As filed with the Securities and Exchange Commission on May 27 , 2009 .

Registration No.   [ ]  
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
_____________________
 
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________
MORGAN STANLEY
(Exact name of registrant as specified in its charter)
 
 
 
Delaware
 
36-3145972
(State or other jurisdiction of
 
(I.R.S. Employer
incorporation or organization)
 
Identification No.)
     
 
1585 Broadway
 
 
New York, NY 10036
 
 
(Address of principal executive offices, including zip code)
 
 

Morgan Stanley 2007 Equity Incentive Compensation Plan
 
Morgan Stanley 2009 Replacement Equity Incentive Compensation Plan for Morgan
Stanley Smith Barney Employees
 
 (Full title of the plans)
_________________________________
Martin M. Cohen, Esq.
Vice President, Counsel and
Assistant Secretary
Morgan Stanley
1585 Broadway
New York, New York 10036
(212) 761-4000
 (Name, address and telephone number of agent for service)
 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer þ
Accelerated filer o
Non-accelerated filer o
Smaller reporting company o
 
 
 
CALCULATION OF REGISTRATION FEE
Title of Securities
to be Registered
Amount to be
Registered (1)
Proposed
Maximum
Offering Price
Per Share (2)
Proposed Maximum
Aggregate
Offering Price
Amount of
Registration Fee
Common Stock, par value $0.01 per share under the Morgan Stanley 2007 Equity Incentive Compensation Plan
25,000,000
 
$ 28.46
$711,500,000
 
$39,701.70
 
Common Stock, par value $0.01 per share under the Morgan Stanley 2009 Replacement Equity Incentive Compensation Plan for Morgan Stanley Smith Barney Employees
5,000,000
 
$28.46
$ 142,300,000
 
$ 7,940.34
 

(1)
Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the “ Securities Act ”), this registration statement on Form S-8 (this “ Registration Statement ”) also covers an indeterminate amount of additional shares of Common Stock, par value $0.01 per share (the “ Common Stock ”) of Morgan Stanley (the “ Registrant ”) that may be offered or delivered under the Morgan Stanley 2007 Equity Incentive Compensation Plan or the Morgan Stanley 2009 Replacement Equity Incentive Compensation Plan for Morgan Stanley Smith Barney Employees to prevent dilution resulting from any stock dividend, stock split, recapitalization or other similar transaction.  No additional registration fee is included for these shares.
 
(2)
Estimated pursuant to Rule 457(h) under the Securities Act solely for purposes of calculating the amount of the registration fee based upon the average of the high and low prices reported for the shares of Common Stock on the New York Stock Exchange on May 19 , 2009 .
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2
 
PART I
 
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
 
 
Item 1.                    Plan Information. *
 
Item 2.                    Registrant Information and Employee Plan Annual Information. *

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
*
Information required by Part I to be contained in the Section 10(a) prospectus is omitted from this Registration Statement in accordance with Rule 428 under the Securities Act and the “Note” to Part I of Form S-8.
 
 
 
PART II
 
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
 
Item 3.
Incorporation of Documents by Reference.
 
The following documents filed with the Securities and Exchange Commission (the “Commission”), are incorporated as of their respective dates in this Registration Statement by reference:
 
(a) the Registrant’s Annual Report on Form 10-K for the fiscal year ended November 30, 2008 (the “Form 10-K”);

(b)  the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009;

(c) the Registrant’s Current Reports on Form 8-K dated December 5, 2008, December 17, 2008, December 19, 2008, January 6, 2009, January 14, 2009, January 16, 2009, February 11, 2009, March 10, 2009, April 22, 2009, April 29, 2009, May 8, 2009 and May 22, 2009; and

(d) the description of the Registrant’s Common Stock contained in the Registrant’s Registration Statement on Form 10 filed with the Commission pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on January 15, 1993, as amended by the description contained in the Registrant’s Forms 8 dated February 11, February 21 and February 22, 1993.

In addition, all documents that the Registrant files pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this Registration Statement and prior to the filing of a post-effective amendment which indicates that all of the Common Stock offered hereby have been sold, or which deregisters all Common Stock then remaining unsold, shall be deemed to be incorporated herein by reference and to be a part hereof from the date of filing of such documents.  Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement incorporated by reference herein modifies or supersedes such statement.  Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.
 
Item 4.
Description of Securities.
 
Not Applicable.
 
Item 5.
Interests of Named Experts and Counsel.
 
