7.10.  Survival

                  	
                    16

                  
	
                    Section
      7.11.  Captions

                  	
                    16

                  
	
                    Section
      7.12.  Specific Performance

                  	
                    16

                  
	
                    Section
      7.13.  Performance

                  	
                    17

                  
	
                    Section
      7.14.  Limited Liability

                  	
                    17

                  
	
                    Section
      7.15.  Mutual Drafting

                  	
                    17

                  
	
                    Section
      7.16.  Effect if Sale Does Not Occur

                  	
                    17

                  
	
                    Section
      7.17.  Corporate Authorization

                  	
                    17

                  
	 
      	 
      


          

        

         

         

         

        
          
            
            

          

          
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        EMPLOYEE
MATTERS AGREEMENT

      

       

      THIS
EMPLOYEE MATTERS AGREEMENT dated as of May 22, 2009 between Morgan Stanley, a
Delaware corporation (“Morgan
Stanley”) and MSCI Inc., a Delaware corporation (“MSCI”) (collectively, the
“Parties”).

       

      RECITALS

       

      WHEREAS,
Morgan Stanley intends to sell all of the outstanding shares of class A common
stock, par value $0.01 per share, of MSCI (“MSCI Class A Common Stock”)
owned by Morgan Stanley (the “Sale”, and the date of the
consummation of the disposition of all shares of MSCI Class A Common Stock held
by Morgan Stanley, the “Sale
Date”);

       

      WHEREAS,
the Parties hereto have determined to set forth certain agreements that will
govern the relationship between the Parties in connection with the
Sale;

       

      NOW
THEREFORE, in consideration of the mutual covenants contained herein, the
Parties hereto agree as follows:

       

      ARTICLE
1

      Definitions

       

      Section
1.01.  Definitions.  Unless
otherwise defined herein, each capitalized term shall have the meaning specified
for such term in the Tax Sharing Agreement between Morgan Stanley, on behalf of
itself and the members of the MS Group, and MSCI, on behalf of itself and the
members of the MSCI Group, dated as of November 20, 2007 (the “Tax Sharing
Agreement”).  As used in this Agreement:

       

      “Action” means any demand,
claim, suit, action, arbitration, inquiry, investigation or other proceeding by
or before any Governmental Authority or any arbitration or mediation
tribunal.

       

      “Agreement” means this Employee
Matters Agreement and all amendments, modifications and changes
hereto.

       

      “Ancillary Agreements” means
the Tax Sharing Agreement and the Separation Agreement. 

       

      “Applicable Law” means any
federal, state, local or foreign law (statutory, common or otherwise),
constitution, treaty, convention, ordinance, code, rule, regulation, order,
injunction, judgment, decree, ruling, directive, guidance, instruction,
direction, permission, waiver, notice, condition, limitation, restriction or
prohibition or other similar requirement enacted, adopted, promulgated, imposed,
issued or applied by a Governmental Authority that is binding upon or applicable
to such 

       

       

      
        
          
          

        

        
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      Person,
its properties or assets or its business or operations, as amended unless
expressly specified otherwise.

       

      “Applicable Tax Rate” has the
meaning set forth in Section 3.02(d).

       

      “Business Day” means any day,
other than a Saturday, a Sunday or a day on which banks in New York, New York
are authorized or obligated by law to close.

       

      “Claims” has the meaning set
forth in Section 6.01.

       

      “Code” means the U.S. Internal
Revenue Code of 1986, as amended.

       

      “COBRA” means the Consolidated
Omnibus Budget Reconciliation Act of 1985, as codified at Part 6 of Subtitle B
of Title I of ERISA and at Section 4980B of the Code, as amended.

       

      “Compensation Deduction
Payment” has the meaning set forth in Section 3.02(d).

       

      “Employee” means any Morgan
Stanley Business Employee or Former Morgan Stanley Employee or MSCI Business
Employee or Former MSCI Employee.

       

      “EEOC” means the U.S. Equal
Employment Opportunity Commission.

       

      “ERISA” means the U.S. Employee
Retirement Income Security Act of 1974, as amended.

       

      “Former MSCI
Employees” means all employees who, as of
their last day of
employment, were employed by any member of the MSCI
Group.

       

      “Former Morgan Stanley
Employees” means all employees who, as
of their last day of employment, were employed by any member of the MS Group.

       

      “Governmental Authority” means
any multinational, foreign, federal, state, local or other governmental,
statutory or administrative authority, regulatory body or commission or any
court, tribunal or judicial or arbitral authority which has any jurisdiction or
control over either Party (or their Affiliates).

       

      “Indemnifying Party” has the
meaning set forth in Section 6.01.

       

      “Indemnitee” has the meaning
set forth in Section 6.01.

