**A.G. EDWARDS,  INC.**

**1988 INCENTIVE  STOCK PLAN**

**2001 Restateme****nt**

**Recitals**

         This  Plan originally became effective in April 1988. It was amended in (1) June 1990  by the stockholders of the Company to increase the number of shares of Common  Stock available under the Plan to 4,060,000 shares (which number has since been  adjusted to 7,612,500 shares to reflect a 50% and a 25% stock dividend, treated  as a stock split), (2) April 1992 by the Board of Directors to comply with changes  under Section 16(b) of the Exchange Act; (3) June 1992 by the stockholders of  the Company to increase the number of shares of Common Stock available under  the Plan to 13,862,500 shares (which number has since been adjusted to 17,328,125  to reflect a 25% stock dividend, treated as a stock split); (4) June 1995 by  the stockholders of the Company to increase the number of shares of Common Stock  available under the Plan to 26,328,125 shares (which number has since been adjusted  to 39,492,188 to reflect a 50% stock dividend, treated as a stock split); (5)  June 1999 by the stockholders of the Company to increase the number of shares  of Common Stock available under the Plan to 54,492,188 shares; and (6) September,  1999 by the Board of Directors to modify the eligibility requirements and restate  the Plan.

          The  Company now wishes to amend the Plan to modify (1) the definition of Market  Value; (2) the provisions governing elections between Options and Restricted  Stock; (3) the provisions governing awards to Senior Participants for Options  and Restricted Stock under the Plan; and (4) to comply with changes under Section  16(b) of the Exchange Act.

         NOW,  THEREFORE, effective March 1, 2001, the Plan is hereby amended and restated  in its entirety as follows:

1.     ***Purpose*.**

        The  purpose of the A.G. Edwards, Inc. 1988 Incentive Stock Plan (the "Plan")  is to motivate employees of A.G. Edwards, Inc. (the "Company") and  its subsidiaries through added incentives to make a maximum contribution to  Company objectives.

2*.     **Definitions.***

        As used in the  Plan, the following words shall have the following meanings:

        "Administrator"  has the meaning ascribed to it in Section 3(a) of the Plan.

        "Award  Amount" has the meaning ascribed to it in Section 5(b) of the Plan.

        "Benefits"  means the benefits awarded to Participants as described in Sections 5 through  9 of the Plan.  Benefits may be awarded separately or in any combination.

        "Board  of Directors" means the Board of Directors of the Company.

        "Business  Day" means any day on which the New York Stock Exchange is open for business.

          "Change  in Control" means the occurrence of any of the following events without  the****prior approval of the Board of Directors: (a) a merger, consolidation  or reorganization of the Company in which the Company does not survive as an  independent entity; (b) a sale of all or substantially all of the assets of  the Company; (c) the first purchase of shares of Common Stock of the Company  pursuant to a tender or exchange offer for more than 20% of the Company's outstanding  shares of Common Stock; or (d) any change in control of a nature that, in the  opinion of the Board of Directors, would be required to be reported under the  federal securities laws; provided that such a change in control shall be deemed  to have occurred if (i) any person is or becomes the beneficial owner, directly  or indirectly, of securities of the Company representing 40% or more of the  combined voting power of the Company's then outstanding securities; or (ii)  during any period of two consecutive years, individuals who at the beginning  of such period constitute the Board of Directors of the Company cease for any  reason to constitute a majority thereof unless the election of any director,  who was not a director at the beginning of the period, was approved by a vote  of at least 70% of the directors then still in office who were directors at  the beginning of the period.

        "Code"  means the Internal Revenue Code of 1986, as amended. Reference to a section  of the Code shall include: (a) that section and any comparable section or sections  of any future legislation that amends, supplements or supersedes that section,  and (b) any rules or regulations promulgated under such section.

        "Common  Stock" means the $1.00 par value common stock of the Company, together  with the Common Stock Purchase Rights (as described in the Rights Agreement  dated December 30, 1988 by and between the Company and Boatmen's Trust Company,  as Rights Agent, as amended) associated with such common stock.

        "Company"  has the meaning ascribed to it in Section 1 of the Plan.

        "Competition  with the Company" means, with respect to any individual, owning, managing,  controlling, participating in or becoming connected with, as an officer, employee,  partner, stockholder, consultant or otherwise, any business, individual, partnership  or corporation that is engaged significantly, or is planning to become engaged  significantly, in a business which, directly or indirectly, competes with a  business of the Company or a Subsidiary; provided, merely acquiring or holding  shares of any business entity that has its securities listed on a national securities  exchange or quoted in the daily listing of over-the-counter market securities  shall not constitute such competition so long as such individual and members  of such individual's family do not own more than 1% of the voting securities  of such an entity.

          "Corporate  Executive Bonus" has the meaning ascribed to it in Section 4 of the Plan.

        "Corporate  Executive Bonus Plan" has the meaning ascribed to it in Section 4 of the  Plan.

        "Date  of Grant" has the meaning ascribed to it in Section 7(b) of the Plan.

        "Deferred  Award Date" has the meaning ascribed to it in Section 6(e) of****the  Plan.

