PROGRAM FOR DEFERRAL OF STOCK OPTION GAINS

Exhibit 10(ii)

MERRILL LYNCH & CO., INC.
PROGRAM FOR DEFERRAL OF STOCK OPTION GAINS
FOR A SELECT GROUP OF ELIGIBLE EMPLOYEES

Dated as of September 17, 1997

MERRILL LYNCH & CO., INC.
PROGRAM FOR DEFERRAL OF STOCK OPTION GAINS
FOR A SELECT GROUP OF ELIGIBLE EMPLOYEES

Table of Contents

Page
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I. GENERAL ...............................................................1
1.1 Purpose and Intent .............................................1
1.2 Definitions ....................................................1
II. ELIGIBILITY ...........................................................3
2.1 Eligible Employees .............................................3
2.2 Representation and Warranty by Participant .....................3
III. DEFERRAL ELECTIONS.....................................................3
3.1 Deferral Elections .............................................3
(a) Making Elections .........................................3
(b) Deemed Exercise...........................................4
(c) Effect of Deferral Followed by a Deemed Exercise..........4
(d) Irrevocability of Deferral Election ......................4
3.2 Minimum Requirements for Deferral ..............................4
3.3 Recission of Deferral Election..................................5
(a) Prior to Deemed Exercise..................................5
(b) Adverse Tax Determination.................................5
IV. CASH/STOCK UNIT ACCOUNTS ..............................................5
4.1 Creation and Crediting to Accounts .............................5
4.2 Dividend Equivalents ...........................................5
4.3 Changes in Capitalization ......................................5
V. STATUS OF ACCOUNT......................................................6
5.1 Status .........................................................6
5.2 Non-Assignability ..............................................6
5.3 Effect of Deferral on Benefits Under Pension and
Welfare Benefit Plans...........................................6
VI. PAYMENT OF ACCOUNT ....................................................7
6.1 Payment Date ...................................................7
(a) Regular Payment Elections.................................7
(b) Modified Installment Payments.............................7
6.2 Manner of Payment ..............................................7
6.3 Termination of Employment ......................................7
(a) Death or Retirement ......................................7
(b) Other Termination of Employment ..........................8
(c) Leave of Absence, Transfer or Disability .................8
(d) Discretion to Alter Payment Date .........................8
6.4 Withholding of Taxes ...........................................8


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6.5 Beneficiary ....................................................8
(a) Designation of Beneficiary ...............................8
(b) Change in Beneficiary ....................................8
(c) Default Beneficiary ......................................9
(d) If the Beneficiary Dies During Payment ...................9
6.6 Hardship Distributions .........................................9
6.7 Domestic Relations Orders ......................................9
VII. ADMINISTRATION OF THE PLAN ............................................10
7.1 Powers of the Committee and the Administrator ..................10
(a) General...................................................10
(b) Limitation of Liability...................................10
7.2 Optional Rabbi Trust............................................10
7.3 Payments on Behalf of an Incompetent ...........................10
7.4 Corporate Books and Records Controlling ........................10
VII. MISCELLANEOUS PROVISIONS ..............................................11
8.1 Litigation .....................................................11
8.2 Headings Are Not Controlling ...................................11
8.3 Governing Law ..................................................11
8.4 Amendment and Termination ......................................11

Exhibit A Form of Deferral Agreement


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MERRILL LYNCH & CO., INC.
PROGRAM FOR DEFERRAL OF STOCK OPTION GAINS
FOR A SELECT GROUP OF ELIGIBLE EMPLOYEES

1.1 Purpose and Intent.

The purpose of the Plan is to encourage the employees who are integral to the
success of the business of the Company to continue their employment and their
alignment with Merrill Lynch & Co., Inc. Common Stock by providing them with the
ability to defer receipt of option gains with respect to non-qualified stock
options granted under the Merrill Lynch & Co., Inc. Long-Term Incentive
Compensation Plan and the Merrill Lynch & Co., Inc. Long-Term Incentive
Compensation Plan for Managers and Producers (collectively, "LTICP").

It is intended that the Plan be unfunded and maintained primarily for the
purpose of providing deferred compensation for a select group of management or
highly compensated employees within the meaning of Title I of ERISA, and all
decisions concerning who is to be considered a member of that select group and
how the Plan shall be administered and interpreted shall be consistent with this
intention.

1.2 Definitions.

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

"Administrator" means the Director of Human Resources of ML & Co., or his
functional successor, or any other person or committee designated as
Administrator of the Plan by the Management Development and Compensation
Committee of the Board of Directors.