       

      “Morgan Stanley Business
Employee” means any individual who is, immediately prior to the Sale,
employed by Morgan Stanley or any of its Subsidiaries or Affiliates and is not
an MSCI Business Employee.

       

      “Morgan Stanley Equity Awards”
means Morgan Stanley Stock Options and Morgan Stanley RSUs.

       

       

      
        
          
          

        

        
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      “Morgan Stanley Equity Plans”
means any plan or arrangement under the authority of which Morgan Stanley has
granted compensatory stock options, restricted stock units or any other
compensatory awards based on Morgan Stanley Common Stock, which awards are
outstanding immediately prior to the Sale Date.

       

      “Morgan Stanley RSU” means a
right representing a contractual entitlement to one share of Morgan Stanley
Common Stock, in accordance with the terms of the relevant award and the Morgan
Stanley Equity Plans under which the Morgan Stanley RSU is granted.

       

      “Morgan Stanley Subsidiary”
means, as used in Article 4, any entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are expected to be
directly or indirectly owned by Morgan Stanley immediately after the
Sale.

       

      “Morgan Stanley Stock Option”
means a right representing the contractual entitlement to purchase one share of
Morgan Stanley Common Stock in accordance with the terms of the relevant award
and the Morgan Stanley Equity Plans.

       

      “MSCI Business Employee” means
any individual who is, immediately prior to the Sale, employed by any member of
the MSCI Group.  An MSCI Business Employee may not be a Morgan Stanley
Business Employee.

       

      “MSCI Group” means one or more of (i) MSCI, (ii) on
or before the Deconsolidation Date, any Person that is, or was, a Subsidiary of MSCI for such period
of ownership by MSCI and (iii) to the extent not previously included by (ii),
Barra and its Subsidiaries, including for (i), (ii) and (iii) any predecessors
and successors thereto.  In addition, for purposes of this
Agreement and the Separation Agreement, “MSCI Group” shall include any
Person that is, or was, a Subsidiary of MSCI for such period of ownership by
MSCI after the Deconsolidation Date.

       

       “Separation Agreement” means
the Separation Agreement between Morgan Stanley and MSCI dated as of May 22,
2009.

       

      Section
1.02.
Interpretation.  In this Agreement, unless the context clearly
indicates otherwise:

       

      (a)        words
used in the singular include the plural and words used in the plural include the
singular;

       

      (b)        references
to any Person include such Person’s successors and assigns but, if applicable,
only if such successors and assigns are permitted by this
Agreement;

       

      (c)        references
to any gender include the other gender;

       

       

      
        
          
          

        

        
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      (d)        the
words “include,” “includes” and “including” shall be deemed to be followed by
the words “without limitation”;

       

      (e)        references
to any Article or Section mean such Article or Section of this Agreement, as the
case may be, and references in any Section or definition to any clause mean such
clause of such Section or definition;

       

      (f)        the
words “herein,” “hereunder,” “hereof,” “hereto” and words of similar import
shall be deemed references to this Agreement as a whole and not to any
particular Section or other provision hereof;

       

      (g)        references
to any agreement, instrument or other document mean such agreement, instrument
or other document as amended, supplemented and modified from time to time to the
extent permitted by the provisions thereof and by this Agreement;

       

      (h)        references
to any law (including statutes and ordinances) mean such law (including all
rules and regulations promulgated thereunder) as amended, modified, codified or
reenacted, in whole or in part, and in effect at the time of determining
compliance or applicability;

       

      (i)        relative
to the determination of any period of time, “from” means “from and including,”
“to” means “to but excluding” and “through” means “through and
including”;

       

      (j)        accounting
terms used herein shall have the meanings historically ascribed to them by
Morgan Stanley and its Subsidiaries, including MSCI, in its and their internal
accounting and financial policies and procedures in effect prior to the date of
this Agreement;

       

      (k)        the
titles to Articles and headings of Sections contained in this Agreement have
been inserted for convenience of reference only and shall not be deemed to be a
part of or to affect the meaning or interpretation of this
Agreement;

       

      (l)        any
portion of this Agreement obligating a Party to take any action or refrain from
taking any action, as the case may be, shall mean that such Party shall also be
obligated to cause its relevant Affiliates to take such action or refrain from
taking such action, as the case may be; and

       

      (m)       unless
otherwise specified in this Agreement, all references to dollar amounts herein
shall be in respect of lawful currency of the United States.

       

      
        
          
          

        

        
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      ARTICLE
2

      Agreements
by Morgan Stanley

       

      Section
2.01.  Systems
Infrastructure. Morgan Stanley agrees
to allow MSCI to use Morgan Stanley PeopleSoft systems infrastructure for a
reasonable time period, but in no event later than May 31, 2009, until MSCI is
able to implement and maintain its own independent systems infrastructure; provided that to the extent
necessary, access to specified Morgan Stanley systems infrastructure may be
extended for such necessary period of time after May 31, 2009.