          "Disability"  means a total and permanent disability that renders a Participant unable to  engage in any, substantial gainful activity by reason of any medically determinable  physical or mental impairment that can be expected to result in death or that  has lasted or can be expected to last for a continuous period of not less than  three years.

        "Disinterested  Administrator" means an Administrator comprised of the Board of Directors  or a committee of two or more directors of the Company, each of whom is a a  Non-Employee Director.

          "Eligible  Employee" has the meaning ascribed to it in Section 4 of the Plan.

        "Employee"  means any individual who is employed by the Employer.

        "Employee  Stock Purchase Plan" has the meaning ascribed to it in Section 7 of the  Plan.

        "Employer"  means the Company and its Subsidiaries, while a Subsidiary.

            "Exchange Act" means the Securities Exchange  Act of 1934, as amended. Reference to a section of the Exchange Act shall include:  (a) that section and any comparable section or sections of any future legislation  that amends, supplements or supersedes that section, and (b) any rules or regulations  promulgated under such section.

        "Exercise  Price" has the meaning ascribed to it in Section 5(d) of the Plan.

        "Incentive  Stock Options" has the meaning ascribed to it in Section 8 of the Plan.

        "Market  Value" means, with respect to a share of Common Stock on a particular date,  the average of the highest and lowest quoted selling prices on the particular  date. If there are no sales on that date, the Market Value shall be the average  of the highest and lowest quoted selling prices on the next trading date.

       "Non-Employee  Director" has the meaning set forth in Rule 16b-3(b)(3)(i) promulgated  under Section 16 of the Exchange Act or any successor rule thereto.

        "Offered  Shares" has the meaning ascribed to it in Section 7(b) of the Plan.

        "Offering"  has the meaning ascribed to it in Section 7 of the Plan.

          "Offering  Period" has the meaning ascribed to it in Section 7(e) of the Plan.

        "Option  Award Date" has the meaning ascribed to it in Section 5(a) of the Plan.

        "Option  Award Amount" has the meaning ascribed to it in Section 5(c) of the Plan.

        "Option  Awards" has the meaning ascribed to it in Section 5(a) of the Plan.

        "Option  Determination Date" has the meaning ascribed to it in Section 5(a) of the  Plan.

        "Options"  has the meaning ascribed to it in Section 5(a) of the Plan.

          "Over  60 Participant" has the meaning ascribed to it in Section 6(e) of the Plan.

        "Phantom  Stock Credits" has the meaning ascribed to it in Section 6(e) of the Plan.

        "Plan"  has the meaning ascribed to it in Section 1 of the Plan.

        "Purchase  Price" has the meaning ascribed to it in Section 7(d) of the Plan.

          "Reporting  Person" means any person who is a director of the Company or any officer  of the Company as that term is defined in Rule 16a-1(f), promulgated under Section  16 of the Exchange Act or any successor rule thereto.

        "Restricted  Period" has the meaning ascribed to it in Section 6(c)(1) of the Plan.

       "Restricted  Share Award Amount" has the meaning ascribed to it in Section 6(b) of the  Plan.

       "Restricted  Share Award Date" has the meaning ascribed to it in Section 6(a) of the  Plan.

       "Restricted  Share Awards" has the meaning ascribed to it in Section 6(a) of the Plan.

       "Restricted  Share Determination Date" has the meaning, ascribed to it in Section 6(a)  of the Plan.

       "Restricted  Shares" has the meaning ascribed to it in Section 6(a) of the Plan.

       "Rule  l6b-3" means Rule 16b‐3 promulgated under Section 16 of the Exchange  Act, or any successor rule thereto.

       "Section  423 Options" has the meaning ascribed to it in Section 7(a) of the Plan.

       "Senior  Participant" has the meaning ascribed to it in Section 5(f) of the Plan.

       "Stock  Purchase Plan Eligible Employee" has the meaning ascribed to it in Section  7(a) of the Plan.

       "Subsidiary"  means any corporation, partnership, joint venture or business trust, control  of which is owned, directly or indirectly, by the Company; provided, for the  purpose of any Incentive Stock Options and options granted pursuant to the Employee  Stock Purchase Plan.  "Subsidiary" shall have the same meaning as  the term "subsidiary corporation" as defined in Section 424 of the  Code.

       "Termination  of Employment," whether or not capitalized when used herein, or any other  similar phrase used herein to refer to the employment of an Employee with the  Employer****being terminated means the Employee ceases to be employed by  the Employer whether the cessation of employment is voluntary or involuntary  and regardless of whether the employment of the Employee with the Employer ceases  because the Employee quits, is discharged, retires, is disabled or dies.

       "Termination  for Aggravated Cause" means a Termination of Employment (whether voluntary  or involuntary) because any of the following acts or events have occurred: any  action or failure to act by a Participant that results in or is likely to result  in detriment to the Employer,, employees or customers; violation of any securities  law; dishonesty whether or not resulting in a direct or indirect monetary loss;  insubordination; drunkenness; use of harmful drugs; willful destruction of property;  provocation or continuous agitation of the Employer's customers or employees;  or conviction of a felony or a misdemeanor.

