EXH. 10(I) = 1997 KECALP DEF. COMPENSATION PLAN

Exhibit 10(i)


MERRILL LYNCH & CO., INC.

1997 KECALP DEFERRED COMPENSATION PLAN

FOR A SELECT GROUP OF ELIGIBLE EMPLOYEES









DATED AS OF JUNE 11, 1997



MERRILL LYNCH & CO., INC.
1997 KECALP DEFERRED COMPENSATION PLAN
FOR A SELECT GROUP OF ELIGIBLE EMPLOYEES

TABLE OF CONTENTS

PAGE

I. GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1 Purpose and Intent . . . . . . . . . . . . . . . . . . . . . . . .1
1.2 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . .1
II. ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.1 Eligible Employees . . . . . . . . . . . . . . . . . . . . . . . .6
(a) General Rule. . . . . . . . . . . . . . . . . . . . . . . . .6
(b) Individuals First Employed During Election
Year or Plan Year . . . . . . . . . . . . . . . . . . . . . .6
(c) Disqualifying Factors . . . . . . . . . . . . . . . . . . . .6
III. DEFERRAL ELECTIONS; ACCOUNTS. . . . . . . . . . . . . . . . . . . . . .6
3.1 Deferral Elections . . . . . . . . . . . . . . . . . . . . . . . .6
(a) Timing and Manner of Making of Elections. . . . . . . . . . .6
(b) Irrevocability of Deferral Election . . . . . . . . . . . . .7
(c) Application of Election . . . . . . . . . . . . . . . . . . .7
3.2 Crediting to Accounts. . . . . . . . . . . . . . . . . . . . . . .7
(a) Benchmark Return Account. . . . . . . . . . . . . . . . . . .7
(b) KECALP Unit Account . . . . . . . . . . . . . . . . . . . . .7
3.3 Requirements for Deferral. . . . . . . . . . . . . . . . . . . . .7
(a) Requirements. . . . . . . . . . . . . . . . . . . . . . . . .7
(b) Failure to Meet Requirements. . . . . . . . . . . . . . . . .8
(c) Pro Rata Reduction of Deferred Amounts. . . . . . . . . . . .8
3.4 Return Options; Adjustment of Accounts . . . . . . . . . . . . . .8
(a) Selection of KECALP Return Option . . . . . . . . . . . . . .8
(b) Selection of Benchmark Return Options . . . . . . . . . . . .9
(c) Selection of the Leverage Percentage. . . . . . . . . . . . .9
(d) Adjustment of KECALP Unit Account . . . . . . . . . . . . . .9
(e) Adjustment of Debit Account . . . . . . . . . . . . . . . . .10
(f) Adjustment of Benchmark Return Account. . . . . . . . . . . .10
(g) Charges . . . . . . . . . . . . . . . . . . . . . . . . . . .11
3.5 Rescission of Deferral Election. . . . . . . . . . . . . . . . . .11
(a) Adverse Tax Determination . . . . . . . . . . . . . . . . . .11
(b) Rescission During the Interim Period For
Amounts Not Yet Earned. . . . . . . . . . . . . . . . . . . .11
IV. STATUS OF DEFERRED AMOUNTS AND ACCOUNT. . . . . . . . . . . . . . . . .12
4.1 No Trust or Fund Created; General Creditor Status. . . . . . . . .12
4.2 Non-Assignability. . . . . . . . . . . . . . . . . . . . . . . . .12
4.3 Effect of Deferral on Benefits Under Pension and
Welfare Benefit Plans. . . . . . . . . . . . . . . . . . . . . . .12
V. PAYMENT OF ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . .12
5.1 Manner of Payment. . . . . . . . . . . . . . . . . . . . . . . . .12
5.2 Termination of Employment. . . . . . . . . . . . . . . . . . . . .13
(a) Death or Retirement . . . . . . . . . . . . . . . . . . . . .13
(b) Other Termination of Employment - Forfeiture
of Leverage . . . . . . . . . . . . . . . . . . . . . . . . .13
(c) Leave of Absence, Transfer or Disability. . . . . . . . . . .13
(d) Discretion to Alter Payment Date. . . . . . . . . . . . . . .13


i.


PAGE

5.3 Withholding of Taxes . . . . . . . . . . . . . . . . . . . . . . .13
5.4 Beneficiary. . . . . . . . . . . . . . . . . . . . . . . . . . . .14
(a) Designation of Beneficiary. . . . . . . . . . . . . . . . . .14
(b) Change in Beneficiary . . . . . . . . . . . . . . . . . . . .14
(c) Default Beneficiary . . . . . . . . . . . . . . . . . . . . .14
(d) If the Beneficiary Dies During Payment. . . . . . . . . . . .14
5.5 Hardship Distributions . . . . . . . . . . . . . . . . . . . . . .14
5.6 Domestic Relations Orders. . . . . . . . . . . . . . . . . . . . .15
VI. ADMINISTRATION OF THE PLAN. . . . . . . . . . . . . . . . . . . . . . .15
6.1 Powers of the Administrator. . . . . . . . . . . . . . . . . . . .15
6.2 Payments on Behalf of an Incompetent . . . . . . . . . . . . . . .15
6.3 Corporate Books and Records Controlling. . . . . . . . . . . . . .15
VII. MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . .16
7.1 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
7.2 Headings Are Not Controlling . . . . . . . . . . . . . . . . . . .16
7.3 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . .16
7.4 Amendment and Termination. . . . . . . . . . . . . . . . . . . . .16


2.


