Exhibit 10

         MERRILL LYNCH & CO., INC. DEFERRED UNIT AND STOCK UNIT PLAN FOR
                             NON-EMPLOYEE DIRECTORS

Article I - General

      Section 1.1 Purposes.

            The purposes of the Merrill Lynch & Co., Inc. Deferred Unit and
Stock Unit Plan for Non-Employee Directors (the "Plan") are (a) to provide an
incentive to highly qualified individuals to serve as Directors of Merrill Lynch
& Co., Inc. ("ML & Co.") and (b) to further align the interests of Non-Employee
Directors with the stockholders of ML & Co.

      Section 1.2 Definitions.

            For the purpose of the Plan, the following terms shall have the
      meanings indicated.

            "Account(s)" means a Participant's Mutual Fund Index Account and/or
      Deferred Unit/Stock Unit Account.

            "Account Balance(s)" means the Participant's Deferred Unit Account
      Balance, Deferred Stock Unit Account Balance and/or Mutual Fund Index
      Account Balance.

            "Administrator" means the Director of Human Resources of ML & Co.,
      or his or her functional successor.

            "Affiliate" means any corporation, partnership, or other
      organization of which ML & Co. owns or controls, directly or indirectly,
      not less than 50% of the total combined voting power of all classes of
      stock or other equity interests.

            "Annual Meeting" means the Annual Meeting of Stockholders of ML &
      Co.

            "annuitized payments" has the meaning specified in Section 2.5(b).

            "Board of Directors" or "Board" shall mean the Board of Directors of
      ML & Co.

            "Business Day" shall mean any day on which the New York Stock
      Exchange is open for business.

            "Change in Control" means a change in control of ML & Co. of a
      nature that would be required to be reported in response to Item 6(e) of
      Schedule 14A of Regulation 14A promulgated under the Exchange Act, whether
      or not ML & Co. is then subject to such reporting requirement; provided,
      however, that, without limitation, a Change in Control shall be deemed to
      have occurred if:

            (a) any individual, partnership, firm, corporation, association,
      trust, unincorporated organization or other entity, or any syndicate or
      group deemed to be a person under Section 14(d)(2) of the Exchange Act,
      other than ML & Co.'s employee stock ownership plan, is or 

      becomes the "beneficial owner" (as defined in Rule 13d-3 of the General
      Rules and Regulations under the Exchange Act), directly or indirectly, of
      securities of ML & Co. representing 30% or more of the combined voting
      power of ML & Co.'s then outstanding securities entitled to vote in the
      election of directors of ML & Co.;

            (b) during any period of two consecutive years (not including any
      period prior to the adoption of this Plan), individuals who at the
      beginning of such period constituted the Board of Directors and any new
      Directors whose election by the Board of Directors or nomination for
      election by the stockholders of ML & Co. was approved by a vote of at
      least three quarters of the Directors then still in office who either were
      directors at the beginning of the period or whose election or nomination
      for election was previously so approved, cease for any reason to
      constitute at least a majority thereof; or

            (c) all or substantially all of the assets of ML & Co. are
      liquidated or distributed.

            "Code" means the U.S. Internal Revenue Code of 1986, as amended from
      time to time.

            "Common Stock" means the Common Stock, par value $1.33 1/3 per
      share, of ML & Co. and a "share of Common Stock" shall mean one share of
      Common Stock together with, for so long as Rights are outstanding, one
      Right (whether trading with the Common Stock or separately).

            "Company" means ML & Co. and all of its Affiliates.

            "Current Market Value" per share of Common Stock for any date means
      the average of the Daily Market Prices of a share of Common Stock for each
      Business Day for which such Daily Market Prices are available during a
      period commencing on a date 21 consecutive Business Days prior to such
      date and ending on the second Business Day prior to such date.

            "Daily Market Price" of shares of Common Stock on any date means:
      (a) the mean of the high and low sales prices reported on the New York
      Stock Exchange--Composite Tape (or, if shares of Common Stock are not
      traded on the New York Stock Exchange, the mean of the high and low sales
      prices reported on any securities exchange or quotation service on which
      the shares of Common Stock are listed or traded) of such shares on the
      date in question, or (b) if shares of Common Stock are not then listed or
      admitted to trading on any securities exchange as to which reported sales
      prices are available, the mean of reported high bid and low asked prices
      on such date, as reported by a reputable quotation service, or by The Wall
      Street Journal, Eastern Edition or a newspaper of general circulation in
      the Borough of Manhattan, City and State of New York.

            "Deferred Stock Unit" means a unit representing ML & Co.'s
      obligation to deliver one share of Common Stock in accordance with the
      terms of the Plan.

            "Deferred Stock Unit Account Balance" means, with respect to a
      particular grant as of any date, the Deferred Stock Units credited to a
      Participant's Deferred Unit/Stock Unit Account, adjusted in accordance
      with Section 3.1 to reflect the addition of dividend equivalents and any
      changes in capitalization and adjusted for any payments to the Participant
      in respect of Deferred Stock Units. 


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            "Deferred Unit" means a unit representing ML & Co.'s obligation to
      pay an amount in cash equal to the value of one share of Common Stock in
      accordance with the terms of the Plan.

            "Deferred Unit Account Balance" means, with respect to a particular
      grant as of any date, the Deferred Units credited to a Participant's
      Deferred Unit/Stock Unit Account, adjusted in accordance with Section 3.1
      to reflect the addition of dividend equivalents and any changes in
      capitalization and adjusted for any payments to the Participant in respect
      of Deferred Units or optional deferrals into a Mutual Fund Index Account
      prior to that date.

