Exhibit 10.3


                       SETTLEMENT AND RELEASE AGREEMENT

                                  * * * * * *

          This Settlement and Release Agreement dated November 22, 2005 (the
"Agreement") by and between Morgan Stanley (the "Company") and John Havens
(the "Executive") sets forth the agreement reached concerning the termination
of Executive's employment with the Company.

          NOW, THEREFORE, the Company and the Executive hereby agree as
follows:

          1. Employment Termination. Effective as of the close of business on
March 29, 2005 (the "Termination Date"), the Executive's employment with the
Company terminated and Executive ceased to hold all positions then held as an
employee, officer or member of the board of directors of the Company and any
of the Company's parents, subsidiaries and/or affiliates, and each of their
predecessors and successors (collectively, the "Affiliated Entities").

          2. Release Payments and Benefits. In consideration for signing this
Agreement and in exchange for the promises, covenants and waivers set forth
herein, the Company will, provided the Executive has not revoked this
Agreement as set forth below, provide Executive with the following: (a) the
Company shall pay the Executive or the Executive's estate (upon proper letters
testamentary), as the case may be, the sum of Seven Million Nine Hundred
Thousand Dollars and no cents ($7,900,000.00), less applicable withholdings
permitted by Section 17, payable on or about the tenth business day following
Executive's (or Executive's estate, if applicable) execution of this
Agreement, provided Executive does not revoke this Agreement within the
seven-day period following the execution of the Agreement;


<PAGE>


               (b) subject to such modification, if any, as shall be necessary
to comply with Section 409A of the U.S. Internal Revenue Code of 1986, as
amended, and any formal guidance issued thereunder, the Company agrees to
treat the Executive as age 55 on the Termination Date for purposes of
determining the Executive's eligibility for benefits under the Company's SERP;
provided, however, that, notwithstanding the foregoing, no such modification
shall reduce the Executive's benefits under the SERP (determined as if the
Executive were age 55 on the Termination Date); and further provided, however,
that the amount of Executive's benefits under the SERP shall be determined as
of the Termination Date;

               (c) Executive shall be eligible to receive continuation of his
current medical benefits under the Company's medical plan through December 31,
2005, in accordance with the terms and conditions of the applicable plan
document;

               (d) Effective January 1, 2006, the Executive will be provided
with the Company's retiree medical benefits pursuant to the terms of the
Morgan Stanley Retiree Medical Plan as may be in effect from time to time and
in the event the Company shall provide additional retiree medical benefits to
members of the Management Committee generally pursuant to the terms of the
Morgan Stanley Retiree Medical Plan as may be in effect from time to time, the
Executive will be provided with such benefits in accordance with the terms of
such Plan; provided, however, that the Executive shall be required to pay the
then actuarially equivalent rate (which takes into consideration the average
claim for plan participants in the Executive's age bracket versus the average
claim for members of the group) as determined by the Company from time to
time;


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<PAGE>


               (e) Executive has submitted for reimbursement his legal fees in
connection with the negotiation and execution of this Agreement and the
Company has agreed to reimburse Executive for such previously submitted fees;

               (f) The Company shall reimburse the Executive for the costs of
appropriate office, secretarial and administrative support through December
31, 2005, or such earlier date, if any, on which the Executive becomes
re-employed, up to a maximum of $75,000.00, upon submission of the appropriate
documentation to the Company; and

               (g) For purposes of any agreement or award governing any Stock
Incentive (as defined in Section 6 hereof) and the applicable plan governing
such Stock Incentive, the Executive will be treated as a full career employee
who has been involuntarily terminated. The terms and conditions of the Stock
Incentive awards shall remain unmodified by this Agreement, except that the
Company has agreed that the Executive's 1999 stock option award shall remain
exercisable by the Executive for the remainder of its original term (subject
to such modification, if any, as shall be necessary to comply with Section
409A of the U.S. Internal Revenue Code of 1986, as amended, and any formal
guidance issued thereunder; provided, however, that if such modification shall
be necessary the Company and the Executive shall negotiate in good faith to
achieve a mutually acceptable modification to the Executive's 1999 stock
option award.)

         3. The Company confirms that the Executive is fully vested in the
accounts credited to him under the Pre-tax Incentive Plans ("PTIPs"), the
Capital Accumulation Plan ("CAP"), and the Owners and Select Earners Program
("OSEP") and payment to him shall be made in accordance with the terms of
those plans. Except as specifically provided herein,


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<PAGE>


continuation or cessation of the Executive's participation in the employee
benefit plans of the Company and its Affiliated Entities shall be determined
in accordance with the terms of those plans. The Company confirms that the
Executive is fully vested in the accounts credited to him under the Company's
401(k) Plan ("401(k) Plan") and Employee Stock Ownership Plan ("ESOP") and
payment to him shall be made in accordance with the terms of those plans.

