FINANCIAL ADVISOR CAPITAL ACCUMULATION AWARD PLAN



 


Exhibit 10.30



MERRILL LYNCH FINANCIAL ADVISOR

CAPITAL ACCUMULATION AWARD PLAN



 

 

 



As amended through
January 1, 2002








 


TABLE OF CONTENTS




									
	I.  DEFINITIONS
		1.  Definitions.
	II.  ELIGIBILITY
		2.  Eligible Employees.
	III.  THE AWARDS; APPRECIATION
		3.  The Awards.
			(a)  Criteria for Awards.
			(b)  Calculation of Amounts Payable for Awards Made Prior to January 2003.
		4.  Shares Available Under the Plan.
	IV.  STATUS OF THE AWARD
		5.  No Trust or Fund Created.
		6.  Non-transferability.
		7.  Relationship to Other Benefits.
	V.  PAYMENT OF THE AWARD
		8.  In General.
		9. Termination of Employment.
			(a)  Death.
			(b)  Retirement; Employment by Competitor.
			(i)  Awards for Performance Periods Prior to 1995.
				(ii)  Awards for Performance Periods After 1994.
				(iii)  Employment by Competitor.
				(iv)  Rule of 65.
			(c)  Other Termination of Your Employment.
				(i)  Awards for Performance Periods Prior to 1995.
				(ii)  Awards for Performance Periods After 1994.
				(iii)  Disability, Leave of Absence or Transfer
			(d)  Alternative Payments on Termination.
			(e)  Termination of Employment After a Change in Control.
				(i)  Payment Upon Change in Control.
				(ii)  Definition of “Change in Control”.
				(iv)  Amendments Subsequent to Change in Control.
				(v)  Cause.
				(vi)  “Good Reason”
		10.  Payment of Forfeited Amounts.
			(a)  Calculation of Payment.









 



MERRILL LYNCH FINANCIAL ADVISOR

CAPITAL ACCUMULATION AWARD PLAN



	 	 	 	 	 	 	 	 	 
	 

	I. DEFINITION
	 	 	1	 
	 	 	1.	Definitions
	 	 	1	 
	II. ELIGIBILITY
	 	 	4	 
	 	 	2.	Eligible Employees
	 	 	4	 
	III. THE AWARDS; APPRECIATION
	 	 	4	 
	 	 	3.	The Awards
	 	4	 
	 	 	 	(a) Criteria for Awards
	 	 	4	 
	 	 	 	(b) Calculation of Amounts Payable for Awards Made Prior to January 2003
	 	 	4	 
	 	 	 	(c) Calculation of Amounts Payable for Awards Made in January 2003 and Thereafter
	 	 	5	 
	 	 	4.	Shares Available Under the Plan
	 	5	 
	IV. STATUS OF THE AWARD
	 	 	5	 
	 	 	5.	No Trust or Fund Created
	 	 	5	 
	 	 	6.	Non-transferability
	 	 	5	 
	 	 	7.	Relationship to Other Benefits
	 	 	5	 
	V. PAYMENT OF THE AWARD
	 	 	6	 
	 	 	8.	In General
	 	6	 
	 	 	9.	Termination of Employment
	 	6	 
	 	 	 	(a) Death
	 	 	6	 
	 	 	 	(b) Retirement; Employment by Competitor
	 	 	6	 
	 	 	 	 	  (i) Awards for Performance Periods Prior to 1995
	 	 	6	 
	 	 	 	 	  (ii) Awards for Performance Periods After 1994
	 	 	6	 
	 	 	 	 	  (iii) Employment by Competitor
	 	 	7	 
	 	 	 	 	  (iv) Rule of 65
	 	 	8	 
	 	 	 	(c) Other Termination of Your Employment
	 	 	7	 
	 	 	 	 	  (i) Awards for Performance Periods Prior to 1995
	 	 	7	 
	 	 	 	 	  (ii) Awards for Performance Periods After 1994
	 	 	8	 
	 	 	 	 	  (iii) Disability,
Leave of Absence or Transfer
	 	 	8	 
	 	 	 	(d) Alternative Payments of Termination
	 	 	8	 
	 	 	 	(e) Termination of Employment After a Change in Control
	 	 	8	 
	 	 	 	 	  (i) Payment Upon Change in Control
	 	 	8	 
	 	 	 	 	  (ii) Definition of “Change in Control”
	 	 	9	 
	 	 	 	 	  (iii) Agreement Concerning a Change in Control
	 	 	9	 
	 	 	 	 	  (iv) Amendments Subsequent to Change in Control
	 	 	10	 
	 	 	 	 	  (v) Cause
	 	 	10	 
	 	 	 	 	  (vi) “Good Reason”
	 	 	11	 
	 	 	10.	Payment of Forfeited Amounts
	 	 	12	 
	 	 	 	(a) Calculation of Payment
	 	 	12	 



