MORGAN
STANLEY


    2007
EQUITY INCENTIVE COMPENSATION PLAN


    (Amended
and Restated as of March 19, 2010)

    


    


    1. Purpose. The primary purposes
of the Morgan Stanley 2007 Equity Incentive Compensation Plan are to attract,
retain and motivate employees, to compensate them for their contributions to the
growth and profits of the Company and to encourage them to own Morgan Stanley
Stock.

    


    2. Definitions. Except as
otherwise provided in an applicable Award Document, the following capitalized terms shall
have the meanings indicated below for purposes of the Plan and any
Award:

    


    “Administrator”
means the individual or individuals to whom the Committee delegates authority
under the Plan in accordance with Section 5(b).

    


    “Award”
means any award of Restricted Stock, Stock Units, Options, SARs or Other Awards
(or any combination thereof) made under and pursuant to the terms of the
Plan.

    


    “Award
Date” means the date specified in a Participant’s Award Document as the
grant date of the Award.

    


    “Award
Document” means a written document (including in electronic form) that
sets forth the terms and conditions of an Award. Award Documents shall be
authorized in accordance with Section 12(e).

    


    “Board”
means the Board of Directors of Morgan Stanley.

    


    “Code ”
means the Internal Revenue Code of 1986, as amended, and the applicable rulings,
regulations and guidance thereunder.

    


    “Committee”
means the Compensation, Management Development and Succession Committee of the
Board, any successor committee thereto or any other committee of the Board
appointed by the Board to administer the Plan or to have authority with respect
to the Plan, or any subcommittee appointed by such Committee.

    


    “Company”
means Morgan Stanley and all of its Subsidiaries.

    


    “Eligible
Individuals” means the individuals described in Section 6 who are
eligible for Awards.

    


    “Employee
Trust” means any trust established or maintained by the Company in
connection with an employee benefit plan (including the Plan) under which
current and former employees of the Company constitute the principal
beneficiaries.

    


    “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the
applicable rulings and regulations thereunder.

    


    “Fair Market
Value” means, with respect to a Share, the fair market value thereof as
of the relevant date of determination, as determined in accordance with a
valuation methodology approved by the Committee.

     

    
      
        
        

      

      
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    “Incentive Stock
Option” means an Option that is intended to qualify for special federal
income tax treatment pursuant to Sections 421 and 422 of the Code, as now
constituted or subsequently amended, or pursuant to a successor provision of the
Code, and which is so designated in the applicable Award
Document.

    


    “Morgan
Stanley” means Morgan Stanley, a Delaware corporation.

    


    “Option” or
“Stock
Option” means a right, granted to a Participant pursuant to Section 9, to
purchase one Share.

    


    “Other
Award” means any other form of award authorized under Section 11 of the
Plan, including any such Other Award the receipt of which was elected pursuant
to Section 12(a).

    


    “Participant”
means an individual to whom an Award has been made.

    


    “Plan”
means the Morgan Stanley 2007 Equity Incentive Compensation Plan, as amended
from time to time in accordance with Section 15(e) below.

    


    “Restricted
Stock” means Shares granted or sold to a Participant pursuant to Section
7.

    


    “SAR” means
a right, granted to a Participant pursuant to Section 10, to receive upon
exercise of such right, in cash or Shares (or a combination thereof) as
authorized by the Committee, an amount equal to the increase in the Fair Market
Value of one Share over a specified exercise price.

    


    “Section 162(m)
Participant” means, for a given fiscal year of Morgan Stanley, any
Participant designated by the Committee as a Participant whose compensation may
be subject to the limit on deductible compensation imposed by Section 162(m) of
the Code (or any successor provisions thereto).

    


    “Section 162(m)
Performance Goals” means the performance formula that was approved by
Morgan Stanley’s stockholders on March 22, 2001 or any other performance formula
or performance goals approved by Morgan Stanley’s stockholders pursuant to
Section 162(m) of the Code (or any successor provisions thereto).

    


    “Section
409A” means Section 409A of the Code (or any successor provisions
thereto).

    


    “Shares”
means shares of Stock.

    


    “Stock”
means the common stock, par value $0.01 per share, of Morgan
Stanley.

