EXHIBIT 10(i)

AS AMENDED THROUGH APRIL 16, 1996







MERRILL LYNCH & CO., INC.
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LONG-TERM INCENTIVE COMPENSATION PLAN
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TABLE OF CONTENTS

PAGE

ARTICLE I - GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Section 1.1 Purpose . . . . . . . . . . . . . . . . . . . . . . . . 1

Section 1.2 Definitions . . . . . . . . . . . . . . . . . . . . . . 1

(a) "Board of Directors" or "Board". . . . . . . . . . . . . . 1
(b) "Code" . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(c) "Company" . . . . . . . . . . . . . . . . . . . . . . . . . 1
(d) "Committee". . . . . . . . . . . . . . . . . . . . . . . . 1
(e) "Common Stock" . . . . . . . . . . . . . . . . . . . . . . 2
(f) "Disability". . . . . . . . . . . . . . . . . . . . . . . . 2
(g) "Fair Market Value" . . . . . . . . . . . . . . . . . . . 2
(h) "Junior Preferred Stock". . . . . . . . . . . . . . . . . . 2
(i) "Other ML & Co. Security" . . . . . . . . . . . . . . . . . 2
(j) "Participant" . . . . . . . . . . . . . . . . . . . . . . 2
(k) "Performance Period" . . . . . . . . . . . . . . . . . . . 2
(l) "Performance Share" . . . . . . . . . . . . . . . . . . . 3
(m) "Performance Unit" . . . . . . . . . . . . . . . . . . . . 3
(n) "Restricted Period". . . . . . . . . . . . . . . . . . . . 3
(o) "Restricted Share" . . . . . . . . . . . . . . . . . . . . 3
(p) "Restricted Unit". . . . . . . . . . . . . . . . . . . . . 3
(q) "Retirement". . . . . . . . . . . . . . . . . . . . . . . . 3
(r) "Rights". . . . . . . . . . . . . . . . . . . . . . . . . . 3
(s) "Rights Agreement". . . . . . . . . . . . . . . . . . . . . 3
(t) "Stock Appreciation Right" . . . . . . . . . . . . . . . . 3
(u) "Stock Option" . . . . . . . . . . . . . . . . . . . . . . 4
(v) "Vesting Period" . . . . . . . . . . . . . . . . . . . . . 4

Section 1.3 Administration . . . . . . . . . . . . . . . . . . . . . 4

Section 1.4 Shares and Units Subject to the Plan . . . . . . . . . . 4

Section 1.5 Eligibility and Participation . . . . . . . . . . . . . 5

ARTICLE II - PROVISIONS APPLICABLE TO PERFORMANCE SHARES AND
PERFORMANCE UNITS . . . . . . . . . . . . . . . . . . . . . 5

Section 2.1 Performance Periods and Restricted Periods. . . . . . . 5

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Section 2.2 Performance Objectives . . . . . . . . . . . . . . . . . 5

Section 2.3 Grants of Performance Shares and Performance Units . . 6

Section 2.4 Rights and Benefits During Performance Period . . . . . 6

Section 2.5 Adjustment with respect to Performance
Shares and Performance Units . . . . . . . . . . . . . . 7

Section 2.6 Payment of Performance Shares and
Performance Units . . . . . . . . . . . . . . . . . . . . . . 7

(a) Performance Shares . . . . . . . . . . . . . . . . . . . . 7

(i) If a Restricted Period has been established . . . . . 7
(ii) If a Restricted Period has not been established . . . . 8

(b) Performance Units . . . . . . . . . . . . . . . . . . . . . 8

Section 2.7 Termination of Employment . . . . . . . . . . . . . . . 8

(a) Prior to the end of a Performance Period. . . . . . . . . . 8

(i) Death . . . . . . . . . . . . . . . . . . . . . . . . . 8
(ii) Disability or Retirement . . . . . . . . . . . . . . . 8
(iii) Other Terminations . . . . . . . . . . . . . . . . . . 9

(b) After the end of a Performance Period but
prior to the end of a Restricted Period . . . . . . . . . . 9

(i) Death, Disability, or Retirement........ . . . . . . . 9
(ii) Other Terminations . . . . . . . . . . . . . . . . . . 9

Section 2.8 Deferral of Payment . . . . . . . . . . . . . . . . . . 10

ARTICLE III - PROVISIONS APPLICABLE TO RESTRICTED SHARES
AND RESTRICTED UNITS . . . . . . . . . . . . . . . . . . . 10

Section 3.1 Vesting Periods and Restricted Periods . . . . . . . . . 10

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Section 3.2 Grants of Restricted Shares and
Restricted Units . . . . . . . . . . . . . . . . . . . 10

Section 3.3 Rights and Restrictions Governing
Restricted Shares . . . . . . . . . . . . . . . . . . 11

Section 3.4 Rights Governing Restricted Units . . . . . . . . . . . 11

Section 3.5 Adjustment with respect to Restricted
Shares and Restricted Units . . . . . . . . . . . . . . 11

Section 3.6 Payment of Restricted Shares and
Restricted Units . . . . . . . . . . . . . . . . . . . 12

(a) Restricted Shares . . . . . . . . . . . . . . . . . . . . . 12
(b) Restricted Units . . . . . . . . . . . . . . . . . . . . . 12

Section 3.7 Termination of Employment . . . . . . . . . . . . . . . 12

(a) Prior to the end of a Vesting Period . . . . . . . . . . . 12

(i) Death . . . . . . . . . . . . . . . . . . . . . . . . . 12
(ii) Disability or Retirement . . . . . . . . . . . . . . . 12
(iii) Other Terminations . . . . . . . . . . . . . . . . . . 12

(b) After the end of a Vesting Period but
prior to the end of a Restricted Period . . . . . . . . . 13

(i) Death, Disability, or Retirement . . . . . . . . . . . 13
(ii) Other Terminations . . . . . . . . . . . . . . . . . . 13

Section 3.8 Extension of Vesting; Deferral of Payment . . . . . . . 13

ARTICLE IV - PROVISIONS APPLICABLE TO STOCK OPTIONS . . . . . . . . . . . 14

Section 4.1 Grants of Stock Options . . . . . . . . . . . . . . . . 14

Section 4.2 Option Documentation . . . . . . . . . . . . . . . . . . 14

Section 4.3 Exercise Price . . . . . . . . . . . . . . . . . . . . . 14

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Section 4.4 Exercise of Stock Options . . . . . . . . . . . . . . . 14

(a) Exercisability . . . . . . . . . . . . . . . . . . . . . . 14
(b) Option Period . . . . . . . . . . . . . . . . . . . . . . . 15
(c) Exercise in the Event of Termination
of Employment . . . . . . . . . . . . . . . . . . . . . . . 15

(i) Death . . . . . . . . . . . . . . . . . . . . . . . . . 15
(ii) Disability or Retirement . . . . . . . . . . . . . . . 15
(iii) Other Terminations . . . . . . . . . . . . . . . . . . 15

(d) Limitations on Transferability . . . . . . . . . . . . . . 16

Section 4.5 Payment of Purchase Price and Tax Liability Upon Exercise;
Delivery of Shares . . . . . . . . . . . . . . . . . . . 16

(a) Payment of Purchase Price . . . . . . . . . . . . . . . . . 16
(b) Payment of Taxes . . . . . . . . . . . . . . . . . . . . . 16
(c) Delivery of Shares . . . . . . . . . . . . . . . . . . . . 17

Section 4.6 Limitation on Fair Market Value of Shares of
Common Stock Received upon Exercise of
Incentive Stock Options . . . . . . . . . . . . . . . . 17

ARTICLE V - PROVISIONS APPLICABLE TO STOCK APPRECIATION
RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Section 5.1 Grants of Stock Appreciation Rights . . . . . . . . . . 17

Section 5.2 Stock Appreciation Rights Granted in
Connection with Incentive Stock Options . . . . . . . . 18

Section 5.3 Payment Upon Exercise of Stock Appreciation
Rights . . . . . . . . . . . . . . . . . . . . . . . . 18

Section 5.4 Termination of Employment . . . . . . . . . . . . . . . 18

(a) Death . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(b) Disability . . . . . . . . . . . . . . . . . . . . . . . . 18
(c) Retirement . . . . . . . . . . . . . . . . . . . . . . . . 19
(d) Other Terminations . . . . . . . . . . . . . . . . . . . . 19



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ARTICLE VI - PROVISIONS APPLICABLE TO OTHER ML & CO.
SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . 19

Section 6.1 Grants of Other ML & Co. Securities . . . . . . . . . . 19

Section 6.2 Terms and Conditions of Conversion or
Exchange . . . . . . . . . . . . . . . . . . . . . . . 20

ARTICLE VII - CHANGES IN CAPITALIZATION. . . . . . . . . . . . . . . . . 20

ARTICLE VIII - PAYMENTS UPON TERMINATION OF EMPLOYMENT AFTER
A CHANGE IN CONTROL . . . . . . . . . . . . . . . . . . . 21

Section 8.1 Value of Payments Upon Termination After a
Change in Control . . . . . . . . . . . . . . . . . . . 21

(a) Performance Shares and Performance Units . . . . . . . . 21
(b) Restricted Shares and Restricted Units . . . . . . . . . 21
(c) Stock Options and Stock Appreciation Rights . . . . . . . 22
(d) Other ML & Co. Securities . . . . . . . . . . . . . . . . 23


Section 8.2 A Change in Control . . . . . . . . . . . . . . . . . . 23

Section 8.3 Effect of Agreement Resulting in Change
in Control . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Section 8.4 Termination for Cause . . . . . . . . . . . . . . . . . 24