            "Deferred Unit/Stock Unit Account" means the reserve account
      established on the books and records of ML & Co. to record a Participant's
      Deferred Unit Account Balance and Deferred Stock Unit Account Balance.

            "Determination Date" has the meaning specified in Section 2.5(b).

            "Director" means a member of the Board.

            "Disability" means any physical or mental condition that in the
      opinion of the Administrator renders a Director incapable of continuing to
      serve on the Board.

            "Early Separation" means ceasing to serve as a Director of ML & Co.
      prior to scheduled Retirement for any reason other than death or
      Disability.

            "End of Service Date" means the date on which a Participant ceases
      to serve as a Director for any reason.

            "Exchange Act" means the Securities Exchange Act of 1934, as
      amended.

            "Executive Committee" means the Executive Committee of the Board of
      Directors.

            "Holding Period" has the meaning specified in Section 2.3(a).

            "Initial Payment Date" has the meaning specified in Section 2.5(b).

            "Junior Preferred Stock" means ML & Co.'s Series A Junior Preferred
      Stock, par value $1.00 per share.

            "modified installment payments" has the meaning specified in Section
      2.5(b).

            "Mutual Fund Index Account" means the reserve account established on
      the books and records of ML & Co. to record a Participant's Mutual Fund
      Index Account Balance.

            "Mutual Fund Index Account Balance" means, with respect to a
      particular grant as of any date, the deferred amounts, if any, credited to
      a Participant's Mutual Fund Index Account pursuant to Section 2.4(b),
      adjusted in accordance with Section 3.2 to reflect the performance of the
      Participant's Selected Mutual Fund Index Account Return Options and
      adjusted for any payments made from the Mutual Fund Index Account to the
      Participant prior to that date. 


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            "Mutual Fund Index Account Return Options" means such Merrill Lynch
      mutual funds or other investment vehicles as the Administrator may from
      time to time designate for the purpose of indexing Mutual Fund Index
      Accounts hereunder. In the event a Mutual Fund Index Account Return Option
      ceases to exist or is no longer to be a Mutual Fund Index Account Return
      Option, the Administrator may designate a substitute Mutual Fund Index
      Account Return Option for such discontinued option.

            "Net Asset Value" means, with respect to each Mutual Fund Index
      Account Return Option that is a mutual fund or other commingled investment
      vehicle for which such values are determined in the normal course of
      business, the net asset value, on the date in question, of the Mutual Fund
      Index Account Return Option for which the value is to be determined.

            "Non-Employee Director" means a member of the Board who is not
      employed by ML & Co. or any corporation, partnership, or other
      organization of which ML & Co. owns or controls, directly or indirectly,
      not less than 50% of the total combined voting power of all classes of
      stock or other equity interests or any successor thereto.

            "Participant" means each Non-Employee Director to whom a grant of
      Deferred Units or Deferred Stock Units has been made under the Plan.

            "Retirement" means ceasing to serve as a Director of ML & Co. on the
      date of the Annual Meeting next following the calendar year of such
      Director's seventieth birthday, or at such other time as may subsequently
      be established as the normal retirement date for Non-Employee Directors.

            "Retirement Annual Meeting" means, with respect to any Retiring
      Non-Employee Director, the Annual Meeting coincident with such Director's
      Retirement.

            "Retirement Fraction" means, with respect to any Retiring
      Non-Employee Director, a fraction whose numerator is the number of Annual
      Meetings (including the Retirement Annual Meeting) remaining until such
      Director's Retirement, and whose denominator is five.

            "Retiring Non-Employee Director" means a Non-Employee Director whose
      Retirement Annual Meeting will occur prior to, or will be the fifth Annual
      Meeting following, the effective date of any grant of Deferred Units or
      Deferred Stock Units to such Director.

            "Rights" means the Rights to Purchase Units of Series A Junior
      Preferred Stock, par value $1.00 per share, of ML & Co. issued pursuant to
      the Rights Agreement dated as of December 16, 1987 between ML & Co. and
      Manufacturers Hanover Trust Company, Rights Agent, as amended from time to
      time.

            "Selected Mutual Fund Index Account Return Option" means a Mutual
      Fund Index Account Return Option selected by a Participant in accordance
      with Section 3.2(a).

            "Tender Offer" means an offer to purchase all or a portion of the
      outstanding shares of Common Stock that is subject to Section 14D of the
      Exchange Act, provided that such offer, if consummated, would result in a
      Change in Control.


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      Section 1.3 Shares Subject to the Plan.

      (a) Reservation of Shares. The total number of shares of Common Stock that
shall be reserved for issuance in payment of Deferred Stock Units under the Plan
shall be 200,000, subject to adjustment for changes in capitalization of ML &
Co. as provided in subparagraph (b) below. Shares of Common Stock issued under
the Plan shall only be shares previously issued and reacquired by ML & Co. and
held in its treasury.

      (b) Changes in Common Stock. If any change is made in the terms or
provisions of the Common Stock (or the Rights of Junior Preferred Stock) subject
to the Plan (whether by reason of reorganization, merger, consolidation,
recapitalization, stock dividend, stock split, combination of shares, exchange
of shares, change in corporate structure, or otherwise), then appropriate
adjustments shall be made to the maximum number of shares of Common Stock and
Rights subject to and reserved under the Plan without any action by the Board of
Directors.