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

"Account Balances" means the Participant's Stock Unit Account Balance and
Cash Unit Account Balance.

"Board of Directors" means the Board of Directors of ML & Co. or any duly
authorized Committee thereof.

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

"Cash Unit" means an entry in a Participant's Cash Unit Account Balance
representing the Company's obligation to pay an amount in cash equal to the
value of one share of Common Stock.

"Cash Unit Account Balance" means, as of any date, the number of Cash
Units credited to the Participant in connection with the payment of dividend
equivalents on Stock Units and/or Cash Units in accordance with Section 4.2, as
adjusted to any changes in capitalization in accordance with Section 4.2 and any
payments made from the Cash Unit Account Balance to the Participant prior to
that date.

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

"Committee" means the Management Development and Compensation Committee of
the Board of the Directors. Except as may be required by law, any function of
the Committee may be delegated to the Administrator.

"Common Stock" means the Common Stock, par value $1.33 1/3 per share of ML
& Co., together with (for so long they are outstanding) one Right to Purchase
Units of Series A Junior Preferred Stock, par value $1.00 per share, of ML & Co.
issued pursuant to the Rights Agreement dated as of December 16, 1987 between ML
& Co. and Manufacturers Hanover Trust Company, Rights Agent, as amended.

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

"Covered Options" means the particular non-qualified options granted under
LTICP as to which a Participant has elected to defer gains.

"Deemed Exercise" means the conversion of Covered Options to the right to
receive the Stock Units.

"Deferral Election" means a Participant's election to defer the gain on
non qualified stock options granted under LTICP as described in Section 3.1 and
Exhibit A hereto.

"Eligible Employee" means an employee eligible to make a deferral under
the Plan, as determined in Article II hereof.

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

"Fair Market Value" of Common Stock on any given date means (a) the mean
of the high and low sales prices on the New York Stock Exchange--Composite Tape
on the date(s) in question, or, if the 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
Common Stock was so traded; or (b) such other amount as may be determined by the
Administrator by any fair and reasonable means.

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

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

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

"Officer(s)" means all officers of ML & Co., as such term is defined in
Rule 16a-1 under the Securities Exchange Act of 1934.

"Participant" means an Eligible Employee who elects to defer under the
Plan.

"Plan" means this Merrill Lynch & Co., Inc. Program for Deferral of Stock
Option Gains for a Select Group of Eligible Employees.

"Rabbi Trust" means the Trust that may be established, at the option of
the Administrator, to receive the delivery of shares otherwise issuable upon the
exercise of Covered Options as provided

hereunder and to hold such shares (or the proceeds thereof) until payment of
amounts pursuant to this Plan.

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

"Stock Unit" means an entry in a Participant's Stock Unit Account Balance
representing the Company's obligation to make payment to a Participant in the
form of one share of Common Stock in accordance with the Plan.

"Stock Unit Account Balance" means, as of any date, the number of Stock
Units credited to a Participant's Cash/Stock Unit Account as adjusted to any
changes in capitalization in accordance with Section 4.2 and any payments made
from the Stock Unit Account Balance to the Participant prior to that date.

ARTICLE II

ELIGIBILITY

2.1 Eligible Employees.

Initially participation in this Plan shall be limited to employees of the
Company who were granted non-qualified Stock Options in 1989, provided that the
Administrator, in his sole discretion, may expand such eligibility to include
additional employees who are generally eligible to participate in the Merrill
Lynch & Co., Inc. Deferred Compensation Plans for a Select Group of Eligible
Employees, and such other employees as the Administrator may, in sole
discretion, determined.

2.2 Representation and Warranty by Participant.

The deferral opportunity being offered hereby has not been and will not be
registered under the Securities Act of 1933 (the "Securities Act") and is being
offered to "accredited investors" (within the meaning of Rule 501(a)(6) under
the Securities Act) in reliance on the exemption from registration provided by
Section 4(2) of the Securities Act. Accordingly, when submitting his or her
election form to the Administrator or his designee, each Participant must
represent and warrant to ML & Co. that he or she is a natural person who had an
individual income in excess of $200,000 in the most recent calendar year then
ended and has a reasonable expectation of reaching the same income level in the
current calendar year. This requirement is in addition to, and not a substitute
for, the eligibility requirements set forth in Section 2.1.

