Document:

Exhibit 10.1

 

AMENDMENT TO LEASE

 

This Amendment to Lease (“Amendment”) is made this 13th day of May, 2015 by and between Faith Realty II, LLC (“Landlord”) and Summer Infant (USA), Inc. (“Tenant”).

 

BACKGROUND

 

The Landlord and Tenant entered into that certain Lease dated March 24, 2009 (“Lease”), pursuant to which the Landlord leased to the Tenant the Premises and the Landlord’s Property.  The Landlord and Tenant desire to extend the Initial Term and to make certain other modifications to the Lease, all on the terms and conditions hereinafter set forth.

 

Now, therefore, in consideration of the mutual promises set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Landlord and Tenant agree as follows:

 

1.                                      Capitalized terms not otherwise defined herein shall have the same meaning ascribed to such terms in the Lease.

 

2.                                      Paragraph 5A of the Summary of Basic Terms is hereby deleted in its entirety and replaced with the following:

 

“5A.                       Lease Term:                            From the Commencement Date (March 24, 2009) through and including  March 31, 2018, subject to extension in accordance with Section 2.4 (b).”

 

3.                                      Paragraph 5D of the Summary of Basic Terms is hereby amended by changing Tenant’s right to extend Lease Term for one term of five (5) years to for one term of three (3) years.

 

4.                                      Paragraph 9 of the Summary of Basic Terms is hereby deleted in its entirety and replaced with the following:

 

“9.                                Base Rent: Base Rent for the Initial Term and Extension Term shall be as follows:

 

	
 
    	
 
    	
Annual
    	
 
    	
Monthly
    	
 
    	
PSF
    	
 
    
	
Period
    	
 
    	
Rent
    	
 
    	
Rent
    	
 
    	
Rate
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Rent Commencement Date through March 31, 2016
    	
 
    	
$
    	
390,000.00
    	
 
    	
$
    	
32,500.00
    	
 
    	
$
    	
7.50
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
April 1, 2016 through March 31, 2018
    	
 
    	
$
    	
429,000.00
    	
 
    	
$
    	
35,750.00
    	
 
    	
$
    	
8.25
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Three (3) years of the Extension Term (if   Tenant elects to exercise such extension) (April 1, 2018 through   March 31, 2021)
    	
 
    	
$
    	
468,000.00
    	
 
    	
$
    	
39,000.00
    	
 
    	
$
    	
9.00
    	
”
    

 

 

5.                                      Paragraph 14A of the Summary of Basic Terms is hereby amended by inserting the name of William Mote, CFO for Joseph Driscoll, CFO as the contact party for notice to the Tenant, and by replacing John M. Bello, Esq. with James Redding, Esq. as the contact party for notice to Greenberg Traurig, LLP.

 

6.                                      The definition of “Initial Term”, set forth in Article I of the Lease is hereby deleted in its entirety and replaced with the following:

 

““Initial Term” means the period beginning on the Commencement Date and extending through and including March 31, 2018.”

 

7.                                      Section 2.4 (a) of the Lease is hereby amended by replacing “seventh (7th)” with “ninth (9th)” in the second line thereof.

 

8.                                      Section 2.4 (b) is hereby amended in its entirety and replaced with the following:

 

“Provided an Event of Default does not then exist, Tenant shall have the right to extend the Lease Term for one (1) period of three (3) years by giving Landlord written notice specifying such extension, which notice must be received by Landlord no later than  twelve (12) months prior to the expiration of the Initial Term.  If such extension becomes effective, the Lease Term shall be automatically extended upon the same terms and conditions as were applicable to the Initial Term, except that (i) Base Rent for the Extension Term shall be the amount set forth in Item 9 of the Summary of Basic Terms, and (ii) there shall be no further right to extend or renew the Lease Term beyond the Extension Term.”