       

      Section
2.02.  Morgan
Stanley Funds.  Unless specifically not permitted under the
respective fund agreement or by Applicable Law, Morgan Stanley agrees to allow
each MSCI Business Employee who is invested in any Morgan Stanley private equity
fund as of the Sale Date to continue his or her participation in such fund after
the Sale Date on the terms of the applicable fund agreement, as though such
Employee were employed by Morgan Stanley.

       

      Section
2.03.  Employee
Discounts.  Morgan Stanley agrees to continue to provide to
MSCI Business Employees who, as of the Sale Date, are MSCI Business Employees
who have a Morgan Stanley brokerage account, employee discounts on Morgan
Stanley brokerage accounts for three years after the Sale Date.

       

      Section
2.04.  Trading.  Morgan
Stanley agrees to extend the amount of time during which MSCI Business Employees
located outside of the United States shall be permitted to trade through the
Morgan Stanley trading desk for a period of time to be mutually agreed by Morgan
Stanley and MSCI, which shall be no less than 30 days after the Sale Date, and
no more than 90 days after the Sale Date.

       

       

      ARTICLE
3

      Equity
Compensation Awards

       

      Section
3.01.  Stock Options
and Restricted Stock Units.  For each unvested Morgan Stanley
Stock Option and each unvested Morgan Stanley RSU held by an MSCI Business
Employee and issued and outstanding under any Morgan Stanley Equity Plan, at the
time of the Sale, such MSCI Business Employee will be treated as involuntarily
terminated not for cause by Morgan Stanley and per the terms of the applicable
award, will become fully vested in such Morgan Stanley Stock Option and Morgan
Stanley RSU on the Sale Date.

       

      Section
3.02.  Responsibility For
Dividend Equivalent Payments, Tax Deduction, Tax Withholding and Reporting
Obligations

       

      (a)        Dividend Equivalent
Payments.  With respect to each Morgan Stanley Equity Award
held by an Employee who was employed by any member of the MSCI Group at the time
of grant, Morgan Stanley will have the obligation to pay MSCI 60% of all
dividend equivalent amounts owing to such employee in respect of such


       

       

      
        
          
          

        

        
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      award,
which amount shall be the dividend equivalent amount owing to such employee net
of the estimated tax benefit to MSCI, as determined by Morgan
Stanley.  MSCI will have the obligation to pay such employees as set
forth in the preceding sentence 100% of all such dividend equivalent amounts net
of any applicable tax withholding.

       

      (b)        Party Eligible to Record Tax
Deduction.  With respect to each Morgan Stanley Equity Award,
including all dividend equivalent amounts paid in respect of such award, held by
an Employee, the Party that will record the tax deduction with respect to such
equity award will be the employer entity at the time of grant.  For
the avoidance of doubt, MSCI will record the tax deduction with respect to each
Employee who was employed by any member of the MSCI Group at the time of grant,
including all dividend equivalent amounts paid to such employee in respect of
such award, and Morgan Stanley will record the tax deduction with respect to
each Morgan Stanley Equity Award held by an Employee who was employed by any
member of the MS Group at the time of grant, including all dividend equivalent
amounts paid to such employee in respect of such award.

       

      (c)        Responsibility for Tax Withholding
and Reporting Obligations.

       

      (i)                 Party Responsible for Income Tax
Withholding and Reporting Obligations.  With respect to each
Morgan Stanley Equity Award held by an Employee, the Party that will be
responsible for all tax withholding and reporting obligations that arise in
connection with the exercise, transfer or other settlement of such award will be
the employer entity at the time of grant.  For the avoidance of doubt,
MSCI will be responsible for all tax withholding and reporting obligations with
respect to each Employee who was employed by any member of the MSCI Group at the
time of grant, and Morgan Stanley will be responsible for all tax withholding
and reporting obligations with respect to each Morgan Stanley Equity Award held
by an Employee who was employed by any member of the MS Group at the time of
grant.

       

      (ii)                 Cash Transfer from Morgan Stanley to
MSCI for Net Share Settlement.  With respect to each Morgan Stanley
Equity Award held by an Employee who was employed by any member of the MSCI
Group at the time of grant, in the event, at the time of the exercise or
conversion of the award, the holder of the award elects net share settlement to
satisfy tax withholding, Morgan Stanley and MSCI agree that Morgan Stanley shall
transfer to MSCI, (A) cash, on a monthly basis, in an amount equal to the value
of any such shares withheld from delivery upon exercise or conversion in the
preceding month and (B) on a timely basis (i.e., giving MSCI a
reasonable amount of time to fulfill any reporting obligations) any information
regarding such event that MSCI is obligated to report to the IRS arising in
connection therewith.