Article II - Deferred Units and Deferred Stock Units; Optional Deferral of
Payment

      Section 2.1 Deferred Unit Grants.

      (a) Initial Grants. Each Non-Employee Director who is a member of the
Board on the effective date of the Plan shall have a Deferred Unit/Stock Unit
Account established in his or her name and be granted and have credited to such
account as of the date this Plan becomes effective the number of Deferred Units
obtained by dividing $50,000 by the Current Market Value per share of Common
Stock on such date and rounding the result upwards to the nearest whole Deferred
Unit; provided, however, that the dollar amount used to determine the grant to
any Retiring Non-Employee Director shall be $50,000 multiplied by the Retirement
Fraction applicable to such Retiring Non-Employee Director.

      (b) New Director Grants. Each person who becomes a Non-Employee Director
after this Plan becomes effective shall, on the date when such person becomes a
Non-Employee Director and without any action by the Board of Directors, have a
Deferred Unit/Stock Unit Account established in his or her name and be granted
and have credited to such account the number of Deferred Units obtained by
dividing $50,000 by the Current Market Value per share of Common Stock on such
date and rounding the result upwards to the nearest whole Deferred Unit;
provided, however, that the dollar amount used to determine the grant to any
Retiring Non-Employee Director shall be $50,000 multiplied by the Retirement
Fraction applicable to such Retiring Non-Employee Director.

      (c) Subsequent Grants. Effective on the close of business on the first
Business Day of the month next following the date of the fifth Annual Meeting
following the grant of Deferred Units to a Non-Employee Director pursuant to
Section 2.1(a) or (b), as applicable, and, thereafter, effective on the date of
the fifth Annual Meeting following the grant of Deferred Units to a Non-Employee
Director pursuant to this Section 2.1 (c), any Director then serving as a
Non-Employee Director shall, without any action by the Board of Directors, be
granted and have credited to his or her Deferred Unit/Stock Unit Account on such
date the number of Deferred Units obtained by dividing $50,000 by the Current
Market Value per share of Common Stock on such date and rounding the result
upwards to the nearest whole Deferred Unit; provided, however, that the dollar
amount used to determine the grant to any Retiring Non-Employee Director shall
be $50,000 multiplied by the Retirement Fraction applicable to such Retiring
Non-Employee Director.


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      (d) Annual Grants. (i) Effective on the close of business on the first
Business Day of the month next following the date of each Annual Meeting any
Director then serving as a Non-Employee Director shall, without any action by
the Board of Directors, be granted and have credited to his or her Deferred
Unit/Stock Unit Account on such date the number of Deferred Units obtained by
dividing $10,000 by the Current Market Value per share of Common Stock on such
date and rounding the result upwards to the nearest whole Deferred Unit. (ii)
Each person who becomes a Non-Employee Director on a date other than the date of
an Annual Meeting, shall, on the date when such person becomes a Non-Employee
Director and without any action by the Board of Directors, have a Deferred
Unit/Stock Unit Account established in his or her name and be granted and have
credited to such account the number of Deferred Units obtained by dividing
$10,000 by the Current Market Value per share of Common Stock on such date and
rounding the result upwards to the nearest whole Deferred Unit.

      Section 2.2 Deferred Stock Unit Grants.

      In the event that ML & Co. determines to amend the Merrill Lynch & Co.,
Inc. Non-Employee Directors' Equity Plan (the "Equity Plan") to eliminate future
grants thereunder, then, without any action by the Board of Directors, each
Director serving as a Non-Employee Director on the effective dates set forth in
Section 2.2(a), (b) or (c) below, shall be granted and have credited to his or
her Deferred Unit/Stock Unit Account the number of Deferred Stock Units obtained
by dividing $50,000 by the Current Market Value per share of Common Stock on
such date and rounding the result upwards to the nearest whole Deferred Stock
Unit, effective as follows:

      (a) Continuing Director Initial Grants. For each Non-Employee Director who
has received a grant under the Equity Plan, effective on the close of business
on the first Business Day of the month next following the date of the Annual
Meeting upon which such Director's grant under the Equity Plan becomes fully
vested;

      (b) New Director Grants. For each Non-Employee Director who has not
received a grant under the Equity Plan, effective on the date that such Director
joins the Board of Directors; and

      (c) Subsequent Grants. For each Non-Employee Director who has received a
grant of Deferred Stock Units under Section 2.2(a) or (b), effective on the
close of business on the first Business Day of the month next following the date
of the fifth Annual Meeting following the grant of Deferred Stock Units to a
Non-Employee Director pursuant to Section 2.2(a) or (b), as applicable, and,
thereafter, effective on the close of business on the date of the fifth Annual
Meeting following the grant of Deferred Stock Units to a Non-Employee Director
pursuant to this Section 2.2(c);

provided, however, that, in each case, the dollar amount used to determine the
grant to any Retiring Non-Employee Director shall be $50,000 multiplied by the
Retirement Fraction applicable to such Retiring Non-Employee Director.

      Section 2.3 Payment of Deferred Units and Deferred Stock Units.