 

9.                                      Section 7.5 of the Lease is hereby amended by having the existing Section captioned as Section 7.5 (a) and having a new section (b) added immediately thereafter to read as follows:

 

“(b)                           In the event that Tenant desires from time to time to make any changes in or additions to the Landlord’s Property after the date of this Amendment, other than Permitted Alterations, then provided that Tenant complies with the provisions of Section 7.5 (a) above, in connection with such changes or additions the Landlord shall provide the Tenant an aggregate improvement allowance, not to exceed the lesser of (i) $78,000 or (ii) the verifiable cost to Tenant of such improvements undertaken by Tenant after the date of this Amendment (“Improvement Allowance”), provided, however, if the Tenant exercises its right to extend the Initial Term of the Lease then the Landlord shall provide the Tenant with an additional aggregate allowance, not to exceed the lesser of (x) $234,000 or (y) the verifiable cost to Tenant of such improvements undertaken by Tenant after the date of this Amendment (“Extended Term Improvement Allowance”).  The Improvement Allowance shall be applied to reduce the Monthly Rent during the period April 1, 2016 through March 31, 2018 in an amount equal to the quotient determined by dividing the Improvement Allowance by 24 (or, if less than 24 months remain in the Initial Term, the number of months remaining in the Initial Term). The Extended Term Improvement Allowance shall be applied to reduce the Monthly Rent during the period April 1, 2018 through March 31, 2021 in an amount equal to the quotient determined by dividing the

 

2

 

Extended Term Improvement Allowance by 36 (or, if less than 36 months remain in the Extension Term, the number of months remaining in the Extension Term).”

 

10.                               Section 13.16 of the Lease is hereby deleted in its entirety and replaced with the following:

 

“Section 13.16. “Tenant’s Purchase Option”.                                               At any time during the first six (6) months of the seventh (7th) Lease Year of the Initial Term Tenant shall have the option of purchasing the Landlord’s Property for $4,457,750.00 by providing Landlord with written notice of its intention to do so setting forth a closing date which is at least three (3) months prior to the expiration of the seventh (7th) Lease year of the Initial Term and not less than fifteen (15) days after the date that such notice is sent. In connection with the foregoing, Landlord agrees that other than for any mortgages that Landlord may encumber the property with during the Initial Term (which mortgages Landlord agrees it shall be responsible for paying off and discharging in the event Tenant exercises its rights under this Section 13.16) of the Lease, Landlord shall not encumber, restrict or alienate all or any portion of the Landlord’s Property without the consent of the Tenant, which consent shall not be unreasonably withheld, conditioned or delayed. Landlord and Tenant agree (i) that all closing costs, including documentary stamps, recording charges and transfer taxes, shall be allocated in accordance with customary practice in the State of Rhode Island for similar transactions and (ii) to deliver such documents, certificates and affidavits as are customarily delivered in the State of Rhode Island for similar transactions.”

 

11.                               Except as modified or amended hereby, the Lease is hereby ratified and affirmed.

 

[Signature page follows]

 

3

 

Tenant and Landlord, each by its duly authorized officer, has signed this Amendment as of the date first set forth above.

 

	
 
    	
LANDLORD
    
	
 
    	
 
    
	
 
    	
Faith   Realty II, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jason P. Macari
    
	
 
    	
Name:
    	
Jason   P. Macari
    
	
 
    	
Title:
    	
President
    
	
 
    	
 
    
	
 
    	
TENANT
    
	
 
    	
 
    
	
 
    	
Summer   Infant (USA), Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   William Mote
    
	
 
    	
Name:
    	
William   Mote
    
	
 
    	
Title:
    	
CFO
    

 

4MORGAN STANLEY

2007 EQUITY INCENTIVE COMPENSATION PLAN

(Amended and Restated as of March 26, 2015)

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

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

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

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

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

“Award
Document” means a written document (including in electronic form) that sets forth the terms and conditions of an
Award. Award Documents shall be authorized in accordance with Section ‎‎13(e).

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

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

“Committee”
means the Compensation, Management Development and Succession Committee of the Board, any successor committee thereto or any other
committee of the Board appointed by the Board to administer the Plan or to have authority with respect to the Plan, or any subcommittee
appointed by such Committee. With respect to any provision regarding the grant of Qualifying Performance Awards, the Committee
shall consist solely of at least two “outside directors” as defined under Section 162(m) of the Code.