          4. Reimbursement of Expenses. The Company shall reimburse the
Executive for out-of-pocket expenses incurred by him on or before the
Termination Date in connection with his employment, upon submission by him of
appropriate documentation and in accordance with the Company's customary
practices and policies. The Executive represents that all such reimbursable
expenses have been submitted to the Company for reimbursement.

          5. Accrued, Unused Vacation Days. In lieu of Executive's accrued,
unused vacation days, the Executive shall receive his base salary compensation
for 5 days, less applicable withholdings permitted by Section 17.

          6. Equity and Performance Awards. Exhibit A hereto sets forth a
complete list of all of the Executive's currently outstanding stock options
(the "Stock Options") and other equity awards (together, "Stock Incentives").
Stock unit awards made to the Executive with respect to 2001, 2002 and 2003
shall have a conversion date on the last trading date of the month in which
the first anniversary of the Termination Date occurs, but shall in all other
events be subject to their terms, except as otherwise expressly provided
herein.

          7. Mutual Nondisparagement. (a) For the 36 month period commencing
on the Execution Date (as defined in Section 9 hereof), the Executive shall
not knowingly make any Public Statements, written or oral, which disparage or
defame the Company or its Affiliated


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Entities or their present, former or future directors, executive officers, or
employees, or their representatives or advisors in their capacity as
representatives and advisors to the Company and/or its Affiliated Entities.

               (b) For the 36 month period commencing on the Execution Date,
the Company shall not make and shall instruct its Management Committee
members, Section 16 officers and the Board of Directors (collectively "Covered
Individuals") not to knowingly make any Public Statements, written or oral,
which disparage or defame the Executive.

               (c) For purposes of this Section 7, (i) the term "Public
Statement" shall mean any statement that the person who makes it intends, or
could reasonably expect, to become public, and (ii) no Public Statement shall
be attributed to the Company unless it is made by a Covered Individual or an
advisor in an official statement or is in the form of a press release or other
similar public statement on behalf of the Company or any business unit of the
Company. Notwithstanding the foregoing, nothing in this Section 7 shall
prevent any person from (i) responding publicly to incorrect, disparaging or
derogatory Public Statements made after the Execution Date to the extent
reasonably necessary to correct or refute such Public Statements or (ii)
making any truthful statement to the extent (x) required by law or by any
court, arbitrator, mediator or administrative or legislative body (including
any committee thereof) with actual or apparent jurisdiction to order such
person to disclose or make accessible such information or (y) necessary in any
litigation or other proceeding between the parties including, without
limitation, in connection with this Agreement or its enforcement.

          8. Confidentiality. The Executive shall hold in a fiduciary capacity
for the benefit of the Company and/or its Affiliated Entities all secret,
proprietary and/or confidential

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<PAGE>


information, knowledge or data relating to the Company and/or its Affiliated
Entities and their respective businesses that he has obtained that is not
public knowledge (other than as a result of the Executive's violation of this
Section 8) including, without limitation, any and all proprietary, trade
secret and confidential information of the Company and/or its Affiliated
Entities, the unauthorized disclosure or use of which would reduce the value
of such information to the Company and/or its Affiliated Entities
("Confidential Information"). Such information includes, without limitation,
the Company's and/or its Affiliated Entities' client lists, its trade secrets,
any confidential information about (or provided by) any client or prospective
or former client of the Company and/or its Affiliated Entities, information
concerning the Company's and/or its Affiliated Entities' business or financial
affairs, including its books and records, commitments, procedures, plans and
prospects, or current or prospective transactions or business of the Company
and/or its Affiliated Entities and any "inside information" within the meaning
of the federal securities laws. For purposes of this Agreement, "Confidential
Information" shall not include information which is or becomes generally known
to the public or in the trade or industry, other than due to the Executive's
violation of this Section 8. The Executive shall not communicate, divulge or
disseminate nor use for his benefit or the benefit of any other person or
entity Confidential Information at any time, except with the prior written
consent of the Company or as otherwise required by law or legal process or
necessary to the assertion of the Executive's entitlements (including any
defense with respect to any claim in connection with any litigation or other
proceedings), or in the carrying out of his duties under Section 10.