      (a) Payment of Units Upon Expiration of Holding Period. Unless deferred at
the option of the Participant in accordance with Section 2.4(a) hereof, the
Deferred Unit Account Balance and Deferred Stock Unit Account Balance with
respect to a particular grant will become


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payable upon the expiration of the holding period with respect to such grant
(the "Holding Period"), which shall expire on the earlier of: (i) the date of
the fifth Annual Meeting following the date of such grant, and (ii) a
Participant's End of Service Date. The Deferred Units will be paid in cash. The
amount of such cash payment shall be determined by multiplying the number of
Deferred Units to be paid by the Current Market Value per share of Common Stock
for the last day of the month immediately preceding the month in which payment
is to be made and rounding the result to the nearest whole cent. The Deferred
Stock Units will be paid in shares of Common Stock. One share of Common Stock
will be delivered for each Deferred Stock Unit to be paid, after rounding any
fractional Deferred Stock Unit upwards to the nearest whole share.

      (b) Reduced Payment upon Early Separation. In the event of a Participant's
Early Separation, the amount payable to such Participant pursuant to paragraph
2.3(a) with respect to grants made pursuant to Sections 2.1(a)-(c) and Section
2.2 hereof shall be reduced by multiplying the relevant Account Balance(s) by a
fraction, the numerator of which shall be 1 plus the number of Annual Meetings
that have occurred since the date of the relevant grant, and the denominator of
which shall be 5 or, in the case of a Retiring Non-Employee Director, the number
of Annual Meetings from the relevant grant date to and including the Retirement
Annual Meeting. No such reduction shall be applied to any Account Balance(s)
relating to grants whose Holding Periods have expired prior to the date of Early
Separation.

      Section 2.4 Optional Deferral of Payment.

      (a) Optional Deferral of Payment. A Participant shall have the option to
defer the payment of all or a portion of any Deferred Unit or Deferred Stock
Unit grant upon the expiration of the relevant Holding Period for later payment
in accordance with Section 2.5 by submitting to the Administrator or his or her
designee such forms as the Administrator shall prescribe by no later than one
year prior to the expiration of the relevant Holding Period. No such deferral
election shall become effective if the Holding Period expires prior to the fifth
Annual Meeting following the date of the relevant grant as a result of the
Participant's Early Separation, death or Disability.

      (1) With respect to Deferred Units, a Participant may elect: (i) to have
all or a portion of his or her Deferred Unit Account Balance retained as
Deferred Units in his or her Deferred Unit/Stock Unit Account for payment at a
later date, or (ii) to have all or a portion of his or her Deferred Unit Account
Balance credited (either at the expiration of the Holding Period or upon some
specified subsequent date) to a Mutual Fund Index Account in accordance with
Section 2.4(b).

      (2) With respect to Deferred Stock Units, a Participant may elect to have
all or a portion of his or her Deferred Stock Unit Account Balance retained as
Deferred Stock Units in his or her Deferred Unit/Stock Unit Account for payment
at a later date.

      (b) Crediting to Mutual Fund Index Account. If a Participant elects,
pursuant to Section 2.4(a), to defer all or a portion of his or her Deferred
Unit Account Balance into a Mutual Fund Index Account, then, as soon as
practicable (but in no event later than the end of the following month) after
the expiration of the Holding Period applicable to such Participant's Deferred
Unit grant, a Mutual Fund Index Account will be established in the Participant's
name and will be credited with a dollar amount determined by multiplying the
relevant number of Deferred Units by the Current Market Value per share of
Common Stock on the last day of the month immediately preceding the month in
which the Holding Period expires and rounding the result to the nearest 


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whole cent. Mutual Fund Index Account Balances may not subsequently be converted
to Deferred Units or Deferred Stock Units.

      (c) Irrevocability of Deferral Election. Except as provided in Sections
2.4(d) or (e) or Section 2.5, an election to defer the payment of all or a
portion of a Participant's Deferred Unit Account Balance or Deferred Stock Unit
Account Balance made pursuant to Section 2.4(a)(1) or (2) shall be irrevocable
once submitted to the Administrator or his or her designee.

      (d) Rescission of Deferral Election Prior to the Expiration of the Holding
Period. An optional deferral election may be rescinded at the request of the
Participant only (i) prior to the expiration of the Holding Period with respect
to any grant of Deferred Units or Deferred Stock Units, and (ii) if the
Administrator, in his or her sole discretion and upon evidence of such basis
that he or she finds persuasive (including a material applicable change in the
Participant's U.S. Federal and/or foreign income tax rate during the period
between the deferral election and the expiration of the Holding Period), agrees
to the rescission of the election. In the event of a rescission under this
Section 2.4(d), no deferral will be effected under the Plan and the Participant
will be paid the Deferred Units or Deferred Stock Units in accordance with
Section 2.4(a).

      (e) Rescission of Deferral Election Caused by an Adverse Tax
Determination. Notwithstanding the provisions of Section 2.4(c), a deferral
election may be rescinded at any time if (i) a final determination is made by a
court or other governmental body of competent jurisdiction that the election was
ineffective to defer income for purposes of U.S. Federal, state, local or
foreign income taxation and the time for appeal from this determination has
expired, and (ii) the Administrator, in his or her sole discretion, decides,
upon the Participant's request and upon evidence of the occurrence of the events
described in clause (i) hereof that he or she finds persuasive, to rescind the
election. Upon such rescission, the relevant Account Balance(s) will be paid to
the Participant as soon as practicable as provided herein.

      Section 2.5 Payment of Amounts Optionally Deferred.