MERRILL LYNCH & CO., INC.
1997 KECALP DEFERRED COMPENSATION PLAN
FOR A SELECT GROUP OF ELIGIBLE EMPLOYEES


ARTICLE I
GENERAL

1.1 PURPOSE AND INTENT.

The purpose of the Plan is to encourage the employees who are integral to
the success of the business of the Company to continue their employment by
providing them with flexibility in meeting their future income needs. It is
intended that this Plan be unfunded and maintained primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees within the meaning of Title I of ERISA, and all decisions
concerning who is to be considered a member of that select group and how this
Plan shall be administered and interpreted shall be consistent with this
intention.

1.2 DEFINITIONS.

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

"Account Balances" means, as of any date, the Benchmark Return Account
Balance, the Debit Account Balance and the KECALP Unit Account Balance.

"Accounts" means the Benchmark Return Account, the KECALP Unit Account and
the Debit Account.

"Adjusted Compensation" means the financial consultant incentive
compensation, account executive incentive compensation or estate planning and
business insurance specialist (or other similar titles established by National
Sales Management) incentive compensation, in each case exclusive of base salary,
earned by a Participant during the Fiscal Year ending in 1997, and payable after
January 1, 1997, as a result of the Participant's production credit level, or
such other similar items of compensation as the Administrator shall designate as
"Adjusted Compensation" for purposes of this Plan.

"Administrator" means the Director of Human Resources of ML & Co., or his
functional successor, or any other person or committee designated as
Administrator of the Plan by the MDCC.

"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 Charge" means the charge provided for in Section 3.4(g)(i).

"Applicable Federal Rate" means the applicable federal rate for short-term
(0-3 years) obligations of the United States Treasury established in January of
each year.

"Available Benchmark Return Account Balance" means amounts in the
Benchmark Return Account after each of the debit balances recorded in the Debit
Account has been reduced to zero.



"Average Leveraged Principal Amount" means, for each Participant, for any
period, the sum of the Leveraged Principal Amounts outstanding at the end of
each day in the period divided by the number of days in such period.

"Benchmark Return Account" means the reserve account for each Participant
established on the books and records of ML & Co. to record the Participant's
Benchmark Return Account Balance under the Plan.

"Benchmark Return Account Balance" means, as of any date, the Deferred
Amounts credited to a Participant's Benchmark Return Account, adjusted to
reflect (1) the performance of the Participant's Selected Benchmark Return
Options as provided in Section 3.4(f); (2) balances transferred to the KECALP
Unit Account, as provided in Section 3.2(b) at the closing of Merrill Lynch
KECALP L.P. 1997; (3) distributions with respect to units in the KECALP Unit
Account made in accordance with Section 3.4(d); (4) chargeoffs of any debit
balance (the aggregate accrued Annual Charge or the Leveraged Principal Amount,
as the case may be) recorded the Debit Account as provided in Section 3.4(e);
and (5) any payouts to the Participant under Article V hereof.

"Benchmark 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 Benchmark Return Accounts hereunder. In the event a
Benchmark Return Option ceases to exist or is no longer to be a Benchmark Return
Option, the Administrator may designate a substitute Benchmark Return Option for
such discontinued option.

"Board of Directors" means the Board of Directors of ML & Co.

"Career Retirement" means a Participant's termination of employment with
the Company for reasons other than for cause on or after: (i) the Participant's
55th birthday, if the Participant has at least 5 years of service; (ii) the
Participant's 50th birthday, if the Participant has at least 10 years of
service; (iii) the Participant's 45th birthday, if the Participant has at least
15 years of service, or (iv) at any age, if the Participant has at least 20
years of service, provided that, in each case, following such termination such
Participant does not engage in any activity that, in the sole judgment of the
Administrator, is in competition with the business of the Company.

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

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

"Compensation" means, as relevant, a Participant's Adjusted Compensation,
Variable Incentive Compensation and/or Sign-On Bonus. In no event shall a
Participant's base pay be considered Compensation (i.e., an amount subject to
deferral under this Plan).

"Debit Account" means, as, the debit account established for each
Participant on the books and records of ML & Co. with a KECALP Unit Account to
record the Participant's Debit Account Balance under the Plan.

"Debit Account Balance" means, as of any date the negative balance, if
any, representing each of: (1) the aggregate Annual Charge, accrued in
accordance with Section 3.4(g)(i); and (2) any Leveraged Principal Amount
(together with any pro rata Interest Amounts determined in accordance with
Section 3.4(g)(ii), if applicable), as reduced by any distributions from the
KECALP Unit Account or chargeoffs against the Benchmark Return Account, in
accordance with Section 3.4(e).


2


"Deferral Percentage" means the percentage (which shall be in whole
percentage increments and not more than 90%), specified by the Participant to be
the percentage of each payment of Compensation he or she wishes to defer under
the Plan.

"Deferred Amounts" means the amounts of Compensation actually deferred by
the Participant under this Plan.

"Election Year" means the 1996 calendar year.

"Eligible Compensation" means a Participant's "eligible compensation" as
determined, from time to time, for purposes of ML & Co.'s Basic Group Life
Insurance Plan.

"Eligible Employee" means an employee eligible to defer amounts under this
Plan, as determined under Section 2.1 hereof.

"ERISA" means the U.S. Employee Retirement Income Security Act of 1974, as
amended from time to time.

"Excess Deferral Amounts" means, for each Participant deferring Adjusted
Compensation, the additional amounts advanced to the Participant by the Company
for crediting to the Participant's KECALP Unit Account, such amounts to equal
the amounts that would actually have been deferred under the Plan from the
Participant's Projected Remaining Adjusted Compensation (taking into account
deferrals under other deferred compensation plans) if such Projected Remaining
Adjusted Compensation had been earned prior to the closing of Merrill Lynch
KECALP L.P. 1997.