Not Applicable.
 
Item 6.
Indemnification of Directors and Officers.
 
Section 145 of the General Corporation Law of the State of Delaware, as amended, provides that under certain circumstances a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director, officer, employee or agent of the corporation or is or was serving at its request in such capacity in another corporation or business association, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation
 
4
 
and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful.

Article VIII of the Amended and Restated Certificate of Incorporation of the Registrant (“Certificate of Incorporation”) and Section 6.07 of the Amended and Restated Bylaws of the Registrant (“Bylaws”), each as amended to date, provide for the indemnification of the Registrant’s directors and officers. The Certificate of Incorporation provides that any person who is or was a director or officer of the Registrant shall be indemnified by the Registrant to the fullest extent permitted from time to time by applicable law. In addition, the Bylaws provide that each person who was or is made a party or is threatened to be made a party to or is involved in any manner in any threatened, pending or completed claim, action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she or a person of whom he or she is the legal representative is or was a director or officer of the Registrant or a director or elected officer of any entity, a majority of the capital stock (other than directors’ qualifying shares) of which is owned directly or indirectly by the Registrant (a “Subsidiary”) shall be indemnified and held harmless by the Registrant to the fullest extent permitted by applicable law. The right to indemnification under the Bylaws includes the right to be paid the expenses incurred in defending a proceeding in advance of its final disposition upon receipt (unless the Registrant upon authorization of the Board of Directors waives said requirement to the extent permitted by applicable law) of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Registrant.  Both the Certificate of Incorporation and the Bylaws provide that the Registrant shall be required to indemnify any person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors or is a proceeding to enforce such person’s claim to indemnification pursuant to the rights granted by the Certificate of Incorporation or Bylaws or otherwise by the Registrant.

Pursuant to the Bylaws, the indemnification and the advancement of expenses incurred in defending a proceeding prior to its final disposition provided by, or granted pursuant to, the applicable Bylaw shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, other provision of the Bylaws, agreement, vote of stockholders or Disinterested Directors (as defined in the Bylaws) or otherwise.

The Registrant’s Bylaws also provide that the Registrant may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification, and rights to be paid by the Registrant the expenses incurred in defending any proceeding in advance of its final disposition, to any person who is or was an employee or agent (other than a director or officer) of the Registrant or a Subsidiary and to any person who is or was serving at the request of the Registrant or a Subsidiary as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise, including service with respect to employee benefit plans maintained or sponsored by the Registrant or a Subsidiary, to the fullest extent as the Bylaws provide with respect to indemnification of, and advancement of expenses for, directors and officers of the Registrant.

Under the Bylaws, the Registrant has the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, partner, member, employee or agent of the Registrant or a Subsidiary, or of another corporation, partnership, limited liability company, joint venture, trust or other enterprise, against any expense, liability or loss whether or not the Registrant would have the power to indemnify that person against that expense, liability or loss under the provisions of applicable law.

The Registrant has in effect insurance policies in the amount of $350 million for directors’ and officers’ liability insurance.

Item 7.
Exemption from Registration Claimed.
 
Not applicable.
 
5
 
Item 8.
Exhibits.
 
See attached Exhibit list.
 
Item 9.
Undertakings.
 
(a)           The undersigned Registrant hereby undertakes:
 
(1)           To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
 
(i)            to include any prospectus required by Section 10(a)(3) of the Securities Act ;
 
(ii)           to reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement; and
 
(iii)          to include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement;
 
provided , however , that the undertakings set forth in paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement.
 
(2)           That, for the purpose of determining any liabilities under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
 
(3)           To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
 
(b)           The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
 
(c)           Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
 
6
 
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7
 
SIGNATURES
 
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of New York, State of New York, on this 27th day of May, 2009.
 
 
MORGAN STANLEY
(Registrant)
 
     
     
         
         
  By: /s/ John J. Mack  
    Name:  John J. Mack  
    Title:  Chairman of the Board and Chief  
      Executive Officer  
 
 
 
POWER OF ATTORNEY
 
KNOW ALL PERSONS BY THESE PRESENTS that each person whose signature appears below hereby constitutes and appoints Martin M. Cohen, Jeanne Greeley O’Regan, Anna Xanthos and W. Gary Beeson and each of them singly, his or her true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to this Registration Statement (any of which amendments may make such changes and additions to this Registration Statement as such attorneys-in-fact may deem necessary or appropriate) and to file the same, with all exhibits thereto, and any other documents that may be required in connection therewith, granting unto said attorneys-in-fact and agents full power and authority to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitutes, may lawfully do or cause to be done by virtue hereof.
 
