Exhibit 10
AMENDED AND RESTATED
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EMPLOYMENT AGREEMENT
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This
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") by
and
between Morgan Stanley (the "Company"), and
John J. Mack (the "Executive")
dated as of September 20, 2005 amends and
restates the original employment
agreement entered into by and between the
Company and the Executive on June
30, 2005.
WHEREAS,
the Board of Directors of the Company (the "Board") has
determined that it is in the best interests
of the Company and its
shareholders to employ the Executive as the
Company's Chief Executive Officer
and to have the Executive become Chairman
and a member of the Board;
WHEREAS,
the Company desires to enter into an agreement embodying the
terms of such employment and service;
and
WHEREAS,
the Executive desires to enter into this Agreement and to
accept such employment and service, subject
to the terms and provisions of
this Agreement;
NOW,
THEREFORE, in consideration of the premises and mutual
covenants
contained herein and for other good and
valuable consideration, the receipt of
which is mutually acknowledged, the Company
and the Executive (individually a
"Party" and together the "Parties") agree
as follows:
1. Effective Date. The "Effective Date" shall mean June 30,
2005.
2. Employment Period. The Company hereby agrees to employ the
Executive, and the Executive hereby agrees
to be employed by the Company
subject to the terms and conditions of this
Agreement, for the period
commencing on the Effective Date and ending
on the fifth anniversary thereof
(the "Employment Period").
3. Terms of Employment. (a) Position and Duties. (i) During the
Employment Period, (A) the Executive shall
serve as the Chairman of the Board
and Chief Executive Officer of the Company,
with such authority, duties and
responsibilities as are commensurate with
such positions, reporting directly
to the Board, and (B) the Executive's
principal location of employment shall
be at the principal headquarters of the
Company; provided, that the Executive
may be required under reasonable business
circumstances to travel outside of
such location in connection with performing
his duties under this Agreement.
In addition, the Company shall cause the
Executive to be appointed as a member
of the Board as of the Effective Date, and
following such date, the Executive
shall remain on the Board, subject to
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Section 4(g), and shall perform his duties
as a director of the Company
conscientiously and faithfully.
(ii) The Executive agrees that during the Employment Period,
he shall devote substantially all of his
business time, energies and talents
to serving as the Company's Chairman of the
Board and Chief Executive Officer,
perform his duties conscientiously and
faithfully subject to the reasonable
and lawful directions of the Board, and in
accordance with each of the
Company's corporate governance and ethics
guidelines, conflict of interests
policies and code of conduct (collectively,
the "Company Policies") applicable
to all Company employees or senior
executives generally. During the Employment
Period, it shall not be a violation of this
Agreement for the Executive,
subject to the requirements of Section 8,
to (A) serve on corporate, civic or
charitable boards or committees, (B)
deliver lectures or fulfill speaking
engagements and (C) manage personal
investments, so long as such activities do
not materially interfere with the
performance of the Executive's
responsibilities as the Chief Executive
Officer or as Chairman or a director
of the Board in accordance with this
Agreement.
(b) Compensation. (i) Base Salary. During the Employment
Period,
the Executive shall receive an annualized
base salary ("Annual Base Salary")
of not less than the individual who served
as Chief Executive Officer of the
Company immediately prior to the Executive
(the "Prior CEO"), payable pursuant
to the Company's normal payroll practices.
During the Employment Period, the
current Annual Base Salary shall be
reviewed for increase only (and once
increased shall never be decreased) at such
time as the salaries of senior
executives of the Company are reviewed
generally, provided that, the
Executive's first such review shall occur
no earlier than fiscal year 2006.
(ii) Annual Bonus. For each fiscal year completed during the
Employment Period, the Executive shall be
eligible to receive an annual bonus
("Annual Bonus") on terms and conditions
and based upon performance targets
that are established by the Compensation,
Management Development and
Succession Committee of the Board or its
successor (the "Committee"), provided
that in no event shall such terms and
conditions or performance targets be
less favorable to the Executive than to
senior executives of the Company
generally.