Section 8.5 Good Reason . . . . . . . . . . . . . . . . . . . . . . 25

(a) Inconsistent Duties . . . . . . . . . . . . . . . . . . . 25
(b) Reduced Salary or Bonus Opportunity . . . . . . . . . . . 25
(c) Relocation . . . . . . . . . . . . . . . . . . . . . . . 25
(d) Compensation Plans . . . . . . . . . . . . . . . . . . . 25
(e) Benefits and Perquisites . . . . . . . . . . . . . . . . 26
(f) No Assumption by Successor . . . . . . . . . . . . . . . 26

Section 8.6 Effect on Plan Provisions . . . . . . . . . . . . . . . 26

ARTICLE IX - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 27

Section 9.1 Designation of Beneficiary . . . . . . . . . . . . . . . 27


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PAGE

Section 9.2 Employment Rights . . . . . . . . . . . . . . . . . . . 27

Section 9.3 Nontransferability . . . . . . . . . . . . . . . . . . . 27

Section 9.4 Withholding . . . . . . . . . . . . . . . . . . . . . . 27

Section 9.5 Relationship to Other Benefits . . . . . . . . . . . . . 28

Section 9.6 No Trust or Fund Created . . . . . . . . . . . . . . . . 28

Section 9.7 Expenses. . . . . . . . . . . . . . . . . . . . . . . . 28

Section 9.8 Indemnification . . . . . . . . . . . . . . . . . . . . 28

Section 9.9 Tax Litigation . . . . . . . . . . . . . . . . . . . . . 28

ARTICLE X - AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . . . . 28

ARTICLE XI - INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . 29

Section 11.1 Governmental and Other Regulations . . . . . . . . . . 29


Section 11.2 Governing Law. . . . . . . . . . . . . . . . . . . . . 29

ARTICLE XII - EFFECTIVE DATE AND STOCKHOLDER APPROVAL . . . . . . . . . . 29



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MERRILL LYNCH & CO., INC.
-------------------------

LONG-TERM INCENTIVE COMPENSATION PLAN
-------------------------------------


ARTICLE I - GENERAL

SECTION 1.1 PURPOSE.
-------

The purposes of the Long-Term Incentive Compensation Plan (the "PLAN")
are: (a) to enhance the growth and profitability of Merrill Lynch & Co.,
Inc., a Delaware corporation ("ML & CO."), and its subsidiaries by providing
the incentive of long-term rewards to key employees who are capable of having
a significant impact on the performance of ML & Co. and its subsidiaries; (b)
to attract and retain employees of outstanding competence and ability; (c) to
encourage long-term stock ownership by employees; and (d) to further the
identity of interests of such employees with those of stockholders of ML &
Co.

SECTION 1.2 DEFINITIONS.
-----------

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

(a) "BOARD OF DIRECTORS" or "BOARD" shall mean the Board of Directors
of ML & Co.

(b) "CODE" shall mean the Internal Revenue Code of l986, as amended,
including any successor law thereto.

(c) "COMPANY" shall mean ML & Co. and 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. For purposes of this Plan, the
terms "ML & Co." and "Company" shall include any successor thereto.

(d) "COMMITTEE" shall mean the Management Development and Compensation
Committee of the Board of Directors, or its functional successor, unless some
other Board committee has been designated by the Board of Directors to
administer the Plan. The Committee shall be constituted so that at all
relevant times it meets the then applicable requirements of Rule 16b-3 (or
its successor) promulgated under the Securities Exchange Act of 1934, as
amended.

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(e) "COMMON STOCK" shall mean 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).

(f) "DISABILITY," unless otherwise provided herein, shall mean any
physical or mental condition that, in the opinion of the Director of Human
Resources of Merrill Lynch & Co., Inc. (or his functional successor), renders
an employee incapable of engaging in any employment or occupation for which
he is suited by reason of education or training, provided that, in the case
of any officer of ML & Co., as defined in Rule 16a-1 under the Securities
Exchange Act of 1934, such determination shall be made by the Committee
following recommendation by the Director of Human Resources.

(g) "FAIR MARKET VALUE" of shares of Common Stock on any given date(s)
shall be: (a) the mean of the high and low sales prices on the New York
Stock Exchange--Composite Tape of such shares on the date(s) in question, or,
if the shares of Common Stock shall not have been traded on any such date(s),
the mean of the high and low sales prices on the New York Stock Exchange--
Composite Tape on the first day prior thereto on which the shares of Common
Stock were so traded; or (b) if the shares of Common Stock are not traded on
the New York Stock Exchange, such other amount as may be determined by the
Committee by any fair and reasonable means.

"FAIR MARKET VALUE" of any Other ML & Co. Security on any given
date(s) shall be: (a) the mean of the high and low sales prices of such Other
ML & Co. Security on the principal securities exchange on which such Security
is traded on the date(s) in question or, if such Other ML & Co. Security
shall not have been traded on any such exchange on such date(s), the mean of
the high and low sales prices on such exchange on the first day prior thereto
on which such Other ML & Co. Security was so traded; or (b) if the Other ML &
Co. Security is not publicly traded on a securities exchange, such other
amount as may be determined by the Committee by any fair and reasonable
means.

(h) "JUNIOR PREFERRED STOCK" shall mean ML & Co.'s Series A Junior
Preferred Stock, par value $1.00 per share.

(i) "OTHER ML & CO. SECURITY" shall mean a financial instrument issued
pursuant to Article VI.

(j) "PARTICIPANT" shall mean any employee who has met the eligibility
requirements set forth in Section 1.5 hereof and to whom a grant has been
made and is outstanding under the Plan.

(k) "PERFORMANCE PERIOD" shall mean, in relation to Performance Shares
or Performance Units, any period, for which performance objectives have been
established, of not less than one nor more than ten consecutive ML & Co.
fiscal years,



2




commencing with the first day of the fiscal year in which such Performance
Shares or Performance Units were granted.

(l) "PERFORMANCE SHARE" shall mean a right, granted to a Participant
pursuant to Article II, that will be paid out as a share of Common Stock.

(m) "PERFORMANCE UNIT" shall mean a right, granted to a Participant
pursuant to Article II, to receive an amount equal to the Fair Market Value
of one share of Common Stock in cash.

(n) "RESTRICTED PERIOD" shall mean, (i) in relation to shares of Common
Stock receivable in payment for Performance Shares, the period beginning at
the end of the applicable Performance Period during which restrictions on the
transferability of such shares of Common Stock are in effect; and (ii) in
relation to Restricted Shares, the period, beginning with the first day of
the month in which Restricted Shares are granted, during which restrictions
on the transferability of such Restricted Shares are in effect and which
shall not be of shorter duration than the Vesting Period applicable to the
same Restricted Shares.

(o) "RESTRICTED SHARE" shall mean a share of Common Stock, granted to a
Participant pursuant to Article III, subject to the restrictions set forth in
Section 3.3 hereof.

(p) "RESTRICTED UNIT" shall mean the right, granted to a Participant
pursuant to Article III, to receive an amount equal to the Fair Market Value
of one share of Common Stock in cash.

(q) "RETIREMENT" shall mean the cessation of employment by the Company
(1) after reaching age 55 and having completed at least 5 years of service;
(2) after reaching age 50 and having completed at least 10 years of service;
(3) after reaching age 45 and having completed at least 15 years of service;
or (4) having completed at least 20 years of service (in each case including
approved leaves of absence of one year or less); provided that any person who
at the time of such cessation of employment is an officer of ML & Co., as
defined in Rule 16a-1 under the Securities Exchange Act of 1934 must qualify
under subclause (1) hereof to be eligible for "Retirement".

(r) "RIGHTS" means the Rights to Purchase Units of Junior Preferred
Stock issued pursuant to the Rights Agreement.

(s) "RIGHTS AGREEMENT" means 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.

(t) "STOCK APPRECIATION RIGHT" shall mean a right, granted to a
Participant pursuant to Article V, to receive, in cash or shares of Common
Stock, an amount equal



3




to the increase in Fair Market Value, over a specified period of time, of a
specified number of shares of Common Stock.

(u) "STOCK OPTION" shall mean a right, granted to a Participant
pursuant to Article IV, to purchase, before a specified date and at a
specified price, a specified number of shares of Common Stock. Stock Options
may be "INCENTIVE STOCK OPTIONS," which meet the definition of such in
Section 422A of the Code, or "NONQUALIFIED STOCK OPTIONS," which do not meet
such definition.

(v) "VESTING PERIOD" shall mean, in relation to Restricted Shares or
Restricted Units, any period of not less than 12 months beginning with the
first day of the month in which the grant of the applicable Restricted Shares
or Restricted Units is effective, during which such Restricted Shares or
Restricted Units may be forfeited if the Participant terminates employment.

SECTION 1.3 ADMINISTRATION.
--------------

(a) The Plan shall be administered by the Committee. Subject to the
provisions of the Plan, the Committee shall have sole and complete authority
to: (i) subject to Section 1.5 hereof, select Participants after receiving
the recommendations of the management of the Company; (ii) determine the
number of Performance Shares, Performance Units, Restricted Shares,
Restricted Units, Stock Appreciation Rights, or Other ML & Co. Securities
subject to each grant; (iii) determine the number of shares of Common Stock
subject to each Stock Option grant; (iv) determine the time or times when
grants are to be made or are to be effective; (v) determine the terms and
conditions subject to which grants may be made; (vi) extend the term of any
Stock Option; (vii) provide at the time of grant that all or any portion of
any Stock Option shall be canceled upon the Participant's exercise of any
Stock Appreciation Rights; (viii) prescribe the form or forms of the
instruments evidencing any grants made hereunder, provided that such forms
are consistent with the Plan; (ix) adopt, amend, and rescind such rules and
regulations as, in its opinion, may be advisable for the administration of
the Plan; (x) construe and interpret the Plan and all rules, regulations, and
instruments utilized thereunder; and (xi) make all determinations deemed
advisable or necessary for the administration of the Plan. All
determinations by the Committee shall be final and binding.