Pursuant to the requirement of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons on behalf of Registrant and in the capacities indicated as of this 27th day of May, 2009.
 
 
Signature
 
Title
/s/ John J. Mack  
 
Chairman of the Board and Chief Executive Officer
 
John J. Mack  
/s/ Colm Kelleher  
 
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Colm Kelleher
 
/s/ Paul C. Wirth  
 
Controller and Principal Accounting Officer
 
Paul C. Wirth  
/s/ Roy J. Bostock  
 
Director
 
Roy J. Bostock  
/s/ Erskine B. Bowles  
 
Director
 
Erskine B. Bowles  
 
 
8
 
 
Signature
 
Title
/s/ Howard J. Davies  
 
Director
 
Howard J. Davies  
/s/ Nobuyuki Hirano  
 
Director
 
Nobuyuki Hirano
 
/s/ C. Robert Kidder  
 
Director
 
C. Robert Kidder  
/s/ Donald T. Nicolaisen  
 
Director
 
Donald T. Nicolaisen  
/s/ Charles H. Noski  
 
Director
 
Charles H. Noski  
/s/ Hutham S. Olayan
 
 
Director
 
Hutham S. Olayan  
/s/ Charles E. Phillips, Jr.  
 
Director
 
Charles E. Phillips, Jr.  
/s/ O. Griffith Sexton  
 
Director
 
O. Griffith Sexton  
/s/ Laura D. Tyson  
 
Director
 
Laura D. Tyson  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9
 
EXHIBIT INDEX
 
 
Certain of the following exhibits, as indicated parenthetically, were previously filed as exhibits to reports filed by Morgan Stanley under the Exchange Act and are hereby incorporated by reference to such reports. Morgan Stanley’s Exchange Act file number is 1-11758.
 
Number
Title of Exhibit
 
4.1
Morgan Stanley 2007 Equity Incentive Compensation Plan, as amended and restated March 10, 2009 (Exhibit 10.1 to Morgan Stanley’s Current Report on Form 8-K dated April 29, 2009).
 
4.2 *
Morgan Stanley 2009 Replacement Equity Incentive Compensation Plan for Morgan Stanley Smith Barney Employees.
 
4.3
Amended and Restated Certificate of Incorporation of Morgan Stanley, as amended to date (Exhibit 3.1 to Morgan Stanley’s Current Report on Form 8-K dated April 8, 2008).
 
4.4
Amended and Restated Bylaws of Morgan Stanley, as amended to date (Exhibit 3 to Morgan Stanley’s Current Report on Form 8-K dated September 16, 2008).
 
5 *
Opinion of Shearman & Sterling LLP regarding the validity of the securities being registered.
 
15 *
Letter of Awareness from Deloitte & Touche LLP.
 
23.1 *
Consent of Shearman & Sterling LLP (included in Exhibit 5).
 
23.2 *
Consent of Deloitte & Touche LLP.
 
24 *
Powers of Attorney (included on signature page).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
*
Filed herewith.
 
10
EXHIBIT 4.2
 
MORGAN STANLEY
2009 REPLACEMENT EQUITY INCENTIVE COMPENSATION PLAN FOR MORGAN
STANLEY SMITH BARNEY EMPLOYEES

 
1.          Purpose.    The primary purpose of the Morgan Stanley 2009 Replacement Equity Incentive Compensation Plan for Morgan Stanley Smith Barney Employees is to induce employees employed by the Smith Barney or Quilter businesses of Citigroup, employees of Citigroup (or its affiliates), and consultants or other persons who perform services for Citigroup or any of its affiliates, to commence employment with the Company or the MS Group, as applicable, in connection with the Transaction and to contribute to the growth and profits of the Company.
 
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.
 
“ Citigroup ” means Citigroup Inc., a Delaware corporation.
 
“ 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 MSSB and all of its Subsidiaries.
 
“ Eligible Individuals ” means the individuals described in Section 6 who are eligible for Awards.
 
 
1
 
 
“ Employee Trust ” means any trust established or maintained by the MS Group in connection with an employee benefit plan (including the Plan) under which current and former employees of the Company or the MS Group 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.
 
“ MS Group ” means Morgan Stanley and its Subsidiaries.
 