    


    “Stock
Unit” means a right, granted to a Participant pursuant to Section 8, to
receive one Share or an amount in cash equal to the Fair Market Value of one
Share, as authorized by the Committee.

    


    “Subsidiary”
means (i) a corporation or other entity with respect to which Morgan Stanley,
directly or indirectly, has the power, whether through the ownership of voting
securities, by contract or otherwise, to elect at least a majority of the
members of such corporation’s board of directors or analogous governing body, or
(ii) any other corporation or other entity in which Morgan Stanley, directly or
indirectly, has an equity or similar interest and which the Committee designates
as a Subsidiary for purposes of the Plan.

     

    
      
        
        

      

      
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    “Substitute
Awards” means Awards granted upon assumption of, or in substitution for,
outstanding awards previously granted by, or held by employees of, a company or
other entity or business acquired (directly or indirectly) by Morgan Stanley or
with which Morgan Stanley combines.

    


    3.   Effective
Date and Term of Plan.

    


    (a) Effective Date. The Plan
shall become effective upon its adoption by the Board, subject to its approval by Morgan
Stanley’s stockholders. Prior to such stockholder approval, the Committee may
grant Awards conditioned on stockholder approval, but no Shares may be issued or
delivered pursuant to any such Award until Morgan Stanley’s stockholders have
approved the Plan. If such stockholder approval is not obtained at or before the
first annual meeting of stockholders to occur after the adoption of the Plan by
the Board, the Plan and any Awards made thereunder shall terminate ab initio and be of no
further force and effect.

    


    (b) Term of Plan. No Awards may
be made under the Plan after the date that is five years from the date of shareholder
approval.

    


    4.   Stock
Subject to Plan.

    


    (a) Overall Plan Limit. The total
number of Shares that may be delivered pursuant to Awards shall be 163,000,000 as
calculated pursuant to Section 4(c). The number of Shares available for delivery
under the Plan shall be adjusted as provided in Section 4(b). Shares delivered
under the Plan may be authorized but unissued shares or treasury shares that
Morgan Stanley acquires in the open market, in private transactions or
otherwise.

    


    (b) Adjustments for Certain
Transactions. In the event of a stock split, reverse stock split,
stock dividend,
recapitalization, reorganization, merger, consolidation, extraordinary dividend
or distribution, split-up, spin-off, combination, reclassification or exchange
of shares, warrants or rights offering to purchase Stock at a price
substantially below Fair Market Value or other change in corporate structure or
any other event that affects Morgan Stanley’s capitalization, the Committee
shall equitably adjust (i) the number and kind of shares authorized for delivery
under the Plan, including the maximum number of Shares available for Awards of
Options or SARs as provided in Section 4(d) and the maximum number of Incentive
Stock Options as provided in Section 4(e), and (ii) the number and kind of
shares subject to any outstanding Award and the exercise or purchase price per
share, if any, under any outstanding Award. In the discretion of the Committee,
such an adjustment may take the form of a cash payment to a Participant. The
Committee shall make all such adjustments, and its determination as to what
adjustments shall be made, and the extent thereof, shall be final. Unless the
Committee determines otherwise, such adjusted Awards shall be subject to the
same vesting schedule and restrictions to which the underlying Award is
subject.

    


    (c) Calculation of Shares Available for
Delivery. In calculating the number of Shares that remain available for delivery
pursuant to Awards at any time, the following rules shall apply (subject to the
limitation in Section 4(e)):

    


    1. The
number of Shares available for delivery shall be reduced by the number of Shares
subject to an Award and, in the case of an Award that is not denominated in
Shares, the number of Shares actually delivered upon payment or settlement of
the Award.

    


    2. The
number of Shares tendered (by actual delivery or attestation) or withheld from
an Award to pay the exercise price of the Award or to satisfy any tax
withholding obligation or liability of a Participant shall be added back to the number of
Shares available for delivery pursuant to Awards.

     

    
      
        
        

      

      
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    3. The
number of Shares in respect of any portion of an Award that is canceled or that
expires without having been paid or settled by the Company shall be added back
to the number of Shares available for delivery pursuant to Awards to the extent
such Shares were counted against the Shares available for delivery pursuant to
clause (1).