ARTICLE III

DEFERRAL ELECTIONS

3.1 Deferral Elections.

(a) Making Elections. Eligible employees can elect to defer receipt of the
gain to which such Participant would otherwise be entitled on exercise of any
non-qualified options granted to

such employees under LTICP. Deferral Elections shall be made by submitting to
the Administrator or his designee the form attached hereto as Exhibit A.

(i) Each Deferral Election must be made at least 90 days prior to
the Deemed Exercise of the Covered Options to which the
Deferral Election relates and must specify the particular
Stock Options (including the date of grant) to which such
Deferral Election relates and the number of Shares issuable
upon exercise of such Stock Options.

(ii) To be effective, each Deferral Election must be made (A) in or
prior to the taxable year immediately prior to the expiration
of such Covered Option and (B) at least six (6) months prior
to the date of such expiration.

(iii) To be effective, each Deferral Election must defer the gain on
a minimum of 1,000 options.

(b) Deemed Exercise. When a Deferral Election has been made, Covered
Options, while remaining subject to all other terms and conditions of LTICP, may
only be exercised subject to the Deemed Exercise procedures in this Plan.
Covered Options will not be converted to Units in accordance with Section 4.1
until a Deemed Exercise has occurred. To effect a Deemed Exercise, Participants
must prove ownership of previously held shares of Common Stock (owned for a
period of not less than six months) having a Fair Market Value on the Deemed
Exercise date equal to the total Exercise Price. The date on which such Deemed
Exercise occurs will determine the number of Stock Units credited to a
Participant in accordance with Section 4.1.

(c) Effect of a Deferral Followed by a Deemed Exercise. Upon a Deemed
Exercise of all or a portion of the Covered Options to which such Deferral
Election relates, a Participant will be credited with a number of Stock Units
determined in accordance with Section 4.1 [and a like number of shares of Common
Stock shall be held for delivery in the Treasury of ML & Co.] and, if the
Administrator determines, delivered to a Rabbi Trust established in accordance
with Section 8.1 hereof for payment to the Participant in accordance with
Article VI hereof.

(d) Irrevocability of Deferral Election. Except as provided in Sections
3.3 and 6.6 and 6.7, an election made under Section 3.1(a) is irrevocable once
submitted to the Administrator or his designee. Once a Participant elects to
defer the gains on all or a portion of a Stock Option, any gains will be
deferred whenever a Deemed Exercise of a Stock Option occurs.

3.2 Minimum Requirements for Deferral.

Minimum Requirements. Notwithstanding any other provision of the Plan, no
deferral will be effected under the Plan with respect to a Participant if:

(a) the Participant is not an Eligible Employee when the election is
made,

(b) the greater of (A) the sum of (1) the compensation amount listed on
the Participant's W-2 form for the most recent calendar year, and
(2) any incentive compensation that is accelerated which the
Participant may receive in the current calendar year that would have
been payable in next calendar year in the absence of the action of
the Company to accelerate the payment, and (B) the Participant's
Eligible Compensation for the next calendar year, is less than
$200,000.

3.3 Rescission of Deferral Election.

(a) Prior to Deemed Exercise. A deferral election hereunder will be
rescinded if a Participant's employment terminates prior to a Deemed Exercise.
In addition, a deferral election may be rescinded at the request of the
Participant prior to a Deemed Exercise, if the Administrator, in his sole
discretion and upon evidence of such basis that he finds persuasive (including a
material applicable change in the Participant's U.S. Federal and/or foreign
income tax rate during the relevant period), agrees to the rescission of the
election. In the event of a rescission under this Section 3.3(a), no deferral
will be effected under the Plan.

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

ARTICLE IV

CASH/STOCK UNIT ACCOUNTS

4.1 Creation and Crediting to Accounts

A Cash/Stock Unit Account shall be created for each Participant who has
deferred under the Plan and effected a Deemed Exercise. As soon as practicable
after the Deemed Exercise (but in no event later than the end of the following
month), a Participant's Stock Unit Account Balance will be credited with a
number of Stock Units (or fractions thereof) equal to: (1) the aggregate Fair
Market Value (on the date of Deemed Exercise) of the number of Covered Option
shares that are the subject of the Deemed Exercise; (2) minus: (A) the aggregate
Exercise Price of the shares subject to the Covered Option; and (B) any FICA or
Medicare taxes due upon such exercise (unless the Administrator determines that
such taxes should be payable in some other manner); (3) divided by the Fair
Market Value of the Common Stock on such Date. Cash Units will be credited to a
Participant's Cash Unit Account Balance in accordance with Section 4.2.