       

      (iii)                 Gross Share Settlement. 
To the extent that an Employee who was employed by any member of the MSCI
Group at the time of grant has not elected net share tax settlement to satisfy
tax withholding as set forth in (ii) 

       

       

      
        
          
          

        

        
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      above,
Morgan Stanley will collect such withholding amount from such Employee in a
manner approved by Morgan Stanley and will remit cash, on a monthly basis, to
MSCI in the amount of any tax withholding obligations that arise in connection
with the vesting, exercise or conversion of such awards in the preceding
month.  Morgan Stanley will deliver to MSCI on a timely basis any
information regarding such events that MSCI is obligated to report to the IRS
arising in connection therewith.

       

      (d)        Cash Payments in respect of Tax
Deductions.  With respect to Morgan Stanley RSUs held by an
Employee who was employed by any member of the MSCI Group at the time of grant
that are converted in January 2010, either MSCI will make a cash payment to
Morgan Stanley for any net incremental tax deduction being made available to
MSCI and not limited by Section 162(m) of the Code upon the conversion of such
Morgan Stanley RSUs or Morgan Stanley will make a cash payment to MSCI for any
net decremental tax deduction being made available to MSCI upon the conversion
of such Morgan Stanley RSUs (each being determined without regard to (i) whether
or not the MSCI Group has any income in such year, or (ii) when and whether, or
in what amount, the MSCI Group actually realizes a benefit in the form of a
reduction in taxes payable or a refund in respect of such tax
deductions) (any such net payment the “Compensation Deduction
Payment”).  The incremental tax deduction shall be equal to the
product of (i) the maximum combined federal and state effective tax rate
applicable to the ordinary business income of the MSCI Group for the prior
taxable year (the “Applicable
Tax Rate”), to be provided by MSCI to Morgan Stanley prior to February 1,
2010, and (ii) the excess of the aggregate fair market value of Morgan Stanley
common stock deliverable (disregarding any net share settlement elections by the
employees) in connection with the conversion of such Morgan Stanley RSUs (the
fair market value of Morgan Stanley common stock delivered in connection with
such conversion to be determined on the conversion date) over the aggregate of
such Morgan Stanley RSUs’ previously determined values for accounting purposes
for which MSCI has been charged.  The decremental tax deduction shall
be equal to the product of (i) the Applicable Tax Rate and (ii) the excess of
the aggregate values for such Morgan Stanley RSUs converted for which MSCI has
been charged for accounting purposes over the aggregate fair market value of
Morgan Stanley common stock deliverable (disregarding any net share settlement
elections by the employees) in connection with the conversion of such Morgan
Stanley RSUs (the fair market value of Morgan Stanley common stock delivered in
connection with such conversion to be determined on the conversion
date).  The Compensation Deduction Payment shall be calculated by
netting any incremental tax deduction against any decremental tax deduction and
the Party responsible for making the Compensation Deduction Payment shall do so
in accordance with Section 14 of the Tax Sharing Agreement.

       

      (e)        Offset.  Any cash
transfers to be made by Morgan Stanley to MSCI under this Agreement may be
offset or otherwise reduced by any payments owed by MSCI to Morgan Stanley, and
any cash transfers to be made by MSCI to Morgan 

       

       

      
        
          
          

        

        
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      Stanley
under this Agreement may be offset or otherwise reduced by any payments owed by
Morgan Stanley to MSCI.

       

      (f)        Effect on Intercompany
Accounts.  As a result of the Sale, the Morgan Stanley Equity
Awards held by Employees who were employed by any member of the MSCI Group at
the time of grant will trigger an accounting charge.  Consistent with
Morgan Stanley’s past practice, MSCI will be charged an intercompany accounting
expense, which will be settled pursuant to the Separation
Agreement.

       

      (g)        Schedule of Outstanding Equity
Awards.  Morgan Stanley will provide a complete schedule
listing all MSCI Business Employees and Former MSCI Employees who hold Morgan
Stanley Equity Awards as of the Sale Date.  Such list will include (i)
the expiration date of each award; (ii) price information, including the grant
price, the volume weighted average price and the estimated Black Scholes value
(determined in accordance with Morgan Stanley’s methodology); and (iii) an
indication of whether or not each such MSCI Business Employee is full career
retirement eligible.  Subsequent to the Sale Date, Morgan Stanley will
update such schedule to provide the estimated Black Scholes value (determined in
accordance with Morgan Stanley’s methodology), based on Morgan Stanley’s closing
stock price on the Sale Date.