          9. Releases. (a) In consideration of the payments and benefits set
forth in Section 2 of this Agreement, except for the rights expressly provided
herein, the Executive for himself, his heirs, administrators, representatives,
executors, successors and assigns (collectively


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<PAGE>


"Releasors") does hereby irrevocably and unconditionally release, acquit and
forever discharge the Company, its Affiliated Entities, partnerships and joint
ventures, and their respective current and former officers, directors,
employees, representatives, agents, attorneys, shareholders, both individually
and in their official capacities including, without limitation, all persons
acting by, through, under or in concert with any of them (collectively,
"Releasees"), and each of them from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies, damages,
remedies, actions, causes of action, suits, rights, demands, costs, losses,
debts and expenses (including attorneys' fees and costs) of any nature
whatsoever arising out of or relating to his employment relationship, or the
termination of that relationship, with the Company, its Affiliated Entities,
partnerships and/or joint ventures, known or unknown, whether in law or equity
and whether arising under federal, state or local law including, without
limitation, any such claim under the Corporate and Criminal Fraud
Accountability Act of 2002, also known as the Sarbanes Oxley Act; any claim
for discrimination based upon race, color, ethnicity, sex, age (including
under the Age Discrimination in Employment Act of 1967 (the "ADEA") and the
Older Workers Benefit Protection Act of 1990), national origin, religion,
disability, retaliation, or any other unlawful criterion or circumstance, the
New York State Human Rights Law; the New York City Human Rights Law; and any
other federal, state or local laws, rules or regulations, whether equal
employment opportunity laws, rules or regulations or otherwise, which the
Executive and the other Releasors had, now have, or may have in the future
against each or any of the Company, the Affiliated Entities or any other
Releasees from the beginning of the world until the date the Executive signed
this Agreement (the "Execution Date") relating to the Executive's employment
with the Company, its Affiliated Entities, partnerships and/or joint ventures.
Anything herein to the contrary notwithstanding, nothing


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<PAGE>


herein shall release the Company, the Affiliated Entities or any other
Releasees from any claims or damages based on: (i) any right or claim that
arises after the Execution Date, (ii) any right, including a right to a
payment or benefit, the Executive may have under this Agreement or for vested
benefits and Stock Incentives pursuant to the terms and conditions of the
applicable plan document, as modified by this Agreement, (iii) Executive's
eligibility for indemnification, as described in Section 20 of this Agreement,
in accordance with applicable laws or the certificate of incorporation or
by-laws of the Company, or under any applicable insurance policy, with respect
to any liability the Executive incurs or has incurred as a director, officer
or employee of the Company, its Affiliated Entities, partnerships and/or joint
ventures, (iv) any right the Executive may have to obtain contribution as
permitted by law in the event of entry of judgment against him as a result of
any act or failure to act for which he and the Company, its Affiliated
Entities, partnerships and/or joint ventures are jointly liable or (v) any
claim in respect of any brokerage account, personal card account or other
personal or business relationship with the Company, its Affiliated Entities,
partnerships and/or joint ventures outside of the employment relationship.
This Section 9(a) shall not apply to any act by the Company, its Affiliated
Entities, partnerships and/or joint ventures that constitutes a criminal act
under any Federal, state or local law (other than due to the fault of the
Executive) during the course of Executive's employment with the Company or
thereafter prior to the Execution Date.

               (b) The Executive acknowledges that: (i) this entire Agreement
is written in a manner calculated to be understood by him; (ii) he has been
advised to consult, and has consulted with, an attorney before executing this
Agreement; (iii) he was given a period of twenty-one (21) days within which to
consider this Agreement; and (iv) to the extent he executes this Agreement
before the expiration of the twenty-one-day period, he


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<PAGE>


does so knowingly and voluntarily and only after consulting his attorney. The
Executive shall have the right to cancel and revoke this Agreement during a
period of seven (7) days following the Execution Date, and this Agreement
shall not become effective, and no money shall be paid hereunder prior to the
expiration of such seven-day period (the "Revocation Date"). The seven-day
period of revocation shall commence upon the Execution Date. In order to
revoke this Agreement, the Executive shall deliver to the Company's Chief
Legal Officer, prior to the expiration of said seven-day period, a written
notice of revocation. Upon such revocation, this Agreement shall be null and
void and of no further force or effect on either party. Executive received
this Agreement on November 21, 2005.

               (c) The Executive acknowledges and agrees that the
consideration provided to him under Section 2 of this Agreement exceeds
anything to which he is otherwise entitled and that he is owed no wages,
commissions, bonuses, finder's fees, equity or incentive awards, severance
pay, vacation pay or any other compensation or vested benefits or payments or
remuneration of any kind or nature other than as specifically provided for in
this Agreement. If Executive should hereafter make any claim or demand or
commence or threaten to commence any action, claim or proceeding against the
Company, the Affiliated Entities or any other Releasees with respect to any
cause, matter or thing which is the subject of the Executive's release under
this Section 9, this Agreement may be raised as a complete bar to any such
action, claim or proceeding, and the Company, the Affiliated Entities or any
other Releasees, as applicable may recover from the Executive all costs
incurred in connection with such action, claim or proceeding, including
attorneys' fees.