“ MSSB ” means Morgan Stanley Smith Barney Holdings LLC, a Delaware Limited Liability Company.
 
“ 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 of the Plan, 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 2009 Replacement Equity Incentive Compensation Plan for Morgan Stanley Smith Barney Employees, as amended from time to time in accordance with Section 15(e) below.
 
“ 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 (or any successor provisions thereto).
 
“ Shares ” means shares of Stock.
 
“ Stock ” means the common stock, par value $0.01 per share, of Morgan Stanley.
 
 
2
 
 
“ 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 either MSSB or Morgan Stanley (as applicable), 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 either MSSB or Morgan Stanley (as applicable), directly or indirectly, has an equity or similar interest and which the Committee designates as a Subsidiary for purposes of the Plan.  For purposes of the Plan, the Company shall not be deemed to be a Subsidiary of Morgan Stanley.
 
“ Transaction ” means the transactions contemplated pursuant to the Joint Venture Contribution and Formation Agreement, dated as of January 13, 2009, as it may be amended, by and between Morgan Stanley and Citigroup.
 
3.          Effective Date and Term of Plan.
 
(a)        Effective Date .  The Plan shall become effective upon the later of its adoption by the Board and the consummation of the Transaction.
 
(b)        Term of Plan.   No Awards may be made under the Plan after the date that is five years from the Plan’s effective date.
 
4.        Stock Subject to Plan.
 
(a)         Overall Plan Limit .  The total number of Shares that may be delivered pursuant to Awards shall be 5,000,000 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 Incentive Stock Options as provided in Section 4(d), 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.
 
 
3
 
 
(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(d)):
 
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 or the MS Group 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 or the MS Group 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.
 
(d)         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 or the MS Group; (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
 
 
4
 
 
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 the MS Group (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
 
 
5
 
 
by the officers, accountants and counsel of the Company or the MS Group 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; Nature of Awards.   Eligible Individuals shall include all officers and other employees (including prospective employees) of the Company or the MS Group who were formerly employed by the Smith Barney or Quilter businesses of Citigroup, and all other employees of Citigroup (or its affiliates), and consultants or other persons who performed services for Citigroup or any of its affiliates, in each case, who commence employment with the Company or the MS Group in connection with the Transaction (or whose employer becomes an affiliate of MSSB in connection with the Transaction).  Any Award made to a prospective employee shall be conditioned upon, and effective not earlier than, such person’s becoming an employee.  An individual’s status as an Administrator will not affect his or her eligibility to receive Awards under the Plan.  Notwithstanding the above, Awards shall be granted under the Plan only in compliance with the rules of the New York Stock Exchange governing inducement awards or such other rules of the New York Stock Exchange, including the New York Stock Exchange Corporate Governance Listing Standards, that allow grants of equity compensation awards without obtaining stockholder approval of the plan pursuant to which such award is granted, or of the award itself.
 
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.  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
 
 
6
 
 
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; provided that, unless the Committee specifically determines otherwise upon the advice of counsel, Incentive Stock Options may not be granted to employees of the Company.  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 Grants .  Anything in the Plan to the contrary notwithstanding, the terms of an Option shall not provide that a new Option will be granted, automatically and without additional consideration in excess of the exercise price of the underlying Option, to a Participant upon exercise of the Option.
 
(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.
 
(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.  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 equity-based or equity-related 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 or the MS Group, which Awards may provide for (i) cash or Stock payments 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 or Stock payments (including  payment of dividend equivalents in cash or Stock) based
 
 
7
 
 
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 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 the MS Group or other benefits from either the Company or the MS Group or under any agreement with the Participant, unless the Company or the MS Group specifically provide 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.
 
 
8
 
 
(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 or the MS Group).
 
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 or the MS Group as may be necessary to discharge such entities’ 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
 
 
9
 
 
that the Participant owes to the Company or the MS Group. 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 or the MS Group, 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, neither the Company nor the MS Group may offset from the payment of such Award amounts that a Participant owes to the Company or the MS Group 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 or the MS Group.
 
(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 an employee of the Company or the MS Group 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.
 