       "Vesting  Period" has the meaning ascribed to it in Section 5(d) of the Plan.

3.    ***Administration.***

         (a)     *Appointment.*The Plan shall be administered by the Board of Directors of the Company  or by one or more committees the members of which need not be members of the  Board of Directors (collectively, the "Administrator") appointed by  the Board of Directors.  Such a committee may be appointed by designating another  committee, such as the Compensation Committee of A.G. Edwards & Sons, Inc.,  to serve as Administrator.  All of the duties of the Administrator may be assigned  to one committee or, if the Board of Directors appoints more than one committee  to serve as Administrator, the Board of Directors may allocate the specific  duties of the Administrator among such committees.  A particular committee to  whom a specific duty is so allocated shall have the sole responsibility and  authority for carrying out such duty. A committee shall continue to serve in  its appointed role until its role is terminated or changed by the Board of Directors.

       (b)*     Duties.*Subject to the provisions of the Plan, the Administrator shall have exclusive  authority to interpret and administer the Plan (including, without limitation,  developing or approving forms to implement all or any part of the Plan), to  delegate its authority and duties under the Plan, and to take all such steps  and make all such rules or determinations in connection with the Plan and any  of the Benefits provided by the Plan as it may deem necessary or advisable (including,  without limitation, rules relating to any tax withholding requirements, designation  of beneficiaries, ownership of shares in joint names and restoration of awards  for rehired Participants); provided, however, the Administrator shall not have  the authority to change the amount, price or timing of any Benefits awarded  by the terms of any formula contained in the Plan; provided, further, with respect  to the forfeiture of any Benefits, only a Disinterested Administrator may make  a determination that a Reporting Person has incurred a Termination for Aggravated  Cause.

4.*    **Eligibility.***

       "Eligible  Employee" shall include any individual who is an Employee of the Employer  at the time Benefits under the Plan****are awarded and who (a) is a non-Reporting****Person who satisfies the eligibility requirements established by the Administrator,  from time to time, taking into account such factors as the Administrator may  consider relevant (which may include, but need not include, the nature of services  rendered by the Employee or the capacity of the Employee to contribute to the  success of the Employer), or (b) is a Reporting Person who is a participant  in the "Corporate Executive Bonus Plan" as of October 1, and as of  the last day, of the fiscal year of the Company for which the Benefits are awarded.

       For the  purposes of this Section 4 and Section 5: (a) "Corporate Executive Bonus  Plan" means the compensation plan by such name together with the Performance  Plan for Executives each as adopted by the Company or a Subsidiary of the Company,  and shall continue to refer to such plans even if the name or terms of such  plans are changed in the future, whereby officers of the Company and Subsidiaries  who are not otherwise eligible for or who do not otherwise receive variable  compensation or bonuses participate in a defined bonus pool, and (b) "Corporate  Executive Bonus" means a bonus received by an Eligible Employee from the  Corporate Executive Bonus Plan. The terms and conditions relating to the Corporate  Executive Bonus Plan with respect to Reporting Persons, including, without limitation,  the requisite qualifications for Employees who are Reporting Persons, shall  not be changed more frequently than is permitted for a change in the amount,  price or timing of any Benefits awarded by the terms of any formula contained  in the Plan, and any such change shall be deemed to be a change and amendment  to the Plan.

5.    ***Stock Options.***

         (b)     *Amount  of Award.*The total amount of the award (the "Award Amount")  for both Options and Restricted Shares (as hereinafter defined) to which an  Eligible Employee is entitled for any specific fiscal year of the Company shall  be equal to: (i) 25% of such Eligible Employee's Corporate Executive Bonus for  such fiscal year if such Eligible Employee is a Reporting Person or (ii) such  amount as may be determined by the Administrator if such Eligible Employee is  a non‐Reporting Person. The Award Amount hereunder to an Eligible Employee  is for services rendered by the Eligible Employee during the fiscal year of  the Company on which such Award Amount is based. In no event shall the Award  Amount for any specific Eligible Employee in any given fiscal year of the Company  beginning on or after March 1, 1995 exceed $100,000. If an Eligible Employee  (who is a Reporting Person) does not receive a Corporate Executive Bonus for  any specific fiscal year of the Company for which awards of Benefits are to****be made, he will not be entitled to an award of Options or Restricted Shares  for that fiscal year.

       (c)*     Election  of Awards.*An Eligible Employee may elect to receive his Award Amount for  any fiscal year as (i) 100% Restricted Shares; (ii) 50% Restricted Shares and  50% Options, or (iii) 100% Options.  Effective on or after January 1, 2000,  the Administrator in its discretion, from time to time may prescribe rules and  procedures, including due dates, for making such an election; and may prescribe  the default option for a Participant who fails to make a valid election pursuant  to such rules and procedures.  

         The  number of shares of Common Stock subject to Options awarded to a Participant  for a specific fiscal year of the Company shall be determined by dividing such  Participant's Option Award Amount for such fiscal year by the greater of (i)  the Market Value of a share of Common Stock on the applicable Option Determination  Date, or (ii) $16 (subject to adjustment as referred to in Section 10), and  multiplying such number by 2.5. All calculations shall be rounded down to the  nearest whole share.