    


    4. If an
Award is settled or paid by the Company in whole or in part through the delivery
of consideration other than Shares, or by delivery of fewer than the full number
of Shares that was counted against the Shares available for delivery pursuant to
clause (1), there shall be added back to the number of Shares available for
delivery pursuant to Awards the excess of the number of Shares that had been so
counted over the number of Shares (if any) actually delivered upon payment or
settlement of the Award.

    


    5. Any
Shares underlying Substitute Awards shall not be counted against the number of
Shares available for delivery pursuant to Awards and shall not be subject to
Section 4(d).

    


    (d) Individual Limit on Options and
SARs. The maximum number of Shares that may be subject to Options or SARs
granted to or elected by a Participant in any fiscal year shall be 2,000,000
Shares. The limitation imposed by this Section 4(d) shall not include Options or
SARs granted to a Participant pursuant to Section 162(m) Performance
Goals.

    


    (e) ISO Limit. The full number of
Shares available for delivery under the Plan may be delivered pursuant to Incentive
Stock Options, except that in calculating the number of Shares that remain
available for Awards of Incentive Stock Options the rules set forth in Section
4(c) shall not apply to the extent not permitted by Section 422 of the
Code.

    


    5.   Administration.

    


    (a) Committee Authority
Generally. The Committee shall administer the Plan and shall have full
power and authority to make all determinations under the Plan, subject to the
express provisions hereof, including without limitation: (i) to select
Participants from among the Eligible Individuals; (ii) to make Awards; (iii) to
determine the number of Shares subject to each Award or the cash amount payable
in connection with an Award; (iv) to establish the terms and conditions of each
Award, including, without limitation, those related to vesting, cancellation,
payment, exercisability, and the effect, if any, of certain events on a
Participant’s Awards, such as the Participant’s termination of employment with
the Company; (v) to specify and approve the provisions of the Award Documents
delivered to Participants in connection with their Awards; (vi) to construe and
interpret any Award Document delivered under the Plan; (vii) to prescribe, amend
and rescind rules and procedures relating to the Plan; (viii) to make all
determinations necessary or advisable in administering the Plan and Awards,
including without limitation determinations as to whether (and if so as of what
date) a Participant has commenced, or has experienced a termination of,
employment; provided,
however, that to the
extent full or partial payment of any Award that constitutes a deferral of
compensation subject to Section 409A is made upon or as a result of a
Participant’s termination of employment, the Participant will be considered to
have experienced a termination of employment if, and only if, the Participant
has experienced a separation from service with the Participant’s employer for
purposes of Section 409A; (ix) to vary the terms of Awards to take account of
securities law and other legal or regulatory requirements of jurisdictions in
which Participants work or reside or to procure favorable tax treatment for
Participants; and (x) to formulate such procedures as it considers to be
necessary or advisable for the administration of the Plan.

     

    
      
        
        

      

      
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    (b) Delegation.
To the extent not prohibited by applicable laws or rules of the New York
Stock Exchange,
the Committee may from time to time delegate some or all of its authority under
the Plan to one or more Administrators consisting of one or more members of the
Committee as a subcommittee or subcommittees thereof or of one or more members
of the Board who are not members of the Committee or one or more officers of the
Company (or of any combination of such persons). Any such delegation shall be
subject to the restrictions and limits that the Committee specifies at the time
of such delegation or thereafter. The Committee may at any time rescind all or
part of the authority delegated to an Administrator or appoint a new
Administrator. At all times, an Administrator appointed under this Section 5(b)
shall serve in such capacity at the pleasure of the Committee. Any action
undertaken by an Administrator in accordance with the Committee’s delegation of
authority shall have the same force and effect as if undertaken directly by the
Committee, and any reference in the Plan to the Committee shall, to the extent
consistent with the terms and limitations of such delegation, be deemed to
include a reference to an Administrator.

    


    (c) Authority to Construe and
Interpret. The Committee shall have full power and authority, subject to the express
provisions hereof, to construe and interpret the Plan.