       

      (h)                   Necessary
Agreements.  Morgan Stanley and MSCI agree to enter into any
necessary agreements regarding the subject matter of this Section 3.02 to enable
them to fulfill their respective obligations hereunder, including but not
limited to compliance with all Applicable Laws and regulations regarding the
reporting, withholding or remitting of income and social insurance taxes, and
further including but not limited to any special arrangements generally
consistent with the practices set forth in this Article that may be necessary or
mutually desirable in connection with any Morgan Stanley Business Employees or
any Former Morgan Stanley Employees who were employed by any member of the MSCI
Group at the time of grant of their Morgan Stanley Equity Awards.

       

       

      ARTICLE
4

      General
Principles for Allocation of Liabilities

       

      Section
4.01. General
Principle.

       

      (a)        Assumption of Certain Obligations by
MSCI Group.  Except as otherwise provided in this Agreement,
the Parties agree that after the Sale Date,  MSCI shall continue the
sponsorship of, and none of Morgan Stanley or any Morgan Stanley Subsidiary
shall have any further liability for or under, the following agreements,
obligations and liabilities, and MSCI shall indemnify Morgan Stanley and the
Morgan Stanley Subsidiaries, and the officers, directors, and employees of each,
and hold them harmless with respect to Morgan Stanley’s and Morgan Stanley’s
Subsidiaries’ obligations or liabilities under such agreements and Morgan


       

       

      
        
          
          

        

        
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      Stanley’s
and Morgan Stanley’s Subsidiaries’ other obligations or liabilities as follows
below and benefit plan claims as set forth in (v) below:

       

      (i)                 All
employment agreements or independent contractor agreements entered into between
Morgan Stanley, its Subsidiaries or Affiliates (which, for the avoidance of
doubt, does not include MSCI) and MSCI Business Employees, Former MSCI
Employees, and independent contractors with respect to the services they provide
to MSCI;

       

      (ii)                 All
collective bargaining agreements, collective agreements, trade union, or works
council agreements entered into between Morgan Stanley, its Subsidiaries or
Affiliates and any union, works council, or other body representing only MSCI
Business Employees and Former MSCI Employees;

       

      (iii)                 All
wages, salary, cash incentive compensation, commissions, bonuses and results
share payable to MSCI Business Employees and Former MSCI Employees on or after
the Sale Date, and all obligations and liabilities for all vacation, holiday,
sick leave, flex days, personal days and paid time off, including banked time,
accrued by MSCI Business Employees;

       

      (iv)                 All
immigration-related, visa, work application, or similar rights, obligations and
liabilities related to MSCI Business Employees and Former MSCI Employees;
and

       

      (v)                 Except
as provided otherwise in paragraph (b) below, all liabilities and obligations of
the MSCI Business with respect to claims (including any EEOC claims) made by or
with respect to MSCI Business Employees and Former MSCI Employees, relating to
any employee benefits, whether or not provided under an “employee benefit plan”
as defined in ERISA, on account of services on or after September 1, 2008,
including such liabilities relating to actions or omissions of or by MSCI or any
officer, director, employee or agent thereof prior to the Sale
Date.  For the avoidance of doubt, Morgan Stanley, its Subsidiaries
and Affiliates shall retain responsibility, including the liability for claims
and payments with respect to, all plans that it continues to administer after
the Sale Date, including without limitation any retirement plans in which MSCI
Business Employees and Former MSCI Employees may have account balances as of the
Sale Date.

       

      (b)        The
Parties agree that none of Morgan Stanley or any Morgan Stanley Subsidiary
shall have any liability for any MSCI Business Employee or Former MSCI
Employee for any health or welfare benefit, whether or not provided
under an “employee benefit plan” as defined in ERISA, on account of any
person who is an MSCI Employee on or after September 1, 2008, and
MSCI shall indemnify Morgan Stanley and the Morgan Stanley Subsidiaries, and the
officers, directors, and employees of each, and hold them harmless with respect
to such plan or program, except that Morgan Stanley will be responsible for (i)
all medical claims 

       

       

      
        
          
          

        

        
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      incurred under
a Morgan Stanley health or welfare plan by MSCI Business Employees and Former
MSCI Employees prior to September 1, 2008, regardless of whether such claims
were reported prior to that date; and (ii) all continuing benefits provided to
MSCI Business Employees and Former MSCI Employees pursuant to COBRA; provided for purposes of this
subsection (ii) that Morgan Stanley (or any Morgan Stanley Subsidiary) was
providing such benefits prior to September 1, 2008.