(b) The Committee shall act in accordance with the procedures
established for a Committee under ML & Co.'s Certificate of Incorporation and
By-Laws or under any resolution of the Board.

SECTION 1.4 SHARES AND UNITS SUBJECT TO THE PLAN.
------------------------------------

The total number of shares of Common Stock that may be distributed under
the Plan shall be 80,000,000 (whether granted as Restricted Shares or
reserved for distribution upon grant of Performance Shares, Stock Options,
Stock Appreciation Rights (to the extent they may be paid out in Common
Stock), or Other ML & Co.



4




Securities), subject to adjustment as provided in Article VII hereof. Shares
of Common Stock distributed under the Plan may be treasury shares or
authorized but unissued shares. The total number of units payable in cash
under the Plan, including Performance Units, Restricted Units, and Stock
Appreciation Rights (to the extent they are paid out in cash) shall be
80,000,000. To the extent that awards of Other ML & Co. Securities are
convertible into Common Stock or are otherwise equity securities (or
convertible into equity securities) of ML & Co., they shall be subject to the
limitation expressed above on the number of shares of Common Stock that can
be awarded under the Plan; otherwise, they shall be treated as if they were
awards of units payable in cash under the Plan and subject to the foregoing
limitation thereon. Any shares of Common Stock that have been granted as
Restricted Shares or that have been reserved for distribution in payment for
Performance Shares but are later forfeited or for any other reason are not
payable under the Plan may again be made the subject of grants under the
Plan. If any Stock Option, Stock Appreciation Right, or Other ML & Co.
Security granted under the Plan expires or terminates, or any Stock
Appreciation Right is paid out in cash, the underlying shares of Common Stock
may again be made the subject of grants under the Plan. Units payable in
cash that are later forfeited or for any reason are not payable under the
Plan may again be the subject of grants under the Plan.

SECTION 1.5 ELIGIBILITY AND PARTICIPATION.
-----------------------------

Participation in the Plan shall be limited to officers (who may also be
members of the Board of Directors) and other salaried, key employees of the
Company.

ARTICLE II - PROVISIONS APPLICABLE TO PERFORMANCE SHARES AND
PERFORMANCE UNITS.

SECTION 2.1 PERFORMANCE PERIODS AND RESTRICTED PERIODS.
------------------------------------------

The Committee shall establish Performance Periods applicable to
Performance Shares and Performance Units and may establish Restricted Periods
applicable to Performance Shares, at its discretion. Each such Performance
Period shall commence with the beginning of a fiscal year in which the
Performance Shares and Performance Units are granted and have a duration of
not less than one nor more than ten consecutive fiscal years. Each such
Restricted Period shall commence with the end of the Performance Period
established for such Performance Shares and shall end on such date as may be
determined by the Committee at the time of grant. There shall be no
limitation on the number of Performance Periods or Restricted Periods
established by the Committee, and more than one Performance Period may
encompass the same fiscal year.

SECTION 2.2 PERFORMANCE OBJECTIVES.
----------------------

At any time before or during a Performance Period, the Committee shall
establish one or more performance objectives for such Performance Period,
provided



5




that such performance objectives shall be established prior to the grant of
any Performance Shares or Performance Units with respect to such Period.
Performance objectives shall be based on one or more measures such as return
on stockholders' equity, earnings, or any other standard deemed relevant by
the Committee, measured internally or relative to other organizations and
before or after extraordinary items, as may be determined by the Committee;
provided, however, that any such measure shall include all accruals for
-------- -------
grants made under the Plan and for all other employee benefit plans of the
Company. The Committee may, in its discretion, establish performance
objectives for the Company as a whole or for only that part of the Company in
which a given Participant is involved, or a combination thereof. In
establishing the performance objective or objectives for a Performance
Period, the Committee shall determine both a minimum performance level, below
which no Performance Shares or Performance Units shall be payable, and a full
performance level, at or above which 100% of the Performance Shares or
Performance Units shall be payable. In addition, the Committee may, in its
discretion, establish intermediate levels at which given proportions of the
Performance Shares or Performance Units shall be payable. Such performance
objectives shall not thereafter be changed except as set forth in Sections
2.5 and 2.6 and Article VII hereof.

SECTION 2.3 GRANTS OF PERFORMANCE SHARES AND PERFORMANCE
--------------------------------------------
UNITS.
-----

The Committee may select employees to become Participants subject to the
provisions of Section 1.5 hereof and grant Performance Shares or Performance
Units to such Participants at any time prior to or during the first fiscal
year of a Performance Period. Grants shall be deemed to have been made as of
the beginning of the first fiscal year of the Performance Period. Before
making grants, the Committee must receive the recommendations of the
management of the Company, which will take into account such factors as level
of responsibility, current and past performance, and performance potential.
Subject to the provisions of Section 2.7 hereof, a grant of Performance
Shares or Performance Units shall be effective for the entire applicable
Performance Period and may not be revoked. Each grant to a Participant shall
be evidenced by a written instrument stating the number of Performance Shares
or Performance Units granted, the Performance Period, the performance
objective or objectives, the proportion of payments for performance between
the minimum and full performance levels, if any, the Restricted Periods and
restrictions applicable to shares of Common Stock receivable in payment for
Performance Shares, and any other terms, conditions, and rights with respect
to such grant. At the time of any grant of Performance Shares, there shall
be reserved out of the number of shares of Common Stock authorized for
distribution under the Plan a number of shares equal to the number of
Performance Shares so granted.

SECTION 2.4 RIGHTS AND BENEFITS DURING PERFORMANCE PERIOD.
---------------------------------------------

The Committee may provide that, during a Performance Period, a
Participant shall be paid cash amounts, with respect to each Performance
Share or Performance



6




Unit held by such Participant, in the same manner, at the same time, and in
the same amount paid, as a dividend on a share of Common Stock.

SECTION 2.5 ADJUSTMENT WITH RESPECT TO PERFORMANCE SHARES AND
-------------------------------------------------
PERFORMANCE UNITS.
------------------

Any other provision of the Plan to the contrary notwithstanding, the
Committee may at any time adjust performance objectives (up or down) and
minimum or full performance levels (and any intermediate levels and
proportion of payments related thereto), adjust the way performance
objectives are measured, or shorten any Performance Period or Restricted
Period, if it determines that conditions, including but not limited to,
changes in the economy, changes in competitive conditions, changes in laws or
governmental regulations, changes in generally accepted accounting
principles, changes in the Company's accounting policies, acquisitions or
dispositions, or the occurrence of other unusual, unforeseen, or
extraordinary events, so warrant.

SECTION 2.6 PAYMENT OF PERFORMANCE SHARES AND PERFORMANCE
---------------------------------------------
UNITS.
-----

Within 90 days after the end of any Performance Period, the Company
shall determine the extent to which performance objectives established by the
Committee pursuant to Section 2.2 hereof for such Performance Period have
been met during such Performance Period and the resultant extent to which
Performance Shares or Performance Units granted for such Performance Period
are payable. Payment for Performance Shares and Performance Units shall be as
follows:

(a) Performance Shares:
------------------

(i) If a Restricted Period has been established in relation
-------------------------------------------
to the Performance Shares:

(A) At the end of the applicable Performance Period, one or
-----------------------------------------------
more certificates representing the number of shares of Common Stock equal to
the number of Performance Shares payable shall be registered in the name of
the Participant but shall be held by the Company for the account of the
employee. Such shares will be nonforfeitable but restricted as to
transferability during the applicable Restricted Period. During the
Restricted Period, the Participant shall have all rights of a holder as to
such shares of Common Stock, including the right to receive dividends, to
exercise Rights, and to vote such Common Stock and any securities issued upon
exercise of Rights, subject to the following restrictions: (1) the
Participant shall not be entitled to delivery of certificates representing
such shares of Common Stock and any other such securities until the
expiration of the Restricted Period; and (2) none of such shares of Common
Stock or Rights may be sold, transferred, assigned, pledged, or otherwise
encumbered or disposed of during the Restricted Period. Any shares of Common
Stock or other securities or property received with respect to such shares
shall be subject to the same restrictions as such shares; provided, however,
-------- -------
that the Company



7




shall not be required to register any fractional shares of Common Stock
payable to any Participant, but will pay the value of such fractional shares,
measured as set forth in Section 2.6(b) below, to the Participant.

(B) At the end of the applicable Restricted Period, all
----------------------------------------------
restrictions applicable to the shares of Common Stock, and other securities
or property received with respect to such shares, held by the Company for the
accounts of recipients of Performance Shares granted in relation to such
Restricted Period shall lapse, and one or more stock certificates for such
shares of Common Stock and securities, free of the restrictions, shall be
delivered to the Participant, or such shares and securities shall be credited
to a brokerage account if the Participant so directs.

(ii) If a Restricted Period has not been established in relation to
-----------------------------------------------
the Performance Shares, at the end of the applicable Performance Period, one
or more stock certificates representing the number of shares of Common Stock
equal to the number of Performance Shares payable, free of restrictions,
shall be registered in the name of the Participant and delivered to the
Participant, or such shares shall be credited to a brokerage account if the
Participant so directs.

(b) Performance Units: At the end of the applicable Performance Period,
-----------------
a Participant shall be paid a cash amount equal to the number of Performance
Units payable, times the mean of the Fair Market Value of Common Stock during
the second calendar month following the end of the Performance Period, unless
some other date or period is established by the Committee at the time of
grant.