         (d)     *Exercise.*Options shall entitle a Participant to purchase shares of Common Stock at  a price (an "Exercise Price") per share equal to the Market Value  of the Common Stock on the applicable Option Determination Date. Options shall  become exercisable three (3) years after the applicable Option Award Date (a  "Vesting Period"), and must be exercised no later than eight (8) years,  unless extended, after the applicable Option Award Date. Any Vesting Period  shall be extended by the length of any leave of absence, except a leave of absence  for medical reasons approved in writing by the Administrator. Options that are  not exercised within eight (8) years (unless extended) after the applicable  Option Award Date will lapse. A Participant may exercise all of his vested Options  in any order and at one time or at different times for less than the total amount  until all of his vested Options have been exercised. A Participant may exercise  his Options only by giving the Administrator written notice of his intent to  exercise his Options.  The written notice must be in a form acceptable by the  Administrator. When a Participant exercises an Option, the applicable Exercise  Price is payable to the Company in full in cash; provided, the Administrator  (or a Disinterested Administrator in the case of a Reporting Person) may permit  a Participant to pay for all or any part of the Common Stock purchased on exercise  of an Option with shares of Common Stock (valued at their Market Value on the  date of the exercise) already owned by the Participant or acquired pursuant  to the exercise of his Options.

         (e)    *Restrictions.*

> 
*(1)   Assignment.*During a Participant's lifetime,      Options shall be exercisable only by the Participant. A Participant cannot      transfer or assign his Options awarded under the Plan other than by will      or by the laws of descent and distribution.

*(2)   **Forfeiture.      A*Participant will forfeit his unvested Options      if his employment with the Employer is terminated for any reason other than      death or Disability on or before the end of any applicable Vesting Period.      A**Termination of Employment shall not be deemed to occur if a Participant      merely transfers from the Company to a Subsidiary, from one Subsidiary to      another Subsidiary or from a Subsidiary to the****Company.

If a Participant is reemployed      by the Company within one year after a termination of employment, Options      forfeited on account of such a termination of employment shall be restored.      The three-year vesting period for such Options shall be extended by the      length of absence from employment; but the original expiration date of such      Option shall not be extended.

*(3)   Termination of Restrictions.*

       (A)     If        a Participant's employment is terminated before the end of any applicable        Vesting Period because of death or Disability, his unvested Options may        be exercised by him (or his beneficiary, personal representative or distributee,        as applicable) during a five‐year exercise period beginning as of        the date of such Termination of Employment, but in no event later than        the expiration of the applicable original exercise period.

         (B)     Any        Vesting Period shall end and all unvested Options shall become exercisable        immediately upon a Change in Control.

*(4)   No      Rights as a Stockholder.*No**person entitled to exercise any Option granted under the      Plan shall have any of the rights or privileges of a stockholder of the      Company with respect to shares issuable upon exercise of such Option until      certificates representing such shares shall have been issued and delivered      to such person.

       (f)*     Awards for Senior Participants.*The terms of this Section 5(f) shall apply  to any unvested Options held by a Participant age 55 or older (a "Senior  Participant").  Shares subject to any unvested Option held by a Senior  Participant shall not be forfeited (but shall remain subject to any applicable  Vesting Period) merely because such Senior Participant's employment with the  Employer is terminated (other than a Termination for Aggravated Cause).

              Upon a Termination for Aggravated Cause, a Senior Participant shall forfeit  all unvested Options. A *Senior**Participant* who engages in Competition  with the Employer within any Vesting Period shall forfeit his unvested Options  at the time such Competition with the Employer commences. All of the Options  of a Senior Participant shall become fully vested immediately upon a Change  in Control. Any restrictions, terms or conditions in this Section 5 applicable  to Options generally shall apply to a Senior Participant's Options to the extent  they are not inconsistent with the provisions of this Section 5(f).

6.    ***Restricted Shares.***

         (a)    *Time  of Award*.  "Restricted Shares" are shares of Common Stock that  are subject to certain restrictions on their disposition and to the rights of  the Company to reacquire such shares upon the occurrence of certain events,  all on the terms specified in the Plan. Subject to an Eligible Employee's election  under Section 5(c), Restricted Shares shall be awarded to Eligible Employees  on the terms specified herein. Awards of Restricted Shares ("Restricted  Share Awards") shall be made for each fiscal year of the Company during  the term of the Plan as of the last day of each such fiscal year (a "Restricted  Share Award Date"). The amounts of the Restricted Share Awards shall be  determined in accordance with Section 6(b) as soon as administratively practical  after the end of each such fiscal year (a "Restricted Share Determination  Date").

        (b)    *Amount  of Award.*The portion of an Award Amount in any specific fiscal year that  is available for Restricted Shares (a "Restricted Share Award Amount")  shall be equal to such Award Amount less any Option Award Amount elected, or  deemed elected, pursuant to Section 5(c) with respect to such Award Amount.  The number of Restricted Shares awarded to a Participant for any specific fiscal  year of the Company is determined by dividing the Participant's Restricted Share  Award Amount for such fiscal year by the greater of (i) the Market Value of  the Common Stock on the applicable Restricted Share Determination Date and (ii)  $16 (subject to adjustment as referred to in Section 10). All calculations shall  be rounded down to the nearest whole share.