    


    (d) Committee Discretion. All of
the Committee’s determinations in carrying out, administering, construing and
interpreting the Plan shall be made or taken in its sole discretion and shall be
final, binding and conclusive for all purposes and upon all persons. In the
event of any disagreement between the Committee and an Administrator, the
Committee’s determination on such matter shall be final and binding on all
interested persons, including any Administrator. The Committee’s determinations
under the Plan need not be uniform and may be made by it selectively among
persons who receive, or are eligible to receive, Awards under the Plan (whether
or not such persons are similarly situated). Without limiting the generality of
the foregoing, the Committee shall be entitled, among other things, to make
non-uniform and selective determinations, and to enter into non-uniform and
selective Award Documents, as to the persons receiving Awards under the Plan,
and the terms and provisions of Awards under the Plan.

    


    (e) No Liability. Subject to
applicable law: (i) no member of the Committee or any Administrator shall be liable for
anything whatsoever in connection with the exercise of authority under the Plan
or the administration of the Plan except such person’s own willful misconduct;
(ii) under no circumstances shall any member of the Committee or any
Administrator be liable for any act or omission of any other member of the
Committee or an Administrator; and (iii) in the performance of its functions
with respect to the Plan, the Committee and an Administrator shall be entitled
to rely upon information and advice furnished by the Company’s officers, the
Company’s accountants, the Company’s counsel and any other party the Committee
or the Administrator deems necessary, and no member of the Committee or any
Administrator shall be liable for any action taken or not taken in good faith
reliance upon any such advice.

    


    6. Eligibility. Eligible
Individuals shall include all officers, other employees (including prospective employees)
and consultants of, and other persons who perform services for, the Company,
non-employee directors of Subsidiaries and employees and consultants of joint
ventures, partnerships or similar business organizations in which Morgan Stanley
or a Subsidiary has an equity or similar interest. Any Award made to a
prospective employee shall be conditioned upon, and effective not earlier than,
such person’s becoming an employee. Members of the Board who are not Company
employees will not be eligible to receive Awards under the Plan. An individual’s
status as an Administrator will not affect his or her eligibility to receive
Awards under the Plan.

     

    
      
        
        

      

      
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    7. Restricted Stock.
An Award of Restricted Stock shall be subject to the terms and
conditions established by the
Committee in connection with the Award and specified in the applicable Award
Document. Restricted Stock may, among other things, be subject to restrictions
on transfer, vesting requirements or cancellation under specified
circumstances.

    


    8. Stock Units. An Award of Stock
Units shall be subject to the terms and conditions established by the
Committee in connection with the Award and specified in the applicable Award
Document. Each Stock Unit awarded to a Participant shall correspond to one
Share. Upon satisfaction of the terms and conditions of the Award, a Stock Unit
will be payable, at the discretion of the Committee, in Stock or in cash equal
to the Fair Market Value on the payment date of one Share. As a holder of Stock
Units, a Participant shall have only the rights of a general unsecured creditor
of Morgan Stanley. A Participant shall not be a stockholder with respect to the
Shares underlying Stock Units unless and until the Stock Units convert to
Shares. Stock Units may, among other things, be subject to restrictions on
transfer, vesting requirements or cancellation under specified
circumstances.

    


    
      9.  Options.

    

    


    (a) Options Generally. An Award
of Options shall be subject to the terms and conditions established by the
Committee in connection with the Award and specified in the applicable Award
Document. The Committee shall establish (or shall authorize the method for
establishing) the exercise price of all Options awarded under the Plan, except
that the exercise price of an Option shall not be less than 100% of the Fair
Market Value of one Share on the Award Date. Notwithstanding the foregoing, the
exercise price of an Option that is a Substitute Award may be less than the Fair
Market Value per Share on the Award Date, provided that such substitution
complies with applicable laws and regulations, including the listing
requirements of the New York Stock Exchange and Section 409A or Section 424, as
applicable, of the Code. Upon satisfaction of the conditions to exercisability
of the Award, a Participant shall be entitled to exercise the Options included
in the Award and to have delivered, upon Morgan Stanley’s receipt of payment of
the exercise price and completion of any other conditions or procedures
specified by Morgan Stanley, the number of Shares in respect of which the
Options shall have been exercised. Options may be either nonqualified stock
options or Incentive Stock Options. Options and the Shares acquired upon
exercise of Options may, among other things, be subject to restrictions on
transfer, vesting requirements or cancellation under specified
circumstances.