               (d) The Executive represents and agrees that he has notified
the Company of all complaints and claims of which he is aware that he may have
against it


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<PAGE>


and/or the Company, the Affiliated Entities or any other Releasees relating to
his employment with the Company and/or the Affiliated Entities (together the
"Claims"). The Executive further represents and agrees that he is not aware of
any Claims other than those that he has notified to the Company. Executive
represents and agrees that he has not filed any lawsuits against any of the
Company, the Affiliated Entities or any other Releasees, or filed or caused to
be filed any charges or complaints against the Company, the Affiliated
Entities or any other Releasees with any municipal, state or federal agency
charged with the enforcement of any law. Pursuant to and as a part of the
Executive's release and discharge of the Company, the Affiliated Entities or
any other Releasees, as set forth herein, the Executive agrees to the fullest
extent permitted by law, not to sue or file a charge, complaint, grievance or
demand for arbitration against the Company, the Affiliated Entities or any
other Releasees in any forum with respect to any matter which is the subject
of Executive's release under this Section 9 or assist or otherwise participate
willingly or voluntarily in any claim, arbitration, suit, action,
investigation or other proceeding of any kind which relates to any matter that
involves the Company, the Affiliated Entities or any other Releasees, and that
occurred up to and including the Execution Date, unless required to do so by
court order, subpoena or other directive by a court, administrative agency,
arbitration panel or legislative body, or unless required to enforce this
Agreement. To the extent any such action may be brought by a third party, the
Executive expressly waives any claim to any form of monetary or other damages,
or any other form of recovery or relief in connection with any such action.
The fourth sentence of this Section 9(d) shall not apply to (i) those items
referenced in Sections 9(a)(i) through 9(a)(v); (ii) the Executive's right to
bring a proceeding pursuant to the Older Workers Benefit Protection Act to
challenge the validity of the Executive's release of claims



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<PAGE>



pursuant to the Age Discrimination in Employment Act; or (iii) Executive's
right to sue or file a charge, complaint, grievance or demand for arbitration
against the Company, the Affiliated Entities or any other Releasees with
respect to any matter that is not the subject of the Executive's release under
this Section 9.

               (e) The Company, on behalf of itself, the Affiliated Entities
and the other Releasees, also agrees that, subject to this Agreement becoming
effective, they hereby irrevocably and unconditionally release, acquit and
forever discharge the Executive from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies, damages,
remedies, actions, causes of action, suits, rights, demands, costs, losses,
debts and expenses (including attorneys' fees and costs) of any nature
whatsoever, known or unknown, whether in law or equity and whether arising
under federal, state or local law that any Releasee had, now has, or may have
in the future against the Executive and the other Releasors from the beginning
of the world until the Execution Date arising out of or relating to the
Executive's employment relationship or the termination of that relationship
with the Company and/or its Affiliated Entities, except that this paragraph
shall not apply to: (i) any act that constitutes a criminal act under any
Federal, state or local law committed or perpetuated by the Executive during
the course of the Executive's employment with the Company or its affiliates or
thereafter prior to the Execution Date (including any criminal act of fraud,
misappropriation of funds or embezzlement or any other criminal action); (ii)
any act of fraud or theft committed by Executive in connection with his
employment with the Company or thereafter prior to the Execution Date; or
(iii) Executive's obligations under this Agreement. Executive represents to
the Company that he has not engaged in or concealed any conduct as encompassed
within clause (i) or (ii) of this Section 9(e).


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               (f) None of the foregoing provisions of this Section 9 shall be
considered as releasing the Company, the Affiliated Entities or any other
Releasees' or the Executive's or any other Releasors entitlements, rights, or
obligations with respect to any Stock Incentives or as otherwise modifying the
terms, conditions or limitations of, any Stock Incentives.

         10. The Executive's Covenants. (a) Cooperation. For the period ending
36 months after the Execution Date, the Executive shall make himself available
to the Company following the Execution Date to assist the Company and/or the
Affiliated Entities, as may be requested by the Company at mutually convenient
times and places, with respect to pending and future litigations,
arbitrations, governmental investigations or other dispute resolutions
relating to or in connection with matters that arose during the Executive's
employment with the Company provided that in no event shall the Executive be
required to provide any cooperation if such cooperation is materially adverse
to his legal interests. To the extent possible, the Company will try to limit
the Executive's participation to regular business hours. In any event, (i) in
any matter subject to this Section 10(a), the Executive shall not be required
to act against the best interests of any new employer or new business venture
in which he is a partner or active participant where the interests of the
Executive's new employer or new business venture are adverse to the interests
of the Company and/or its Affiliated Entities, and (ii) any request for such
cooperation shall take into account (A) the significance of the matters at
issue in the litigation, arbitration, proceeding or investigation and (B) the
Executive's other personal and business commitments. The Company agrees to
provide the Executive reasonable notice, to the extent practicable, in the
event his assistance is required. The Company will reimburse the Executive for
the reasonable expenses and costs actually incurred by him as a result of
providing such assistance, upon the