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

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

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

    1 

     

    

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

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

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

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

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

“Other
Award” means any other form of award authorized under Section ‎‎12, including any such Other Award the receipt
of which was elected pursuant to Section ‎‎13(a).

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

“Plan”
means the Morgan Stanley 2007 Equity Incentive Compensation Plan, as amended from time to time in accordance with Section ‎‎16(e).

“Qualifying
Performance Award” means an Award granted pursuant Section ‎11.

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

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

“Section
162(m) Participant” means, for a given performance period, any individual designated by the Committee by not later
than 90 days following the start of such performance period (or such other time as may be required or permitted by Section 162(m)
of the Code) as an individual whose compensation for such performance period may be subject to the limit on deductible compensation
imposed by Section 162(m) of the Code.

“Section
162(m) Performance Goals” means any performance formula that was approved by Morgan Stanley’s stockholders
and the performance objectives established by the Committee in accordance with Section ‎11 or any other performance goals approved
by Morgan Stanley’s stockholders pursuant to Section 162(m) of the Code.

“Section
409A” means Section 409A of the Code.

“Shares”
means shares of Stock.

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

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

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

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

3.Effective
Date and Term of Plan.

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

(b)Term
of Plan. No Awards may be made under the Plan after May 15, 2017.

4.Stock
Subject to Plan.

(a)Overall
Plan Limit. The total number of Shares that may be delivered pursuant to Awards shall be 303,000,000 as calculated pursuant
to Section ‎4(c). The number of Shares available for delivery under the Plan shall be adjusted as provided in Section
‎‎4(b). Shares delivered under the Plan may be authorized but unissued shares or treasury shares that Morgan Stanley
acquires in the open market, in private transactions or otherwise.

(b)Adjustments
for Certain Transactions. In the event of a stock split, reverse stock split, stock dividend, recapitalization, reorganization,
merger, consolidation, extraordinary dividend or distribution, split-up, spin-off, combination, reclassification or exchange of
shares, warrants or rights offering to purchase Stock at a price substantially below Fair Market Value or other change in corporate
structure or any other event that affects Morgan Stanley’s capitalization, the Committee shall equitably adjust (i) the number
and kind of shares authorized for delivery under the Plan, including the maximum number of Shares available for Awards of Options
or SARs as provided in Section ‎4(d), the maximum number of Incentive Stock Options as provided in Section ‎4(e)
and the individual Qualifying Performance Award maximum under Section ‎11, and (ii) the number and kind of shares subject
to any outstanding Award and the

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exercise or purchase
price per share, if any, under any outstanding Award. In the discretion of the Committee, such an adjustment may take the form
of a cash payment to a Participant. The Committee shall make all such adjustments, and its determination as to what adjustments
shall be made, and the extent thereof, shall be final. Unless the Committee determines otherwise, such adjusted Awards shall be
subject to the same vesting schedule and restrictions to which the underlying Award is subject.

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

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

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

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

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

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

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

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

    4 

     

    

5.Administration.

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

(b)Delegation.
To the extent not prohibited by applicable laws or rules of the New York Stock Exchange or, in the case of Qualifying Performance
Awards, Section 162(m) of the Code, the Committee may, from time to time, delegate some or all of its authority under the Plan
to one or more Administrators consisting of one or more members of the Committee as a subcommittee or subcommittees thereof or
of one or more members of the Board who are not members of the Committee or one or more officers of the Company (or of any combination
of such persons). Any such delegation shall be subject to the restrictions and limits that the Committee specifies at the time
of such delegation or thereafter. The Committee may at any time rescind all or part of the authority delegated to an Administrator
or appoint a new Administrator. At all times, an Administrator appointed under this Section ‎5(b) shall serve in
such capacity at the pleasure of the Committee. Any action undertaken by an Administrator in accordance with the Committee’s
delegation of authority shall have the same force and effect as if undertaken directly by the Committee, and any reference in the
Plan to the Committee shall, to the extent consistent with the terms and limitations of such delegation, be deemed to include a
reference to an Administrator.