    


    (b) Prohibition on Restoration Option
Grants. Anything in the Plan to the contrary notwithstanding, the
terms of an Option shall not provide that a new Option will be granted,
automatically and without additional consideration in excess of the exercise
price of the underlying Option, to a Participant upon exercise of the
Option.

    


    (c) Prohibition on Repricing of Options
and SARs. Anything in the Plan to the contrary notwithstanding, the
Committee may not reprice any Option or SAR. “Reprice” means any action that
constitutes a “repricing” under the rules of the New York Stock
Exchange.

    


    (d) Payment of Exercise Price.
Subject to the provisions of the applicable Award Document and to the extent
authorized by rules and procedures of Morgan Stanley from time to time, the
exercise price of the Option may be paid in cash, by actual delivery or
attestation to ownership of freely transferable Shares already owned by the
person exercising the Option, or by such other means as Morgan Stanley may
authorize.

    


    (e) Maximum Term on Stock Options and
SARs. No Option or SAR shall have an expiration date that is later than the
tenth anniversary of the Award Date thereof.

     

    
      
        
        

      

      
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    10. SARs. An
Award of SARs shall be subject to the terms and conditions established by
the Committee in
connection with the Award and specified in the applicable Award Document. The
Committee shall establish (or shall authorize the method for establishing) the
exercise price of all SARs awarded under the Plan, except that the exercise
price of a SAR shall not be less than 100% of the Fair Market Value of one Share
on the Award Date. Notwithstanding the foregoing, the exercise price of any SAR
that is a Substitute Award may be less than the Fair Market Value of one Share
on the Award Date, subject to the same conditions set forth in Section 9(a) for
Options that are Substitute Awards. Upon satisfaction of the conditions to the
payment of the Award, each SAR shall entitle a Participant to an amount, if any,
equal to the Fair Market Value of one Share on the date of exercise over the SAR
exercise price specified in the applicable Award Document. At the discretion of
the Committee, payments to a Participant upon exercise of an SAR may be made in
Shares, cash or a combination thereof. SARs and the Shares that may be acquired
upon exercise of SARs may, among other things, be subject to restrictions on
transfer, vesting requirements or cancellation under specified
circumstances.

    


    11. Other Awards. The Committee
shall have the authority to establish the terms and provisions of other forms of
equity-based or equity-related Awards (such terms and provisions to be specified
in the applicable Award Document) not described above that the Committee
determines to be consistent with the purpose of the Plan and the interests of
the Company, which Awards may provide for (i) cash or Stock payments based in
whole or in part on the value or future value of Stock or on any amount that
Morgan Stanley pays as dividends or otherwise distributes with respect to Stock,
(ii) the acquisition or future acquisition of Stock, (iii) cash or Stock
payments (including payment of dividend equivalents in cash or Stock) based on
one or more criteria determined by the Committee unrelated to the value of
Stock, or (iv) any combination of the foregoing. Awards pursuant to this Section
11 may, among other things, be made subject to restrictions on transfer, vesting
requirements or cancellation under specified circumstances.

    


    
      12.  General
Terms and Provisions.

    

    


    (a) Awards in General. Awards
may, in the discretion of the Committee, be made in substitution in whole or in part for
cash or other compensation payable to an Eligible Individual. In accordance with
rules and procedures authorized by the Committee, an Eligible Individual may
elect one form of Award in lieu of any other form of Award, or may elect to
receive an Award in lieu of all or part of any compensation that otherwise might
have been paid to such Eligible Individual; provided, however, that any such
election shall not require the Committee to make any Award to such Eligible
Individual. Any such substitute or elective Awards shall have terms and
conditions consistent with the provisions of the Plan applicable to such Award.
Awards may be granted in tandem with, or independent of, other Awards. The
grant, vesting or payment of an Award may, among other things, be conditioned on
the attainment of performance objectives, including without limitation
objectives based in whole or in part on net income, pre-tax income, return on
equity, earnings per share, total shareholder return or book value per
share.

