Document:

Exhibit 10.1

 

 

MORGAN STANLEY

EQUITY INCENTIVE COMPENSATION PLAN

(Amended and Restated as of March 26, 2021)

 

1.                  
Purpose. The primary purposes of the Morgan Stanley
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 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 ‎12(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.

 

“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.

 

“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 ‎11, including any such Other Award the receipt of which
was elected pursuant to Section ‎12(a).

 

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

 

“Plan”
means the Morgan Stanley Equity Incentive Compensation Plan, as amended from time to time in accordance with Section ‎15(f).

 

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

 

“Shares”
means shares of Stock.

 

“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, 2027.

 

4.                Stock Subject to Plan.

 

(a)             
Overall Plan Limit. The total number of Shares that may be delivered pursuant to Awards shall
be 433,000,000 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) and the maximum number of Incentive Stock Options as provided in
Section 4(e), and (ii) the number and kind of shares subject to any outstanding Award and the 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.

 

(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.

 

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, 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 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.

 

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 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.            
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, including
the attainment of performance objectives or (iv) any combination of the foregoing. Awards pursuant to this Section 11 may, among other
things, be made subject to restrictions on transfer, vesting requirements or cancellation under specified circumstances.

 

12.            
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 the Award under
specified circumstances, restrictions on transfer or provision for mandatory resale to the Company).

 

13.            
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 12(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.

 

14.           
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.

 

15.            
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 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 and Exclusive Jurisdiction. The Plan and all rights hereunder shall be governed
by, and construed and enforced in accordance with, 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 or procedural law of another jurisdiction.
Unless the Participant is bound by an arbitration agreement with Morgan Stanley (or its parents, subsidiaries, affiliates, predecessors,
successors or assigns) covering any dispute arising out of or in any way connected with the Plan, a Participant’s participation
in the Plan or rights under the Plan, the United States District Court for the Southern District of New York shall have exclusive jurisdiction
over any such dispute or, if the United States District Court for the Southern District of New York does not have subject matter jurisdiction,
the Supreme Court for the State of New York, New York County shall have exclusive jurisdiction.

 

(e)             
Severability. The provisions set forth herein shall be severable and, if any provision of
this Plan shall be determined to be legally unenforceable or void, such unenforceable or void provision shall not affect the legality,
validity or enforceability of the remaining provisions hereof and may be severed from the remaining provisions as appropriate, to the
extent permitted by law. If a tribunal of competent jurisdiction determines that a particular provision set forth herein is invalid,
unenforceable, or void under the applicable law in a particular jurisdiction, such provision will not be enforced in that jurisdiction,
but shall remain effective and enforceable in all other jurisdictions. 

 

(f)               
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.Exhibit
4.1

 

Form
51-102F3 

Material
Change Report

 

		Item 1 	Name
                                         and Address of Company

 

Nouveau
Monde Graphite Inc. (“NMG” or the “Company”)

331,
Brassard Street 

Saint-Michel-des-Saints,
QC, J0K 3B0

 

		Item 2	Date
                                         of Material Change

 

July 14, 2020

 

		Item
                                         3	News
                                         Release

 

The
press release was disseminated on July 15, 2020 with respect to the material change and was filed on SEDAR.

 

		Item
                                         4	Summary
                                         of Material Change

 

On
July 15, 2020, the Company announced that it had agreed with Pallinghurst Graphite Limited (“Pallinghurst”) financing
transactions totaling C$20 million that will fund the next phase of NMG’s development. The Company has entered into a convertible
bond subscription agreement (the “Subscription Agreement”) with Pallinghurst pursuant to which NMG has agreed
to issue to Pallinghurst a secured convertible bond (the “Bond Transaction”). Concurrently, the Company has also
entered into a royalty purchase agreement with Pallinghurst pursuant to which Pallinghurst has agreed to exchange the principal
amount and accrued interest under its existing debt facility which has a principal amount of C$4 million into a net smelter return
royalty (the “Royalty”) on the Matawinie graphite mining project (the “Royalty Transaction”
and together with the Bond Transaction, the “Transactions”).

 

		Item
                                         5	Full
                                         Description of Material Change

 

Under
the terms of the Subscription Agreement, the secured convertible bond (the “Bond”) is a three- year instrument
with a principal amount of C$15 million. The principal amount under the Bond will bear interest at a rate per annum of 15%, payable
annually commencing on December 31, 2020. Accrued interest under the Bond will be capitalized quarterly and added to the principal
amount thereunder unless NMG elects to settle any accrued interest with Pallinghurst at the end of a given calendar quarter, otherwise,
the annual payment of any interest shall be made in cash or in shares at the Company’s discretion. The principal amount, together
with all accrued and unpaid or uncapitalized interest thereunder, will become payable on the date that is 36 months following
the issuance of the Bond. The Company’s obligations under the Bond will be secured by a hypothec in favour of Pallinghurst over
substantially all of NMG’s movable and immovable assets, subject to certain existing permitted encumbrances.