"Fiscal Month" means the monthly period used by ML & Co. for financial
accounting purposes.

"Fiscal Year" means the annual period used by ML & Co. for financial
accounting purposes.

"Full-Time Domestic Employee" means a full-time employee of the Company
paid from the Company's domestic based payroll (other than any U.S. citizen or
"green card" holder who is employed outside the United States).

"Full-Time Expatriate Employee" means a U.S. citizen or "green card"
holder employed by the Company outside the United States and selected by the
Administrator as eligible to participate in the Plan (subject to the other
eligibility criteria).

"Initial Leveraged Amount" means the initial dollar amount by which of a
Participant's deferral is leveraged as determined in accordance with Section
3.4(c).

"Interim Period" means the period beginning on the date the Participant
elects to defer compensation under the Plan and ending on either (1) the date of
the closing of Merrill Lynch KECALP L.P. 1997 or (2) the date that KECALP Inc.,
the general partner of Merrill Lynch KECALP L.P. 1997 receives notice from the
SEC that its request to amend the exemptive order for the KECALP partnerships to
allow ML & Co. to invest in Merrill Lynch KECALP L.P. 1997 has been denied.

"Interest" means the interest accruing on a Participant's Average
Leveraged Principal Amount at the Applicable Federal Rate.


3


"Interest Amounts" means, for any Participant, as of any date, the amount
of Interest that has accrued to such date on such Participant's Average
Leveraged Principal Amount, from the date on which a Participant's Leveraged
Principal Amount is established, or from the most recent date that Interest
Amounts were added to the Leverage Principal Amount.

"KECALP Return Option" means the option of indexing returns hereunder to
the performance of Merrill Lynch KECALP L.P. 1997, on a leveraged or unleveraged
basis.

"KECALP Unit Account" means the reserve account for each Participant who
has chosen the KECALP Return Option, established on the books and records of ML
& Co. to record such Participant's KECALP Unit Account Balance.

"Leveraged or Unleveraged Unit Distributions" means the distributions from
the KECALP Unit Account attributable to the leveraged or unleveraged portion (as
the case may be) of a Participant's KECALP Unit Account.

"Leverage-Eligible Participants" means persons who have at least $400,000
of Total Compensation for the Election Year and otherwise qualify, in accordance
with standards determined by the Administrator, to select the KECALP Return
Option on a leveraged basis.

"Leverage Percentage" means the percentage of leverage chosen by a
Leverage-Eligible Participant, which percentage will be subject to the limits
determined by the Administrator.

"Leveraged Principal Amount" means a Participant's Initial Leveraged
Amount, if any, plus, to the extent applicable, the amount of any Excess
Deferral Amounts not repaid with actual deferrals of Adjusted Compensation by
the end of January 1998, or any as adjusted to reflect the addition of Interest
Amounts (or any pro rata Interest Amounts) determined in accordance with Section
3.4(g)(ii).

"Maximum Deferral" means the whole dollar amount specified by the
Participant to be the amount of Compensation he or she elects to be deferred
under the Plan.

"MDCC" means the Management Development and Compensation Committee of the
Board of Directors.

"ML & Co." means Merrill Lynch & Co., Inc.

"Net Asset Value" means, (1) with respect to each Benchmark 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 Selected Benchmark Return Option for which the
value is to be determined, and (2) with respect to the KECALP Return Option, the
net asset value as determined periodically by the General Partner of Merrill
Lynch KECALP L.P. 1997.

"Partial Year Adjusted Compensation" means the actual amount of Adjusted
Compensation earned by a Participant during the period from December 28, 1996 to
the last day of the fiscal month prior to the closing of Merrill Lynch KECALP
L.P. 1997.

"Participant" means an Eligible Employee who has elected to defer
Compensation under the Plan.


4


"Plan" means this Merrill Lynch & Co., Inc. 1997 KECALP Deferred
Compensation Plan for a Select Group of Eligible Employees.

"Plan Year" means the Fiscal Year ending in 1997.

"Projected Remaining Adjusted Compensation" means, for any Participant,
the amount determined by annualizing such Participant's Partial Year Adjusted
Compensation and subtracting such Participant's Partial Year Adjusted
Compensation from such annualized amount.

"Retirement" means a Participant's termination of employment with the
Company for reasons other than for cause (i) on or after the Participant's 65th
birthday, or (ii) on or after the Participant's 55th birthday, if the
Participant has at least 10 years of service; or (iii) with the express approval
of the Administrator, which will be granted only if such termination is found by
the Administrator to be in, or not contrary to, the best interests of the
Company.

"SEC" means the Securities and Exchange Commission.

"Selected Benchmark Return Option" means a Benchmark Return Option
selected by the Participant in accordance with Section 3.4(b).

"Sign-On Bonus" means a single-sum amount paid or payable to a new
Eligible Employee during the Plan Year upon commencement of employment that is
to be paid during the Interim Period, in addition to base pay and other
Compensation, to induce him or her to become an employee of the Company, or any
similar item of compensation as the Administrator shall designate as "Sign-On
Bonus" for purposes of this Plan.

"Total Compensation" means Eligible Compensation plus the grant value, as
determined by ML & Co. at the time of grant, of stock-based awards that are
granted to certain employees of the Company generally in January or February of
the Plan Year with respect to the prior Fiscal Year, which, for purposes of this
Plan, are considered earned during the Plan Year regardless of when they are
actually granted or paid to the Participant.