SECTION 2.7 TERMINATION OF EMPLOYMENT.
-------------------------

(a) Prior to the end of a Performance Period:

(i) Death: If a Participant ceases to be an employee of the
-----
Company prior to the end of a Performance Period by reason of death, any
outstanding Performance Shares or Performance Units with respect to such
Participant shall become payable and be paid to such Participant's
beneficiary or estate, as the case may be, as soon as practicable in the
manner set forth in Sections 2.6(a)(ii) and 2.6(b) hereof, respectively. In
determining the extent to which performance objectives established for such
Performance Period have been met and the resultant extent to which
Performance Shares or Performance Units are payable, the Performance Period
shall be deemed to end as of the end of the fiscal year in which the
Participant's death occurred.

(ii) Disability or Retirement: The Disability or Retirement of a
------------------------
Participant shall not constitute a termination of employment for purposes of
this Article II, and such Participant shall not forfeit any Performance
Shares or Performance Units held by him, provided that following Disability
or Retirement such Participant does not engage in or assist any business that
the Committee, in its sole discretion, determines to be in competition with
business engaged in by the Company during the remainder of



8




the applicable Performance Period. A Participant who does engage in or
assist any business that the Committee, in its sole discretion, determines to
be in competition with business engaged in by the Company shall be deemed to
have terminated employment.

(iii) Other Terminations: If a Participant ceases to be an
------------------
employee prior to the end of a Performance Period for any reason other than
death, the Participant shall immediately forfeit all Performance Shares and
Performance Units previously granted under the Plan and all right to receive
any payment for such Performance Shares and Performance Units. The Committee
may, however, direct payment in accordance with the provisions of Section 2.6
hereof for a number of Performance Shares or Performance Units, as it may
determine, granted under the Plan to a Participant whose employment has so
terminated (but not exceeding the number of Performance Shares or Performance
Units that could have been payable had the Participant remained an employee)
if it finds that the circumstances in the particular case so warrant. For
purposes of the preceding sentence, the Performance Period over which
performance objectives shall be measured shall be deemed to end as of the end
of the fiscal year in which termination occurred.

(b) After the end of a Performance Period but prior to the end of a
Restricted Period:

(i) Death, Disability, or Retirement: If a Participant ceases
--------------------------------
to be an employee of the Company by reason of death or in the case of the
Disability or Retirement of a Participant, the Restricted Period shall be
deemed to have ended and shares held by the Company shall be paid as soon as
practicable in the manner set forth in Section 2.6(a)(i)(B).

(ii) Other Terminations: Terminations of employment for any reason
------------------
other than death after the end of a Performance Period but prior to the end
of a Restricted Period shall not have any effect on the Restricted Period,
unless the Committee, in its sole discretion, finds that the circumstances so
warrant and determines that the Restricted Period shall end on an earlier
date as determined by the Committee and that shares held by the Company shall
be paid as soon as practicable following such earlier date in the manner set
forth in Section 2.6(a)(i)(B).

(c) Except as otherwise provided in this Section 2.7, termination of
employment after the end of a Performance Period but before the payment of
Performance Shares or Performance Units relating to such Performance Period
shall not affect the amount, if any, to be paid pursuant to Section 2.6
hereof. Approved leaves of absence of one year or less shall not be deemed
to be terminations of employment under this Section 2.7. Leaves of absence
of more than one year will be deemed to be terminations of employment under
this Section 2.7, unless the Committee determines otherwise.



9





SECTION 2.8 DEFERRAL OF PAYMENT.
-------------------

The Committee may, in its sole discretion, offer a Participant the
right, by execution of a written agreement, to defer the receipt of all or
any portion of the payment, if any, for Performance Shares or Performance
Units. If such an election to defer is made, the Common Stock receivable in
payment for Performance Shares shall be deferred as stock units equal in
number to and exchangeable, at the end of the deferral period, for the number
of shares of Common Stock that would have been paid to the Participant. Such
stock units shall represent only a contractual right and shall not give the
Participant any interest, right, or title to any Common Stock during the
deferral period. The cash receivable in payment for Performance Units or
fractional shares receivable for Performance Shares shall be deferred as cash
units. Deferred stock units and cash units may be credited annually with the
appreciation factor contained in the deferred compensation agreement, which
may include dividend equivalents. All other terms and conditions of deferred
payments shall be as contained in the written agreement.

ARTICLE III - PROVISIONS APPLICABLE TO RESTRICTED SHARES AND
RESTRICTED UNITS.

SECTION 3.1 VESTING PERIODS AND RESTRICTED PERIODS.
--------------------------------------

The Committee shall establish one or more Vesting Periods applicable to
Restricted Shares and Restricted Units and one or more Restricted Periods
applicable to Restricted Shares, at its discretion. Each such Vesting Period
shall have a duration of not less than 12 months, measured from the first day
of the month in which the grant of the applicable Restricted Shares or
Restricted Units is effective. Each such Restricted Period shall have a
duration of 12 or more consecutive months, measured from the first day of the
month in which the grant of the applicable Restricted Shares is effective,
but in no event shall any Restricted Period applicable to a Restricted Share
be of shorter duration than the Vesting Period applicable to such Restricted
Share.

SECTION 3.2 GRANTS OF RESTRICTED SHARES AND RESTRICTED UNITS.
------------------------------------------------

The Committee may select employees to become Participants (subject to
the provisions of Section 1.5 hereof) and grant Restricted Shares or
Restricted Units to such Participants at any time. Before making grants, the
Committee must receive the recommendations of the management of the Company,
which will take into account such factors as level of responsibility, current
and past performance, and performance potential.

Subject to the provisions of Section 3.7 hereof, a grant of Restricted
Shares or Restricted Units shall be effective for the entire applicable
Vesting and Restricted Periods and may not be revoked. Each grant to a
Participant shall be evidenced by a written instrument stating the number of
Restricted Shares granted, the Vesting Period, the Restricted Period, the
restrictions applicable to such Restricted Shares, the nature



10




and terms of payment of consideration, if any, and the consequences of
forfeiture that will apply to such Restricted Shares, and any other terms,
conditions, and rights with respect to such grant. Each grant to a
Participant of Restricted Units shall be evidenced by a written instrument
stating the number of Restricted Units granted, the Vesting Period, and all
other terms, conditions and rights with respect to such grant.

SECTION 3.3 RIGHTS AND RESTRICTIONS GOVERNING RESTRICTED
--------------------------------------------
SHARES.
-------

At the time of grant of Restricted Shares, subject to the receipt by the
Company of any applicable consideration for such Restricted Shares, one or
more certificates representing the appropriate number of shares of Common
Stock granted to a Participant shall be registered either in his name or for
his benefit either individually or collectively with others, but shall be
held by the Company for the account of the Participant. The Participant
shall have all rights of a holder as to such shares of Common Stock,
including the right to receive dividends, to exercise Rights, and to vote
such Common Stock and any securities issued upon exercise of Rights, subject
to the following restrictions: (a) the Participant shall not be entitled to
delivery of certificates representing such shares of Common Stock and any
other such securities until the expiration of the Restricted Period; (b) none
of the Restricted Shares may be sold, transferred, assigned, pledged, or
otherwise encumbered or disposed of during the Restricted Period; and (c) all
of the Restricted Shares shall be forfeited and all rights of the Participant
to such Restricted Shares shall terminate without further obligation on the
part of the Company unless the Participant remains in the continuous
employment of the Company for the entire Vesting Period in relation to which
such Restricted Shares were granted, except as otherwise allowed by Section
3.7 hereof. Any shares of Common Stock or other securities or property
received with respect to such shares shall be subject to the same
restrictions as such Restricted Shares.

SECTION 3.4 RIGHTS GOVERNING RESTRICTED UNITS.
---------------------------------

During the Vesting Period for Restricted Units, a Participant shall be
paid, with respect to each Restricted Unit to which such Vesting Period is
applicable, cash amounts in the same manner, at the same time, and in the
same amount paid, as a dividend on a share of Common Stock.


SECTION 3.5 ADJUSTMENT WITH RESPECT TO RESTRICTED SHARES AND
------------------------------------------------
RESTRICTED UNITS.
-----------------


Any other provision of the Plan to the contrary notwithstanding, the
Committee may at any time shorten any Vesting Period or Restricted Period, if
it determines that conditions, including but not limited to, changes in the
economy, changes in competitive conditions, changes in laws or governmental
regulations, changes in generally accepted accounting principles, changes in
the Company's accounting



11




policies, acquisitions or dispositions, or the occurrence of other unusual,
unforeseen, or extraordinary events, so warrant.

SECTION 3.6 PAYMENT OF RESTRICTED SHARES AND RESTRICTED
-------------------------------------------
UNITS.
-----

(a) Restricted Shares: At the end of the Restricted Period, all
-----------------
restrictions contained in the Restricted Share Agreement and in the Plan
shall lapse as to Restricted Shares granted in relation to such Restricted
Period, and one or more stock certificates for the appropriate number of
shares of Common Stock, free of restrictions, shall be delivered to the
Participant or such shares shall be credited to a brokerage account if the
Participant so directs.

(b) Restricted Units: At the end of the Vesting Period applicable to
----------------
Restricted Units granted to a Participant, a cash amount equivalent in value
to the Fair Market Value of one share of Common Stock on the last day of the
Vesting Period, or during such period as is established by the Committee at
the time of grant, shall be paid, with respect to each such Restricted Unit,
to the Participant, or his beneficiary or estate, as the case may be.

SECTION 3.7 TERMINATION OF EMPLOYMENT.
-------------------------

(a) Prior to the end of a Vesting Period:

(i) Death: If a Participant ceases to be an employee of the
-----
Company prior to the end of a Vesting Period by reason of death, all
Restricted Shares and Restricted Units granted to such Participant are
immediately payable as set forth in Section 3.6.

