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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 13, 2005
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Morgan Stanley
(Exact name of registrant as specified in its charter)
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Delaware 1-11758 36-3145972
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
1585 Broadway, New York, New York 10036
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 761-4000
Not Applicable
(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
| | Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
| | Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
| | Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
| | Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01. Entry into a Material Definitive Agreement.
On May 13, 2005, Morgan Stanley (the "Company") entered into settlement and
release agreements with each of Mr. Tarek Abdel-Meguid (the "Abdel-Meguid
Agreement") and Mr. Joseph R. Perella (the "Perella Agreement") with respect
to the termination of each individual's employment with the Company effective
as of the close of business on May 20, 2005 (the "Termination Date").
Each settlement and release agreement provides that, subject to the applicable
individual's "Good Behavior," the Company will pay to the individual in
January 2006 a cash bonus for fiscal year 2005 in an amount equal to the bonus
paid to him for fiscal year 2004 multiplied by 171/365 (which in each case
equals approximately $6.4 million). "Good Behavior" means that (1) through
December 31, 2005 (a) the individual has not committed any act that would
constitute a "Cancellation Event" (as defined in the applicable settlement and
release agreement) and (b) unless waived in writing by the Board of Directors
of the Company, the individual will not support or associate himself with the
so-called "Group of 8" or become part of any management team sponsored by such
group and (2) through the Termination Date the individual (a) proactively
assists in key employee retention efforts, (b) supports the Company and his
colleagues in a positive manner, (c) assists in client relationship efforts
where helpful or necessary, (d) remains employed by the Company (unless sooner
terminated by the Company) and (e) assists in the orderly transition of his
duties.
In accordance with the terms of stock unit awards made to each individual with
respect to 2001, 2002 and 2003, such units will convert to shares one year
after the Termination Date and will continue to be subject to their terms,
except as otherwise expressly provided in the applicable settlement and
release agreement. The Abdel-Meguid Agreement provides that Mr. Abdel-Meguid's
2001 Special Stock Unit Award will continue to vest in accordance with its
terms and the Company shall cancel his 2001 Special Option Award in exchange
for a cash payment of $1,950,000 on or before June 1, 2005.
The Abdel-Meguid Agreement further provides that the Company will treat Mr.
Abdel-Meguid as age 55 on the Termination Date for purposes of determining his
entitlement to benefits under the Company's Supplemental Executive Retirement
Plan and that Mr. Abdel-Meguid will be provided with the Company's medical
benefits provided to members of the Management Committee for 12 months after
the Termination Date at the then prevailing employee rate.
Each individual will receive a gross-up payment from the Company if it is
determined that any payment or benefit that the individual receives from the
Company would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code.
Among other things, each settlement and release agreement also contains mutual
nondisparagement, confidentiality and release provisions as well as covenants
by the applicable individual to make himself available to the Company to
assist in relation to or in connection with matters that arose during the
individual's employment with the Company.
The above summary is qualified by the entirety of the terms and conditions set
forth in the Abdel-Meguid Agreement and Perella Agreement, as applicable, that
are filed as Exhibits 10.1 and 10.2, respectively, to this Form 8-K and are
incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
Exhibit
Number Description
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10.1 Settlement and Release Agreement, dated May 13, 2005,
between the Company and Mr. Tarek Abdel-Meguid (portions of
this Exhibit have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 under the Securities
Exchange Act of 1934).
10.2 Settlement and Release Agreement, dated May 13, 2005,
between the Company and Mr. Joseph R. Perella (portions of
this Exhibit have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 under the Securities
Exchange Act of 1934).
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MORGAN STANLEY
(Registrant)
By: /s/ Ronald T. Carman
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Name: Ronald T. Carman
Title: Assistant Secretary
Date: May 19, 2005