4.2 Dividend Equivalents.

Whenever a cash dividend is paid on a share of Common Stock, the
Participant's Cash/Stock Unit Account shall be credited, on the payment date for
such cash dividend, with the number of Cash Units determined by multiplying the
per share amount of the cash dividend by the Participant's Stock Unit Account
Balance and Cash Unit Account Balance (expressed in Stock Units and Cash Units,
respectively), on the record date for such cash dividend and dividing the result
by the price per share of Common Stock used for purposes of the reinvestment of
such cash dividend in the Merrill Lynch & Co., Inc. Dividend Reinvestment
Program, and rounding the result to the nearest 1/100th of a Unit (with .005
being rounded upwards).

4.3 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 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 Board of
Directors, 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 Stock or Cash
Units, the Committee shall make such adjustments, if any, that it may deem
necessary or equitable in each Participant's Cash/Stock Unit Account in order to
preserve the full benefits of the Plan for the Participants, taking into account
any 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, 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 or
Stock or Cash Units, such adjustment shall be made as may be deemed equitable by
the Committee to give proper effect to such event.

ARTICLE V

STATUS OF ACCOUNT

5.1 Status.

Nothing contained herein and no action taken pursuant hereto will be
construed to create any kind or a fiduciary relationship between ML & Co. and
any Participant, the Participant's beneficiary or estate, or any other person.
Title to and beneficial ownership of any funds represented by any Account
Balance will at all times remain with the Company, or in the event a Rabbi Trust
is established, in the Rabbi Trust, and available to the creditors of the
Company in the event of a bankruptcy. No person will, by virtue of the
provisions of the Plan, have any interest whatsoever in any specific assets of
the Company. TO THE EXTENT THAT ANY PERSON ACQUIRES A RIGHT TO RECEIVE PAYMENTS
FROM THE COMPANY UNDER THE PLAN, SUCH RIGHT WILL BE NO GREATER THAN THE RIGHT OF
ANY UNSECURED GENERAL CREDITOR OF THE COMPANY.

5.2 Non-Assignability.

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

5.3 Effect of Deferral on Benefits Under Pension and Welfare Benefit Plans.

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

ARTICLE VI

PAYMENT OF ACCOUNT

6.1 Payment Date.

(a) Regular Payment Elections. Subject to Section 7.1(b), the
Participant's Account Balances will be paid by ML & Co., as elected by the
Participant at the time of his or her deferral election, either in a single
payment to be made, or in the number of annual installment payments (not to
exceed 15) chosen by the Participant to commence, (i) in the month following the
month of the Participant's Retirement or death, (ii) in any month and year
selected by the Participant after the end of 1998 or (iii) in any month in the
calendar year following the Participant's Retirement; provided that no member of
Executive Management shall elect to receive the payment (in the case of a single
payment) or commencement of payment (in the case of installment payments)
earlier than a date which is six months and one day after the earliest to occur
of Retirement, Death or other termination of employment. The amount of each
annual installment payment, if applicable, shall be determined by multiplying
the Fair Market Value of the Account Balances as of the last day of the month
immediately preceding the month in which the payment is to be made by a
fraction, the numerator of which is one and the denominator of which is the
number of remaining installment payments (including the installment payment to
be made) and rounding the result to the nearest whole Stock Unit of Cash Unit as
the case may be.

(b) Modified Installment Payments. If the Participant had elected
(at the time of deferral) to receive at least 11 but no more than 15 annual
Installment Payments in accordance with Section 7.1(a), then such Participant's
Account Balances, will be paid in modified installment payments, such modified
installment payments to commence at least six months and one day following the
Participant's Retirement or upon the Participant's death. The modified
installment payments shall be computed in accordance with the last sentence of
Section 7.1(a) and will in all other respects be treated like regular
installment payments under the Plan.

6.2 Manner of Payment. Payments of Stock Unit Account Balances will be made in
the form of one share of Common Stock for each Stock Unit to be paid, [with any
fractional Stock Units paid in cash.] Payments of Cash Units will be made in
cash. The amount of such cash payment shall be determined by multiplying the
number of Cash Units to be paid by the Fair Market Value of a share of Common
Stock on the last business day immediately prior to the day on which payment is
to be made and rounding the result up to the nearest whole cent.