(ii) Disability or Retirement: The Disability or Retirement of a
------------------------
Participant shall not constitute a termination of employment for purposes of
this Article III and such Participant shall not forfeit any Restricted Shares
or Restricted Units held by him, provided that, during the remainder of the
applicable Vesting Period, such Participant does not engage in or assist any
business that the Committee, in its sole discretion, determines to be in
competition with business engaged in by the Company. A Participant who does
engage in or assist any business that the Committee, in its sole discretion,
determines to be in competition with business engaged in by the Company shall
be deemed to have terminated employment.

(iii) Other Terminations: If a Participant ceases to be an
------------------
employee prior to the end of a Vesting Period for any reason other than
death, the Participant shall immediately forfeit all Restricted Shares and
Restricted Units previously granted with respect to such Vesting Period in
accordance with the provisions of Section 3.2 hereof, unless the Committee,
in its sole discretion, finds that the circumstances in the particular case
so warrant and allows a Participant whose employment has so



12




terminated to retain any or all of the Restricted Shares or Restricted Units
granted to such Participant.

(b) After the end of a Vesting Period but prior to the end of a
Restricted Period:

(i) Death, Disability, or Retirement: If a Participant ceases to
--------------------------------
be an employee of the Company by reason of death, or in the case of the
Disability or Retirement of a Participant, prior to the end of a Restricted
Period, all Restricted Shares granted to such Participant are immediately
payable in the manner set forth in Section 3.6.

(ii) Other Terminations: Terminations of employment for any reason
------------------
other than death after the end of a Vesting Period but prior to the end of a
Restricted Period shall not have any effect on the Restricted Period, unless
the Committee, in its sole discretion, finds that the circumstances so
warrant and determines that the Restricted Period shall end on an earlier
date as determined by the Committee and that shares held by the Company shall
be paid as soon as practicable following such earlier date in the manner set
forth in Section 3.6.

(c) Approved leaves of absence of one year or less shall not be deemed
to be terminations of employment under this Section 3.7. Leaves of absence
of more than one year will be deemed to be terminations of employment under
this Section 3.7, unless the Committee determines otherwise.

SECTION 3.8 EXTENSION OF VESTING; DEFERRAL OF PAYMENT.
-----------------------------------------

The Committee may, in its sole discretion, offer any Participant the
right, by execution of a written agreement with ML & Co. containing such
terms and conditions as the Committee shall in its sole discretion provide
for, to extend the Vesting Period applicable to all or any portion of such
Participant's Restricted Shares or Restricted Units, to convert all or any
portion of such Participant's Restricted Shares into Restricted Units or to
defer the receipt of all or any portion of the payment, if any, for such
Participant's Restricted Units (including any Restricted Shares converted
into Restricted Units). In the event that any Vesting Period with respect to
Restricted Shares is extended pursuant to this Section 3.8, the Restricted
Period with respect to such Restricted Shares shall be extended to the same
date. The provisions of any written agreement with a Participant pursuant to
this Section 3.8 may provide for the payment or crediting of interest, an
appreciation factor or index or dividend equivalents, as appropriate.



13





ARTICLE IV - PROVISIONS APPLICABLE TO STOCK OPTIONS.

SECTION 4.1 GRANTS OF STOCK OPTIONS.
-----------------------

The Committee may select employees to become Participants (subject to
Section 1.5 hereof) and grant Stock Options to such Participants at any time;
provided, however, that Incentive Stock Options shall be granted within 10
years of the earlier of the date the Plan is adopted by the Board or approved
by the stockholders. Before making grants, the Committee must receive the
recommendations of the management of the Company, which will take into
account such factors as level of responsibility, current and past
performance, and performance potential. Subject to the provisions of the
Plan, the Committee shall also determine the number of shares of Common Stock
to be covered by each Stock Option. The Committee shall have the authority,
in its discretion, to grant "Incentive Stock Options" or "Nonqualified Stock
Options," or to grant both types of Stock Options. Furthermore, the
Committee may grant a Stock Appreciation Right in connection with a Stock
Option, as provided in Article V.

SECTION 4.2 OPTION DOCUMENTATION.
--------------------

Each Stock Option granted under the Plan shall be evidenced by written
documentation containing such terms and conditions as the Committee may deem
appropriate and are not inconsistent with the provisions of the Plan.

Section 4.3 EXERCISE PRICE.
--------------

The Committee shall establish the exercise price at the time any Stock
Option is granted at such amount as the Committee shall determine, except
that such exercise price shall not be less than 50% of the Fair Market Value
of the underlying shares of Common Stock on the day a Stock Option is granted
and that, with respect to an Incentive Stock Option, such exercise price
shall not be less than 100% of the Fair Market Value of the underlying shares
of Common Stock on the day such Incentive Stock Option is granted. The
exercise price will be subject to adjustment in accordance with the
provisions of Article VII of the Plan.

SECTION 4.4 EXERCISE OF STOCK OPTIONS.
-------------------------

(a) Exercisability: Stock Options shall become exercisable at
--------------
such times and in such installments as the Committee may provide at the time
of grant. The Committee may, however, in its sole discretion accelerate the
time at which a Stock Option or installment may be exercised. A Stock Option
may be exercised at any time from the time first set by the Committee until
the close of business on the expiration date of the Stock Option.
Notwithstanding the foregoing, in no event may a Participant, or a
Participant's transferee pursuant to Section 4.4(d), exercise a Stock Option
during the 12-month period following a hardship withdrawal by the Participant
of Elective



14




401(k) Deferrals as defined under the Merrill Lynch & Co., Inc. 401(k)
Savings & Investment Plan.

(b) Option Period: For each Stock Option granted, the Committee
-------------
shall specify the period during which the Stock Option may be exercised,
provided that no Stock Option shall be exercisable after the expiration of 10
years from the date of grant of such Stock Option.

(c) Exercise in the Event of Termination of Employment:
--------------------------------------------------

(i) Death: If a Participant ceases to be an employee of the Company by
-----
reason of death prior to the exercise or expiration of Stock Options granted
to him and outstanding on the date of death, such Stock Options may be
exercised to the full extent not yet exercised, regardless of whether or not
then fully exercisable under the terms of the grant or under the terms of
Section 4.4(a) hereof, by his estate or beneficiaries, as the case may be, if
such Stock Options are outstanding in his name, or by his transferee pursuant
to Section 4.4(d) or such transferee's estate or beneficiaries, if such Stock
Options are outstanding in the name of such transferee, at any time and from
time to time, but in no event after the expiration date of such Stock Option.

(ii) Disability or Retirement: The Disability or Retirement of a
------------------------
Participant shall not constitute a termination of employment for purposes of
this Article IV, provided that following Disability or Retirement such
Participant does not engage in or assist any business that the Committee, in
its sole discretion, determines to be in competition with business engaged in
by the Company. A Participant who does engage in or assist any business that
the Committee, in its sole discretion, determines to be competition with
business engaged in by the Company shall be deemed to have terminated
employment. In the case of Incentive Stock Options, Disability shall be as
defined in Code Section 22(e)(3).

(iii) Other Terminations: If a Participant ceases to be an employee
------------------
prior to the exercise or expiration of a Stock Option for any reason other
than death, all outstanding Stock Options granted to such Participant,
whether outstanding in his name or in the name of another person as a result
of a transfer in accordance with Section 4.4(d), shall expire on the date of
such termination of employment, unless the Committee, in its sole discretion,
finds that the circumstances in the particular case so warrant and determines
that the Participant, his transferee pursuant to Section 4.4(d) or such
transferee's estate or



15




beneficiaries, may exercise any such outstanding Stock Option (to the extent
that any such outstanding Stock Option could have been exercised at the date
of such termination of employment) at any time and from time to time within
up to 5 years after such termination of employment but in no event after the
expiration date of such Stock Option (the "Extended Period"). If a
Participant dies during the Extended Period and prior to the exercise or
expiration of a Stock Option, his estate or beneficiaries, as the case may
be, if such Stock Option is outstanding in his name, or his transferee
pursuant to Section 4.4(d) or such transferee's estate or beneficiaries, if
such Stock Option is outstanding in the name of such transferee, may exercise
such Stock Option (to the extent such Stock Option could have been exercised
at the date of termination of employment) at any time and from time to time,
but in no event after the end of the Extended Period.

(d) Limitations on Transferability: Stock Options are not transferable
------------------------------
by a Participant except by will or the laws of descent and distribution and
are exercisable during his lifetime only by him; provided, however, that the
Committee shall have the authority, in its discretion, to grant (or to
sanction by way of amendment of an existing grant) Stock Options which may be
transferred by the Participant during his lifetime to any member of his
immediate family or to a trust established for the exclusive benefit of one
or more members of his immediate family, in which case the written
documentation containing the terms and conditions of such Stock Options shall
so state. A transfer of a Stock Option pursuant to this subparagraph may
only be effected by the Corporation at the written request of a Participant
and shall become effective only when recorded in the Corporation's record of
outstanding Stock Options. In the event a Stock Option is transferred as
contemplated in this subparagraph, such Stock Option may not be subsequently
transferred by the transferee except by will or the laws of descent and
distribution. In the event a Stock Option is transferred as contemplated in
this subparagraph, such Stock Option shall continue to be governed by and
subject to the terms and limitations of the Plan and the relevant grant, and
the transferee shall be entitled to the same rights as the Participant under
Articles VII, VIII and X hereof, as if no transfer had taken place. As used
in this subparagraph, "immediate family" shall mean, with respect to any
person, any child, stepchild or grandchild, and shall include relationships
arising from legal adoption.