      (a) Regular Payment Elections. A Participant's Account Balance(s) will be
paid by ML & Co., as elected by the Participant at the time of his or her
optional deferral election, either in a single payment to be made, or in the
number of annual installment payments (not to exceed 15) chosen by the
Participant to commence, (i) in the month following the month of the
Participant's End of Service Date or death, (ii) in any month and year selected
by the Participant after the scheduled expiration of the Holding Period (i.e.,
without taking into account the possibility of Early Separation, death or
Disability) or (iii) in any month in the calendar year following the
Participant's End of Service Date, but in no event may the date elected under
clause (i), (ii) or (iii) result in the payment (in the case of a single
payment) or commencement of payments (in the case of installment payments) later
than the month following the Participant's 72nd birthday. The amount of each
annual installment payment, if applicable, shall be determined by multiplying
the Account Balance(s) as of the last day of the month immediately preceding the
month in which the payment is to be made by a fraction, the numerator of which
is one and the denominator of which is the number of remaining installment
payments (including the installment payment to be made) and rounding the result
to the nearest whole Deferred Unit, Deferred Stock Unit or cent, as the case may
be.

      (b) Modified Installment Payments. In lieu of one of the regular payment
elections provided for in Section 2.5(a), a Participant may elect to receive his
or her Deferred Unit Account Balance or Mutual Fund Index Account Balance in at
least 11 but no more than 15 annual 


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installment payments ("modified installment payments"), such modified
installment payments to commence on the last business day in March in the year
following the Participant's End of Service Date (the "Initial Payment Date").
The modified installment payments shall be computed in accordance with the last
sentence of Section 2.5(a) and will in all other respects be treated like
regular installment payments under the Plan. By electing modified installment
payments, the Participant agrees that at any time prior to the last day of
February immediately preceding a Participant's Initial Payment Date (the
"Determination Date"), ML & Co. shall have the right, without the consent of
Participant or any beneficiary, to change the Participant's method of payment to
11 annuitized payments ("annuitized payments"), in the event that the
Administrator, in his or her sole discretion, determines that such a change is
necessary or appropriate in order to preserve the intended state tax benefits of
the modified installment payments to the Participant or any beneficiary. In the
event that the Administrator determines that annuitized payments shall be made,
the amount of the annuitized payments will be determined by applying the
Discount Rate, as defined below, to the value of the Deferred Unit Account
Balance (determined as provided in Section 2.5(c)) or Mutual Fund Index Account
Balance, as applicable, as of the Determination Date to create a stream of 11
equal annual payments. If annuitized payments are to be made, then the Deferred
Unit Account Balance or Mutual Fund Index Account Balance, as applicable, shall
cease to be adjusted pursuant to Article III as of the Determination Date and
the Company's only obligation to the Participant shall be to make the annuitized
payments when due. As used herein, Discount Rate shall mean ML & Co.'s
then-applicable after-tax cost of borrowing and is defined as (A) x (B), where
(A) is equal to 1 minus ML & Co.'s then-effective tax rate, expressed as a
decimal, and (B) is equal to the sum of: (i) the annual yield on the
then-current 5-year U.S. Treasury Note, and (ii) a spread (which will not be
less than 0.10%) indicative of ML & Co.'s borrowing cost for transactions of
similar structure and average maturity to the annuity, as determined by ML & Co.

      (c) Form of Payment. Deferred Units payable pursuant to this Section 2.5
will be paid in cash. Except as otherwise provided in Section 2.5(b), the amount
of any such cash payment shall be determined by multiplying the number of
Deferred Units to be paid by the Current Market Value per share of Common Stock
for the last day of the month immediately preceding the month in which payment
is to be made and rounding the result to the nearest whole cent. Deferred Stock
Units payable pursuant to this Section 2.5 will be paid in shares of Common
Stock. One share of Common Stock will be delivered for each Deferred Stock Unit
to be paid, after rounding any fractional Deferred Stock Unit upwards to the
nearest whole share. Amounts deferred as Mutual Fund Index Account Balances will
be paid in cash as provided in Section 2.5(a) or (b), whichever is applicable.

      (d) Death Prior to Payment. If the Participant dies prior to payment of
any or all amounts optionally deferred, then the Account Balance(s) will be paid
to the Participant's beneficiary in accordance with the Participant's election
of either installment payments, modified installment payments or a single
payment, provided, however, that, in the event that a beneficiary of the
Participant's Account Balance(s) is the Participant's estate or is otherwise not
a natural person, then (i) if the Participant has elected a regular payment
election pursuant to Section 2.5(a), the applicable portion of the Account
Balance(s) will be paid in a single payment to such beneficiary, and (ii) if the
Participant has elected modified installment payments pursuant to Section
2.5(b), the applicable portion of the Account Balance(s) will continue to be
paid as modified installment payments or annuitized payments, as the case may
be, but only to a single person consisting of the administrator or executor of
the Participant's estate or another person lawfully designated by the


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administrator or executor (and in the event no such person is designated within
a reasonable time, payment will be made in a lump sum).

      (e) Discretion to Alter Payment Date. Notwithstanding the other provisions
of this Section 2.5, if the Participant ceases to be a Director for any reason,
the Administrator may, in his or her sole discretion, direct that the Account
Balance(s), except for any Deferred Unit Account Balance resulting from a grant
pursuant to Section 2.1(a) (but not any subsequent optional deferral thereof),
be paid at some other time or that it be paid in installments; provided, that no
such direction that adversely affects the rights of the Participant or his or
her beneficiary under this Plan shall be implemented without the consent of the
affected Participant or beneficiary. This direction may be revoked by the
Administrator at any time in his or her sole discretion.