"Undistributed Deferred Amounts" means, as on any date on which the Annual
Charge is determined, a Participant's Deferred Amounts (exclusive of any
appreciation or depreciation) minus for each distribution from the Plan prior to
such date, an amount equal to the product of the Deferred Amounts and a fraction
the numerator of which is the amount of such distribution and the denominator of
which is the combined Net Asset Value (prior to distribution) of the
Participant's Benchmark Return Account and KECALP Unit Account as of the date of
the relevant distribution.

"Variable Incentive Compensation" means the variable incentive
compensation or office manager incentive compensation that is paid in cash to
certain employees of the Company, generally in January or February of the Plan
Year with respect to the prior Fiscal Year, which, for purposes of this Plan, is
considered earned during the Plan Year regardless of when it is actually paid to
the Participant, or such other similar items of compensation as the
Administrator shall designate as "Variable Incentive Compensation" for purposes
of this Plan.

"401(k) Plan" means the Merrill Lynch & Co., Inc. 401(k) Savings &
Investment Plan.


5


ARTICLE II
ELIGIBILITY

2.1 ELIGIBLE EMPLOYEES.

(a) GENERAL RULE. An individual is an Eligible Employee if he or she
(i) is a Full-Time Domestic Employee or a Full-Time Expatriate Employee, (ii)
has at least $200,000 of Eligible Compensation for the Election Year, (iii) has
attained at least the title of Vice President, Director or Managing Director, or
holds a National Sales Management position with the Company (a "National Sales
Manager"), and (iv) (A) is a financial consultant or an estate planning and
business insurance specialist (or other similar title established by National
Sales Management), who was a member in 1996 of the Chairman's Club, the Charles
E. Merrill Circle, the Society of Eagles, the Falcons Club or the Win Smith
Fellows, (B) is a National Sales Manager, (C) is a member of the International
Private Banking Group, (D) is employed as an Investment Manager for Merrill
Lynch Asset Management, (E) is a non-producing employee in Band 1 or 2, or (F)
is a producing employee in grade 95 or above; PROVIDED, that non-producing
employees in Band 1 or above and producing employees in grade 97 or above (or
their executive equivalents) shall not be required to meet condition (ii)
hereof, and PROVIDED, FURTHER, that employees who were 1994 Win Smith Fellows
shall not be required to meet condition (iii) hereof.

(b) INDIVIDUALS FIRST EMPLOYED DURING ELECTION YEAR OR PLAN YEAR.
Subject to the approval of the Administrator in his sole discretion, an
individual who is first employed by the Company during the Election Year or
during the Interim Period of the Plan Year is an Eligible Employee if his or her
Eligible Compensation is greater than $200,000 and he or she is either employed
as a National Sales Manager or is to be nominated for at least the title of Vice
President, Director or Managing Director at the first opportunity following his
or her commencement of employment with the Company.

(c) DISQUALIFYING FACTORS. An individual shall not, however, be an
Eligible Employee if either (i) as of the deadline for submission of elections
specified in Section 3.1(a) the individual's wages have been attached or are
being garnished or are otherwise restrained pursuant to legal process or (ii)
within 13 months prior to the deadline for submission of elections specified in
Section 3.1(a), the individual has made a hardship withdrawal of Elective 401(k)
Deferrals as defined under the 401(k) Plan.


ARTICLE III
DEFERRAL ELECTIONS; ACCOUNTS

3.1 DEFERRAL ELECTIONS.

(a) TIMING AND MANNER OF MAKING OF ELECTIONS. An election to defer
Compensation for payment in accordance with Section 5.1 shall be made by
submitting to the Administrator such forms as the Administrator may prescribe.
Each election submitted must specify a Maximum Deferral and a Deferral
Percentage with respect to each category of Compensation to be deferred. All
elections by a Participant to defer Compensation under the Plan must be received
by the Administrator or such person as he may designate for the purpose by no
later than November 18th of the Election Year or, in the event such date is not
a business day, the immediately preceding business day; PROVIDED, HOWEVER, that
the Eligible Employee's election to defer a Sign-On Bonus during the Interim
Period must be part of such Eligible Employee's terms and conditions of
employment agreed to prior to the Eligible Employee's first day of employment
with the Company; and providing further; that the


6


Administrator may permit Eligible Employees who are Participants in the Merrill
Lynch & Co., Inc. 1997 Deferred Compensation Plan for a Select Group of Eligible
Employees to transfer out a portion of their account balances thereunder to this
Plan upon such terms and conditions he deems appropriate.

(b) IRREVOCABILITY OF DEFERRAL ELECTION. Except as provided in
Sections 3.5 and 5.5, an election to defer the receipt of any Compensation made
under Section 3.1(a) is irrevocable once submitted to the Administrator or his
designee. The Administrator's acceptance of an election to defer Compensation
shall not, however, affect the contingent nature of such Compensation under the
plan or program under which such Compensation is payable.

(c) APPLICATION OF ELECTION. The Participant's Deferral Percentage
will be applied to each payment of Compensation to which the Participant's
deferral election applies, PROVIDED, that the aggregate of the Participant's
Deferred Amounts shall not exceed the Participant's Maximum Deferral.

3.2 CREDITING TO ACCOUNTS.

(a) BENCHMARK RETURN ACCOUNT. A Participant's Deferred Amounts will be
credited to the Participant's Benchmark Return Account (to the extent they are
not credited directly to the Participant's KECALP Unit Account or applied
against the Participant's Excess Deferral Amount as provided in Section 3.2(b)),
as soon as practicable (but in no event later than the end of the following
month) after the last day of the Fiscal Month during which such Deferred Amounts
would, but for deferral, have been paid and will be accounted for in accordance
with Section 3.4. No interest will accrue, nor will any adjustment be made to a
Benchmark Return Account, for the period until the Deferred Amounts are
credited.