SECTION 4.5 PAYMENT OF PURCHASE PRICE AND TAX LIABILITY UPON
------------------------------------------------
EXERCISE; DELIVERY OF SHARES.
------------------------------

(a) Payment of Purchase Price: The purchase price of the shares
-------------------------
as to which a Stock Option is exercised shall be paid to the Company at the
time of exercise (i) in cash, (ii) by delivering freely transferable shares
of Common Stock already owned by the person exercising the Stock Option
having a total Fair Market Value on the day prior to the date of exercise
equal to the purchase price, (iii) a combination of cash and shares of Common
Stock equal in value to the exercise price, or (iv) by such other means as
the Committee, in its sole discretion, may determine.

(b) Payment of Taxes: Upon exercise, a Participant may elect to
----------------
satisfy any federal, state or local taxes required by law to be withheld that
arise as a result of the exercise of a Stock Option by directing the Company
to withhold from the shares of Common Stock otherwise deliverable upon the
exercise of such Stock Option, such number of shares as shall have a total
Fair Market Value, on the day prior to the date of exercise, at least equal
to the amount of tax to be withheld; provided that, with respect to any
officer of ML & Co., as defined in Rule 16a-1 under the Securities Exchange
Act of 1934, the Committee shall have the right to disapprove such election.




16




(c) Delivery of Shares: Upon receipt by the Company of the
------------------
purchase price, stock certificate(s) for the shares of Common Stock as to
which a Stock Option is exercised (net of any shares withheld pursuant to
Section 4.5(b) above) shall be delivered to the person in whose name the
Stock Option is outstanding or such person's estate or beneficiaries, as the
case may be, or such shares shall be credited to a brokerage account or
otherwise delivered, in such manner as such person or such person's estate or
beneficiaries, as the case may be, may direct.

SECTION 4.6 LIMITATION ON FAIR MARKET VALUE OF SHARES OF COMMON STOCK
---------------------------------------------------------
RECEIVED UPON EXERCISE OF INCENTIVE STOCK OPTIONS.
-------------------------------------------------

The aggregate Fair Market Value (determined at the time an Incentive
Stock Option is granted) of the shares of Common Stock with respect to which
an Incentive Stock Option is exercisable for the first time by a Participant
during any calendar year (under all plans of the Company) shall not exceed
$100,000 or such other limit as may be established from time to time under
the Code.

ARTICLE V - PROVISIONS APPLICABLE TO STOCK APPRECIATION RIGHTS.

SECTION 5.1 GRANTS OF STOCK APPRECIATION RIGHTS.
-----------------------------------

The Committee may select employees to become Participants (subject to
the provisions of Section 1.5 hereof) and grant Stock Appreciation Rights to
such Participants at any time. Before making grants, the Committee must
receive the recommendations of the management of the Company, which will take
into account such factors as level of responsibility, current and past
performance, and performance potential. The Committee shall have the
authority to grant Stock Appreciation Rights in connection with a Stock
Option or independently. The Committee may grant Stock Appreciation Rights
in connection with a Stock Option, either at the time of grant or by
amendment, in which case each such right shall be subject to the same terms
and conditions as the related Stock Option and shall be exercisable only at
such times and to such extent as the related Stock Option is exercisable. A
Stock Appreciation Right granted in connection with a Stock Option shall
entitle the holder to surrender to the Company the related Stock Option
unexercised, or any portion thereof, and receive from the Company in exchange
therefor an amount equal to the excess of the Fair Market Value of one share
of the Common Stock on the day preceding the surrender of such Stock Option
over the Stock Option exercise price times the number of shares underlying
the Stock Option, or portion thereof, that is surrendered. A Stock
Appreciation Right granted independently of a Stock Option shall entitle the
holder to receive upon exercise an amount equal to the excess of the Fair
Market Value of one share of Common Stock on the day preceding the exercise
of the Stock Appreciation Right over the Fair Market Value of one share of
Common Stock on the date such Stock Appreciation Right was granted, or such
other price determined by the Committee at the time of grant, which shall in
no event be less than 50% of the Fair Market Value of one share of Common
Stock on the date such Stock Appreciation



17




Right was granted. Stock Appreciation Rights are not transferable by a
Participant except by will or the laws of descent and distribution and are
exercisable during his lifetime only by him.

SECTION 5.2 STOCK APPRECIATION RIGHTS GRANTED IN CONNECTION WITH
-----------------------------------------------------
INCENTIVE STOCK OPTIONS.
------------------------

(a) Stock Appreciation Rights granted in connection with Incentive
Stock Options must expire no later than the last date the underlying
Incentive Stock Option can be exercised.

(b) Such Stock Appreciation Rights may be granted for no more than 100%
of the difference between the exercise price of the underlying Incentive
Stock Option and the Fair Market Value of the Common Stock subject to the
underlying Incentive Stock Option at the time the Stock Appreciation Right is
exercised.

(c) Such Stock Appreciation Rights are transferable only to the extent
and at the same time and under the same conditions as the underlying
Incentive Stock Options.

(d) Such Stock Appreciation Rights may be exercised only when the
underlying Incentive Stock Options may be exercised.

(e) Such Stock Appreciation Rights may be exercised only when the Fair
Market Value of the shares of Common Stock subject to the Incentive Stock
Options exceeds the exercise price of the Incentive Stock Options.

SECTION 5.3 PAYMENT UPON EXERCISE OF STOCK APPRECIATION RIGHTS.
---------------------------------------------------

The Company's obligation to any Participant exercising a Stock
Appreciation Right may be paid in cash or shares of Common Stock, or partly
in cash and partly in shares, at the sole discretion of the Committee.

SECTION 5.4 TERMINATION OF EMPLOYMENT.
-------------------------

(a) Death: If a Participant ceases to be an employee of the Company
-----
prior to the exercise or expiration of a Stock Appreciation Right outstanding
in his name on the date of death, such Stock Appreciation Right may be
exercised to the full extent not yet exercised, regardless of whether or not
then fully exercisable under the terms of the grant, by his estate or
beneficiaries, as the case may be, at any time and from time to time within
l2 months after the date of death but in no event after the expiration date
of such Stock Appreciation Right.

(b) Disability: The Disability of a Participant shall not constitute a
----------
termination of employment for purposes of this Article IV, provided that
following the Disability such Participant does not engage in or assist any
business that the Committee, in its sole



18




discretion, determines to be in competition with business engaged in by the
Company. A Participant who does engage in or assist any business that the
Committee, in its sole discretion, determines to be in competition with
business engaged in by the Company shall be deemed to have terminated
employment.

(c) Retirement: The Retirement of a Participant shall not constitute a
----------
termination of employment for purposes of this Article IV, provided that
following Retirement such Participant does not engage in or assist any
business that the Committee, in its sole discretion, determines to be in
competition with business engaged in by the Company, and such Participant may
exercise any Stock Appreciation Right outstanding in his name at any time and
from time to time within 5 years after the date his Retirement commenced but
in no event after the expiration date of such Stock Appreciation Right. A
Participant who does engage in or assist any business that the Committee, in
its sole discretion, determines to be in competition with business engaged in
by the Company shall be deemed to have terminated employment.

(d) Other Terminations: If a Participant ceases to be an employee
------------------
prior to the exercise or expiration of a Stock Appreciation Right for any
reason other than death, all outstanding Stock Appreciation Rights granted to
such Participant shall expire on the date of such termination of employment,
unless the Committee, in its sole discretion, determines that he may exercise
any such outstanding Stock Appreciation Right (to the extent that he was
entitled to do so at the date of such termination of such employment) at any
time and from time to time within up to 5 years after such termination of
employment but in no event after the expiration date of such Stock
Appreciation Right.

ARTICLE VI - PROVISIONS APPLICABLE TO OTHER ML & CO. SECURITIES.

SECTION 6.1 GRANTS OF OTHER ML & CO. SECURITIES.
-----------------------------------

Subject to the provisions of the Plan and any necessary action by the
Board of Directors, the Committee may select employees to become Participants
(subject to the provisions of Section 1.5 hereof) and grant to Participants
Other ML & Co. Securities or the right or option to purchase Other ML & Co.
Securities on such terms and conditions as the Committee shall determine,
including, without limitation, the period such rights or options may be
exercised, the nature and terms of payment of consideration for such Other ML
& Co. Securities, whether such Other ML & Co. Securities shall be subject to
any or all of the provisions of Article III of the Plan applicable to
Restricted Shares and/or Restricted Units, the consequences of termination of
employment, and the terms and conditions, if any, upon which such Other ML &
Co. Securities may or must be repurchased by the Company. Before making
grants, the Committee must receive the recommendations of the management of
the Company, which will take into account such factors as level of
responsibility, current and past performance, and performance potential.
Each such Other ML & Co. Security shall be issued at a price that will not
exceed the Fair Market Value thereof on the date the corresponding right or
option is granted. Other ML & Co. Securities may bear interest or pay
dividends from such date



19




and at a rate or rates or pursuant to a formula or formulas fixed by the
Committee or any necessary action of the Board. Any applicable conversion or
exchange rate with respect to Other ML & Co. Securities shall be fixed by, or
pursuant to a formula determined by, the Committee or any necessary action of
the Board at each date of grant and may be predicated upon the attainment of
financial or other performance goals.

SECTION 6.2 TERMS AND CONDITIONS OF CONVERSION OR EXCHANGE.
----------------------------------------------

Each Other ML & Co. Security may be convertible or exchangeable on such
date and within such period of time as the Committee, or the Board if
necessary, determines at the time of grant. Other ML & Co. Securities may be
convertible into or exchangeable for (i) shares of Preferred Stock of ML &
Co. or (ii) other securities of ML & Co. or any present or future subsidiary
of ML & Co., whether or not convertible into shares of Common Stock, as the
Committee, or the Board if necessary, determines at the time of grant (or at
any time prior to the conversion or exchange date).