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

(d)Committee
Discretion. All of the Committee’s determinations in carrying out, administering, construing and interpreting the Plan
shall be made or taken in its sole discretion and shall be final, binding and conclusive for all purposes and upon all persons.
In the event of

    5 

     

    

any disagreement between
the Committee and an Administrator, the Committee’s determination on such matter shall be final and binding on all interested
persons, including any Administrator. The Committee’s determinations under the Plan need not be uniform and may be made by
it selectively among persons who receive, or are eligible to receive, Awards under the Plan (whether or not such persons are similarly
situated). Without limiting the generality of the foregoing, the Committee shall be entitled, among other things, to make non-uniform
and selective determinations, and to enter into non-uniform and selective Award Documents, as to the persons receiving Awards under
the Plan, and the terms and provisions of Awards under the Plan.

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

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

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

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

    6 

     

    

9.Options.

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

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

(c)Prohibition
on Repricing of Options and SARs. Anything in the Plan to the contrary notwithstanding, the Committee may not reprice any Option
or SAR. “Reprice” means any action that constitutes a “repricing” under the rules of the New York Stock
Exchange or, except as otherwise expressly provided in Section 4(b), any other amendment to an outstanding Option or SAR that has
the effect of reducing its exercise price or any cancellation of an outstanding Option or SAR in exchange for cash or another Award.

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

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

10.SARs.
An Award of SARs shall be subject to the terms and conditions established by the Committee in connection with the Award and specified
in the applicable Award Document. The Committee shall establish (or shall authorize the method for establishing) the exercise price
of all SARs awarded under the Plan, except that the exercise price of a SAR shall not be less than 100% of the Fair Market Value
of one Share on the Award Date. Notwithstanding the foregoing, the exercise price of any SAR that is a Substitute Award may be
less than the Fair Market Value of one Share on the Award Date, subject to the

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same conditions set forth in Section ‎‎9(a)
for Options that are Substitute Awards. Upon satisfaction of the conditions to the payment of the Award, each SAR shall entitle
a Participant to an amount, if any, equal to the Fair Market Value of one Share on the date of exercise over the SAR exercise price
specified in the applicable Award Document. At the discretion of the Committee, payments to a Participant upon exercise of an SAR
may be made in Shares, cash or a combination thereof. SARs and the Shares that may be acquired upon exercise of SARs may, among
other things, be subject to restrictions on transfer, vesting requirements or cancellation under specified circumstances.

11.Qualifying
Performance Awards.

(a)The
Committee may, in its sole discretion, grant a Qualifying Performance Award to any Section 162(m) Participant. A Qualifying Performance
Award shall be subject to the terms and conditions established by the Committee in connection with the Award and specified in the
applicable Award Document, but in all events shall be subject to the attainment of Section 162(m) Performance Goals as may be specified
by the Committee. Qualifying Performance Awards may be denominated as a cash amount, number of Shares or other securities of the
Company, or a combination thereof. Subject to the terms of the Plan, the Section 162(m) Performance Goals to be achieved during
any performance period, the length of any performance period, the amount of any Qualifying Performance Award granted and the amount
of any payment or transfer to be made pursuant to any Qualifying Performance Award shall be determined by the Committee. The Committee
shall have the discretion, by Section 162(m) Participant and by Award, to reduce (but not to increase) some or all of the amount
that would otherwise be payable under the Award by reason of the satisfaction of the Section 162(m) Performance Goals set forth
in the Award. In making any such determination, the Committee is authorized in its discretion to take into account additional factors
that the Committee may deem relevant to the assessment of individual or company performance for the performance period.