(b) KECALP UNIT ACCOUNT. Upon the closing of Merrill Lynch KECALP L.P.
1997, Participants will have their KECALP Unit Accounts credited with a whole
number of units determined by dividing by $1,000 the sum of the following: (1)
the Benchmark Return Account Balance, as of the day prior to the closing date;
(2) any additional Deferred Amounts which have not yet been credited to the
Benchmark Return Account as of such date; (3) the Participant's Excess Deferral
Amounts, if applicable; and (4) the Participant's Initial Leveraged Amount
(computed in accordance with Section 3.4(c)). Any amounts not applied to the
KECALP Unit Account will remain in the Benchmark Return Account (or be applied
to reduce negative balances in the Debit Account). No fractional units will be
credited.

Excess Deferral Amounts shall be deemed advances of Deferred Amounts
hereunder. Accordingly, actual amounts of Adjusted Compensation deferred, in
accordance with a Participant's elections, after the crediting of the
Participant's KECALP Unit Account, will be applied against such advances and no
such deferrals shall be credited to the Participant's Benchmark Return Account
until such advances are repaid. To the extent that Excess Deferral Amounts have
not been repaid at the end of the Plan Year, such unpaid Excess Deferral Amounts
shall be added to the Debit Account as either an Initial Leveraged Amount or
Leveraged Principal Amount (whether or not such Participant was initially a
Leverage-Eligible Participant).

3.3 REQUIREMENTS FOR DEFERRAL.

(a) REQUIREMENTS. Notwithstanding any other provision of this Plan, no
deferral will be effected under this Plan with respect to a Participant if:


7


(i) the Participant is not an Eligible Employee as of December 31,
1996,

(ii) the Participant's election, as applied to the Participant's
Variable Incentive Compensation (determined by substituting the
Election Year for the Plan Year) or Adjusted Compensation
(determined by substituting the Fiscal Year immediately prior to
the Fiscal Year ending in the Election Year for the Fiscal Year
ending in the Plan Year) would have resulted in an annual deferral
of less than $15,000,

(iii) the greater of (A) the sum of (1) the "Medicare wages" amount
listed on the Participant's W-2 form for the Plan Year, and (2) any
Compensation that is accelerated that the Participant may receive
in December of the Election Year that would have been payable in
the Plan Year in the absence of the action of the Company to
accelerate the payment, and (B) the Participant's Eligible
Compensation for the Plan Year, is less than $200,000 (except in
the circumstances provided for in the proviso to Section 2.1(a); or

(iv) it is determined by the Administrator that the SEC will not agree
by September 30, 1997 to allow an investment by ML & Co. in Merrill
Lynch KECALP L.P. 1997;

PROVIDED, that any Participant who first becomes an employee of the Company
during the Plan Year shall not be required to satisfy conditions (i) and (ii).
Condition (ii) shall not be construed to require a Participant's elections to
result in an ACTUAL deferral of at least $15,000. In the event that condition
(iv) has not occurred by September 30, 1997, but occurrence is expected within
1997, the Administrator shall have the discretion to extend the date to a later
date in 1997.

(b) FAILURE TO MEET REQUIREMENTS. If the requirements of Section
3.3(a)(i) or (ii) are not met by a Participant to whom such requirements are
applicable, such Participant's Deferred Amounts, if any, will be paid to such
Participant, without adjustment to reflect the performance of any Selected
Benchmark Return Option, as soon as practicable after it has been determined
that the requirements have not been met. If the requirements of Section
3.3(a)(iii) are not met by a Participant, the greater of such Participant's
Deferred Amounts or Benchmark Return Account Balance will be paid to such
Participant as soon as practicable after it has been determined that the
requirements have not been met. If the requirements of Section 3.3(a)(iv) are
not met, such Participant's Benchmark Return Account Balance will be paid to
such Participant as soon as practicable after it has been determined that the
requirements have not been met.

(c) PRO RATA REDUCTION OF DEFERRED AMOUNTS. In addition, in the event
that the Administrator determines that, as a result of amounts deferred that are
benchmarked to the KECALP Return Option, the size of Merrill Lynch KECALP L.P.
1997 would exceed $250 million, the Administrator may direct that the number of
unleveraged units to be credited to the KECALP Unit Accounts for all persons who
have chosen the KECALP Return Option, be reduced proportionately to reduce the
size of Merrill Lynch KECALP L.P. to less than $250 million. In such event, to
the extent that actual Deferred Amounts are reduced, the related Deferred
Amounts will be returned to Participants as soon as practicable and the
Participant's Initial Leveraged Amount will be recomputed in accordance with
Section 3.4(c) based on such reduced Deferred Amounts.

3.4 RETURN OPTIONS; ADJUSTMENT OF ACCOUNTS.

(a) SELECTION OF KECALP RETURN OPTION. Coincident with the
Participant's election to defer Compensation, the Participant will give a
preliminary indication of interest in selecting the KECALP Return Option. During
a 30-day period following the receipt by a Participant of the final


8


Prospectus for Merrill Lynch KECALP L.P. 1997, Participants will be required to
confirm their selection of the KECALP Return Option (and designate any Leverage
Percentage) or may instead elect to have their Deferred Amounts benchmarked to
the Benchmark Return Options, provided that such benchmarking shall be on an
unleveraged basis. PARTICIPANTS SHOULD BE AWARE THAT CHOOSING TO DEFER USING THE
KECALP RETURN OPTION IS CONTINGENT UPON THE AGREEMENT BY THE SEC THAT THE
EXEMPTIVE ORDER FOR THE KECALP PARTNERSHIPS CAN BE AMENDED TO ALLOW ML & CO. TO
INVEST IN MERRILL LYNCH KECALP L.P. 1997 TO HEDGE ITS OBLIGATIONS TO
PARTICIPANTS. IN ADDITION, ONCE THE CLOSING OF MERRILL LYNCH KECALP L.P. 1997
HAS OCCURRED, PARTICIPANTS WHO HAVE CHOSEN THE KECALP RETURN OPTION WILL NOT BE
ABLE TO CHANGE THEIR ELECTION.