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<PAGE>


submission of the appropriate documentation to the Company. Such expenses and
costs shall include, without limitation, demonstrably lost wages, travel costs
and legal fees to the extent the Executive reasonably believes that separate
representation is warranted, provided the Company is notified in advance of
the amount of such lost wages, costs and fees. The Executive's entitlement to
reimbursement of such expenses and costs, including legal fees, pursuant to
this Section 10(a), shall in no way affect the Executive's rights to be
indemnified and/or advanced expenses in accordance with the Company's
corporate documents, any applicable insurance policy, and/or in accordance
with this Agreement.

               (b) For the period ending 36 months after the Execution Date,
the Executive agrees that he shall not offer assistance or testimony in any
action against the Company, the Affiliated Entities or any other Releasees
(other than an action against the Company, the Affiliated Entities or any
other Releasee and the Executive jointly) brought by any other entity,
individual or individuals, unless ordered to do so by a court, agency or
regulatory authority, and then only after the Executive has given the
Company's Chief Legal Officer written notice, together with all supporting
legal papers or documents served upon him, as promptly as practicable
following his receipt of such notice.

               (c) Cooperation with Government and Regulatory Authorities. Any
non-disclosure provision in this Agreement does not prohibit or restrict the
Executive or his attorneys from responding to any inquiry about this Agreement
or its underlying facts and circumstances by the Securities and Exchange
Commission, the National Association of Securities Dealers, Inc. or any other
self-regulatory organization. Nothing in this Agreement prohibits or restricts
the Executive from testifying or providing information to or assisting in an
investigation or proceeding brought by any governmental or regulatory body or
official(s),


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or from testifying, participating in or otherwise assisting in a proceeding
relating to an alleged violation of any Federal or state law relating to fraud
or to any rule or regulation of the Securities and Exchange Commission or to
any self regulatory organization, and the notice provisions in the preceding
paragraph shall not apply in connection with any such investigation or
proceeding.

               (d) Remedies. The Executive acknowledges and agrees that
because of the nature of the business in which the Company and its Affiliated
Entities are engaged and because of the nature of the Confidential Information
to which the Executive has had access during his employment, a breach or
threatened breach of any provision of Section 7 or 8 of this Agreement would
result in immediate, substantial and irreparable harm to the Company and its
Affiliated Entities for which money damages do not provide an adequate remedy.
The Executive also acknowledges and agrees that it would be impractical and
excessively difficult to determine the actual damages of the Company and its
Affiliated Entities in the event the Executive breached or threatened to
breach any of the covenants of Section 7 or 8, and remedies at law (such as
monetary damages) for any breach of the Executive's covenants under Section 7
or 8 would be inadequate. The Company acknowledges and agrees that a breach or
threatened breach of any provision of Section 7 would result in immediate,
substantial and irreparable harm to the Executive for which money damages do
not provide an adequate remedy. The Company also acknowledges and agrees that
it would be impractical and excessively difficult to determine the actual
damages of the Executive in the event the Company breached or threatened to
breach any of the covenants of Section 7, and remedies at law (such as
monetary damages) for any breach of the Company's covenants under Section 7
would be inadequate. The parties therefore agree


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and consent that if either of them commits any such breach or threatens to
commit any such breach, the other party shall have the right (in addition to,
and not in lieu of, any other right or remedy that may be available to it) to
temporary and permanent injunctive relief from a court of competent
jurisdiction, without posting any bond or other security and without the
necessity of proof of actual damage. With respect to any provision of Sections
7 or 8 that is finally determined to be unenforceable, the Executive and the
Company hereby agree that this Agreement or any provision hereof may be
reformed so that it is enforceable to the maximum extent permitted by law. If
any of the covenants of Sections 7 or 8 is determined to be wholly or
partially unenforceable in any jurisdiction, such determination shall not be a
bar to or in any way diminish the Company's right to enforce any such covenant
in any other jurisdiction.