(iii) Long-Term Incentive Compensation. For each fiscal year
completed during the Employment Period, the
Executive shall be eligible to
receive long-term incentive compensation
("Long-Term Incentive Compensation",
and together with Annual Base Salary and
Annual Bonus, "Total Compensation")
on terms and conditions no less favorable
to the Executive than (x) members of
the Management Committee of the Company
(the "Management Committee") generally
and (y) the terms and conditions of the
Equity Incentive Compensation Plan,
2004 Discretionary Retention Awards Award
Certificate (the "2004 EICP");
provided that for purposes of the Long-Term
Incentive Compensation (other than
the Special RSU Grant (as defined below)),
the Executive shall be treated as
if the Executive had been
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continuously employed by the Company and
had not terminated employment with
the Company in January 2001; provided,
further, that the Executive shall not
be so treated in the event that prior to
the first anniversary of the
Effective Date the Executive is terminated
for Cause (as defined below). The
proportion of Total Compensation provided
to the Executive as Annual Base
Salary, Annual Bonus and Long-Term
Incentive Compensation, respectively, for
each of fiscal years 2005 and 2006 shall be
substantially similar to the
proportion of Total Compensation provided
as Annual Base Salary, Annual Bonus
and Long-Term Incentive Compensation,
respectively, to members of the
Management Committee generally.
(iv) Special RSU Grant. As soon as practicable following the
Effective Date, the Executive shall be
granted a special one-time grant of
500,000 restricted stock units based on
shares of the Company's common stock
(the "Special RSU Grant"). Twenty percent
of the Special RSU Grant shall vest,
and the underlying shares shall be
delivered, on the first anniversary of the
Effective Date, 20 percent of the Special
RSU Grant shall vest, and the
underlying shares shall be delivered, on
each of the second, third, fourth and
fifth anniversaries of the Effective Date.
Except as specifically set forth
herein, the Special RSU Grant shall have
the same terms and conditions as
grants of restricted stock units under the
2004 EICP. In no event shall the
Special RSU Grant be considered part of the
Executive's Total Compensation.
(v) Retirement Benefits. During the Employment Period, the
Executive shall be eligible to participate
in any qualified or nonqualified
deferred compensation, pension, and
retirement plans maintained by the Company
applicable to senior executives of the
Company generally, in each case, as
amended from time to time, provided that
for all purposes of such plans, the
Executive shall be treated as if the
Executive had been continuously employed
by the Company and had not terminated
employment with the Company in January
2001, provided, further, that the Executive
shall not be so treated in the
event that prior to the first anniversary
of the Effective Date the Executive
is terminated for Cause.
(vi) Other Benefits. During the Employment Period, the
Executive shall be entitled to participate
in all welfare, perquisites, fringe
benefit, and other benefit plans,
practices, policies and programs, as may be
in effect from time to time, for senior
executives of the Company generally,
provided that, during the Employment
Period, the Executive shall receive
perquisites no less favorable than those
provided to the Prior CEO, including,
without limitation, use of the Company's
aircraft and use of a car and driver.
In addition, following the Executive's
retirement or any termination of his
employment, the Executive shall be entitled
to retiree health benefits
pursuant to the retiree health plans,
practices, programs and policies of the
Company (or under programs providing the
same benefits), and for purposes of
determining the amount of the Executive's
contributions and benefits under
such plans, practices, programs and
policies, the Executive shall be treated
as if the Executive had been continuously
employed by the Company and had not
terminated employment with the Company in
January 2001 (the "Executive's
Retiree Health Benefits"), provided, that
the Executive shall not be entitled
to the
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Executive's Retiree Health Benefits in the
event that prior to the first
anniversary of the Effective Date the
Executive is terminated for Cause.
(vii) Expenses. During the Employment Period, the Executive
shall be entitled to receive prompt
reimbursement for business expenses
incurred by the Executive in accordance
with the Company's policies, as may be
in effect from time to time, for its senior
executives generally.
(viii) Vacation. During the Employment Period, the Executive
shall be entitled to paid vacation in
accordance with the Company's policies,
as may be in effect from time to time, for
its senior executives generally,
provided that for purposes of determining
the Executive's vacation benefits,
the Executive shall be treated as if the
Executive had been continuously
employed by the Company and had not
terminated employment with the Company in
January 2001.
(ix) Office and Support Staff. During the Employment Period,
the Executive shall be entitled to an
office or offices of a size and with
furnishings and other appointments, and
shall be provided with secretarial and
administrative assistance, as is provided
generally to other senior executives
of the Company.
(c) Other Entities. The Executive agrees to serve, without
additional compensation, as an officer and
director for each of the Company's
subsidiaries, partnerships, joint ventures,
limited liability companies and
other affiliates, including entities in
which the Company has a significant
investment (collectively, the Company and
such entities, the "Affiliated
Group"), as determined by the Company,
provided, that such service does not
materially interfere with the Executive's
performance of his duties and
responsibilities as the Chairman of the
Board and Chief Executive Officer of
the Company. As used in this Agreement, the
term "affiliates" shall include
any entity controlled by, controlling, or
under common control with the
Company.