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	 	 	 	(b)Limitations on Payment of Forfeited Amounts
	 	 	12	 
	 	 	11.	Withholding
	 	14	 
	 	 	12.	Designation of Beneficiary
	 	14	 
	 	 	 	(a) Designation of Beneficiary and Alternate Beneficiary
	 	 	14	 
	 	 	 	(b) Change in Beneficiary
	 	 	14	 
	 	 	 	(c) In the Event of Death of the Beneficiary During Payment
	 	 	14	 
	VI.    ADMINISTRATION OF THE PLAN	 	 	14	 
	 	 	13.	Powers of the Committee
	 	 	14	 
	VII. MISCELLANEOUS PROVISIONS	 	 	15	 
	 	 	14.	Changes in Capitalization
	 	 	15	 
	 	 	15.	Tax Litigation
	 	 	15	 
	 	 	16.	Employment Rights
	 	 	16	 
	 	 	17.	 Amendment of the Plan
	 	 	16	 
	 	 	18.	Governing Law
	 	 	16	 



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MERRILL LYNCH FINANCIAL ADVISOR

CAPITAL ACCUMULATION AWARD PLAN


     The Merrill Lynch Financial Advisor Capital Accumulation Award Plan
reflects MLPF&S’s commitment to reward top producing Private Client Employees.
The purpose of the Award is to establish and retain a strong sales force and
professional managers by recognizing the benefits of their contributions to
MLPF&S.


     The terms and conditions of the Merrill Lynch Financial Advisor Capital
Accumulation Award Plan are as follows:




I.  DEFINITIONS



1.   Definitions.


    “Account” means a book reserve established in the name of an eligible
employee by MLPF&S, to which the Award or Awards granted to such eligible
employee will be credited.


    “Account Balance” as of a particular date means the vested portion of the
Awards, plus any accrued Appreciation, in the Account as of that date.


    “Affiliate” means any corporation, partnership, or other organization of
which ML & Co. owns or controls, directly or indirectly, not less than 50
percent of the total combined voting power of all classes of stock or other
equity interest.


    “Appreciation” means the amounts accrued on the Awards under Section 3.


    “Awards” means the amounts awarded pursuant to Section 3 of the Plan.


    “Award Date” means a date, established by the Committee with respect to
each Award, as of which such Award will be credited to the Account.


    “Award Year” means the calendar year in which an Award Date falls.


    “Committee” means the Management Development and Compensation Committee of
the Board of Directors of ML & Co.


    “Common Stock” means Merrill Lynch & Co., Inc. Common Stock, par value
$1.33 1/3 per share.


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    “Common Stock Amount” means the number derived by dividing the amount of
an Award by the Fair Market Value of Common Stock as of the last day of the
Performance Period, or such other date or period as may be established by the
Committee, rounded to the nearest whole number. Such number represents the
total number of shares of Common Stock you may receive on the Payment Date.


    “Company” means ML & Co. and all of its Affiliates.


    “Disability.”  You
will be deemed to have incurred a “Disability” if you
are entitled to receive benefits under the Merrill Lynch & Co., Inc. Long-Term
Disability Plan.


    “Fair Market Value” of Common Stock on any given date(s) shall be: (a)
the mean of the high and low sales prices on the New York Stock Exchange
Composite Tape on the date(s) in question, or, if the Common Stock shall not
have been traded on any such date(s), the mean of the high and low sales prices
on the New York Stock Exchange Composite Tape on the first day prior thereto on
which the Common Stock was traded; provided, however, if the Distribution Date
(as defined in the Rights Agreement) shall have occurred and the Rights shall
then be represented by separate certificates rather than by certificates
representing the Common Stock, there shall be added to such value calculated in
accordance with (a) above, the mean of the high and low sales prices of the
Rights on the New York Stock Exchange Composite Tape on the date(s) in
question, or if the Rights shall not have been traded on any such date(s), the
mean of the high and low sales prices on the New York Stock Exchange Composite
Tape on the first day prior thereto on which the Rights were so traded; or (b)
such other amount as may be determined by the Committee by any fair and
reasonable means.


    “Fiscal Year” means the annual period used by ML & Co. for financial
accounting purposes.


    “Forfeited Amount” means, with respect to an Award Date, the amount of
Awards credited to Accounts as of such Award Date that have been forfeited by
participants pursuant to Section 9.


    “Junior Preferred Stock” means ML & Co.’s Series A Junior Preferred Stock,
par value $1.00 per share.


    “Minimum Value” means the dollar amount obtained by applying a per annum
rate of 1%, compounded annually, to the amount of an Award, from and including
the last day of the Performance Period, or such other date as may be
established by the Committee, to and including the Payment Date.