    


    (b) Discretionary Awards. All
grants of Awards and deliveries of Shares, cash or other property under the Plan shall
constitute a special discretionary incentive payment to the Participant and
shall not be required to be taken into account in computing the amount of
salary, wages or other compensation of the Participant for the purpose of
determining any contributions to or any benefits under any pension, retirement,
profit-sharing, bonus, life insurance, severance or other benefit plan of the
Company or other benefits from the Company or under any agreement with the
Participant, unless Morgan Stanley specifically provides otherwise.

     

    
      
        
        

      

      
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    (c) Dividends and
Distributions. If Morgan Stanley pays any dividend or makes any
distribution to
holders of Stock, the Committee may in its discretion authorize payments (which
may be in cash, Stock (including Restricted Stock) or Stock Units or a
combination thereof) with respect to the Shares corresponding to an Award, or
may authorize appropriate adjustments to outstanding Awards, to reflect such
dividend or distribution. The Committee may make any such payments subject to
vesting, deferral, restrictions on transfer or other conditions. Any
determination by the Committee with respect to a Participant’s entitlement to
receive any amounts related to dividends or distributions to holders of Stock,
as well as the terms and conditions of such entitlement, if any, will be part of
the terms and conditions of the Award, and will be included in the Award
Document for such Award.

    


    (d) Deferrals. In accordance with
the procedures authorized by, and subject to the approval of, the Committee,
Participants may be given the opportunity to defer the payment or settlement of
an Award to one or more dates selected by the Participant. To the extent an
Award constitutes a deferral of compensation subject to Section 409A, the
Committee shall set forth in writing (which may be in electronic form), on or
before the date the applicable deferral election is required to be irrevocable
in order to meet the requirements of Section 409A, the conditions under which
such election may be made.

    


    (e) Award Documentation and Award
Terms. The terms and conditions of an Award shall be set forth in an Award
Document authorized by the Committee. The Award Document shall include any
vesting, exercisability, payment and other restrictions applicable to an Award
(which may include, without limitation, the effects of termination of
employment, cancellation of the Award under specified circumstances,
restrictions on transfer or provision for mandatory resale to the
Company).

    


    (f) Awards to Section 162(m)
Participants. Except for Options and SARs the shares underlying which are counted
against the individual limit set forth in Section 4(d), all Awards to Section
162(m) Participants shall be made pursuant to the attainment of Section 162(m)
Performance Goals as certified by the Committee in accordance with the
requirements of Section 162(m) of the Code. Without any further action by the
Board or the Committee, this Section 12(f) shall cease to apply on the effective
date of the repeal of Section 162(m) of the Code (and any successor provision
thereto).

    


    13.  Certain
Restrictions.

    


    (a) Stockholder Rights. No
Participant (or other persons having rights pursuant to an Award) shall have any of the
rights of a stockholder of Morgan Stanley with respect to Shares subject to an
Award until the delivery of the Shares, which shall be effected by entry of the
Participant’s (or other person’s) name in the share register of Morgan Stanley
or by such other procedure as may be authorized by Morgan Stanley. Except as
otherwise provided in Section 4(b) or 12(c), no adjustments shall be made for
dividends or distributions on, or other events relating to, Shares subject to an
Award for which the record date is prior to the date such Shares are delivered.
Notwithstanding the foregoing, the terms of an Employee Trust may authorize some
or all Participants to give voting or tendering instructions to the trustee
thereof in respect of Shares that are held in such Employee Trust and are
subject to Awards. Except for the risk of cancellation and the restrictions on
transfer that may apply to certain Shares (including restrictions relating to
any dividends or other rights) or as otherwise set forth in the applicable Award
Document, the Participant shall be the beneficial owner of any Shares delivered
to the Participant in connection with an Award and, upon such delivery shall be
entitled to all rights of ownership, including, without limitation, the right to
vote the Shares and to receive cash dividends or other dividends (whether in
Shares, other securities or other property) thereon.