(b) SELECTION OF BENCHMARK RETURN OPTIONS. Coincident with the
Participant's election to defer Compensation, the Participant must select one or
more Benchmark Return Options and the percentage of the Participant's Benchmark
Return Account to be adjusted to reflect the performance of each Selected
Benchmark Return Option during the Interim Period and at all other times when
there is a positive Benchmark Return Account Balance. All elections of Selected
Benchmark Return Options shall be in multiples of 10% unless the Administrator
determines that lower increments are administratively feasible, in which case
such lower increment shall apply. A Participant may, by complying with such
procedures as the Administrator may prescribe on a uniform and nondiscriminatory
basis, 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 Benchmark Return Options to be applicable with respect to
his or her Account. WHEN SELECTING SELECTED BENCHMARK RETURN OPTIONS,
PARTICIPANTS SHOULD BE AWARE THAT THE PERFORMANCE OF THE SELECTED BENCHMARK
RETURN OPTIONS WILL AFFECT THEIR BENCHMARK RETURN ACCOUNT BALANCE DURING THE
INTERIM PERIOD, WHICH MAY RESULT IN A SMALLER OR LARGER ALLOCATION TO THE KECALP
RETURN OPTION THAN WAS ORIGINALLY INTENDED.

(c) SELECTION OF THE LEVERAGE PERCENTAGE. Prior to the closing of the
offering of Merrill Lynch KECALP L.P. 1997, Leverage-Eligible Participants will
commit to selecting the KECALP Return Option on a leveraged basis and will
choose the Leverage Percentage, in accordance with standards determined by the
Administrator, by submitting such forms as the Administrator shall prescribe. On
the day prior to the closing of Merrill Lynch KECALP L.P. 1997, the
Administrator will determine each Leverage-Eligible Participant's Initial
Leveraged Amount by applying such Participant's Leverage Percentage to the sum
of (1) the dollar value of a Participant's Benchmark Return Account Balance (and
any additional Deferred Amounts not credited to such Benchmark Return Account)
plus, if applicable, (2) such Participant's Excess Deferral Amounts. This
Initial Leveraged Amount will be converted into units in the KECALP Unit Account
in accordance with Section 3.2(b) at the closing of Merrill Lynch KECALP L.P.
1997. The Initial Leveraged Amount will be recorded as the Leveraged Principal
Amount, to which amount Interest Amounts will be added annually in accordance
with Section 3.4(g)(ii).

(d) ADJUSTMENT OF KECALP UNIT ACCOUNT. While a Participant with a
KECALP Unit Account will receive quarterly statements of the estimated value of
the KECALP Unit Account, such statement will be for recordkeeping purposes only
and will not represent the Participant's ownership of, or any ownership interest
in, Merrill Lynch KECALP L.P. 1997. Whenever a distribution is paid on an actual
unit of Merrill Lynch KECALP L.P. 1997, an amount equal to such per unit
distribution times the number of units in the Participant's KECALP Unit Account
will be applied first against any Debit Account Balance, as provided in Section
3.4(e) and then, if any portion of such distribution remains after each debit
balance in the Debit Account is reduced to zero, be credited to the
Participant's Benchmark Return Account. BECAUSE THE KECALP RETURN OPTION IS
ILLIQUID, NO PAYOUTS SHALL BE MADE FROM THE KECALP UNIT ACCOUNT. PAYOUTS TO
PARTICIPANTS UNDER ARTICLE V HEREOF WILL BE MADE ONLY FROM AMOUNTS CREDITED TO A
PARTICIPANT'S BENCHMARK RETURN ACCOUNT AFTER THE


9


DEBIT ACCOUNT BALANCE IS REDUCED TO ZERO. The KECALP Unit Account and the Debit
Account will also be adjusted in accordance with Section 5.2 hereof in the event
of a Participant's termination of his employment at Merrill Lynch, (other than
as a result of death, disability, Career Retirement, or Retirement).

(e) ADJUSTMENT OF DEBIT ACCOUNT. Any negative Debit Account Balance
shall be charged off as soon as possible against either (i) any positive balance
in a Participant's Benchmark Return Account or (ii) any distributions from the
KECALP Unit Account. Reductions of the Debit Account Balance, as provided in the
foregoing sentence shall be deemed to be applied first to reduce the debit
balance attributable to accrued Annual Charges and then, after all such accrued
Annual Charges have been satisfied, to reduce any Leverage Principal Amount.

(f) ADJUSTMENT OF BENCHMARK RETURN ACCOUNT. While the Participant's
Accounts do not represent the Participant's ownership of, or any ownership
interest in, any particular assets, the Benchmark Return Account shall be
adjusted to reflect credits or debits relating to distributions with respect to
the KECALP Unit Account or the chargeoffs against the Debit Account and to
reflect the investment experience of the Participant's Selected Benchmark Return
Options in the same manner as if investments or dispositions 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' Accounts (the "ML II System"). In
adjusting Benchmark Return Accounts, the timing of receipt of Participant
instructions or credits or debits relating to distributions or chargeoffs with
respect to the KECALP Unit Account or the Debit Account by the ML II System
shall control the timing and pricing of the notional investments in the
Participant's Selected Benchmark 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 or
dispositions were actually to be made, except that in connection with the
crediting of Deferred Amounts or distributions to the Participant's Benchmark
Return Account and distributions from or debits to the Benchmark Return Account,
appropriate deferral allocation instructions shall be treated as received from
the Participant prior to the close of transactions through the ML II System on
the relevant day. Each Selected Benchmark Return Option shall be valued using
the Net Asset Value of the Selected Benchmark Return Option as of the relevant
day; PROVIDED, that, in valuing a Selected Benchmark 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 considers appropriate in his
sole discretion.