    “ML & Co.” means Merrill Lynch & Co., Inc.


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    “MLPF&S” means Merrill Lynch, Pierce, Fenner & Smith Incorporated, a
subsidiary of ML & Co.


    “Payment Calculation Date” means, with respect to an Award, the first day
of the month in which an Award first becomes payable under Section 8 or 9.


    “Payment Date” means, with respect to any amount payable under the Plan,
the date on which such amount first becomes payable.


    “Plan” means this Merrill Lynch Financial Advisor Capital Accumulation
Award Plan.


    “Performance Period” means the period, generally a fiscal year of ML &
Co., during which you generate the production/revenue or achieve the goals that
are the basis of an Award.


    “Private Client Employee” means a Financial Advisor (including a resident
manager or producing manager), life market estate planning and business
insurance specialist (EPBIS), broad market EPBIS, insurance planning specialist
or mortgage and credit specialist, or any other employee group that the
Committee, in its sole discretion, determines are private client employees for
purposes of eligibility for awards under the Plan, as evidenced in the
applicable Committee resolutions or instrument of grant.


    “Proportional Amount” means the proportion that the amount of an Award
credited to an Account with respect to an Award Date bears to the total amount
of Awards credited to all Accounts with respect to such Award Date that have
not been forfeited or paid pursuant to Section 9.


    “Retirement.”
  You will be deemed to have reached
“Retirement” if your
employment with the Company terminates (i) on or after you have attained your
65th birthday, (ii) when you cease employment on or after your 55th birthday
and you have completed at least 10 years of service, including approved leaves
of absence of one year or less, or (iii) at any age with the express approval
of the Committee, in its sole discretion, upon a recommendation by the
management of MLPF&S, in its sole discretion. (Participants should be aware
that such recommendations will be considered only in exceptional cases.)


    “Rights” means the Rights to Purchase Units of Series A Junior Preferred
Stock issued pursuant to the Rights Agreement.


    “Rights Agreement” means the Rights Agreement dated as of December 16,
1987 between ML & Co. and Manufacturers Hanover Trust Company, Rights Agent.


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    “Rule
of 65.”  You will be deemed to be eligible for the Rule of 65
contained in Section 9(c)(iv) of FACAAP if, after December 31, 2001, your
employment with the Company terminates other than for cause (i) on or after you
have completed at least 20 years of service with the Company, including
approved leaves of absence of one year or less, and (ii) your combined length
of service with the Company and your age equals at least 65, and (iii) you are
not eligible for “Retirement” under the Plan.


    “You” means the individual participant in this Plan.




II.   ELIGIBILITY



2.   Eligible Employees.


      You are eligible for an Award if (i) you were, during the Performance
Period, a Private Client Employee (regardless of whether you continue to be a
Private Client Employee at the time of grant), (ii) you meet the applicable
Award criteria determined pursuant to Section 3 (a) and (iii) as of the date of
grant, your employment with the Company has not terminated for any reason other
than death or Retirement.




III.   THE AWARDS; APPRECIATION



3.   The Awards.



     (a)        Criteria for Awards.   The criteria for Awards will be established
periodically by the Committee, upon the recommendation of the management of the
Company. The criteria for Awards may vary from Performance Period to
Performance Period and according to type of performance, and may be announced
prior to, during, or following the applicable Performance Period. An Award
will generally be stated as an amount equal to a percentage of achievement
against established goals during a Performance Period. An Award may, however,
be a fixed dollar amount and the amount of Awards may vary according to such
factors as are established periodically by the Committee.
Awards granted will be credited to the Account as of the Award Date.




     (b)        Calculation of Amounts Payable for Awards Made Prior to January 2003.  There
shall be computed, with respect to each Award, both the cash amount and
the Common Stock Amount of such Award. If, as of the Payment Calculation Date,
the then Fair Market Value of the Common Stock Amount is equal to or greater
than the Minimum Value of the Common Stock Amount, you will receive the Common
Stock Amount in shares of Common Stock; however, if such Fair Market Value of
the Common Stock Amount as of such date is less than such Minimum Value, you
will receive such Minimum Value in cash. If shares of Common Stock are
unavailable for payment under the Plan or if the Committee shall otherwise, in
its sole discretion, so direct, the


4






 


Fair Market Value of such shares as of the
Payment Calculation Date will instead be paid in cash. Fractional shares shall
be paid in cash. Until receipt by you of any share of Common Stock hereunder,
you will have no right, title, or interest in such share, including, without
limitation, the right to receive dividends and to vote any shares.


        (c)        Calculation of Amounts Payable for Awards Made in January 2003 and
Thereafter.  Each award shall be converted into a Common Stock Amount of such
Award. When the award is payable under the terms of the Plan, you will receive
the Common Stock Amount in shares of Common Stock. Fractional shares shall be
paid in cash. Until receipt by you of any share of Common Stock hereunder, you
will have no right, title, or interest in such share, including, without
limitation, the right to receive dividends and to vote any shares.