4. Termination of Employment. (a) Death or Disability. The
Executive's employment shall terminate
automatically upon the Executive's
death during the Employment Period. In the
event a Disability of the Executive
has occurred during the Employment Period
(pursuant to the definition of
Disability set forth below), the Company
may provide the Executive with
written notice in accordance with Section
11(b) of this Agreement of its
intention to terminate the Executive's
employment. In such event, the
Executive's employment with the Company
shall terminate effective on the 30th
day after receipt of such notice by the
Executive (the "Disability Effective
Date"), provided that, within the 30-day
period after such receipt, the
Executive shall not have returned to
full-time performance of the Executive's
duties. For purposes of this Agreement,
"Disability" shall mean the inability
of the Executive to perform his duties with
the Company on a full-time basis
for six consecutive months as a result of
incapacity due to mental or physical
illness which is determined to be total and
permanent by a licensed
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physician mutually selected by (i) the
Company or its insurers and (ii) the
Executive or the Executive's legal
representative. If the Parties cannot agree
on a licensed physician, each Party shall
select a licensed physician and the
two physicians shall select a third who
shall be the approved licensed
physician for this purpose.
(b) Cause. The Company may terminate the Executive's employment
during the Employment Period with or
without Cause. For purposes of this
Agreement, "Cause" shall mean:
(i) the continued failure of the Executive to perform
substantially the Executive's duties with
the Company (other than any such
failure resulting from incapacity due to
physical or mental illness), for a
period of 10 days after a written demand
for substantial performance is
delivered to the Executive by the Board
which specifically identifies the
manner in which the Board believes that the
Executive has not substantially
performed the Executive's duties, or
(ii) the willful engaging by the Executive in illegal or
fraudulent conduct or gross misconduct
which, in each case, is materially and
demonstrably injurious to the Company, or
either of their respective
reputations or to any clients or customers
of the Company, or
(iii) conviction of a felony or guilty or nolo contendere
plea by the Executive with respect thereto,
or
(iv) a violation in any material respect of any Company
Policies applicable to the Executive which
is materially and demonstrably
injurious to the Company, if such breach is
not cured within 30 business days
following receipt of a notice of such
breach, or
(v) a material breach by the Executive of Section 8 of this
Agreement, if such breach is not cured
within 30 business days following
receipt of a notice of such breach.
For purposes of this provision, no act or
failure to act on the part of the
Executive shall be considered "willful"
unless it is done, or omitted to be
done, by the Executive in bad faith or
without reasonable belief that the
Executive's action or omission was in the
best interests of the Company or was
done or omitted to be done with reckless
disregard to the consequences. Any
act, or failure to act, based upon
authority given pursuant to a resolution
duly adopted by the Board or based upon the
advice of counsel for the Company
shall be conclusively presumed to be done,
or omitted to be done, by the
Executive in good faith and in the best
interests of the Company. The
cessation of employment of the Executive
shall not be deemed to be for Cause
unless and until there shall have been
delivered to the Executive a copy of a
resolution duly adopted by the affirmative
vote of not less than a majority of
the entire membership of the Board at a
meeting of the Board called and held
for such purpose (after reasonable notice
is provided to
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the Executive and the Executive is given an
opportunity, together with
counsel, to be heard before the Board),
finding that in the good faith opinion
of the Board, the Executive is guilty of
the conduct constituting Cause and
specifying the particulars thereof in
detail.
(c) Good Reason. The Executive's employment may be terminated
by
the Executive for Good Reason. For purposes
of this Agreement, "Good Reason"
shall mean, in the absence of a written
consent of the Executive:
(i) the assignment to the Executive of any duties materially
inconsistent with the Executive's, duties
or responsibilities, or any other
material action by the Company which is
materially inconsistent with or
materially reduces such duties or
responsibilities; or
(ii) any diminution in Executive's title or reporting
relationship as contemplated by Section
3(a) of this Agreement; or
(iii) any failure by the Company to comply with any of the
provisions of Section 3(b) of this
Agreement; or
(iv) the Company's requiring the Executive's principal
office to be based at any office or
location other than that provided in
Section 3(a) of this Agreement; or
(v)
any purported termination by the Company of the
Executive's employment otherwise than as
expressly permitted by this
Agreement; or
(vi) any failure to elect or reelect the Executive to the
Board; or
(vii) any failure by the Company to cause any successor to
all or substantially all or a substantial
portion of its business and/or
assets to assume expressly and agree to
perform this Agreement in accordance
with Section 9(b).