       

      ARTICLE
5

      General
Provisions

       

      Section
5.01.  Restrictive
Covenants.  Notwithstanding anything in this Agreement to the
contrary, the Parties agree that any restrictive covenant agreements between
Morgan Stanley, its Subsidiaries or Affiliates and MSCI Business Employees or
Former MSCI Employees shall continue to exist, to the extent applicable,
consistent with their terms.  Morgan Stanley shall retain all rights
with respect to such agreements, and MSCI shall have no obligations with respect
to such agreements..

       

      Section
5.02.  Preservation
of Rights to Amend.  The rights of Morgan Stanley or MSCI, if
any, to amend or terminate any plan, program, or policy referred to herein shall
not be limited in any way by this Agreement.

       

      Section
5.03.  Confidentiality.  Each Party agrees that
any information conveyed or otherwise received by or on behalf of a Party in
conjunction herewith are confidential, to the extent required by
law.

       

      Section
5.04.  Administrative
Complaints/Litigation.  Except as otherwise provided in this
Agreement, after the Sale Date, MSCI shall be solely liable for the handling,
administration, investigation and defense of actions, including, without
limitation, ERISA, occupational safety and health, employment standards, union
grievances, wrongful dismissal, discrimination or human rights and unemployment
compensation claims, asserted at any time against Morgan Stanley, or MSCI or
their respective Affiliates by any MSCI Business Employee or Former MSCI
Employee (including any dependent or beneficiary of any such Employee) or any
other person, to the extent such actions or claims arise out of or relate to
employment or the provision of services (whether as an employee, contractor,
consultant, or otherwise) to or with the MSCI Business.  To the extent
that any legal action relates to a putative or certified class of plaintiffs,
which includes both Morgan Stanley Business Employees (or Former Morgan Stanley
Employees) and MSCI Business Employees (or Former MSCI Employees) and such
action involves employment or benefit plan related claims, reasonable costs and
expenses incurred by the Parties in responding to such legal action shall be
allocated among the Parties equitably in proportion to a reasonable assessment
of the relative proportion of Morgan Stanley Business Employees (or Former
Morgan Stanley Employees) and MSCI Business Employees (or Former MSCI Employees)
included in or represented by the putative or certified 

       

       

      
        
          
          

        

        
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      plaintiff
class.  The procedures contained in the indemnification provisions of
the Separation Agreement shall apply with respect to each Party’s
indemnification obligations under this Section 5.04.  Morgan Stanley
agrees to reasonably cooperate with, and to instruct its employees, counsel and
advisors to reasonably assist, MSCI in its defense of any claims or proceedings,
at MSCI’s expense.

       

      Section
5.05.  Costs of
Compliance with Agreement.  Except as otherwise provided in
this Agreement or any other Sale Document, each Party shall pay its own expenses
in fulfilling its obligations under this Agreement.

       

      ARTICLE
6

      Indemnification

       

      Section
6.01.  Indemnification.  Each
of MS Group and MSCI Group (each, as applicable, the “Indemnifying Party”) agrees to
indemnify, defend and hold harmless the other Party, and if applicable, their
respective directors, officers, members, shareholders, partners, attorneys,
accountants, agents and their heirs, successors and assigns (each, as
applicable, the “Indemnitee”) from, against and
in respect of any damages, claims, losses, charges, actions, suits, proceedings,
deficiencies, taxes, interest, penalties and reasonable costs and expenses
(including without limitation reasonable attorney’s fees and disbursements)
(“Claims”), imposed on,
sustained, incurred or suffered by or asserted against any of the Indemnitees
relating to or arising out of the performance of this Agreement by the
Indemnifying Party, except to the extent that any such Claim results from the
willful misconduct or gross negligence of the Indemnitee or breach by the
Indemnitee of this Agreement.

       

      Section
6.02.  Notice of
Claims.  The Indemnitee agrees to notify the Indemnifying
Party, promptly in writing upon the receipt by the Indemnitee of notice of any
pending or threatened claim or proceeding, including without limitation any
audit or assessment with respect to taxes, which arise out of, in connection
with or result from the activities contemplated hereby for which the
Indemnifying Party has agreed to indemnify the Indemnitee.  The
Indemnitee further agrees to reasonably cooperate and assist and to instruct its
employees, counsel and advisors to reasonably assist the Indemnifying Party in
the defense of such claims or proceedings.  The Indemnifying Party
shall be entitled to participate, at its expense, in the defense of its interest
in any such claim or proceeding.

       

      ARTICLE
7

      Miscellaneous

       

      Section
7.01.  Notices.  Any
notice, instruction, direction or demand under the terms of this Agreement
required to be in writing shall be duly given upon delivery, if delivered by
hand, facsimile transmission, or mail, to the following addresses:

       

       

       

      
        
          
          

        

        
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      (a)        If
to Morgan Stanley to:

       

      Morgan
Stanley

      1585
Broadway

      New York,
NY 10036

      Attn:
Martin M. Cohen, Director of Company Law

      Facsimile:
(212) 507-3334

       

      with a
copy to:

       

      Davis
Polk & Wardwell

      450
Lexington Avenue

      New York,
NY 10017

      Attn:  John
Bick, Esq./Jean McLoughlin, Esq.