          11. Return of Property. By the Termination Date (or shortly
thereafter) the Executive represents that he returned to the Company any and
all property of the Company and/or its Affiliated Entities in the Executive's
possession (including property embodying Confidential Information) including,
without limitation, any and all records, manuals, customer lists, notebooks,
computers, computer programs, cellular phones, files, papers, electronically
stored information and documents, and all copies thereof, kept or made by the
Executive in connection with the Executive's employment. Anything to the
contrary notwithstanding, and in all cases regardless of whether the
information is retained in original form, as a copy, electronically or
otherwise, the Executive shall be entitled to retain (A) papers and other
materials of a personal nature, including, without limitation, personal
photographs, correspondence, diaries, calendars and rolodexes, files relating
to his personal affairs and personal phone books, (B) information showing his
compensation or relating to reimbursement


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of expenses, (C) information he reasonably believes may be needed for his
personal tax purposes and (D) copies of plans, programs and agreements
relating to his employment, or termination thereof, with the Company.

         12. Entire Agreement; Other Benefits. This Agreement sets forth the
entire agreement between the Company and its Affiliated Entities and the
Executive with respect to the subject matter hereof and supersedes and cancels
all prior and contemporaneous written and oral agreements between the Company
and its Affiliated Entities and Executive with respect to the subject matter
hereof, and supersedes any severance plan, policy or arrangement of the
Company and its Affiliated Entities. Notwithstanding the foregoing, nothing
contained in this Section 12 is intended to limit any right, including any
right to a payment or vested benefit, the Executive may have to vested
benefits and Stock Incentives pursuant to the terms and conditions of the
applicable plan documents, as modified by this Agreement, including, without
limitation, the plans referred in Sections 2, 3 and 6. In the event that any
term or provision of this Agreement is inconsistent with any other agreement,
plan, program, policy or other arrangement of the Company or its Affiliated
Entities, or any term of provision thereof, this Agreement, and any such term
or provision hereof, shall prevail. Without limiting the generality of the
foregoing, the Executive expressly acknowledges and agrees that except as
specifically set forth in this Agreement, he is not entitled to receive any
severance pay, severance benefits, compensation, incentive compensation, Stock
Incentives or employee benefits of any kind whatsoever from the Company or its
Affiliated Entities.

          13. Successors. This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by
the Executive other than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be


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<PAGE>


enforceable by the Executive's legal representatives and designated
beneficiaries. This Agreement shall inure to the benefit of and be binding
upon the Company and its successors. In the event of a change of control of
the Company, this Agreement will inure to the benefit of and become an
obligation of the successor to the Company or the acquirer of all or
substantially all of its assets.

          14. Amendment. This Agreement may be amended, modified or changed
only by a written instrument executed by the Executive and the Company. Any
waiver to be effective must be in writing and signed by the party against whom
it is being enforced.

          15. Governing Law; Headings; Arbitration. (a) This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York, without reference to principles of conflict of laws.

               (b) The headings of this Agreement are not part of the
provisions hereof and shall have no force or effect.

               (c) Any disputes, controversies and claims arising out of or
relating to this Agreement shall be determined by an arbitral tribunal of
three arbitrators under the rules of the American Arbitration Association in
New York, New York. Each party shall bear its own expenses in the arbitration.
This paragraph shall not, however, be deemed a waiver of either party's right
to injunctive relief as provided in Section 10(d).

          16. Notices. All notices and other communications hereunder shall be
in writing; shall be delivered by hand delivery to the other party or mailed
by overnight mail or


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registered or certified mail, return receipt requested, postage prepaid; shall
be deemed delivered

                 [Remainder of page intentionally left blank.]


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upon actual receipt; and shall be addressed as follows:

                                    If to the Executive:
                                    --------------------

                                    At the last address on
                                    File with the Company

                                    With a copy to:
                                    ---------------

                                    Joseph E. Bachelder, Esq.
                                    The Bachelder Law Firm
                                    780 Third Avenue
                                    29th Floor
                                    New York, NY 10018

                                    If to the Company:
                                    ------------------

                                    Morgan Stanley
                                    1585 Broadway
                                    New York, NY  10036
                                    Attention:  Karen Jamesley

or to such other address as either party shall have furnished to the other in
writing in accordance herewith.

          17. Tax Withholding. Notwithstanding any other provision of this
Agreement, the Company may withhold from any amounts payable under this
Agreement, or any other benefits received pursuant hereto, such Federal, state
and/or local taxes as shall be required to be withheld under any applicable
law or regulation.


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<PAGE>


          18. No Mitigation; No Offset. In no event shall the Executive be
obligated to seek other employment or take any other action by way of
mitigation of the amounts payable under this Agreement. There shall be no
offset by the Company against the Executive's entitlements under this
Agreement for any compensation or other amounts that he earns from subsequent
employment or engagement of his services or on account of any claim that the
Company may have against him. In no event shall the Company have a right of
offset against any account that the Executive maintains with the Company,
including without limitation, his brokerage account, on account of any claims
arising under this Agreement.