4.    Shares Available Under the Plan.


        The total number of shares of Common Stock that may be issued under the
Plan shall be 104,000,000 subject to adjustment as provided in Section 14.
Shares of Common Stock issued under the Plan shall be treasury shares.




IV.   STATUS OF THE AWARD



5.    No Trust or Fund Created.


        Neither the Plan nor any grant made hereunder shall create or be construed
to create a trust or separate fund of any kind or a fiduciary relationship
between the Company and you or any other person. To the extent that any person
acquires a right to receive payments from the Company pursuant to a grant under
the Plan, such right shall be no greater than the right of any unsecured
general creditor of the Company.




6.    Non-transferability.


        Your rights under the Plan, including the right to any amounts or shares
payable, may not be assigned, pledged, or otherwise transferred except, in the
event of your death, to your designated beneficiary or, in the absence of such
a designation, by will or the laws of descent and distribution.




7.   Relationship to Other Benefits.


        No payment under the Plan shall be taken into account in determining any
benefits under any pension, retirement, group insurance, or other employee
benefit plan of the Company. The Plan shall not preclude the stockholders
of ML & Co., the Board of Directors or any committee
thereof, or the Company from authorizing or approving other employee benefit
plans or forms of incentive compensation, nor shall it limit or prevent the
continued operation of other


5






 


incentive compensation plans or other employee
benefit plans of the Company or the participation in any such plans by
participants in the Plan.




V.   PAYMENT OF THE AWARD



8.   In General.


        (a)     Subject to the provisions of Section 9, the Common Stock Amount or
Minimum Value (other than for awards granted in or after January 2003) with
respect to an Award as appropriate, will be paid to you in a lump sum (in
shares of Common Stock or in cash, as determined under Section 3, in the case
of the Common Stock Amount; or in cash, in the case of the Minimum Value) as
soon as practicable following January 1 of the tenth year following the Award
Year, provided that, for Awards made in and after January 2003 for Performance
Years 2002 and thereafter, you will receive only the Common Stock Amount and
such Common Stock Amount will be paid to you as soon as practicable following
January 1 of the eighth year following the Award Year; and provided further
that for Awards made in January 2001 and January 2002 to Financial Advisors
employed by International Private Client, such awards will be paid to you, in
the case of Awards for the 2000 Performance Period, as soon as practicable
following January 1 of the fifth year following the Award Year, and, in the
case of Awards made for the 2001 Performance Period, as soon as practicable
following January 1 of the seventh year following the Award Year.


        (b)     If you (i) (A) are 65 years of age or older and (B) have completed 10
years or more of service; (ii) (A) are 60 years of age or older and (B) have
completed 15 years or more of service, or (iii) (A) are 55 years of age or
older and (B) have completed 20 years or more of service, you will be given a
one-time option to cause the acceleration of the vesting of 50% of the total
number of shares represented by the Common Stock Amount of all Awards granted
to you under the Plan (in the order and in accordance with procedures
determined by the Administrator) provided that you (1) sign a contract with the
Corporation agreeing not to compete in any way with the business of the
Corporation following your termination of employment and (2) agree to a formal
account transition plan with Advisory Division, and provided further that in
the event your employment terminates as a result of Retirement all
non-accelerated Awards granted to you under the Plan that have not been paid
and become payable as a result of such Retirement, shall (notwithstanding the
Performance Period to which they relate) be payable in two equal installments
the first of which shall be in January after the date of your Retirement and
the second of which shall be one year after the first payment. In the event
that you satisfy the requirements of the preceding sentence the “Payment
Calculation Date” for such vested awards shall be the first day of the month
following the date that such conditions were met and the payment shall be made
as soon as practicable following the Payment Calculation Date. This provision
shall not apply to awards made to Financial Advisors employed by International
Private Client in January 2001 and January 2002.


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        (c)     Notwithstanding the foregoing or any other provision of this Plan
(except Section 9(e), which shall control in the event of a conflict), the
Committee directs that in the event of any allegation of any misconduct on your
part, including any violation of any law, regulation, or Company policy, that
payment of the Account Balance will be delayed until the Committee or the
management of the Company, upon consultation with the General Counsel, either
(i) has determined that payment is appropriate under the circumstances, or (ii)
has made a determination that the Account Balance shall be forfeited by you.




9.   Termination of Employment.



        (a)         Death.  If you die prior to payment pursuant to Section 8, then your
Award(s) will be deemed to be 100% vested and the Account Balance will be paid
to your beneficiary as soon as practicable. In such event, the “Payment
Calculation Date” will be deemed to be the first day of the month in which the
death occurred.