      Facsimile:
(212) 450-3800

       

      (b)        If
to MSCI to:

       

      MSCI
Inc.

      88 Pine
Street

      New York,
NY

      Attn:
General Counsel

      Telephone:
(212) 804-3900

       

      or to
such other addresses or telecopy numbers as may be specified by like notice to
the other Party.  All such notices, requests and other communications
shall be deemed given, (a) when delivered in person or by courier or a courier
services, (b) if sent by facsimile transmission (receipt confirmed) on a
Business Day prior to 5 p.m. in the place of receipt, on the date of
transmission (or, if sent after 5 p.m., on the following Business Day) or (c) if
mailed by certified mail (return receipt requested), on the date specified on
the return receipt.

       

      Section
7.02.  Amendments; No
Waivers.  

       

      (a)        From
and after the Sale, any provision of this Agreement may be amended or waived if,
and only if, such amendment or waiver is in writing and signed, in the case of
an amendment, by Morgan Stanley and MSCI, or in the case of a waiver, by the
Party against whom the waiver is to be effective.

       

      (b)        No
failure or delay by any Party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.  The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law.

       

      Section
7.03.  Successors
and Assigns.  The provisions of this Agreement shall be binding
upon and inure to the benefit of the Parties hereto and their 

       

       

      
        
          
          

        

        
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      respective
successors and permitted assigns; provided that neither Party
may assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement without the consent of the other Party
hereto.  If any Party or any of its successors or permitted assigns
(i) shall consolidate with or merge into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) shall transfer all or substantially all of its properties and assets to any
Person, then, and in each such case, proper provisions shall be made so that the
successors and assigns of such Party shall assume all of the obligations of such
Party under this Agreement and the Ancillary Agreements.

       

      Section
7.04.  Governing
Law.  This Agreement shall be construed in accordance with and
governed by the law of the State of New York, without regard to the conflicts of
laws rules thereof.

       

      Section
7.05.  Counterparts;
Effectiveness; Third-Party Beneficiaries.  This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.  This Agreement shall become effective when each Party
hereto shall have received a counterpart hereof signed by the other Party
hereto.  Until and unless each Party has received a counterpart hereof
signed by the other Party hereto, this Agreement shall have no effect and no
Party shall have any right or obligation hereunder (whether by virtue of any
other oral or written agreement or other communication).  Neither this
Agreement nor any provision hereof is intended to confer any rights, benefits,
remedies, obligations, or liabilities hereunder upon any Person other than the
Parties hereto and their respective successors and permitted
assigns.  No Employee or other current or former employee of Morgan
Stanley or MSCI or any Subsidiary or Affiliate of either (or his/her spouse,
dependent or beneficiary), or any other person not a party to this Agreement,
shall be entitled to assert any claim hereunder.  Without limiting the
foregoing, the provisions of this Agreement are not intended to, nor shall they
confer upon any Person other than the Parties hereto any right or expectation as
to the adoption, amendment, maintenance, continuation, operation or funding of
any employee benefit plan, policy or arrangement.  Without limiting
the foregoing, nothing in this Agreement shall be deemed to amend, modify or
terminate the terms of any benefits under such plan, policy or arrangement or
shall limit the rights of either Party to do so.

       

      Section
7.06.  Entire
Agreement.  This Agreement and the Ancillary Agreements
constitute the entire understanding of the Parties with respect to the subject
matter hereof and thereof and supersede all prior agreements, understandings and
negotiations, both written and oral, between the Parties with respect to the
subject matter hereof and thereof.  No representation, inducement,
promise, understanding, condition or warranty not set forth herein or in the
Ancillary Agreement has been made or relied upon by any Party hereto. Regardless
of anything else contained herein, the Parties do not intend for this Agreement
to amend any employee benefit plans or arrangements.

       

       

      
        
          
          

        

        
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      Section
7.07.  Jurisdiction.  Any
Action seeking to enforce any provision of, or based on any matter arising out
of or in connection with, this Agreement or the transactions contemplated hereby
may be brought in the United States District Court for the Southern District of
New York or any other New York State court sitting in New York County, and each
of the Parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum.  Process in any such suit, action or proceeding
may be served on any Party anywhere in the world, whether within or without the
jurisdiction of any such court.  Without limiting the foregoing, each
Party agrees that service of process on such Party as provided in Section 7.01
shall be deemed effective service of process on such Party.