       (c)*    *Restrictions.

*(1)**     Restricted      Period.*Restricted Shares shall be subject to the restrictions described      herein for three (3) years from their applicable Restricted Share Award      Date (a "Restricted Period"). Any Restricted Period shall be extended      by the length of any leave of absence, except a leave of absence for medical      reasons approved in writing by the Administrator.

During any Restricted Period,      a Participant will have the entire beneficial ownership and the right to      vote his Restricted Shares and receive any dividends thereon; provided,      however, a Participant may not sell, transfer, pledge or otherwise dispose      of or encumber his Restricted Shares (other than by will or by the laws      of descent and distribution) during any applicable Restricted Period. A      Participant shall not be entitled to delivery of a certificate representing      shares of Common Stock until the expiration of the Restricted Period applicable      to such shares as Restricted Shares.

*(2) *e   If      a Participant is reemployed by the Company within one year after a termination      of employment, Restricted Shares forfeited on account of such a termination      of employment shall be returned to the Participant.  The restricted period      for such Restricted Shares shall be extended by the length of absence from      employment.  The Participant shall not be entitled to any dividends, the      record date of which ocurred during such absence.

*(3)      Termination**of Restrictions.*

   (A)*     *If        a Participant's employment with the Employer is terminated during any        Restricted Period because of death or Disability, the restrictions on        his Restricted Shares will end and he (or his beneficiary, personal representative        or distributee, as applicable) will be entitled to receive and retain        his Restricted Shares.

   (B)     A        Restricted Period shall end, and Participants shall have a nonforfeitable        right to their Restricted Shares, immediately upon a Change in Control.

         (d)     *Awards  for Senior Participants.*The terms of this Section 6(d) shall apply to  any Restricted Shares held by a Senior Participant, except as may be provided  in Section 6(e). Restricted Shares held by a Senior Participant shall not be  forfeited (but shall remain subject to their restrictions during any applicable  Restricted Period) merely because such Senior Participant's employment with  the Employer is terminated (other than a Termination for Aggravated Cause).  Upon a Termination for Aggravated Cause, a Senior Participant shall forfeit  all of his Restricted Shares still subject to a Restricted Period at the time  of termination. A Senior Participant who engages in Competition with the Employer  during any Restricted Period shall forfeit all of his Restricted Shares subject  to a Restricted Period at the time such Competition with the Employer commences.  A Restricted Period applicable to a Senior Participant's Restricted Shares shall  end upon a Change in Control. Any restrictions, terms or conditions in this  Section 6 applicable to Restricted Shares generally shall apply to a Senior  Participant's Restricted Shares to the extent they are not inconsistent with  the provisions of this Section 6(d).

       (e)     *Phantom  Stock Credits.*An Eligible Employee who is 60 years of age or older (an  "Over 60 Participant") on any Restricted Share Award Date, and who  elects to receive Restricted Shares as all or part of his award, shall not be  awarded Restricted Shares on that date. Instead, such an Over 60 Participant  shall be awarded "Phantom Stock Credits" which will serve as the basis  for an award of Restricted Shares two years after such a Restricted Share Award  Date (a "Deferred Award Date"), with each Phantom Stock Credit representing  the right to receive one share of Restricted Stock. An account shall be established  for each Over 60 Participant to show the number of Phantom Stock Credits allocated  to him. The award of Phantom Stock Credits allocated to such an account for  any specific fiscal year of the Company shall be in an amount that will entitle  such Over 60 Participant to the number of Restricted Shares to which such Over  60 Participant would have been entitled to receive under the applicable award  formula if such Over 60 Participant had been younger than 60 years of age on  the applicable Restricted Share Award Date.

         The  number of Phantom Stock Credits in an Over 60 Participant's account shall be  adjusted to reflect dividends on the Common Stock on each dividend record date  after the applicable Restricted Share Determination Date. The number of additional  Phantom Stock Credits allocated to an Over 60 Participant's account for a cash  dividend shall equal the total amount of each such dividend imputed to such  Over 60 Participant (the per share dividend multiplied by the number of Phantom  Stock Credits in such Over 60 Participant's account before such increase) divided  by the Market Value of the Common Stock on the record date of the dividend.  The number of additional Phantom Stock Credits allocated to an Over 60 Participant's  account for a stock dividend shall equal the number of additional shares of  Common Stock to which such Over 60 Participant would have been entitled if he  had been the holder of a number of shares of Common Stock equal in number to  the number of Phantom Stock Credits allocated to his account as of that dividend  record date before such increase. The number of Phantom Stock Credits allocated  to an Over 60 Participant's account instead of dividends will be added to****the total number of such Over 60 Participant's Phantom Stock Credits for  calculating future amounts to be allocated in lieu of dividends.