        (b)         Retirement; Employment by Competitor.  Termination of your employment
as a result of Retirement or a change in your status in anticipation of
Retirement shall have the following effect:




                  (i)     Awards for Performance Periods Prior to 1995.    With respect to Awards
granted prior to and for the 1994 Performance Period (i.e., the Performance
Period ended December 30, 1994), your Award(s) will vest and be paid to you as
soon as practicable after your Retirement, in which case the “Payment
Calculation Date” will be deemed to be the first day of the month in which the
Retirement occurred. In addition, if you have entered into a formal account
transition plan with Advisory Division that does not exceed one year and
transferred to an IA code for not more than one year from Retirement, your
Awards will be vested and paid to you as soon as practicable after such
transfer, in which case the “Payment Calculation Date” will be deemed to be the
first day of the month in which such transfer occurred.




                  
(ii)
    Awards for Performance Periods After
1994.     With respect to Awards
granted for Performance Periods after the 1994 Performance Period, your Account
Balance will vest and become payable in two installments, the first payable as
of the end of the year in which Retirement occurs (or, in the case of any Award
granted after Retirement, as of the Award Date) and the second vested and
payable as of the end of the year following the year in which Retirement occurs
(subject to paragraph 9(b)(iii) below). Each such installment payment will be
calculated based on 50% of the Award. The Payment Calculation Date for each
installment will be deemed to be the first business day of January of the year
following the year in which the installment becomes payable (except that the
Payment Calculation Date for the first installment in



7






 





respect of any Award granted after Retirement shall be deemed to be the Award Date), and the payment
shall be made as soon thereafter as practicable. Notwithstanding the
foregoing, if the value of any Award as of the first day of the month in which
the Retirement occurs is less than $500, such Award will be paid in a lump sum
as soon as practicable after Retirement and the Payment Calculation Date will
be deemed to be the first day of the month in which the Retirement occurs.




                  (iii)     Employment by Competitor.  Notwithstanding the foregoing, if, within
two years of the date of your Retirement, or at any time after such two-year
period if amounts are still payable to you as provided in subsection (ii)
above, you commence employment or become affiliated in any way with a company
determined by the Committee (or its designee) to be a retail brokerage
competitor of the Company or an Affiliate, any amount paid to you under this
section shall be forfeited by you and returned to the Company and all amounts
that have not yet vested under this section shall cease to vest and no longer
be payable.




                  (iv)
     Rule of 65.  If your employment terminates after December 31, 2001,
and you qualify for the Rule of 65, your awards will continue to be outstanding
and to vest in accordance with their original terms, provided that your awards
will cease to be eligible for continued vesting and you will lose your award if
you commence employment or become affiliated in any way with a company
determined by the Committee (or its designee) to be a retail brokerage
competitor of the Company or an Affiliate.




        (c)       Other Termination of Your Employment.  Termination of your employment
for any reason other than death or Retirement shall have the following effect:




                  
(i)     Awards for Performance Periods Prior to 1995.  With respect to Awards
granted prior to and for the 1994 Performance Period (i.e., the Performance
Period ended December 30, 1994), you will receive only partial payment of an
Award based upon the percentage of such Award that has vested as of December
31st of the year prior to the year in which the termination occurs and the
remainder of the Award shall be deemed forfeited. Vesting of your Award(s)
shall occur as of the end of the day on December 31st of each year in
accordance with the following schedule:




	 	 	 	 	 
	 	 	Percentage of Total Award
Vested at Year-End
	Year	 	
	
	 	

	Award Year 	 	 	
0	%
	Second Year	 	 	
0	%
	Third Year    	 	 	
0	%
	Fourth Year	 	 	
0	%



8






 




	 	 	 	 	 
	Fifth Year

	 	 	50%	
	Sixth Year
	 	 	60%
	
	Seventh Year
	 	 	70%
	
	Eighth Year
	 	 	80%
	
	Ninth Year
	 	 	90%
	
	Tenth Year	 	 	100%	



The vested amount will be paid to you in a lump sum as soon as practicable
following such termination. In addition, (A) the “Payment Calculation Date”
will be deemed to be the first day of the month in which such termination
occurred and (B) anything else in this Plan to the contrary notwithstanding,
you will receive no more than the Minimum Value with respect to an Award.




                (ii)
 Awards for Performance Periods After 1994.  With respect to Awards
granted for Performance Periods after the 1994 Performance Period excluding
Awards made to Financial Advisors employed by International Private Client with
respect to Performance Periods in 2000 and 2001 (which shall become vested in
accordance with the terms of such Awards), your Award will become 100% vested
at the end of the day on December 31st of the tenth year following the Award
Year, and the vested amount will be payable in accordance with Section 8
hereof. If your employment terminates for any reason other than death or
Retirement on or prior to such date, you shall immediately forfeit your entire
Award, unless the Committee, in its sole discretion, finds that the
circumstances in the particular case so warrant and allows you to retain any
portion or all of your Award, in which case it may, in its sole discretion,
specify that you shall receive payment of no more than the Minimum Value with
respect to the portion of the Award it allows you to retain.