      (f) Hardship Distributions. ML & Co. may pay to the Participant, on such
terms and conditions as the Administrator may establish, such part or all of the
Account Balance(s), except for any Deferred Unit Account Balance resulting from
a grant pursuant to Section 2.1(a) (but not any subsequent optional deferral
thereof), as the Administrator may, in his or her sole discretion based upon
substantial evidence submitted by the Participant, determine necessary to
alleviate hardship caused by an unanticipated emergency or necessity outside of
the Participant's control affecting the Participant's personal or family
affairs. Such payment will be made only at the Participant's written request and
with the express approval of the Administrator and will be made on the date
selected by the Administrator in his or her sole discretion. The balance of the
Account(s), if any, will continue to be governed by the terms of this Plan.
Hardship shall be deemed to exist only on account of expenses for medical care
(described in Code Section 213(d)) of the Participant, the Participant's spouse
or the Participant's dependents (described in Code Section 152); payment of
unreimbursed tuition and related educational fees for the Participant, the
Participant's spouse or the Participant's dependents; the need to prevent the
Participant's eviction from, or foreclosure on, the Participant's principal
residence; unreimbursed damages resulting from a natural disaster; or such other
financial need deemed by the Administrator in his or her sole discretion to be
immediate and substantial.

      Section 2.6 Beneficiary.

      (a) Designation of Beneficiary. The Participant may designate, in a
writing delivered to the Administrator or his or her designee before the
Participant's death, a beneficiary to receive payments under the Plan in the
event of the Participant's death. The Participant may also designate a
contingent beneficiary to receive payments under the Plan if the primary
beneficiary does not survive the Participant. The Participant may designate more
than one person as the Participant's beneficiary or contingent beneficiary, in
which case (i) no contingent beneficiary would receive any payment unless all of
the primary beneficiaries predeceased the Participant, and (ii) the surviving
beneficiaries in any class shall share in any payments in proportion to the
percentages of interest assigned to them by the Participant.

      (b) Change in Beneficiary. The Participant may change his or her
beneficiary or contingent beneficiary (without the consent of any prior
beneficiary) in a writing delivered to the Administrator or his or her designee
before the Participant's death. Unless the Participant states otherwise in
writing, any change in beneficiary or contingent beneficiary will automatically
revoke such prior designations of the Participant's beneficiary or of the
Participant's contingent beneficiary, as the case may be, under this Plan only;
and any designations under other deferral agreements or plans of the Company
will remain unaffected.


                                       10

      (c) Default Beneficiary. In the event a Participant does not designate a
beneficiary, or no designated beneficiary survives the Participant, the
Participant's beneficiary shall be the Participant's surviving spouse, if the
Participant is married at the time of his or her death and not subject to a
court-approved agreement or court decree of separation, or otherwise the person
or persons designated to receive benefits on account of the Participant's death
under the ML & Co. pre-retirement death benefit for Non-Employee Directors,
unless the rights to such benefit have been assigned, in which case any amounts
payable to the Participant's beneficiary under the Plan will be paid to the
Participant's estate.

      (d) If the Beneficiary Dies During Payment. If a beneficiary who is
receiving or is entitled to receive payments hereunder dies after the
Participant but before all the payments have been made, the portion of the
Account Balance(s) to which that beneficiary was entitled will be paid as soon
as practicable in a single payment to such beneficiary's estate and not to any
contingent beneficiary the Participant may have designated; provided, however,
that if the beneficiary was receiving modified installment payments or
annuitized payments pursuant to Section 2.5(b), the applicable portion of the
Account Balance(s) will continue to be paid as modified installment payments or
annuitized payments, as the case may be, but only to a single person consisting
of the administrator or executor of the beneficiary's estate or another person
lawfully designated by the administrator or executor (and in the event no such
person is designated within a reasonable time, payment will be made in a lump
sum).

      Section 2.7 Domestic Relations Orders.

      Notwithstanding the Participant's elections hereunder, ML & Co. will pay
to, or to the Participant for the benefit of, the Participant's spouse or former
spouse the portion of the Participant's Account Balance(s) specified in a valid
court order entered in a domestic relations proceeding involving the
Participant's divorce or legal separation; provided that no portion of the
Account Balance(s) that may be subject to reduction pursuant to Section 2.3(b)
will be so distributed. Any such payment will be made net of any amounts the
Company may be required to withhold under applicable federal, state or local
law.

      Section 2.8 Withholding of Taxes.

      ML & Co. will deduct or withhold from any payment to be made or deferred
hereunder any U.S. Federal, state or local or foreign income or employment taxes
required by law to be withheld or require the Participant or the Participant's
beneficiary to pay any amount, or the balance of any amount, required to be
withheld.

Article III - Adjustment of Account(s)

      Section 3.1 Adjustment of Deferred Unit/Stock Unit Accounts.