          19. Company Representation. The Company represents and warrants to
the Executive that (i) the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized on behalf of the Company by its Board of
Directors or a committee thereof and that all corporate action required to be
taken by the Company for the execution, delivery and performance of this
Agreement has been or promptly shall be duly and effectively taken; (ii) the
officer signing this Agreement on behalf of the Company is duly authorized to
do so; (iii) the execution, delivery and performance of this Agreement by the
Company does not violate any applicable law, regulation, order, judgment or
decree or any agreement, plan or corporate governance document to which the
Company is a party or by which it is bound; and (iv) upon execution and
delivery of this Agreement by the parties, and unless this Agreement is
revoked by the Executive within seven (7) days after the Execution Date, it
shall be a valid and binding obligation of the Company enforceable against it
in accordance with its terms, except: (a) to the extent that enforceability
may be limited by applicable bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally; or (b) in the event that
Executive materially breaches


                                      20
<PAGE>


a material provision of the Agreement which is not fully cured (if curable)
within 15 days after receipt of notice from the Company specifying the nature
of such breach.

          20. Indemnification and Insurance. The Company's certificate of
incorporation and bylaws provide that the Company will indemnify, to the
fullest extent permitted by the General Corporation Law of the State of
Delaware (the "DGCL"), each person who was, is or is threatened to be involved
in any threatened, pending or completed action, suit or proceeding by reason
of the fact that he or she is or was a director or officer of the Company or a
director or elected officer of a majority-owned subsidiary of the Company. In
addition, the Company's bylaws provide that the Company will pay to such
persons expenses that are incurred in defense of a proceeding in advance of
the final disposition of the proceeding upon receipt of an undertaking by or
on behalf of such person to repay the amount if it is ultimately determined
that such person is not entitled to indemnification. The Company's directors
and officers liability insurance policy provides, subject to certain
limitations, for reimbursement of any person who serves or served as a
director or officer of the Company for loss incurred by such person resulting
from any claim first made against such person during the policy period for a
wrongful act, except where indemnified by the Company. Nothing in this
Agreement shall be construed to alter (a) the provisions regarding directors'
liability, indemnification and advancement of expenses contained in the
Company's certificate of incorporation and bylaws (including the DGCL
requirement that any Company-provided indemnification must be authorized upon
a determination that the person seeking indemnification has met applicable
statutorily mandated standards of conduct) or (b) the provisions contained in
the Company's directors and officers insurance policy, in each case as they
would relate to the Executive.


                                      21
<PAGE>


          21. This Agreement may be executed in counterparts by facsimile
signatures.

THE EXECUTIVE EXPRESSLY ACKNOWLEDGES, REPRESENTS, AND WARRANTS THAT HE HAS
READ THIS AGREEMENT CAREFULLY; THAT HE FULLY UNDERSTANDS THE TERMS,
CONDITIONS, AND SIGNIFICANCE OF THIS AGREEMENT; THAT THE COMPANY HAS ADVISED
HIM TO CONSULT WITH AN ATTORNEY CONCERNING THIS AGREEMENT; THAT HE HAS HAD A
FULL OPPORTUNITY TO REVIEW THIS AGREEMENT WITH AN ATTORNEY; THAT HE
UNDERSTANDS THAT THIS AGREEMENT HAS BINDING LEGAL EFFECT; AND THAT HE HAS
EXECUTED THIS AGREEMENT FREELY, KNOWINGLY AND VOLUNTARILY.

          PLEASE READ CAREFULLY. THIS AGREEMENT HAS IMPORTANT LEGAL
CONSEQUENCES.


          IN WITNESS WHEREOF, each of the parties hereto has duly executed
this Agreement as set forth below:

                                           MORGAN STANLEY


                                           By: /s/ Karen C. Jamesley
                                               ---------------------

                                           Date:  November 22, 2005



                                           /s/ John Havens
                                           -----------------------
                                               John Havens

                                           Date:  November 22, 2005



                                      22
<PAGE>


                                  Exhibit A


<PAGE>


John Havens
-----------


<TABLE>
<CAPTION>

                                                                                                                    As of 10/18/2005


Units
                                               Original         Vested     Unvested                        Value of        Value of
                                                 Amount           Held         Held     Canceled          Vested(a)     Unvested(a)
                                         -------------------------------------------------------------------------------------------
<S>       <C>                                 <C>            <C>               <C>          <C>       <C>                     <C>
MSCO      2001 EICP  Year-end                 62,544.00      62,544.00         0.00         0.00      $3,291,065.28           $0.00
MSCO      2002 EICP  Year-end                 58,351.00      58,351.00         0.00         0.00      $3,070,429.62           $0.00
MSCO      2003 EICP  Year-end                 58,313.00      58,313.00         0.00         0.00      $3,068,430.06           $0.00
MSCO      2004 EICMC Year-end                158,603.00     158,603.00         0.00         0.00      $8,345,689.86           $0.00
                                         -------------------------------------------------------------------------------------------
                                             337,811.00     337,811.00         0.00         0.00     $17,775,614.82           $0.00