                (iii)  Disability, Leave of Absence or Transfer.  Your employment will not
be considered as terminated if you are on an approved leave of absence, have
incurred a Disability, or if you transfer or are transferred but remain in the
employ of the Company.




           (d)         Alternative Payments on Termination.  If your employment terminates
and amounts become payable pursuant to Sections 9(a), 9(b), or 9(c), the
Committee may, in its sole discretion, direct that the Account Balance be paid
at some other time or that it be paid in installments (on which delayed
payment(s) the Committee may determine that Appreciation will not accrue and/or
that some other appreciation rate will be applied), which determination
(including the manner of payment and application of an appreciation rate) may
be changed by the Committee at any time.




           (e)         Termination of Employment After a Change in Control.




                (i)   Payment Upon Change in Control.  Any other provision of this Plan to
the contrary notwithstanding, in the event that a Change in Control of


9






 


ML & Co. occurs and thereafter your employment is terminated by the Company without
cause or by you for Good Reason, your Award(s) will be deemed to be 100% vested
and your entire Account Balance will be paid to you (or to your beneficiary in
the event of death) in cash in a lump sum, as promptly as possible after such
termination of employment. Your Common Stock Amount shall have a cash value
equal to the highest of such Common Stock Amount’s (A) Minimum Value on the
date of your termination, (B) Fair Market Value on the date of your
termination, or (C) highest Fair Market Value for any day during the 90-day
period ending on the date of the Change in Control, and, if such termination
occurs before the Payment Date, the “Payment Calculation Date” shall be deemed
to be the date on which such termination occurs. Payment shall be calculated
according to Section 3 (as modified by this subsection (e)), regardless of
whether a termination under this subsection (e) occurs on or before December 31
of the ninth year following an Award Year.




                    (ii)   Definition of “Change in Control”.  A “Change in Control” means a
change in control of ML & Co. of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether
or not ML & Co. is then subject to such reporting requirement;
provided,
however, that, without limitation, a Change in Control shall be deemed to have
occurred if:



          (A)    any individual, partnership, firm, corporation, association, trust,
unincorporated organization or other entity, or any syndicate or group deemed
to be a person under Section 14(d)(2) of the Exchange Act, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), directly or indirectly, of securities of
ML & Co. representing 30% or more of the combined voting power of ML & Co.’s
then outstanding securities entitled to vote in the election of directors of ML
& Co.; or


          (B)    during any period of two consecutive years individuals who at the
beginning of such period constituted the Board of Directors of ML & Co. and any
new directors, whose election by the Board of Directors or nomination for
election by the stockholders of ML & Co. was approved by a vote of at least 3/4
of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a majority
thereof; or


          (C)    all or substantially all of the assets of ML & Co. are liquidated or
distributed.


                    (iii)  Agreement Concerning a Change in Control. If ML & Co. executes an
agreement, the consummation of which would result in the occurrence of the
Change in Control as described in subparagraph (ii), then, with respect to a
termination of employment, unless such termination is by the



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Company for Cause, or by you other than for Good Reason, occurring after the execution of such
agreement (and, if such agreement expires or is terminated prior to
consummation, prior to such expiration or termination of such agreement), a
Change in Control shall be deemed to have occurred as of the date of the
execution of such agreement.




          (iv)   Amendments Subsequent to Change in Control.  In the event of a Change
in Control, no changes in the Plan and no adjustments, determinations or other
exercises of discretion by the Committee or the Board of Directors, that were
made subsequent to the Change in Control and that would have the effect of
diminishing your rights or payments under the Plan or this Section 9(e), or of
causing you to recognize income (for federal income tax purposes) with respect
to your Account Balance prior to the actual distribution in cash to you of such
Account Balance, shall be effective.




          (v)  Cause.  Termination of your employment by the Company for “Cause”
shall mean termination upon:



     (A)    your willful and continued failure substantially to perform your
duties with the Company (other than any such failure resulting from your
incapacity due to physical or mental illness or any such actual or anticipated
failure resulting from termination by you for Good Reason) after a written
demand for substantial performance is delivered to you by the Board of
Directors, which demand specifically identifies the manner in which the Board
of Directors believes that you have not substantially performed your duties; or


     (B)   the willful engaging by you in conduct which is demonstrably and
materially injurious to the Company, monetarily or otherwise.


No act or failure to act by you shall be deemed “willful” unless done, or
omitted to be done, by you not in good faith and without reasonable belief that
this action or omission was in the best interest of the Company.