      (a) Dividend Equivalents. Whenever a cash dividend is paid on a share of
Common Stock, a Participant's Deferred Unit/Stock Unit Account will be adjusted
by adding to the Deferred Unit Account Balance or Deferred Stock Unit Account
Balance, as applicable, the number of Deferred Units or Deferred Stock Units
determined by multiplying the per share amount of the cash dividend by the
Deferred Unit Account Balance or Deferred Stock Unit Account Balance, as
applicable, on the record date for the cash dividend, dividing the result by the
price per share of Common Stock used for purposes of the reinvestment of such
cash dividend in the Merrill Lynch & 


                                       11

Co., Inc. Dividend Reinvestment Program currently administered by Group Employee
Services, or if at any time there is no Dividend Reinvestment Program, the Daily
Market Price of a share of Common Stock on the date the cash dividend is paid,
and rounding the result to the nearest 1/100th of a Deferred Unit or Deferred
Stock Unit as the case may be (with .005 being rounded upwards); provided that,
if a Participant's Deferred Unit Account Balance or Deferred Stock Unit Account
Balance is reduced to zero in accordance with the Plan between the record date
and the payment date for such cash dividend, then, in lieu of such adjustment to
the Participant's Deferred Unit/Stock Unit Account, the dividend equivalent
amount with respect to such record date will be determined by multiplying the
per share amount of the cash dividend by the Deferred Unit Account Balance or
Deferred Stock Unit Account Balance on the record date for the cash dividend and
rounding the result to the nearest whole cent, which amount shall be applied as
follows: (i) the amount relating to any Deferred Units or Deferred Stock Units,
as the case may be, with respect to which distribution has been made to the
Participant under the Plan shall be paid to the Participant in cash, and (ii)
the amount relating to the portion, if any, of the Deferred Unit Account Balance
that is credited to the Participant's Mutual Fund Index Account in accordance
with the Plan shall be credited to such Mutual Fund Index Account, in each case,
at the same time as such cash dividend is paid to the holders of the Common
Stock.

      (b) Changes in Capitalization. Any other provision of the Plan to the
contrary notwithstanding, if any change shall occur in or affect shares of
Common Stock (or the Rights or Junior Preferred Stock) on account of a merger,
consolidation, reorganization, stock dividend, stock split or combination,
reclassification, recapitalization, or distribution to holders of shares of
Common Stock (other than cash dividends), including, without limitation, a
merger or other reorganization event in which the shares of Common Stock cease
to exist, then appropriate adjustments shall be made, without any action by the
Board of Directors, to the Deferred Units and Deferred Stock Units, as shall be
necessary to maintain the proportionate interest of the Participants and to
preserve, without increasing, the value of their Account Balance(s). In the
event of a change in the presently authorized shares of Common Stock that is
limited to a change in the designation thereof or a change of authorized shares
with par value into the same number of shares with a different par value or into
the same number of shares without par value, the shares resulting from any such
change shall be deemed to be shares of Common Stock within the meaning of the
Plan.

      Section 3.2 Adjustment of Mutual Fund Index Accounts; Mutual Fund Index
                  Account Return Options.

      (a) Selection of Mutual Fund Index Account Return Options. At the time of
his or her optional deferral election pursuant to Section 2.4(a), the
Participant must select one or more Mutual Fund Index Account Return Options and
the percentage of the Participant's Mutual Fund Index Account to be adjusted to
reflect the performance of each Selected Mutual Fund Index Account Return
Option. A Participant may, by complying with such procedures as the
Administrator may prescribe, including procedures specifying the frequency with
respect to which such changes may be effected (but not more than twelve times in
any calendar year), change the Selected Mutual Fund Index Account Return Options
to be applicable with respect to his or her Mutual Fund Index Account.

      (b) Adjustment of Mutual Fund Index Accounts. While a Participant's Mutual
Fund Index Account does not represent the Participant's ownership of, or any
ownership interest in, any particular assets, the Mutual Fund Index Account
shall be adjusted to reflect the investment experience of the Participant's
Selected Mutual Fund Index Account Return Options in the same 


                                       12

manner as if investments in accordance with the Participant's elections had
actually been made through the ML Benefit Services Platform and ML II Core
Recordkeeping System, or any successor system used for keeping records of
Participants' Mutual Fund Index Accounts (the "ML II System"). In adjusting
Mutual Fund Index Accounts, the timing of receipt of Participant instructions by
the ML II System shall control the timing and pricing of the notional
investments in the Participant's Selected Mutual Fund Index Account Return
Options in accordance with the rules of operation of the ML II System and its
requirements for placing corresponding investment orders, as if orders to make
corresponding investments were actually to be made, except that in connection
with the crediting of deferred amounts to the Participant's Mutual Fund Index
Account and distributions from the Mutual Fund Index Account, deferral
allocation instructions shall be treated as if received by the ML II System
prior to the close of transactions through the ML II System on the relevant day.
Each Selected Mutual Fund Index Account Return Option shall be valued using the
Net Asset Value of the Selected Mutual Fund Index Account Return Option as of
the relevant day, provided, that, in valuing a Selected Mutual Fund Index
Account Return Option for which a Net Asset Value is not computed, the value of
the security involved for determining Participants' rights under the Plan shall
be the price reported for actual transactions in that security through the ML II
System on the relevant day, without giving effect to any transaction charges or
costs associated with such transactions, provided, further, that, if there are
no such transactions effected through the ML II System on the relevant day, the
value of the security shall be:

            (i)   if the security is listed for trading on one or more national
                  securities exchanges, the average of the high and low sale
                  prices for that day on the principal exchange for such
                  security, or if such security is not traded on such principal
                  exchange on that day, the average of the high and low sales
                  prices on such exchange on the first day prior thereto on
                  which such security was so traded;

            (ii)  if the security is not listed for trading on a national
                  securities exchange but is traded in the over-the-counter
                  market, the average of the highest and lowest bid prices for
                  such security on the relevant day; or

            (iii) if neither clause (i) nor (ii) applies, the value determined
                  by the Administrator by whatever means he or she considers
                  appropriate in his or her sole discretion.

Article IV - Status of Accounts

      Section 4.1 No Trust or Fund Created; General Creditor Status.