       

      Section
7.08.  WAIVER OF
JURY TRIAL.  THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

       

      Section
7.09.  Severability.  If
any one or more of the provisions contained in this Agreement should be declared
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained in this Agreement shall not
in any way be affected or impaired thereby so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any Party.  Upon such a declaration, the Parties
shall modify this Agreement so as to effect the original intent of the Parties
as closely as possible in an acceptable manner so that the transactions
contemplated hereby are consummated as originally contemplated to the fullest
extent possible.

       

      Section
7.10.  Survival.  All
covenants and agreements of the Parties contained in this Agreement shall
survive the Sale Date indefinitely, unless a specific survival or other
applicable period is expressly set forth herein.

       

      Section
7.11.  Captions.  The
captions herein are included for convenience of reference only and shall be
ignored in the construction or interpretation hereof.

       

      Section
7.12.  Specific
Performance.  Each Party to this Agreement acknowledges and
agrees that damages for a breach or threatened breach of any of the provisions
of this Agreement may be inadequate and irreparable harm may
occur.  In recognition of this fact, each Party agrees that, if there
is a breach or threatened breach, in addition to any damages, the other
nonbreaching Party to this Agreement, without posting any bond, shall be
entitled to seek and obtain equitable relief in the form of specific
performance, temporary restraining order, temporary or permanent injunction,
attachment, or any other equitable remedy which may then be available to
obligate the breaching Party (i) to perform its obligations under this Agreement
or (ii) if the breaching Party is unable, for whatever reason, to perform those
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      take any
other actions as are necessary, advisable or appropriate to give the other Party
to this Agreement the economic effect which comes as close as possible to the
performance of those obligations (including, but not limited to, transferring,
or granting liens on, the assets of the breaching Party to secure the
performance by the breaching Party of those obligations).

       

      Section
7.13.  Performance.  Each
Party shall cause to be performed all actions, agreements and obligations set
forth herein to be performed by any member of such Party’s Group.

       

      Section
7.14.  Limited
Liability.  Notwithstanding any other provision of this
Agreement, no individual who is a stockholder, director, employee, officer,
agent or representative of MSCI or Morgan Stanley, nor any individual employed
or previously employed by MSCI or Morgan Stanley or their respective Affiliates
and serving or previously serving as a fiduciary of any benefit plan of MSCI or
Morgan Stanley or their respective Affiliates (or any body consisting of such
individuals), in his, her or its capacity as such, shall have any liability in
respect of or relating to the covenants or obligations of MSCI or Morgan Stanley
under this Agreement and, to the fullest extent legally permissible, each of
MSCI and Morgan Stanley, for itself and its respective stockholders, directors,
employees, officers and Affiliates, waives and agrees not to seek to assert or
enforce any such liability that any such Person otherwise might have pursuant to
Applicable Law.

       

      Section
7.15.  Mutual
Drafting.  This Agreement shall be deemed to be the joint work
product of Morgan Stanley and MSCI and any rule of construction that a document
shall be interpreted or construed against a drafter of such document shall not
be applicable.

       

      Section
7.16.  Effect if
Sale Does Not Occur.  Notwithstanding anything in this
Agreement to the contrary, if the Sale does not occur, this Agreement shall be
of no force and effect.

       

      Section
7.17.  Corporate
Authorization.  The officers of Morgan Stanley and MSCI are
hereby authorized, empowered and directed, in the name and on behalf of each of
Morgan Stanley and MSCI, respectively, to take or cause to be taken all such
further action, to execute and deliver or cause to be executed and delivered all
such further agreements, certificates, instruments and documents, to make or
cause to be made all such filings with governmental or regulatory authorities,
and to pay or cause to be paid all such fees and expenses, in each case which
shall in such officers’ judgment be deemed necessary, proper or advisable to
effect and carry out the intent of this Agreement, such determination to be
evidenced conclusively by such officers’ execution and delivery thereof or
taking of action in respect thereto.

       

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      IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed in their
names by a duly authorized officer as of the date first written
above.

       

      
        	
                MORGAN
      STANLEY

              	 
	 	 
	 	 
	
                By:

              	  /s/ Colm
      Kelleher	 
	 
      	
                Name:     Colm
      Kelleher

              	 
	 
      	
                Title:      
      Chief Financial Officer

              	 
	 
      	 
	 
      	 


      

      


      


      
        	
                MSCI
      INC.

              	 
	 	 
	 	 
	
                By:

              	 
      /s/ Henry A.
      Fernandez	 
	 
      	
                Name:     Henry
      A. Fernandez

              	 
	 
      	
                Title:      
      Chairman and CEO

              	 
	 
      	 
	 
      	 


      

      
 

      
        Signature
page to the Employee Matters Agreement