       Over  60 Participants cannot transfer or assign their Phantom Stock Credits awarded  under the Plan other than by will or by the laws of descent and distribution.  If an Over 60 Participant's employment is terminated (other than a Termination  for Aggravated Cause), he shall not forfeit the right to an award of Restricted  Shares on any Deferred Award Date, nor shall he forfeit Restricted Shares awarded  on any Deferred Award Date, merely because of such a termination. If an Over  60 Participant's employment is terminated before any Deferred Award Date because  of death or Disability, such Over 60 Participant (or his beneficiary, personal  representative or distributee, as applicable) shall be entitled to receive at  the time of such termination a stock certificate for the whole number of shares  of Common Stock equal to the number of Phantom Stock Credits then credited to  his account (rounded down to the nearest whole number of shares). Any Deferred  Award Date shall occur and any applicable Restricted Period for Restricted Shares  awarded shall end immediately upon a Change in Control.

        If  an Over 60 Participant's termination is a Termination for Aggravated Cause,  he shall forfeit the right to an award of Restricted Shares based on any Phantom  Stock Credits attributable to his account and shall forfeit all shares of Restricted  Shares still subject to a Restricted Period at the time of his Termination for  Aggravated Cause. An Over 60 Participant who engages in Competition with the  Employer before any Deferred Award Date or the end of any Restricted Period  shall forfeit his Phantom Stock Credits and Restricted Shares.

       As of any  specific Deferred Award Date, each Over 60 Participant shall be awarded that  number of shares of Restricted Shares equal to the number of Phantom Stock Credits  (rounded down to the nearest whole share) then credited to his account for the  applicable award year. Restricted Shares awarded as of any Deferred Award Date  shall be subject to all of the previously described terms and restrictions applicable  to Restricted Shares, to the extent they are not inconsistent with the provisions  of this Section 6(e), except that any applicable Restricted Period shall be  for only nine months unless extended during a leave of absence. Over 60 Participants  have no rights as stockholders with respect to their Phantom Stock Credits until  their Restricted Shares are awarded.

7.*    **Employee Stock Purchase Plan.***

       Solely  for purposes of the Code, this Section *7*shall be treated as a separate  plan and referred to as the A.G. Edwards, Inc. Employee Stock Purchase Plan  ("Employee Stock Purchase Plan"). Notwithstanding anything to the  contrary in the Plan, the following provisions shall apply to any options ("Section  423 Options") to purchase Common Stock awarded Participants ("Offering")  in accordance with this Section 7:

         (a)     *Eligibility.*  Section 423 Options awarded in accordance with the Employee Stock Purchase Plan  shall be granted only to Employees. To be eligible for an award of Section 423  Options in any specific Offering, an Employee (a "Stock Purchase Plan Eligible  Employee") must be a full‐time or part-time Employee (temporary Employees  are not eligible) on the Date of Grant (as hereinafter defined) for such Offering****and on the first business day in October of the next year after such****date.

        Irrespective  of any other provision of the Plan or the Employee Stock Purchase Plan, no Section  423 Option may be granted to an Employee who owns stock possessing 5% or more  of the total combined voting power or value of all classes of stock of the Company  or a Subsidiary as determined in accordance with Section 423(b)(3) of the Code;  and no Section 423 Option may be granted to any Employee if such option permits  the Employee's rights to purchase stock under all employee stock purchase plans  (as defined in Section 423 of the Code) of the Company or any Subsidiary to  accrue at a rate that exceeds Twenty-Five Thousand Dollars ($25,000.00) of Market  Value of such stock (determined at the time the Section 423 Option is granted)  for each calendar year in which such option is outstanding at any time.

         (b)   *  Timing  of Offerings.*An Offering shall be made for each fiscal year of the Company  during the term of the Plan as of the first Business Day in October of each  such fiscal year. The total number of shares offered ("Offered Shares")  to all Stock Purchase Plan Eligible Employees in any specific Offering shall  be determined by the Administrator. Subject to a Stock Purchase Plan Eligible  Employee's election to participate in an Offering pursuant to Section 7(e),  Section 423 Options shall be granted to each individual who is a Stock Purchase  Plan Eligible Employee on the Date of Grant of any Offering. For purposes of  this Section 7, "Date of Grant" shall have the same meaning as set  forth in Treasury Regulation 1.421‐7(c).

       (c)*     Amount  of Shares Purchasable.*Section 423 Options granted to a Participant in  connection with any specific Offering shall entitle such Participant to purchase  individually at the end of the applicable Offering Period (as hereinafter defined)  his proportionate share of the Offered Shares for such Offering, based on the  percentage that his individual contributions represent of the total contributions  of all Stock Purchase Plan Eligible Employees with respect to such Offering;  provided, however, a Stock Purchase Plan Eligible Employee may not purchase  more than $25,000 worth of Common Stock as provided in Section 7(a).

       Only  full shares of Common Stock may be purchased, and no fractional shares will  be issued; provided, any amounts not used to purchase Common Stock shall be  refunded on terms established by the Administrator. If any Offering is oversubscribed,  any amount received from any Participant that is not used to purchase Common  Stock shall be refunded on terms established by the Administrator. No Section  423 Option awarded in accordance with the terms of the Employee Stock Purchase  Plan shall be transferable otherwise than by will or by the laws of descent  and distribution, and shall be exercisable only by the Participant to whom it  is granted or by a transferee as permitted herein.