(b)In
any calendar year, no one Section 162(m) Participant may be granted Awards pursuant to Section ‎11(a) that allow for
payments with an aggregate value determined by the Committee to be in excess of $10 million; provided that, to the extent
that one or more Qualifying Performance Awards granted to any one Section 162(m) Participant during any calendar year are denominated
in Shares, the maximum number of Shares that may underlie such awards will be determined by reference to the volume-weighted average
price of a Share of the Company on the first date of grant of such awards, subject to adjustment to the extent provided in Section
‎4(b). In the case of a tandem award pursuant to which a Section 162(m) Participant’s realization of a portion
of such award results in a corresponding reduction to a separate portion of the award, only the number of Shares or the cash amount
relating to the maximum possible realization under the award shall be counted for purposes of the limitations above (i.e.,
without duplication). For purposes of the foregoing sentence, the calendar year or years in which amounts under Qualifying Performance
Awards are deemed paid, granted or received shall be as determined by the Committee.

(c)Section
162(m) Performance Goals may vary by Section 162(m) Participant and by Award, and may be based upon the attainment of specific
or per-share amounts of, or changes in, one or more, or a combination of two or more, of the following: earnings (before or after
taxes); earnings per share; shareholders’ equity or return on shareholders’ equity; risk-weighted

    8 

     

    

assets or return on
risk-weighted assets; capital, capital ratios or return on capital; book value or book value per share; operating income (before
or after taxes); operating margins or pre-tax margins; stock price or total shareholder return; market share (including market
share of revenue); debt reduction or change in rating; or cost reductions. The Committee may provide that in measuring the achievement
of the performance objectives, an Award may include or exclude items such as realized investment gains and losses, extraordinary,
unusual or non-recurring items, asset write-downs, effects of accounting changes, currency fluctuations, acquisitions, divestitures,
reserve-strengthening, litigation, claims, judgments or settlements, the effect of changes in tax law or other such laws or provisions
affecting reported results and other non-operating items, as well as the impact of changes in the fair value of certain of the
Company’s long-term and short-term borrowings resulting from fluctuations in the Company’s credit spreads and other
factors. The foregoing objectives may be applicable to the Company as a whole, one or more of its subsidiaries, divisions, business
units or business lines, or any combination of the foregoing, and may be applied on an absolute basis or be relative to other companies,
industries or indices (e.g., stock market indices) or be based upon any combination of the foregoing. In addition to the
performance objectives, the Committee may also condition payment of any such Award upon the attainment of conditions, such as completion
of a period of service, notwithstanding that the performance objective or objectives specified in the Award are satisfied.

(d)Following
the completion of any performance period applicable to a Qualifying Performance Award, the Committee shall certify in writing the
applicable performance and amount, if any, payable to Section 162(m) Participants for such performance period. The amounts payable
to a Section 162(m) Participant will be paid following the end of the performance period after such certification by the Committee
in accordance with the terms of the Qualifying Performance Award.

(e)Without
further action by the Board, this Section ‎11 shall cease to apply on the effective date of the repeal of Section 162(m)
of the Code (and any successor provision thereof).

12.Other
Awards. The Committee shall have the authority to establish the terms and provisions of other forms of Awards (such terms and
provisions to be specified in the applicable Award Document) not described above that the Committee determines to be consistent
with the purpose of the Plan and the interests of the Company, which Awards may provide for (i) payments in the form of cash, Stock,
notes or other property as the Committee may determine based in whole or in part on the value or future value of Stock or on any
amount that Morgan Stanley pays as dividends or otherwise distributes with respect to Stock, (ii) the acquisition or future acquisition
of Stock, (iii) cash, Stock, notes or other property as the Committee may determine (including payment of dividend equivalents
in cash or Stock) based on one or more criteria determined by the Committee unrelated to the value of Stock, or (iv) any combination
of the foregoing. Awards pursuant to this Section ‎12 may, among other things, be made subject to restrictions on transfer,
vesting requirements or cancellation under specified circumstances.

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13.General
Terms and Provisions.

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

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

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

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

(e)Award
Documentation and Award Terms. The terms and conditions of an Award shall be set forth in an Award Document authorized by the
Committee. The Award Document shall include any vesting, exercisability, payment and other restrictions applicable to an Award
(which may include, without limitation, the effects of termination of employment, cancellation of

    10 

     

    

the Award under specified
circumstances, restrictions on transfer or provision for mandatory resale to the Company).

14.Certain
Restrictions.