10


All debits and charges against the Benchmark Return Account shall be applied as
a PRO RATA reduction of the portion of the Benchmark Return Account Balance
indexed to each of the Participant's Selected Benchmark Return Options.
(g) CHARGES:

(i) ANNUAL CHARGE. As of the last day of each Fiscal Year or
such earlier day in December as the Administrator shall
determine, an Annual Charge of 2.0% of the Participant's
Undistributed Deferred Amounts (exclusive of any
appreciation or depreciation) shall be applied to reduce the
Benchmark Return Account Balance (but not below zero). To
the extent the Benchmark Return Account Balance is
insufficient to satisfy the Annual Charge, the unpaid
portion will accrue as a negative balance in the Debit
Account.

(ii) INTEREST AMOUNTS. As of the last day of each Fiscal Year,
Interest Amounts computed by the Administrator shall be
added to the Leveraged Principal Amount. If on any date the
Leveraged Principal Amount would be discharged completely as
a result of distributions or chargeoffs, Interest Amounts
will be computed though such date and added to the Leveraged
Principal Amount as of such date.

3.5 RESCISSION OF DEFERRAL ELECTION.

(a) ADVERSE TAX DETERMINATION. Notwithstanding the provisions of
Section 3.1(b), 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 sole
discretion, decides, upon the Participant's request and upon evidence of the
occurrence of the events described in (i) hereof that he finds persuasive, to
rescind the election. In the event that such rescission occurs during the
Interim Period or in the event that a Participant has chosen not to select the
KECALP Return Option, upon such rescission, the Benchmark Return Account
Balance, including any adjustment for performance of the Selected Benchmark
Return Options will be paid to the Participant as soon as practicable, and no
additional amounts will be deferred pursuant to this Plan. In the event that
such rescission occurs after the Interim Period, the Available Benchmark Return
Account Balance will be repaid to the Participant and further payments will be
made as additional amounts become credited to the Benchmark Return Account.

(b) RESCISSION DURING THE INTERIM PERIOD FOR AMOUNTS NOT YET EARNED.
During the Interim Period, upon the Participant's written request, the
Administrator may, in his sole discretion, terminate any deferral elections made
hereunder with respect to Compensation not yet earned and no further amounts
will be deferred. In addition, in the event a Participant receives a hardship
withdrawal under the 401(k) Plan, the Administrator shall, as of the date the
Participant's Elective 401(k) Deferrals (as defined in the 401(k) Plan) are
suspended under the 401(k) Plan as a result of such hardship withdrawal,
terminate the Participant's deferrals under this Plan in accordance with the
preceding sentence as if the Participant had requested rescission in writing.
In each case, amounts previously deferred will continue to be governed by the
terms of this Plan.


11


ARTICLE IV
STATUS OF DEFERRED AMOUNTS AND ACCOUNTS

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 any Account Balance 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.

4.2 NON-ASSIGNABILITY.

The Participant's right or the right of any other person to Account
Balances 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.

4.3 EFFECT OF DEFERRAL ON BENEFITS UNDER PENSION AND WELFARE BENEFIT PLANS.

The effect of deferral 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
PAYMENT OF ACCOUNTS

5.1 MANNER OF PAYMENT.

By choosing the KECALP Return Option, Participants are electing to receive
payouts as amounts become available as a result of distributions with respect to
the KECALP Unit Account. Participants will be able to elect either (A) to
receive payouts as the distributions with respect to the KECALP Unit Account are
made (once a Participant's Debit Account Balance has been reduced to zero) or
(B) to receive payouts as the distributions with respect to the KECALP Unit
Account are made (once a Participant's Debit Account Balance has been reduced to
zero) but in no event prior to a month and year specified by the Participant or
the month of March in the year following Retirement, provided that no election
may result in the commencement of payment later than the month following the
Participant's 70th birthday (other than as a result of the timing of
distributions with respect to the KECALP Unit Account). Persons who decline to
confirm their choice of the KECALP Return Option following the receipt of a
final Prospectus for Merrill Lynch KECALP L.P. 1997 will receive their Benchmark
Return Account Balance in a lump sum on a date specified in their initial
election, which may be either (X) a month and date specified by such Participant
or (Y) the month of March in the year following such Participant's Retirement,
provided that, in each case such payment shall not occur until after January 31,
2000.


12


5.2 TERMINATION OF EMPLOYMENT.

(a) DEATH OR RETIREMENT. Upon a Participant's death or Retirement
prior to payment, the Available Benchmark Return Account Balance will be paid,
in accordance with the Participant's elections and as provided in Section 5.1,
as applicable, to the Participant (in the event of Retirement) or to the
Participant's beneficiary (in the event of death); PROVIDED, HOWEVER, that in
the event that a Participant, who has died, had specified a date prior to which
payments would not be made and the beneficiary of the Participant's Account is
the Participant's estate or is otherwise not a natural person, then, such
specified date will be ignored and such payments made as available in accordance
with clause (A) of the first sentence of Section 5.1.