    


    (b) Transferability. No Award
granted under the Plan shall be transferable, whether voluntarily or involuntarily, other
than by will or by the laws of descent and distribution; provided that, except
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    respect to Incentive Stock Options, the Committee may permit
transfers on such terms and conditions as it shall determine. During the
lifetime of a Participant to whom Incentive Stock Options were awarded, such
Incentive Stock Options shall be exercisable only by the
Participant.

    


    14. Representation; Compliance with Law.
The Committee may condition the grant, exercise, settlement or retention
of any Award on the Participant making any representations required in the
applicable Award Document. Each Award shall also be conditioned upon the making
of any filings and the receipt of any consents or authorizations required to
comply with, or required to be obtained under, applicable law.

    


    
      15.  Miscellaneous
Provisions.

    

    


    (a) Satisfaction of Obligations.
As a condition to the making or retention of any Award, the vesting, exercise or
payment of any Award or the lapse of any restrictions pertaining thereto, Morgan
Stanley may require a Participant to pay such sum to the Company as may be
necessary to discharge the Company’s obligations with respect to any taxes,
assessments or other governmental charges (including FICA and other social
security or similar tax) imposed on property or income received by a Participant
pursuant to the Award or to satisfy any obligation that the Participant owes to
the Company. In accordance with rules and procedures authorized by Morgan
Stanley, (i) such payment may be in the form of cash or other property,
including the tender of previously owned Shares, and (ii) in satisfaction of
such taxes, assessments or other governmental charges or, exclusively in the
case of an Award that does not constitute a deferral of compensation subject to
Section 409A, of other obligations that a Participant owes to the Company,
Morgan Stanley may make available for delivery a lesser number of Shares in
payment or settlement of an Award, may withhold from any payment or distribution
of an Award or may enter into any other suitable arrangements to satisfy such
withholding or other obligation. To the extent an Award constitutes a deferral
of compensation subject to Section 409A, the Company may not offset from the
payment of such Award amounts that a Participant owes to the Company with
respect to any such other obligation except to the extent such offset is not
prohibited by Section 409A and would not cause a Participant to recognize income
for United States federal income tax purposes prior to the time of payment of
the Award or to incur interest or additional tax under Section
409A.

    


    (b) No Right to Continued
Employment. Neither the Plan nor any Award shall give rise to any right on the part of
any Participant to continue in the employ of the Company.

    


    (c) Headings. The headings of
sections herein are included solely for convenience of reference and shall not affect
the meaning of any of the provisions of the Plan.

    


    (d) Governing Law. The Plan and
all rights hereunder shall be construed in accordance with and governed by the laws of
the State of New York, without regard to any conflicts or choice of law, rule or
principle that might otherwise refer the interpretation of the award to the
substantive law of another jurisdiction.

    


    (e) Amendments and Termination.
The Board or Committee may modify, amend, suspend or terminate the Plan in
whole or in part at any time and may modify or amend the terms and conditions of
any outstanding Award (including by amending or supplementing the relevant Award
Document at any time); provided, however, that no such modification, amendment,
suspension or termination shall, without a Participant’s consent, materially
adversely affect that Participant’s rights with respect to any Award previously
made; and provided, further, that the Committee shall have the right at any
time, without a Participant’s consent and whether or not the Participant’s
rights are materially adversely affected thereby, to amend or modify the Plan or
any Award under the Plan in any manner that the

     

    
      
        
        

      

      
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    Committee considers necessary or advisable to comply with any law,
regulation, ruling, judicial decision, accounting standards, regulatory guidance
or other legal requirement. Notwithstanding the preceding sentence, neither the
Board nor the Committee may accelerate the payment or settlement of any Award,
including, without limitation, any Award subject to a prior deferral election,
that constitutes a deferral of compensation for purposes of Section 409A except
to the extent such acceleration would not result in the Participant incurring
interest or additional tax under Section 409A. No amendment to the Plan may
render any Board member who is not a Company employee eligible to receive an
Award at any time while such member is serving on the Board. To the extent
required by applicable law or the rules of the New York Stock Exchange,
amendments to the Plan shall not be effective unless they are approved by Morgan
Stanley’s stockholders.

     

     
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