      Nothing contained herein and no action taken pursuant hereto will be
construed to create a trust or separate fund of any kind or a fiduciary
relationship between ML & Co. and any Participant, the Participant's beneficiary
or estate, or any other person. Title to and beneficial ownership of any funds
represented by the Account Balance(s) will at all times remain in ML & Co.; such
funds will continue for all purposes to be a part of the general funds of ML &
Co. and may be used for any corporate purpose. No person will, by virtue of the
provisions of this Plan, have any interest whatsoever in any specific assets of
the Company. TO THE EXTENT THAT ANY PERSON ACQUIRES A RIGHT TO RECEIVE PAYMENTS
FROM ML & CO. UNDER THIS PLAN, SUCH RIGHT WILL BE NO GREATER THAN THE RIGHT OF
ANY UNSECURED GENERAL CREDITOR OF ML & CO.


                                       13

      Section 4.2 Non-Assignability.

      The Participant's right or the right of any other person to the Account
Balance(s) or any other benefits hereunder cannot be assigned, alienated, sold,
garnished, transferred, pledged, or encumbered except by a written designation
of beneficiary under this Plan, by written will, or by the laws of descent and
distribution.

      Section 4.3 Effect on Benefits Under Pension and Welfare Benefit Plans.

      The effect of the grants, deferrals and payments under the Plan on pension
and welfare benefit plans in which the Participant may be a participant will
depend upon the provisions of each such plan, as amended from time to time.

Article V - Change in Control

      Section 5.1 Payment of Account Balance(s) upon Change in Control.

      (a) Payment of Account Balance(s). Notwithstanding any other provision of
this Plan, in the event that (i) ML & Co. receives a Tender Offer Statement on
Schedule 14D-1 under the Securities Exchange Act of 1934 relating to a Tender
Offer or (ii) a Change in Control shall occur, the Participant's Account
Balance(s), except for any Deferred Unit Account Balance resulting from a grant
pursuant to Section 2.1(a) (but not any subsequent optional deferral thereof),
will be paid to the Participant in a lump sum promptly after the receipt of such
Tender Offer Statement or the occurrence of such Change in Control, and in any
event, not later than 30 days thereafter.

      (b) Manner of Payment. Payment of Account Balance(s) pursuant to Section
5.1(a) shall be made in the following manner:

      (1) With respect to Deferred Units and Deferred Stock Units, payment shall
be made in cash and shall be calculated as if any applicable Holding Period had
expired. The amount of the cash payment shall be determined by multiplying the
number of Deferred Units and Deferred Stock Units in the Participant's Deferred
Unit/Stock Unit Account by the Daily Market Price per share of Common Stock on
the date of the event specified in Section 5.1(a)(i) or (ii), as the case may
be, or, if higher, the highest Daily Market Price per share of Common Stock on
any day during the 90-day period ending on such date.

      (2) Any Mutual Fund Index Account Balance shall be valued as of the date
of the event specified in 5.1(a), and such amount shall be paid in cash.

Article VI - Administration of the Plan

      Section 6.1 Powers of the Administrator.

      The Administrator has full power and authority to interpret, construe, and
administer this Plan. The Administrator's interpretations and construction
hereof, and actions hereunder, including any determinations regarding the amount
or recipient of any payments, will be binding and conclusive on all persons for
all purposes. The Administrator will not be liable to any person for any action
taken or omitted in connection with the interpretation and administration of
this Plan 


                                       14

unless attributable to his or her willful misconduct or lack of good faith. The
Administrator may designate persons to carry out the specified responsibilities
of the Administrator and shall not be liable for any act or omission of a person
as designated.

      Section 6.2 Payments on Behalf of an Incompetent.

      If the Administrator finds that any person who is presently entitled to
any payment hereunder is a minor or is unable to care for his or her affairs
because of disability or incompetency, payment of the Account Balance(s) may be
made to anyone found by the Administrator to be the committee or other
authorized representative of such person, or to be otherwise entitled to such
payment, in the manner and under the conditions that the Administrator
determines. Such payment will be a complete discharge of the liabilities of ML &
Co. hereunder with respect to the amounts so paid.

      Section 6.3 Corporate Books and Records Controlling.

      The books and records of the Company will be controlling in the event a
question arises hereunder concerning Account Balance(s), deferral elections,
beneficiary designations, or any other matters.

      Article VII - Miscellaneous Provisions

      Section 7.1 Litigation.

      The Company shall have the right to contest, at its expense, any ruling or
decision, administrative or judicial, on an issue that is related to the Plan
and that the Administrator believes to be important to Participants, and to
conduct any such contest or any litigation arising therefrom to a final
decision.

      Section 7.2 Headings Are Not Controlling.

      The headings contained in this Plan are for convenience only and will not
control or affect the meaning or construction of any of the terms or provisions
of this Plan.

      Section 7.3 Governing Law.

      To the extent not preempted by applicable U.S. Federal law, this Plan will
be construed in accordance with and governed by the laws of the State of New
York as to all matters, including, but not limited to, matters of validity,
construction, and performance.

      Section 7.4 Amendment and Termination.

      The Board of Directors, or, if permitted pursuant to Rule 16b-3 under the
Exchange Act, the Executive Committee may amend or terminate this Plan at any
time, provided that no amendment or termination may be made that would adversely
affect the right of a Participant to his or her Account Balance(s) as of the
date of such amendment or termination.


                                       15

Article VIII - Effective Date

      The Plan shall be effective as of August 12, 1996.


                                       16