ARTICLE VII - 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 Performance Units,
Restricted Units, Stock Options, Stock Appreciation Rights, or Other ML & Co.
Securities 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, or, if in the opinion of the
Committee, after consultation with the Company's independent public
accountants, changes in the Company's accounting policies, acquisitions,
divestitures, distributions, or other unusual or extraordinary items have
disproportionately and materially affected the value of shares of Common
Stock or Performance Units, Restricted Units, Stock Options, Stock
Appreciation Rights, or Other ML & Co. Securities, the Committee shall make
such adjustments, if any, that it may deem necessary or equitable in (a) the
maximum number of shares of Common Stock available for distribution under the
Plan; (b) the number of shares subject to or reserved for issuance under
outstanding Performance Share, Restricted Share, and Stock Option grants; (c)
the performance objectives for the Performance Periods not yet completed,
including the minimum, intermediate, and full performance levels and portion
of payments related thereto; and (d) any other terms or provisions of any
outstanding grants of Performance Shares, Performance Units, Restricted
Shares, Restricted Units, Stock Options, Stock Appreciation Rights, or Other
ML & Co. Securities, in order to preserve the full benefits of such grants
for the Participants, taking into account inflation, interest rates, and any
other factors that the Committee, in its sole discretion, considers relevant.
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,



20




the shares resulting from any such change shall be deemed to be shares of
Common Stock within the meaning of the Plan. In the event of any other
change affecting the shares of Common Stock, Performance Units, Restricted
Units, Stock Options, Stock Appreciation Rights, or Other ML & Co.
Securities, such adjustment shall be made as may be deemed equitable by the
Committee to give proper effect to such event.

ARTICLE VIII - PAYMENTS UPON TERMINATION OF EMPLOYMENT AFTER A
CHANGE IN CONTROL.

SECTION 8.1 VALUE OF PAYMENTS UPON TERMINATION AFTER A CHANGE
--------------------------------------------------
IN CONTROL.
-----------

Any other provision of the Plan to the contrary notwithstanding and
notwithstanding any election to the contrary previously made by the
Participant, in the event a Change in Control shall occur and thereafter the
Company shall terminate the Participant's employment without Cause or the
Participant shall terminate his employment with the Company for Good Reason,
the Participant shall be paid the value of his Performance Shares,
Performance Units, Restricted Shares, Restricted Units, Stock Options, Stock
Appreciation Rights, and Other ML & Co. Securities in a lump sum in cash,
promptly after termination of his employment but, without limiting the
foregoing, in no event later than 30 days thereafter. Payments shall be
calculated as set forth below:

(a) Performance Shares and Performance Units.
----------------------------------------

Any payment for Performance Shares and Performance Units pursuant to
this Section 8.1(a) shall be calculated by applying performance objectives
for any outstanding Performance Shares and Performance Units as if the
applicable Performance Period and any applicable Restricted Period had ended
on the first day of the month in which the Participant's employment is
terminated. The amount of any payment to a Participant pursuant to this
Section 8.1(a) shall be reduced by the amount of any payment previously made
to the Participant with respect to the Performance Shares and Performance
Units, exclusive of ordinary dividend payments, resulting by operation of law
from the Change in Control, including, without limitation, payments resulting
from a merger pursuant to state law. The value of the Performance Shares and
Performance Units payable pursuant to this Section 8.1(a) shall be the amount
equal to the number of Performance Shares and Performance Units payable in
accordance with the preceding sentence multiplied by the Fair Market Value of
a share of Common Stock on the day the Participant's employment is terminated
or, if higher, the highest Fair Market Value of a share of the Common Stock
on any day during the 90-day period ending on the date of the Change in
Control (the "Pre-CIC Value").

(b) Restricted Shares and Restricted Units.
--------------------------------------

Any payment under this Section 8.1(b) shall be calculated as if all the
relevant Vesting and Restricted Periods had been fully completed immediately
prior to the date



21




on which the Participant's employment is terminated. The amount of any
payment to a Participant pursuant to this Section 8.1(b) shall be reduced by
the amount of any payment previously made to the Participant with respect to
the Restricted Shares and Restricted Units, exclusive of ordinary dividend
payments, resulting by operation of law from the Change in Control,
including, without limitation, payments resulting from a merger pursuant to
state law. The value of the Participant's Restricted Shares and Restricted
Units payable pursuant to this Section 8.1(b) shall be the amount equal to
the number of the Restricted Shares and Restricted Units outstanding in a
Participant's name multiplied by the Fair Market Value of a share of Common
Stock on the day the Participant's employment is terminated or, if higher,
the Pre-CIC Value.

(c) Stock Options and Stock Appreciation Rights.
-------------------------------------------

Any payment for Stock Options and Stock Appreciation Rights pursuant to
this Section 8.1(c) shall be calculated as if all such Stock Options and
Stock Appreciation Rights, regardless of whether or not then fully
exercisable under the terms of the grant, became exercisable immediately
prior to the date on which the Participant's employment is terminated. The
amount of any payment to a Participant pursuant to this Section 8.1(c) shall
be reduced by the amount of any payment previously made to a Participant with
respect to the Stock Options and Stock Appreciation Rights, exclusive of any
ordinary dividend payments, resulting by operation of law from the Change in
Control, including, without limitation, payments resulting from a merger
pursuant to state law. The value of the Participant's Stock Options and
Stock Appreciation Rights payable pursuant to this Section 8.1(c) shall be

(i) in the case of a Stock Option, for each
underlying share of Common Stock, the excess of the
Fair Market Value of a share of Common Stock on the
day the Participant's employment is terminated, or,
if higher, the Pre-CIC Value, over the per share
exercise price for such Stock Option;

(ii) in the case of a Stock Appreciation Right granted in
tandem with a Stock Option, the Fair Market Value of
a share of Common Stock on the day the Participant's
employment is terminated, or, if higher, the Pre-CIC
Value, over the Stock Option exercise price; and

(iii) in the case of a Stock Appreciation Right
granted independently of a Stock Option, the Fair
Market Value of a share of Common Stock on the day
the Participant's employment is terminated, or, if
higher, the Pre-CIC Value, over the Fair Market
Value of one share of Common Stock on the date such
Stock Appreciation Right was granted, or such other
price determined by the Committee at the time of
grant.



22




(d) Other ML & Co. Securities.
-------------------------

Any payment for Other ML & Co. Securities under this Section 8.1(d)
shall be calculated as if any relevant Vesting or Restricted Periods or other
applicable conditions dependent on the passage of time and relating to the
exercisability of any right or option to purchase Other ML & Co. Securities,
or relating to the full and unconditional ownership of such Other ML & Co.
Securities themselves, had been met on the first day of the month in which
the Participant's employment is terminated. The amount of any payment to a
Participant pursuant to this Section 8.1(d) shall be reduced by the amount of
any payment previously made to the Participant with respect to the Other ML &
Co. Securities, exclusive of ordinary dividend payments, resulting by
operation of law from the Change in Control, including, without limitation,
payments resulting from a merger pursuant to state law. The value of the
Participant's Other ML & Co. Securities payable pursuant to this Section
8.1(d) shall be

(i) in the case of an option or right to purchase
such Other ML & Co. Security, for each underlying
Other ML & Co. Security, the excess of the Fair
Market Value of such Other ML & Co. Security on the
day the Participant's employment is terminated, or,
if higher, the Pre-CIC Value, over the exercise
price of such option or right; and

(ii) in the case of the Other ML & Co. Security itself
(where there is no outstanding option or right
relating to such Other ML & Co. Security), the Fair
Market Value of the Other ML & Co. Security on the
day the Participant's employment is terminated, or,
if higher, the Pre-CIC Value.

SECTION 8.2 A CHANGE IN CONTROL.
-------------------

A "CHANGE IN CONTROL" shall mean 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 Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT"), whether or not the Company 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 the
Company'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 Effective Date of this Plan) individuals who at the
beginning of such period



23




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.

SECTION 8.3 EFFECT OF AGREEMENT RESULTING IN CHANGE IN CONTROL.
--------------------------------------------------

If ML & Co. executes an agreement, the consummation of which would
result in the occurrence of a Change in Control as described in Section 8.2,
then, with respect to a termination of employment without Cause or for Good
Reason occurring after the execution of such agreement (and, if such
agreement expires or is terminated prior to consummation, prior to such
expiration or termination of such agreement), a Change in Control shall be
deemed to have occurred as of the date of the execution of such agreement.

SECTION 8.4 TERMINATION FOR CAUSE.
---------------------

Termination of the Participant's employment by the Company for "CAUSE"
shall mean termination upon:

(a) the willful and continued failure by the Participant substantially
to perform his duties with the Company (other than any such failure resulting
from the Participant's incapacity due to physical or mental illness or from
the Participant's Retirement or any such actual or anticipated failure
resulting from termination by the Participant for Good Reason) after a
written demand for substantial performance is delivered to him by the Board
of Directors, which demand specifically identifies the manner in which the
Board of Directors believes that he has not substantially performed his
duties; or

(b) the willful engaging by the Participant in conduct that is
demonstrably and materially injurious to the Company, monetarily or
otherwise.

No act or failure to act by the Participant shall be deemed "willful"
unless done, or omitted to be done, by the Participant not in good faith and
without reasonable belief that his action or omission was in the best
interest of the Company.

Notwithstanding the foregoing, the Participant shall not be deemed to
have been terminated for Cause unless and until there shall have been
delivered to him a copy of a resolution duly adopted by the affirmative vote
of not less than three quarters of the entire membership of the Board of
Directors at a meeting of the Board called and held for such purpose (after
reasonable notice to the Participant and an opportunity for him, together
with counsel, to be heard before the Board of Directors), finding that, in
the



24




good faith opinion of the Board of Directors, the Participant was guilty of
conduct set forth above in clause (a) or (b) of the first sentence of this
Section 8.4 and specifying the particulars thereof in detail.