         (d)     *Purchase  Price.*The price ("Purchase Price") per share at which Participants  can purchase Common Stock pursuant to their Section 423 Options granted with  respect to any specific Offering shall be the lesser of the following two amounts:  (1) the greater of (A) 85% of the Market Value of the Common Stock on the applicable  Date of Grant, or (B) 85% of the average of the Market Values of the Common  Stock on the first Business Day of each month in  the Offering Period (as hereinafter  defined), including the month of the applicable Date of Grant; and (2) 85% of  the Market****Value on the earlier of (i) Change in Control or (ii) the  first Business Day in October of the next year after the applicable Date****of Grant.

       (e)     *Participation  and Contributions.*To**participate in any specific Offering,****a  Stock Purchase Plan Eligible Employee must elect to contribute between 1% and  10% of his total cash compensation (based on salary, commission, bonus and overtime)  paid during the period from the applicable Date of Grant until the earlier of  (i) Change in Control or (ii) the first Business Day in October of the next  year after such date (an "Offering Period").

         During  any Offering Period, a Participant may not increase or decrease his contributions;  provided, he may stop future contributions for the remainder of such Offering  Period and either use amounts contributed up to that date to purchase Common  Stock at the end of the Offering Period, or request a refund of the total amount  contributed during such Offering Period. A Participant may request a refund  of all, but not less than all, of his contributions prior to the end of any  specific Offering Period, in which case he would cease to be a Participant in  that Offering. If a Participant's employment is terminated prior to the end  of a specific Offering Period, he will not be able to continue participation  in that Offering, and contributions with respect to that Offering will be automatically  refunded.

       The  Administrator may establish and adopt uniform rules and forms relating to how  and when elections, contributions, withdrawals and refunds may be made by or  paid to Participants. All employees granted Section 423 Options under the Employee  Stock Purchase Plan shall have the same rights and privileges as required by  Section 423(b)(5) of the Code.

         (f)*     Purchase  of Stock.*Common Stock shall be purchased automatically for Participants  using their accumulated contributions to the maximum possible extent at the  end of any specific Offering Period.  A Participant must be a Stock Purchase  Plan Eligible Employee at the end of a specific Offering Period to purchase  Common Stock in the Offering.

       (g)     *Reporting  Person Restrictions and Limitations.*Notwithstanding any provision contained  in this Section 7 to the contrary, if**a Reporting Person who is a Participant  in the Employee Stock Purchase Plan elects to cease participation in the Employee  Stock Purchase Plan, (including by means of an election to request a refund  pursuant to Section 7(e)) such Participant may not elect to participate again  for at least six (6) months from the date of the prior election.

8.*    **Other Benefits.***

         A  Disinterested Administrator may award Common Stock or the right to acquire****Common Stock to any Employee upon such terms and conditions as such Disinterested****Administrator in its discretion shall determine. Such awards may consist  of any single Benefit, or a combination of the Benefits, described in the preceding  sections (in addition to the award of any such Benefits pursuant to the terms,  conditions and formulae contained in such preceding sections), or any other  right to acquire Common Stock (including, without limitation, options granted  in the form of "Incentive Stock Options" which are intended to qualify  as incentive stock options within the meaning of Section 422 of the Code or  stock appreciation rights), and may be subject to any conditions such Disinterested  Administrator may prescribe, such as a right of first refusal by the Company  to repurchase the shares; provided, however, that any Benefit awarded in accordance  with the provisions of the Plan which grants the right to purchase shares of  Common Stock, except any Benefit which is subject to restrictions that in the  aggregate would amount to a substantial risk of forfeiture for purposes of Section  83 of the Code, shall require that the price at which the Participant may purchase  such shares shall be at least 85% of the Market Value of such shares as determined  by such Disinterested Administrator at the time such benefit is awarded.

       The  Administrator may make any type of awards that can be made by a Disinterested  Administrator; provided, unless the Plan is amended as provided below, such  awards are made only to Employees who are not Reporting Persons. The Board of  Directors may amend the Plan, from time to time as provided or limited herein,  (i) to change any terms, conditions or formulae pursuant to which an award of  Benefits as described in the preceding sections may be awarded (either increasing  or decreasing the amount of such awards); provided, such changes comply with  Rule 16b‐3 and/or (ii) to provide terms, conditions and a formula (complying  with Rule 16b‐3) pursuant to which any right to acquire Common Stock (including,  without limitation, Incentive Stock Options and stock appreciation rights) may  be awarded, in addition to the Benefits described in the preceding sections.  If any such amendments are made, the awards of Benefits authorized by such amendments  may be administered by the Administrator.

9*.    **Shares Subject to Plan.***

       Subject  to the provisions of Section 10 (relating to adjustment for changes in capital  stock), the maximum number of shares that may be issued under the Plan (including  shares to be issued under the Employee Stock Purchase Plan) shall not exceed  in the aggregate fifty‐four million four hundred ninety-two thousand one  hundred eighty‐eight (54,492,188) shares of Common Stock of the Company.  Such shares may be unissued shares or treasury shares.