     Notwithstanding the foregoing, you shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to you a
copy of a resolution duly adopted by the affirmative vote of not less than
three quarters of the entire membership of the Board of Directors at a meeting
of the Board called and held for such purpose (after reasonable notice to you
and an opportunity for you, together with counsel, to be heard before the Board
of Directors), finding that, in the good faith opinion of the Board of
Directors, you were guilty of conduct set forth above in clause (A) or (B) of
the first sentence of this Subsection and specifying the particulars thereof in
detail.




          (vi)
  “Good Reason”  shall mean your termination of your employment with the
Company if, without your written consent, any of the following circumstances
shall occur:



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     (A) 
  a meaningful and detrimental alteration in your position or in the
nature or status of your responsibilities from those in effect immediately
prior to the Change in Control;


     (B) 
  a reduction by the Company of your base salary as in effect just prior
to the Change in Control;


     (C)    the relocation of the office of the Company where you were employed at
the time of the Change in Control (the “CIC Location”) to a location more than
fifty miles away from the CIC Location, or the Company’s requiring you to be
based more than fifty miles away from the CIC Location (except for required
travel on the Company’s business to an extent substantially consistent with
your business travel obligations just prior to the Change in Control);


     (D)    the failure of the Company to continue in effect any benefit or
compensation plan, including, but not limited to, this Plan, the Company’s
retirement program, or the Company’s Long-Term Incentive Compensation Plan,
Employee Stock Purchase Plan, 1978 Incentive Equity Purchase Plan, cash
incentive compensation or other plans adopted prior to the Change in Control,
in which you are participating at the time of the Change in Control, unless an
equitable arrangement (embodied in an ongoing substitute or alternative plan)
has been made with respect to such plan in connection with the Change in
Control, or the failure by the Company to continue your participation therein
on at least as favorable a basis, in terms of both the amount of benefits
provided and the level of your participation relative to other participants, as
existed at the time of the Change in Control; or


     (E)    the failure of the Company to continue to provide you with benefits at
least as favorable as those enjoyed by you under any of the Company’s pension,
life insurance, medical, health and accident, disability, deferred compensation
or savings plans in which you were participating at the time of the Change in
Control, the taking of any action by the Company which would directly or
indirectly materially reduce any of such benefits or deprive you of any
material fringe benefit enjoyed by you at the time of the Change in Control, or
the failure by the Company to provide you with the number of paid vacation days
to which you are entitled on the basis of years of service with the Company in
accordance with the Company’s normal vacation policy in effect at the time of
the Change in Control.




10.    Payment of Forfeited Amounts.



     (a)         Calculation of Payment.  With respect to any Award Date prior to
December 27, 1991, a Proportional Amount of the Forfeited Amount with respect
to such Award Date, plus Appreciation on such Proportional Amount, will be
distributed to each participant (or, in the event of death, to his or her
beneficiary)


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who has become 100% vested, at the same time that the Award
credited to an Account as of such Award Date is paid to such participant (or
beneficiary). For purposes of calculating the Proportional Amounts and
Appreciation thereon (i) the Payment Calculation Date for a Proportional Amount
will be deemed to be the Payment Calculation Date with respect to the Award to
which the Proportional Amount relates, and (ii) the Proportional Amount payable
to a participant will be determined as of the date such participant becomes
100% vested, without adjustment for amounts of Awards forfeited after such
date.


     (b)        Limitations on Payment of Forfeited Amounts.   With respect to Award
Dates after December 27, 1991, you shall no longer become entitled to receive a
Proportional Amount of any Forfeited Amounts forfeited on or after such date,
and no adjustments shall be made to your Account for any Forfeited Amounts.


11.   Withholding.


     The Company shall have the right, before any payment is made or a
certificate for any shares is delivered or any shares are credited to any
brokerage account, to deduct or withhold from any payment under the Plan any Federal,
state, or local taxes, including transfer taxes,
required by law to be withheld or to require you or your beneficiary or estate,
as the case may be, to pay any amount, or the balance of any amount, required
to be withheld.


12.   Arbitration.


     Any claim or dispute concerning your individual rights or entitlements under or
otherwise relating to this Plan shall be settled by arbitration before either
the American Arbitration Association (“AAA” or JAMS (formerly the “Judicial
Arbitration and Mediation Services”)) depending upon which of these forums you
choose, in accordance with the Commercial Dispute Resolutions Procedures of the
AAA or the Comprehensive Arbitration Rules and Procedures of JAMS,
provided,
however, that: (1) the arbitrator shall be required to adhere to established
principles of substantive law and the governing burdens of proof; (2) the
arbitrator shall be prohibited for disregarding, adding to or modifying the
terms of the Plan; (3) the arbitrator shall be an attorney licensed to practice
law who is experienced in similar matters; and (4) more than one employee or
former employee may consolidate their claims and join in the same arbitration
proceeding only with the consent of all the parties to the proceeding. No
claim or dispute concerning rights or entitlements under or otherwise relating
to the Plan may be brought or litigated in a class action. The award rendered
in this arbitration shall be final and binding, and judgment upon the award may
be entered in any court of competent jurisdiction.