SECTION 8.5 GOOD REASON.
-----------

"GOOD REASON" shall mean the Participant's termination of his employment
with the Company if, without the Participant's written consent, any of the
following circumstances shall occur:

(a) Inconsistent Duties. A meaningful and detrimental alteration in
-------------------
the Participant's position or in the nature or status of his responsibilities
(including those as a director of ML & Co., if any) from those in effect
immediately prior to the Change in Control;

(b) Reduced Salary or Bonus Opportunity. A reduction by the Company in
-----------------------------------
the Participant's annual base salary as in effect immediately prior to the
Change in Control; a failure by the Company to increase the Participant's
salary at a rate commensurate with that of other key executives of the
Company; or a reduction in the Participant's annual cash bonus below the
greater of (i) the annual cash bonus that he received, or to which he was
entitled, immediately prior to the Change in Control, or (ii) the average
annual cash bonus paid to the Participant by the Company for the three years
preceding the year in which the Change in Control occurs;

(c) Relocation. The relocation of the office of the Company where the
----------
Participant is employed at the time of the Change in Control (the "CIC
Location") to a location that in his good faith assessment is an area not
generally considered conducive to maintaining the executive offices of a
company such as ML & Co. because of hazardous or undesirable conditions
including without limitation a high crime rate or inadequate facilities, or
to a location that is more than twenty-five (25) miles away from the CIC
Location or the Company's requiring the Participant to be based more than
twenty-five (25) miles away from the CIC Location (except for required travel
on the Company's business to an extent substantially consistent with his
customary business travel obligations in the ordinary course of business
prior to the Change in Control);

(d) Compensation Plans. The failure by the Company to continue in
------------------
effect any compensation plan in which the Participant participates, including
but not limited to this Plan, the Company's retirement program, Employee
Stock Purchase Plan, 1978 Incentive Equity Purchase Plan, Equity Capital
Accumulation Plan, Canadian Capital Accumulation Plan, Management Capital
Accumulation Plan, limited partnership offerings, cash incentive compensation
or any other plans adopted prior to the Change in Control, unless an
equitable arrangement (embodied in an ongoing substitute or alternative plan)
has been made with respect to such plan in connection with the Change in
Control, or the failure by the Company to continue the Participant's



25




participation therein on at least as favorable a basis, both in terms of the
amount of benefits provided and the level of his participation relative to
other Participants, as existed immediately prior to the Change in Control;

(e) Benefits and Perquisites. The failure of the Company to continue
------------------------
to provide the Participant with benefits at least as favorable as those
enjoyed by the Participant under any of the Company's retirement, life
insurance, medical, health and accident, disability, deferred compensation or
savings plans in which the Participant was participating immediately prior to
the Change in Control; the taking of any action by the Company that would
directly or indirectly materially reduce any of such benefits or deprive the
Participant of any material fringe benefit enjoyed by him immediately prior
to the Change in Control, including, without limitation, the use of a car,
secretary, office space, telephones, expense reimbursement, and club dues; or
the failure by the Company to provide the Participant with the number of paid
vacation days to which the Participant is entitled on the basis of years of
service with the Company in accordance with the Company's normal vacation
policy in effect immediately prior to the Change in Control;

(f) No Assumption by Successor. The failure of ML & Co. to obtain a
--------------------------
satisfactory agreement from any successor to assume and agree to perform a
Participant's employment agreement as contemplated thereunder or, if the
business of the Company for which his services are principally performed is
sold at any time after a Change in Control, the purchaser of such business
shall fail to agree to provide the Participant with the same or a comparable
position, duties, compensation, and benefits as provided to him by the
Company immediately prior to the Change in Control.

SECTION 8.6 EFFECT ON PLAN PROVISIONS.
-------------------------

In the event of a Change in Control, no changes in the Plan, or in any
documents evidencing grants of Performance Shares, Performance Units,
Restricted Shares, Restricted Units, Stock Options, Stock Appreciation
Rights, or Other ML & Co. Securities and no adjustments, determinations or
other exercises of discretion by the Committee or the Board of Directors,
that were made subsequent to the Change in Control and that would have the
effect of diminishing a Participant's rights or his payments under the Plan
or this Article shall be effective, including, but not limited to, any
changes, determinations or other exercises of discretion made to or pursuant
to the Plan. Once a Participant has received a payment pursuant to this
Article VIII, shares of Common Stock that were reserved for issuance in
connection with any Performance Shares, Restricted Shares, Stock Options, or
Other ML & Co. Securities for which payment is made shall no longer be
reserved and shares of Common Stock that are Restricted Shares or that are
restricted and held by the Company pursuant to Section 2.6(a)(i), for which
payment has been made, shall no longer be registered in the name of the
Participant and shall again be available for grants under the Plan. If the
Participant's employment is terminated without Cause or for Good Reason after
a Change in Control, any election to defer payment for Performance Shares or



26




Performance Units pursuant to Section 2.8 hereof or Restricted Shares or
Restricted Units pursuant to Section 3.8 hereof shall be null and void.

ARTICLE IX - MISCELLANEOUS.

SECTION 9.1 DESIGNATION OF BENEFICIARY.
--------------------------

A Participant, or the transferee of a Stock Option pursuant to
Section 4.4(d), may designate, in a writing delivered to ML & Co. before his
death, a person or persons to receive, in the event of his death, any rights
to which he would be entitled under the Plan. A Participant or Stock Option
transferee, may also designate an alternate beneficiary to receive payments
if the primary beneficiary does not survive the Participant or Stock Option
transferee. A Participant or Stock Option transferee may designate more than
one person as his beneficiary or alternate beneficiary, in which case such
persons would receive payments as joint tenants with a right of survivorship.
A beneficiary designation may be changed or revoked by a Participant or Stock
Option transferee at any time by filing a written statement of such change or
revocation with the Company. If a Participant or Stock Option transferee
fails to designate a beneficiary, then his estate shall be deemed to be his
beneficiary.

SECTION 9.2 EMPLOYMENT RIGHTS.
-----------------

Neither the Plan nor any action taken hereunder shall be construed as
giving any employee of the Company the right to become a Participant, and a
grant under the Plan shall not be construed as giving any Participant any
right to be retained in the employ of the Company.

SECTION 9.3 NONTRANSFERABILITY.
------------------

Except as provided in Section 4.4(d), a Participant's rights under
the Plan, including the right to any amounts or shares payable, may not be
assigned, pledged, or otherwise transferred except, in the event of a
Participant's death, to his designated beneficiary or, in the absence of such
a designation, by will or the laws of descent and distribution.

SECTION 9.4 WITHHOLDING.
-----------

The Company shall have the right, before any payment is made or a
certificate for any shares is delivered or any shares are credited to any
brokerage account, to deduct or withhold from any payment under the Plan any
Federal, state, local or other taxes, including transfer taxes, required by
law to be withheld or to require the Participant or his beneficiary or
estate, as the case may be, to pay any amount, or the balance of any amount,
required to be withheld.



27





SECTION 9.5 RELATIONSHIP TO OTHER BENEFITS.
------------------------------

No payment under the Plan shall be taken into account in determining any
benefits under any retirement, group insurance, or other employee benefit
plan of the Company. The Plan shall not preclude the stockholders of ML &
Co., the Board of Directors or any committee thereof, or the Company from
authorizing or approving other employee benefit plans or forms of incentive
compensation, nor shall it limit or prevent the continued operation of other
incentive compensation plans or other employee benefit plans of the Company
or the participation in any such plans by Participants in the Plan.

SECTION 9.6 NO TRUST OR FUND CREATED.
------------------------

Neither the Plan nor any grant made hereunder shall create or be
construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company and a Participant or any other person. To
the extent that any person acquires a right to receive payments from the
Company pursuant to a grant under the Plan, such right shall be no greater
than the right of any unsecured general creditor of the Company.

SECTION 9.7 EXPENSES.
--------

The expenses of administering the Plan shall be borne by the Company.

SECTION 9.8 INDEMNIFICATION.
---------------

Service on the Committee shall constitute service as a member of the
Board of Directors so that members of the Committee shall be entitled to
indemnification and reimbursement as directors of ML & Co. pursuant to its
Certificate of Incorporation, By-Laws, or resolutions of its Board of
Directors or stockholders.

SECTION 9.9 TAX LITIGATION.
--------------

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

ARTICLE X - AMENDMENT AND TERMINATION.

The Board of Directors or the Committee (but no other committee of the
Board of Directors) may modify, amend or terminate the Plan at any time,
except that, to the extent then required by applicable law, rule or
regulation, approval of the holders of a majority of shares of Common Stock
represented in person or by proxy at a meeting of the stockholders will be
required to increase the maximum number of shares of



28




Common Stock available for distribution under the Plan (other than increases
due to an adjustment in accordance with the Plan). No modification,
amendment or termination of the Plan shall adversely affect the rights of a
Participant under a grant previously made to him without the consent of such
Participant.

ARTICLE XI - INTERPRETATION.

SECTION 11.1 GOVERNMENTAL AND OTHER REGULATIONS.
----------------------------------

The Plan and any grant hereunder shall be subject to all applicable
Federal and state laws, rules, and regulations and to such approvals by any
regulatory or governmental agency that may, in the opinion of the counsel for
the Company, be required.

SECTION 11.2 GOVERNING LAW.
-------------

THE PLAN SHALL BE CONSTRUED AND ITS PROVISIONS ENFORCED AND ADMINISTERED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
ENTERED INTO AND PERFORMED ENTIRELY IN SUCH STATE.

ARTICLE XII - EFFECTIVE DATE AND STOCKHOLDER APPROVAL.

The Plan shall not be effective unless or until approved by a majority
of the votes cast at a duly held stockholders' meeting at which a quorum
representing a majority of all outstanding voting stock is, either in person
or by proxy present and voting on the Plan.



29