<CAPTION>

                                            Value of      Conversion
                                         Canceled(a)      Date(b)
                                         ------------------------------------
<S>       <C>                                  <C>        <C>                <C>              <C>
MSCO      2001 EICP  Year-end                  $0.00      Mar 31,2006        or               Sep 8, 2006
MSCO      2002 EICP  Year-end                  $0.00      Mar 31,2006        or               Sep 10, 2007
MSCO      2003 EICP  Year-end                  $0.00      Mar 31,2006        or               Sep 8, 2008
MSCO      2004 EICMC Year-end                  $0.00      Sep 8, 2009   FC Conv. choice not written into terms due to Jobs Act
                                         -----------
                                               $0.00
</TABLE>



<TABLE>
<CAPTION>

Options
                                               Original         Vested     Unvested                        Value of        Value of
                                                 Amount           Held         Held     Canceled          Vested(a)     Unvested(a)
                                         -------------------------------------------------------------------------------------------
<S>       <C>                                 <C>            <C>               <C>          <C>               <C>             <C>
MSCO      1997 EICP  Restore options          61,929.00      61,929.00         0.00         0.00              $0.00           $0.00
          to another award
MSCO      1998 EICP  Year-end                 84,684.00      84,684.00         0.00         0.00      $1,437,510.90           $0.00
MSCO      1999 EICP  Year-end                 70,306.00      70,306.00         0.00         0.00              $0.00           $0.00
MSCO      2000 EICP  Year-end                169,208.00     169,208.00         0.00         0.00              $0.00           $0.00
MSCO      2001 EICP  Year-end                140,725.00     140,725.00         0.00         0.00              $0.00           $0.00
MSCO      2002 EICP  Year-end                131,291.00     131,291.00         0.00         0.00      $1,321,063.17           $0.00
MSCO      2003 EICP  Year-end                131,205.00     131,205.00         0.00         0.00              $0.00           $0.00
                                         -------------------------------------------------------------------------------------------
                                             789,348.00     789,348.00         0.00         0.00      $2,758,574.07           $0.00

<CAPTION>

                                            Value of    Restriction      Strike    Expiration
                                         Canceled(a)    Lift(b)          Price     Date(b)
                                         -----------------------------------------------------
<S>       <C>                                  <C>      <C>            <C>         <C>            <C>
MSCO      1997 EICP  Restore options           $0.00    Jan 2,2003     $57.0100    Jan 2, 2008    Full life of vested options
          to another award
MSCO      1998 EICP  Year-end                  $0.00    Jan 2,2004     $35.6450    Jan 2, 2009    Full life of vested options
MSCO      1999 EICP  Year-end                  $0.00    Jan 2,2005     $60.1384    Jan 2, 2010    Full life of options per Agreement
MSCO      2000 EICP  Year-end                  $0.00    Jan 2,2006     $65.3375    Jan 2, 2011    Full life of options per FC
MSCO      2001 EICP  Year-end                  $0.00    Mar 31,2006    $57.0258    Jan 2, 2012    Full life of options per FC
MSCO      2002 EICP  Year-end                  $0.00    Mar 31,2006    $42.5579    Jan 2, 2013    Full life of options per FC
MSCO      2003 EICP  Year-end                  $0.00    Mar 31,2006    $55.4472    Jan 2, 2014    Full life of options per FC
                                         -----------
                                               $0.00
</TABLE>


a)    Based on the fair market value of MWD stock of $52.6200 on October 17,
      2005.

b)    For the 2001, 2002 and 2003 unit awards, Full Career employees can
      choose to convert one year after termination or on schedule. Dates are
      subject to change by the Morgan Stanley Board of Director's Compensation
      Committee.

FC = Full Career

Full Career - 1 Qualified (Management Committee Awards 2000 and Forward only)

--------------------------------------------------------------------------------
This is a highly abbreviated general description of the estimated amount of
your awards that would be subject to cancellation under various scenarios.
This summary does not address all features of your awards and is not a
complete description of the relevant cancellation provisions. Please see the
terms and conditions set forth in your award certificates for important
details, which may differ from the description in this summary. If there is
any conflict between the terms, conditions or amounts subject to cancellation
described in this summary and in your award certificates, the latter will
control. As described in your award certificates, Morgan Stanley reserves the
right to modify the terms of awards to the extent necessary or advisable in
order to comply with the American Jobs Creation Act of 2004, including,
without limitation, the payment provisions applicable to stock units.
--------------------------------------------------------------------------------