 

At
any time, Pallinghurst will have the right to convert all or a portion of the Bond into such number of common shares of NMG equal
to the principal amount being converted, divided by the conversion price of C$0.20 per common share. Pallinghurst will also have
the right to convert all or a portion of any accrued and unpaid or uncapitalized interest under the Bond into common shares of
NMG at the market price of the common shares at the future time of conversion subject to TSXV approval at such time. The Bond
(and the common shares the Bond may be converted into) will be subject to a hold period of four months from the date of issuance
of the Bond in accordance with applicable Canadian securities laws.

    

     

    

Concurrently
with the issuance of the Bond, the Company will issue to Pallinghurst common share purchase warrants entitling Pallinghurst to
purchase up to 75,000,000 common shares of NMG, subject to customary anti-dilution clauses, at a price of C$0.22 per common share
for a period of 36 months from the issuance date of the warrants (the “Warrants”). The Warrants (and the underlying
common shares) will be subject to a hold period of four months from the date of issuance of the Warrants in accordance with applicable
Canadian securities laws.

 

The
proceeds of the Bond Transaction will be used for the development of the Matawinie graphite property and general working capital
purposes of the Company.

 

In
addition, concurrently with the entering into of the Subscription Agreement, NMG entered into the royalty purchase agreement whereby
NMG will issue and sell a 3.0% Royalty to Pallinghurst for an aggregate purchase price of C$4 million plus accrued interest. For
a period of three years following issuance thereof, the Royalty will be subject to a 1.0% buy back right in favor of the Company.
The consideration to be paid by NMG upon exercise of its buy back right will be equal to approximately C$1.3 million, plus an
amount equal to interest accrual at a rate of 9.0% per annum from and after the closing of the Transactions up to the buyback
date. Pursuant to the Royalty, Pallinghurst will have the right, for a period of three years following closing of the Transactions,
to request that the Royalty be converted into a graphite stream agreement or other similar forward purchase agreement, provided
that NMG will not be required to complete any such conversion if such conversion could have a negative impact on NMG.

 

The
final purchase price for the Royalty will be established at closing of the Transactions, and will be equal to the sum of (i) C$4
million, plus (ii) an amount equal to all accrued and unpaid interest under a promissory note dated June 27, 2019 in the principal
amount of C$2 million and a promissory note dated March 16, 2020 in the principal amount of C$2 million (the “Promissory
Notes”). The purchase price for the Royalty will be satisfied by setting-off all amounts owing by NMG to Pallinghurst
under the Promissory Notes.

 

Closing
of the Transactions is expected to occur at the end of August 2020 and is subject to customary closing conditions, including obtaining
final regulatory approvals and approval from a majority of the minority shareholders of NMG, as well as to the concurrent closing
of both the Bond Transaction and the Royalty Transaction.

 

Pallinghurst
owns, or exercises control or direction over, more than 10% of the outstanding voting securities of NMG and as such, Pallinghurst
is a related party of NMG. The Transactions constitute a “related party transaction” within the meaning of Regulation
61-101 – Protection of Minority Security Holders in Special Transactions (“Regulation 61-101”) and
Policy 5.9 – Protection of Minority Security Holders in Special Transactions of the TSXV. The Company relied on the
exemption from the valuation requirements contained in section 5.5(b) of Regulation 61-101 in respect of related party participation
in the Transactions, as the securities of the Company are not listed on any of the specified markets.

 

Pallinghurst
currently owns 52,350,000 common shares of NMG representing 19.99% of the issued and outstanding common shares. Assuming the conversion
in whole of the Bond, Pallinghurst would own 127,350,000 common shares of NMG representing 37.80% of the issued and outstanding
common shares. In addition, assuming the conversion in whole of the Bond and the exercise in full of the Warrants, NMG would receive
additional proceeds of $16.5 million upon exercise of the Warrants and Pallinghurst would own 202,350,000 common shares of NMG
representing 49.12% of the then issued and outstanding common shares.

 

The
board of directors of NMG has unanimously approved the Transactions, with interested directors Arne H. Frandsen and Chris Shepherd
having declared a conflict of interest in, and abstaining from voting on, the matters being considered.

    

     

    

		Item
                                         6	Reliance
                                         on subsection 7.1(2) of National Instrument 51-102

 

Not
applicable.

 

		Item
                                         7	Omitted
                                         Information

 

Not
applicable.

 

		Item
                                         8	Executive
                                         Officer

 

The
following executive officer is knowledgeable about the material change and may be contacted about this report.

 

Eric
Desaulniers

edesaulniers@nouveaumonde.ca 

+1
819 923-0333

 

		Item
                                         9	Date
                                         of Report

 

July
24, 2020

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