(a)Stockholder
Rights. No Participant (or other persons having rights pursuant to an Award) shall have any of the rights of a stockholder
of Morgan Stanley with respect to Shares subject to an Award until the delivery of the Shares, which shall be effected by entry
of the Participant’s (or other person’s) name in the share register of Morgan Stanley or by such other procedure as
may be authorized by Morgan Stanley. Except as otherwise provided in Section ‎4(b) or 13‎(c), no adjustments
shall be made for dividends or distributions on, or other events relating to, Shares subject to an Award for which the record date
is prior to the date such Shares are delivered. Notwithstanding the foregoing, the terms of an Employee Trust may authorize some
or all Participants to give voting or tendering instructions to the trustee thereof in respect of Shares that are held in such
Employee Trust and are subject to Awards. Except for the risk of cancellation and the restrictions on transfer that may apply to
certain Shares (including restrictions relating to any dividends or other rights) or as otherwise set forth in the applicable Award
Document, the Participant shall be the beneficial owner of any Shares delivered to the Participant in connection with an Award
and, upon such delivery shall be entitled to all rights of ownership, including, without limitation, the right to vote the Shares
and to receive cash dividends or other dividends (whether in Shares, other securities or other property) thereon.

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

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

16.Miscellaneous
Provisions.

(a)Satisfaction
of Obligations. As a condition to the making or retention of any Award, the vesting, exercise or payment of any Award or the
lapse of any restrictions pertaining thereto, Morgan Stanley may require a Participant to pay such sum to the Company as may be
necessary to discharge the Company’s obligations with respect to any taxes, assessments or other governmental charges (including
FICA and other social security or similar tax) imposed on property or income received by a Participant pursuant to the Award or
to satisfy any obligation that the Participant owes to the Company. In accordance with rules and procedures authorized by Morgan
Stanley, (i) such payment may be in the form of cash or other property, including the tender of previously owned Shares, and (ii)
in satisfaction of such taxes, assessments or other governmental charges or, exclusively in the case of an Award that
does not constitute a deferral

 

    11 

     

    

 

of compensation subject to Section 409A, of other obligations that a Participant owes to the Company, Morgan Stanley may
make available for delivery a lesser number of Shares in payment or settlement of an Award, may withhold from any payment or distribution
of an Award or may enter into any other suitable arrangements to satisfy such withholding or other obligation. To the extent an
Award constitutes a deferral of compensation subject to Section 409A, the Company may not offset from the payment of such Award
amounts that a Participant owes to the Company with respect to any such other obligation except to the extent such offset is not
prohibited by Section 409A and would not cause a Participant to recognize income for United States federal income tax purposes
prior to the time of payment of the Award or to incur interest or additional tax under Section 409A.

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

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

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

(e)Amendments
and Termination. The Board or Committee may modify, amend, suspend or terminate the Plan in whole or in part at any time and
may modify or amend the terms and conditions of any outstanding Award (including by amending or supplementing the relevant Award
Document at any time); provided, however, that no such modification, amendment, suspension or termination shall, without
a Participant’s consent, materially adversely affect that Participant’s rights with respect to any Award previously
made; and provided, further, that the Committee shall have the right at any time, without a Participant’s consent
and whether or not the Participant’s rights are materially adversely affected thereby, to amend or modify the Plan or any
Award under the Plan in any manner that the Committee considers necessary or advisable to comply with any law, regulation, ruling,
judicial decision, accounting standards, regulatory guidance or other legal requirement. Notwithstanding the preceding sentence,
neither the Board nor the Committee may accelerate the payment or settlement of any Award, including, without limitation, any Award
subject to a prior deferral election, that constitutes a deferral of compensation for purposes of Section 409A except to the extent
such acceleration would not result in the Participant incurring interest or additional tax under Section 409A. No amendment to
the Plan may render any Board member who is not a Company employee eligible to receive an Award at any time while such member is
serving on the Board. To the extent required by applicable law or the rules of the New York Stock Exchange, amendments to the Plan
shall not be effective unless they are approved by Morgan Stanley’s stockholders.

    	12

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