 
10
EXHIBIT 5
 
 
599 LEXINGTON AVENUE  |  NEW YORK  |  NY  |  10022-6069
WWW.SHEARMAN.COM  |  T +1.212.848.7222  |   F +1.212.848.7179  |  F +1.212.848.7180  |  F +1.212.848.7181
 
 
 
May 27, 2009
 
 
 
 
Morgan Stanley
1585 Broadway
New York, NY 10036
 
 
 
Ladies and Gentlemen:
 
We are acting as counsel for Morgan Stanley, a Delaware corporation (the “ Company ”), in connection with preparation and filing by the Company of a registration statement on Form S-8 (the  “ Registration Statement ”) with the Securities and Exchange Commission (the “ Commission ”) under the Securities Act of 1933, as amended (the “ Securities Act ”), with respect to 30,000,000 shares of common stock, par value $0.01 of the Company (the  “ Shares ”), that may be delivered from time to time pursuant to the Morgan Stanley 2009 Replacement Equity Incentive Compensation Plan for Morgan Stanley Smith Barney Employees and the Morgan Stanley 2007 Equity Incentive Compensation Plan (together, the  “ Plans ”).
 
In connection with the foregoing, we have reviewed originals or copies identified to our satisfaction of the following documents:
 
 
(a)
The Registration Statement;
 
 
(b)
The certificate of incorporation and by-laws of the Company, in each case as amended to date; and
 
 
(c)
Originals or copies of such other corporate records of the Registrant, certificates of public officials and of officers of the Registrant, and agreements and other documents as we have deemed necessary as a basis for the opinions expressed below.
 
In our examination, we have assumed the genuineness of all signatures, the authenticity of all documents, certificates and instruments submitted to us as originals and the conformity with originals of all documents submitted to us as copies.
 
Our opinion set forth below is based on the text of the Plans as referenced in the Exhibit Index to the Registration Statement.
 
Our opinion expressed below is limited to the General Corporation Law of the State of Delaware, and we do not express any opinion herein concerning any other law.
 
Based upon and subject to the foregoing and having regard for such legal considerations as we have deemed relevant, we are of the opinion that authorized but not previously issued Shares which
 
 
Morgan Stanley
Page 2
 
 
 
may be delivered under the Plans have been duly authorized by the Company and, when (a) issued and delivered by the Company in accordance with the terms of the Plans and (b) paid for in full in accordance with the terms of the Plans, will be validly issued, fully paid and non-assessable.
 
This opinion letter speaks only as of the date hereof.  We expressly disclaim any responsibility to advise you of any development or circumstance of any kind, including any change of law or fact that may occur after the date of this opinion letter that might affect the opinions expressed herein.
 
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement.  In giving this consent, we do not thereby concede that we come within the category of persons whose consent is required the Securities Act or the General Rules and Regulations of the Commission promulgated thereunder.
 
This opinion is rendered solely to you in connection with the above matter. This opinion may not be relied upon by you for any other purpose or relied upon by or furnished to any other person without our prior written consent.
 
Very truly yours,
 
/s/ Shearman & Sterling LLP 
LER/DEL/GS/ER
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EXHIBIT 15

To the Directors and Shareholders of Morgan Stanley:

We have reviewed, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the unaudited interim condensed consolidated financial information of Morgan Stanley and subsidiaries for the three-month periods ended March 31, 2009 and 2008 and the one-month period ended December 31, 2008, and have issued our report dated May 7, 2009 (which report contains an explanatory paragraph relating to the change in fiscal year-end from November 30 to December 31 and recasting of prior interim financial statements to a calendar year basis, an explanatory paragraph relating to the adoption of Statement of Financial Accounting Standards (“SFAS”) No. 160, “Noncontrolling Interests in Consolidated Financial Statements—an amendment of Accounting Research Bulletin No. 51”, and an explanatory paragraph relating to the adoption of FSP EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities”). As indicated in such report, because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, which is included in Morgan Stanley’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, is incorporated by reference in this Registration Statement.

We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

/s/   Deloitte & Touche LLP
New York, New York
May 27, 2009
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EXHIBIT 23.2

 
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
We consent to the incorporation by reference in this Registration Statement on Form S-8 of our reports dated January 28, 2009, relating to the consolidated financial statements and financial statement schedule, and effectiveness of Morgan Stanley's internal control over financial reporting (which reports on the consolidated financial statements and financial statement schedule, which express an unqualified opinion and include an explanatory paragraph relating to the adoption of Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements” and SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115,” an explanatory paragraph relating to the adoption of SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R)” and an explanatory paragraph relating to the adoption of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109,”) appearing in the Annual Report on Form 10-K of Morgan Stanley for the year ended November 30, 2008.
 
/s/   Deloitte & Touche LLP
New York, New York
May 27, 2009