(b) OTHER TERMINATION OF EMPLOYMENT - FORFEITURE OF LEVERAGE. If the
Participant's employment terminates at any time for any reason other than death
or Retirement, then, notwithstanding the Participant's elections hereunder, any
Available Benchmark Return Account Balance will be paid to the Participant, as
soon as practicable, in a single payment if all distributions have been made
with respect to the KECALP Unit Account or as available, as soon thereafter as
is practicable, notwithstanding the Participant's elections hereunder. In the
event that a Participant's employment terminates at any time for any reason
other than death, disability, Career Retirement, or Retirement, such Participant
will forfeit all rights to the leveraged portion of such Participant's KECALP
Unit Account, including any future Leveraged Distributions, unless the
Administrator, in his sole discretion, determines that such forfeiture would be
detrimental to Merrill Lynch based on the Net Asset Value of the KECALP Unit
Account. In the event of such forfeiture, the Participant's KECALP Unit Account
Balance and Debit Account Balance will be restated by the Administrator, as of
the date of termination, to reflect what such balances would have been had the
Participant selected no leverage under Section 3.4(c). To the extent necessary,
the Participant's Benchmark Return Account Balance will also be adjusted, as of
the date of the termination, to credit the Participant with the amount of any
Unleveraged Distributions that were previously applied to the repayment of the
Leveraged Principal Amount and any Interest Amounts and, to the extent
necessary, any Leveraged Distributions paid out to the Participant will be
stated as a negative balance in the Participant's Debit Account. Leveraged and
Unleveraged Distributions shall be deemed to have been applied and distributed
proportionately. All calculations hereunder shall be made by the Administrator
and shall be final and determinative.

(c) LEAVE OF ABSENCE, TRANSFER OR DISABILITY. The Participant's
employment will not be considered terminated if the Participant is on an
approved leave of absence or if the Participant transfers or is transferred but
remains in the employ of the Company or if the Participant is eligible to
receive disability payments under the ML & Co. Basic Long-Term Disability Plan.

(d) DISCRETION TO ALTER PAYMENT DATE. Notwithstanding the provisions
of Section 5.2, if the Participant's employment terminates for any reason, the
Administrator may, in his sole discretion, direct that any Available Benchmark
Return Account Balance be paid at some other time; 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 sole discretion.

5.3 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 may require the Participant or the
Participant's beneficiary to pay any amount, or the balance of any amount,
required to be withheld.


13


5.4 BENEFICIARY.

(a) DESIGNATION OF BENEFICIARY. The Participant may designate, in a
writing delivered to the Administrator or his designee before the Participant's
death, a beneficiary to receive payments in the event of the Participant's
death. The Participant may also designate a contingent beneficiary to receive
payments in accordance with this 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 will 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 designee before
the Participant's death. Unless the Participant states otherwise in writing,
any change in beneficiary or contingent beneficiary will automatically revoke
prior such 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.

(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 either 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 the person or persons
designated to receive benefits on account of the Participant's death under the
ML & Co. Basic Group Life Insurance Plan (the "Life Insurance Plan"). However,
if an unmarried Participant does not have coverage in effect under the Life
Insurance Plan, or the Participant has assigned his or her death benefit under
the Life Insurance Plan, any amounts payable to the Participant's beneficiary
under the Plan will be paid to the Participant's estate.

(d) IF A BENEFICIARY DIES DURING PAYMENT. If a beneficiary who is
receiving or is entitled to receive payments hereunder dies after the
Participant dies, but before all payments have been made, the portion of the
Benchmark Return Account to which that beneficiary was entitled will be paid as
soon as practicable in one lump sum or as available (in the event that all
distributions have not been made with respect to the KECALP Unit Account) to
such beneficiary's estate and not to any contingent beneficiary the Participant
may have designated.

5.5 HARDSHIP DISTRIBUTIONS.

ML & Co. may pay to the Participant, on such terms and conditions as the
Administrator may establish, such part or all of a Participant's Available
Benchmark Return Account Balance as he may, in his 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 sole discretion. The balance of the
Participant's Accounts, 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


14


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 sole discretion to be
immediate and substantial.

5.6 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 Available Benchmark Return Account
Balance specified in a valid court order entered in a domestic relations
proceeding involving the Participant's divorce or legal separation. Such
payment will be made net of any amounts the Company may be required to withhold
under applicable federal, state or local law. Any such payment shall be deemed a
distribution under the Plan for purposes of the definition of Undistributed
Deferred Amounts.


ARTICLE VI
ADMINISTRATION OF THE PLAN

6.1 POWERS OF THE ADMINISTRATOR.

The Administrator has full power and authority to interpret, construe and
administer this Plan so as to ensure that it provides deferred compensation for
the Participant as a member of a select group of management or highly
compensated employees within the meaning of Title I of ERISA. 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 unless
attributable to his 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.


6.2 PAYMENTS ON BEHALF OF AN INCOMPETENT.

If the Administrator finds that any person who is 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 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.

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 the amount of Adjusted Compensation,
Incentive Compensation, Sign-On Bonus, Eligible Compensation, the Deferred
Amounts, the Account Balance, the designation of a beneficiary, or any other
matters.


15


ARTICLE VII
MISCELLANEOUS PROVISIONS

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.

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.

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.

7.4 AMENDMENT AND TERMINATION.

ML & Co., through the Administrator, reserves the right to amend or
terminate this Plan at any time, except that no such amendment or termination
shall adversely affect the right of a Participant to his or her Account Balances
(as reduced by the current year's Charges, or pro rata portion thereof, as set
forth in Section 3.4(g)) as of the date of such amendment or termination.


16