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13.   Designation of Beneficiary.


  (a)          Designation of Beneficiary and Alternate Beneficiary.  You may
designate, in writing delivered to ML & Co. before your death, a beneficiary
to receive payments in the event of your death. You may also designate an
alternate beneficiary to receive payments if the primary beneficiary does not
survive you. You may designate more than one person as your beneficiary or
alternate beneficiary, in which case such persons would receive payments as
joint tenants with a right of survivorship as to the amounts not yet paid from
your Account. If you die without a surviving beneficiary, then your estate
will be considered your beneficiary.


  (b)          Change in Beneficiary.  You may change your beneficiary or alternate
beneficiary (without the consent of any prior beneficiary) in writing
delivered to ML & Co. before your death. Unless you state otherwise in
writing, any change in beneficiary or alternate beneficiary will automatically
revoke prior designations only of your beneficiary or only of your alternate
beneficiary, as the case may be, under this Plan only; designations under other
Plans will remain unaffected.


  (c)          In the Event of Death of the Beneficiary During Payment.  If a
beneficiary who is receiving payments hereunder dies before all of the payments
have been made and if there is no surviving joint tenant, the Account Balance
will be paid as soon as practicable in one lump sum to such beneficiary’s
estate and not to any alternate beneficiary you may have designated.


VI.    ADMINISTRATION OF THE PLAN


14.   Powers of the Committee.


     The Committee has full power and authority to interpret, construe, and
administer the Plan and to adopt, amend and rescind such rules and regulations
as, in its opinion, may be advisable for the administration of the Plan.
The Committee’s interpretations and construction
hereof, and actions hereunder, including any determinations regarding the
amount or recipient of any payments and whether any amount of Common Stock
payable hereunder will instead be paid in the equivalent amount of cash, will
be binding and conclusive on all persons for all purposes. The Committee will
not be liable to any person for any action taken or omitted in connection with
the interpretation and administration of this Plan unless attributable to its
willful misconduct or lack of good faith.


VII.   MISCELLANEOUS PROVISIONS


15.   Changes in Capitalization.


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     Any other provision of the Plan to the contrary notwithstanding (except
for Section 9(e), which shall control in the event of a conflict), if any
change shall occur in or affect Common Stock on account of a merger,
consolidation, reorganization, stock dividend, stock split or combination,
reclassification, recapitalization or distribution to holders of Common Stock
(other than cash dividends) or, if in the opinion of the Board of Directors of
ML & Co. (the “Board of Directors”), after consultation with ML & Co.’s
independent public accountants, changes in ML & Co.’s accounting policies,
acquisitions, divestitures, distributions or other unusual or extraordinary
items have disproportionately and materially affected the value of Common
Stock, the Board of Directors may make such adjustments, if any, that it may
deem necessary or equitable, in its sole discretion, in order to preserve the
benefit of this Plan for ML & Co. and its employees and stockholders, in the
number of shares subject to or reserved for issuance under this Plan and in the
method of calculating Appreciation. In the event of a change in the presently
authorized Common Stock that is limited to a change in the designation thereof
or a change of authorized shares with par value into the same number of shares
with a different par value or into the same number of shares without par value,
the shares resulting from any such change shall be deemed to be Common Stock
within the meaning of this Plan and in the method of calculating Appreciation.
In the event of any other change affecting the Common Stock, such adjustment
may be made as may be deemed equitable by the Board of Directors to give proper
effect to such event, in its sole discretion, in order to preserve the benefit
of this Plan for ML & Co. and its employees and stockholders.


16.   Tax Litigation.


     The Company shall have the right to contest, at its expense, any tax
ruling or decision, administrative or judicial, on any issue that is related to
the Plan and that the Company believes to be important to participants in the
Plan and to conduct any such contest or any litigation arising therefrom to a
final decision.


17.   Employment Rights.


     Neither the Plan nor any action taken hereunder shall be construed as
giving any employee of the Company the right to become a participant, and a
grant under the Plan shall not be construed as giving any participant any right
to be retained in the employ of the Company.


18.   Amendment of the Plan.


     The Board of Directors or the Committee (but no other committee of the
Board of Directors) may modify, amend or terminate the Plan at any time. No
such modification, amendment or termination will, without your consent,
adversely affect your rights in relation to an Award after it has been granted
to you.


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19.   Governing Law.


     This Plan will be construed in accordance with and governed by the laws of
the State of New York as to all matters, including, but not limited to, matters
of validity, construction and performance.



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