       If  there is a lapse, expiration, termination or cancellation of any Benefit without  the issuance of shares, or if shares are issued in connection with any Benefit  and later are reacquired by the Company pursuant to rights reserved on issuance,  the shares subject to or reserved for such Benefit may again be used in connection  with the grant of any of the Benefits described in this Plan; provided, that  in no event may the number of shares of Common Stock issued under this Plan  exceed fifty‐four million four hundred ninety‐two thousand one hundred  eighty‐eight (54,492,188), subject to adjustment as described in Section  10.

10*.  **Adjustment Upon Changes in Stock.***

         If  any change is made in the shares of Common Stock of the Company by reason of  any****merger, consolidation, reorganization, recapitalization, stock dividend,  split up, combination of****shares, exchange of shares, change in corporate  structure, or otherwise, appropriate adjustments shall be made by the Administrator  to: (a) the kind and maximum number of shares subject to the Plan, (b) the kind  and number of shares and price per share of stock subject to each outstanding  Benefit, (c) the number of Offered Shares referred to in Section 7(b) and (d)  any other amount herein which is so indicated. Any increase in the shares, or  the right to acquire shares, as the result of such an adjustment shall be subject  to the same terms and conditions that apply to the Benefit for which such increase  was received. No fractional shares of Common Stock shall be issued under the  Plan on account of any such adjustment, and rights to shares always shall be  limited after such an adjustment to the lower full share.

11.  ***Amendment of the Plan.***

       Except  as provided below, the Board of Directors of the Company may at any time amend  the Plan (including the provisions of the Employee Stock Purchase Plan); provided,  the Board may not, without approval (within twelve months before or after the  date of such change) of such number of the stockholders as may be required by  either federal income tax or securities law for any particular amendment: (a)  increase the maximum number of shares of Common Stock in the aggregate which  may be issued under the Plan, except as may be permitted under the adjustment  provisions of Section 10, or (b) adopt any other amendment for which shareholder  approval is required by federal income tax or securities laws. The Board of  Directors may not alter or impair any Benefit previously granted under the Plan  without the consent of the person to whom the Benefit was granted.

       If  required to qualify the Plan under Rule l6b-3, no amendment to the Plan shall  be made more than once every six months that would change the amount, price  or timing of any Benefits awarded by the terms of any formula contained in the  Plan, other than to comport with changes in the Code, the Employment Retirement  Income Security Act of 1974 (as amended), or the rules thereunder.

12.*  **Termination of the Plan.***

          The Plan shall continue in force until it is terminated by the Board of Directors.  The Board of Directors may terminate or suspend the Plan (including the Employee  Stock Purchase Plan) at any time. No Benefit shall be awarded after termination  of the Plan. Rights and obligations under a Benefit awarded while the Plan is  in effect shall not be altered or impaired by termination or suspension of the  Plan except by consent of the person to whom the Benefit was awarded.

13.*  **Withholding  Tax.***

       The  Company shall have the right to withhold with respect to any payments made to  Participants under the Plan any taxes required by law to be withheld because  of such payments.

14.*  **Rules of Construction.***

       The  terms of the Plan shall be construed in accordance with the laws of the State  of****Missouri; provided, that the terms of the Plan as they relate to Incentive  Stock Options shall be construed first in accordance with the meaning under  and in a manner that will result in the Plan satisfying the requirements of  the provisions of the Code governing incentive stock options; provided, further,  that the terms of Section 7 of the Plan shall be construed first in accordance  with the meaning under, and in a manner that will result in the Employee Stock  Purchase Plan satisfying the requirements of, the Code governing such plans.  The Plan is intended to qualify under Rule 16b‐3 and shall be interpreted  and administered in a manner consistent with such intention. Unless otherwise  expressly provided, any calculation required by any provision of the Plan shall  be rounded down to the nearest whole number. Any word contained in the text  of the Plan shall be read in the singular or plural or as masculine, feminine  or neuter as may be applicable or permissible in the particular context.

15.  ***Nontransferability.*****

         Each  Option or similar right (including a Stock Appreciation Right) granted under  this Plan shall not be transferable other than by will or by the laws of descent  and distribution, and shall be exercisable during the holder's lifetime only  by the holder or the holder's guardian or legal representative.

16.*  **Effective Date.***

       The  Plan originally became effective as of April 21, 1988. The Plan as currently  revised and restated shall become effective on the date stated on the first  page hereof.

**CERTIFICATION**

       The  undersigned hereby certifies that the foregoing A.G. Edwards, Inc. 1988 Incentive  Stock Plan (as amended and restated) is restated in a form that reflects separate  amendments thereto duly adopted by the Board of Directors of A.G. Edwards, Inc.  and by the stockholders of A.G. Edwards, Inc., through February 22, 2001.

       IN  WITNESS WHEREOF, the undersigned has executed this Certification as of February  22, 2001.

 

Douglas L. Kelly, Secretary