Notwithstanding the foregoing, the
Executive shall not be considered to have
Good Reason to terminate this Agreement
unless and until he gives the Company
written notice of the circumstances
constituting the Good Reason and the
Company fails to have cured such
circumstances within 30 business days of
receipt of such notice.
(d) Voluntary Termination. The Executive may voluntarily
terminate
his employment without Good Reason.
(e) Notice of Termination. Any termination by the Company for
Cause, or by the Executive for Good Reason,
shall be communicated by Notice of
Termination to the other Party hereto given
in accordance with Section 11(b)
of this Agreement. For purposes of this
Agreement, a "Notice of Termination"
means a written notice which (i) indicates
the specific termination provision
in this Agreement relied upon, (ii) to the
extent applicable, sets forth in
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reasonable detail the facts and
circumstances claimed to provide a basis for
termination of the Executive's employment
under the provision so indicated and
(iii) if the Date of Termination (as
defined below) is other than the date of
receipt of such notice, specifies the
termination date (which date shall be
not more than thirty days after the giving
of such notice). The failure by the
Executive or the Company to set forth in
the Notice of Termination any fact or
circumstance which contributes to a showing
of Good Reason or Cause shall not
waive any right of the Executive or the
Company, respectively, hereunder or
preclude the Executive or the Company,
respectively, from asserting such fact
or circumstance in enforcing the
Executive's or the Company's rights
hereunder.
(f) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the
Company for Cause, or by the
Executive for Good Reason, the date of
receipt of the Notice of Termination or
any later date specified therein within 30
days of such notice, as the case
may be, (ii) if the Executive's employment
is terminated by the Company other
than for Cause or Disability, or if the
Executive voluntarily resigns without
Good Reason, the date on which the
terminating Party notifies the other Party
of such termination, (iii) if the
Executive's employment is terminated by
reason of death, the date of death of the
Executive or (iv) if the Executive's
employment is terminated by the Company due
to Disability, the Disability
Effective Date.
(g) Resignation from All Positions. Notwithstanding any other
provision of this Agreement, upon the
termination of the Executive's
employment for any reason, unless otherwise
requested by the Board, the
Executive shall immediately resign from all
positions that he holds or has
ever held with the Company and any other
member of the Affiliated Group (and
with any other entities with respect to
which the Company has requested the
Executive to perform services), including,
without limitation, the Board and
all boards of directors of any member of
the Affiliated Group. The Executive
hereby agrees to execute any and all
documentation to effectuate such
resignations upon request by the Company,
but he shall be treated for all
purposes as having so resigned upon
termination of his employment, regardless
of when or whether he executes any such
documentation.
(h) Definitions. Notwithstanding the terms of any employee
benefit
plan, program or arrangement under which
the Executive is a participant, the
definitions of "Cause", "Good Reason" and
"Disability" set forth in this
Section 4 shall apply to the Executive's
termination of employment under such
plans, programs or arrangements.
5. Obligations of the Company upon Termination. (a) Good
Reason;
Other Than for Cause. If, during the
Employment Period, the Company shall
terminate the Executive's employment other
than for Cause, death or Disability
or the Executive shall terminate employment
for Good Reason:
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(i) the Company shall pay to the Executive in a lump-sum
cash payment as soon as practicable after
the Date of Termination the
aggregate of the following amounts:
A. the Executive's Annual Base Salary through the Date of
Termination to the extent not theretofore paid;
B. the excess of (1) the product of (x) the Executive's
Total
Compensation for the most recently completed fiscal year and (y)
a
fraction,
the numerator of which is the number of days in the fiscal
year in
which the Date of Termination occurs through the Date of
Termination, and the denominator of which is 365, over (2) the
Annual
Base
Salary to the extent paid for the year that includes the Date
of
Termination (the amounts in Sections 5(a)(i)(A) and (B), the
"Accrued
Obligations"); and
C. an amount equal to the product of (1) the Executive's
Total
Compensation for the most recently completed fiscal year and
(2)
the
greater of (x) a fraction, the numerator of which is the number
of
days from
the Date of Termination through the fifth anniversary of the
Effective
Date, and the denominator of which is 365 and (y) 1.
For purposes of determining the Executive's
Total Compensation in respect of
any fiscal year for which Long-Term
Incentive Compensation was awarded in a
form other than restricted stock units,
restricted stock or cash, the value of
such award shall be determined by the
Committee in its good faith discretion.
(ii) notwithstanding the terms
