Exhibit 10.2


                       SETTLEMENT AND RELEASE AGREEMENT

                                  * * * * * *

         This Settlement and Release Agreement dated November 22, 2005 (the
"Agreement") by and between Morgan Stanley (the "Company") and Vikram Pandit
(the "Executive") sets forth the agreement reached concerning the termination
of the 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 Nine Million Thirty-Seven
Thousand Five Hundred Dollars and no cents ($9,037,500.00), 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.

         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, 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.





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<PAGE>


         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 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



                                      4
<PAGE>

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 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,




                                      5
<PAGE>

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 "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,




                                      6
<PAGE>

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
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




                                      7
<PAGE>

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 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



                                      8
<PAGE>

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 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



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<PAGE>

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 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


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<PAGE>


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).

         (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.


                                      11
<PAGE>


         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 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


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<PAGE>


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), 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.


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<PAGE>


         (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 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


                                      14
<PAGE>


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 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


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<PAGE>


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 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.


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<PAGE>


         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 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


                                      19
<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.


                                      20
<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/ Vikram Pandit
                                           -----------------------------
                                               Vikram Pandit

                                           Date:  November 22, 2005



                                      21


<PAGE>


                                  Exhibit A

<PAGE>


<TABLE>
<CAPTION>


                                                                                                                 As of 10/18/2005

Vikram Pandit


Units
                                           Original         Vested      Unvested      Canceled         Value of       Value of
                                             Amount           Held          Held                       Vested(a)    Unvested(a)
                                       ------------------------------------------------------------------------------------------
<S>               <C>                     <C>            <C>                <C>           <C>    <C>                     <C>
MSCO              2001 EICP  Year-end     70,582.00      70,582.00          0.00          0.00    $3,714,024.84          $0.00
MSCO              2002 EICP  Year-end     67,163.00      67,163.00          0.00          0.00    $3,534,117.06          $0.00
MSCO              2003 EICP  Year-end     69,585.00      69,585.00          0.00          0.00    $3,661,562.70          $0.00
MSCO              2004 EICMC Year-end    181,440.00     181,440.00          0.00          0.00    $9,547,372.80          $0.00
                                       ------------------------------------------------------------------------------------------
                                         388,770.00     388,770.00          0.00          0.00   $20,457,077.40          $0.00


<CAPTION>

Units
                                          Value of     Conversion
                                        Canceled(a)       Date(b)
                                       --------------------------
<S>               <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      Canceled         Value of       Value of
                                             Amount           Held          Held                       Vested(a)    Unvested(a)
                                       ------------------------------------------------------------------------------------------
<S>               <C>                  <C>            <C>                   <C>           <C>     <C>                    <C>
MSCO              1997 EICP  Year-end    122,614.00     122,614.00          0.00          0.00    $3,151,792.87          $0.00
MSCO              1998 EICP  Year-end    214,606.00     214,606.00          0.00          0.00    $3,642,936.85          $0.00
MSCO              1999 EICP  Year-end    183,326.00     183,326.00          0.00          0.00            $0.00          $0.00
MSCO              2000 EICP  Year-end    214,654.00     214,654.00          0.00          0.00            $0.00          $0.00
MSCO              2001 EICP  Year-end    158,809.00     158,809.00          0.00          0.00            $0.00          $0.00
MSCO              2002 EICP  Year-end    151,117.00     151,117.00          0.00          0.00    $1,520,554.37          $0.00
MSCO              2003 EICP  Year-end    156,567.00     156,567.00          0.00          0.00            $0.00          $0.00
                                       ------------------------------------------------------------------------------------------
                                       1,201,693.00   1,201,693.00          0.00          0.00    $8,315,284.09          $0.00

<CAPTION>


Options


                                            Value of   Restriction     Strike   Expiration
                                         Canceled(a)       Lift(b)      Price       Date(b)
                                         --------------------------------------------------
<S>               <C>                         <C>     <C>            <C>       <C>           <C>
MSCO              1997 EICP  Year-end         $0.00    Jan 2,2003    $26.9150  Jan 2, 2008   Full life of options per FC
MSCO              1998 EICP  Year-end         $0.00    Jan 2,2004    $35.6450  Jan 2, 2009   Full life of options per FC
MSCO              1999 EICP  Year-end         $0.00    Jan 2,2005    $60.1384  Jan 2, 2010   Full life of options per FC
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



a) Based on the fair market value of MWD stock of $52.62 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



        ----------------------------------------------------------------------------------------------------------------------
          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.
        ----------------------------------------------------------------------------------------------------------------------
</TABLE>