6.3 Termination of Employment.

(a) Death or Retirement. If the Participant dies or begins Retirement
prior to payment, then the Account Balances will be paid, in accordance with the
Participant's elections and as provided in Sections 6.1 and 6.2, to the
Participant (in the event of Retirement) or to the Participant's beneficiary (in
the event of death), provided, however, that in the event that a beneficiary of
the Participant's Account is the Participant's estate or is otherwise not a
natural person, then (i) if the Participant has elected a regular payment
election pursuant to Section 6.1(a), the applicable portion of the Account
Balances will be paid in a single payment to such beneficiary notwithstanding
any election of installment payments, and (ii) if the Participant has elected
modified installment payments pursuant to Section 6.1(b), the applicable portion
of the Cash/Stock Unit Account, if applicable, will continue to be payable as
modified installment payments, but only to a single person consisting of the
administrator or executor of the Participant's estate or another

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

(b) Other Termination of Employment. If the Participant's employment
terminates at any time for any reason other than death or Retirement, the
Account Balances will be paid to the Participant in a single payment in the
manner specified in Section 6.2, as soon thereafter as is practicable,
notwithstanding the Participant's elections hereunder.

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

(d) Discretion to Alter Payment Date. Notwithstanding the provisions of
Sections 6.3(a) and (b), if the Participant's employment terminates for any
reason, the Administrator may, in his sole discretion, direct that the Account
Balances be paid at some other time or that it be paid in installments;
provided, that no such direction that adversely affects the rights of the
Participant or his or her beneficiary under the Plan shall be implemented
without the consent of the affected Participant or beneficiary. This direction
may be revoked by the Administrator at any time in his sole discretion.

6.4 Withholding of Taxes.

ML & Co. will deduct or withhold from any payment to be made or deferred
hereunder any U.S. Federal, state or local or foreign income or employment taxes
required by law to be withheld or require the Participant or the Participant's
beneficiary to pay any amount, or the balance of any amount, required to be
withheld, provided that when any payments are made to Participants in connection
with a deferral (either as a result of a revocation of such deferral by the
Corporation or otherwise) all federal state or local taxes required by law that
arise as a result of such payout shall be paid either (A) by applying the cash
payable from the Cash Unit Account Balance or, (B) in the event (A) does not
yield sufficient cash to pay such taxes, by withholding from the number of
shares otherwise deliverable, such number of shares as shall have a Fair Market
Value (as such term is defined in LTICP) on the date of such payout at least
equal to the amount of tax to be withheld

6.5 Beneficiary.

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

(b) Change in Beneficiary. The Participant may change his or her
beneficiary or contingent beneficiary (without the consent of any prior
beneficiary) in a writing delivered to the Administrator or his designee before
the Participant's death. Unless the Participant states otherwise in writing, any
change in beneficiary or contingent beneficiary will automatically revoke such
prior designations of the Participant's beneficiary or of the Participant's
contingent beneficiary, as the

case may be, under the Plan only; and any designations under other deferral
agreements or plans of the Company will remain unaffected.

(c) Default Beneficiary. In the event a Participant does not designate a
beneficiary, or no designated beneficiary survives the Participant, the
Participant's beneficiary shall be the Participant's surviving spouse, if the
Participant is married at the time of his or her death and not subject to a
court-approved agreement or court decree of separation, or otherwise the person
or persons designated to receive benefits on account of the Participant's death
under the ML & Co. Basic Group Life Insurance Plan (the "Life Insurance Plan").
However, if an unmarried Participant does not have coverage in effect under the
Life Insurance Plan, or the Participant has assigned his or her death benefit
under the Life Insurance Plan, any amounts payable to the Participant's
beneficiary under the Plan will be paid to the Participant's estate.

(d) If the Beneficiary Dies During Payment. If a beneficiary who is
receiving or is entitled to receive payments hereunder dies after the
Participant but before all the payments have been made, the portion of the
Account Balances to which that beneficiary was entitled will be paid as soon as
practicable in one lump sum to such beneficiary's estate and not to any
contingent beneficiary the Participant may have designated; provided, however,
that if the beneficiary was receiving modified installment payments pursuant to
Section 6.1(b), the applicable portion of the Index Account Balances will
continue to be paid as modified installment payments, but only to a single
person consisting of the administrator or executor of the beneficiary's estate
or another person lawfully designated by the administrator or executor (and in
the event no such person is designated within a reasonable time, payment will be
made in a lump sum).

6.6 Hardship Distributions.

ML & Co. may pay to the Participant, on such terms and conditions as the
Administrator may establish, such part or all of the Account Balances as he may,
in his sole discretion based upon substantial evidence submitted by the
Participant, determine necessary to alleviate hardship caused by an
unanticipated emergency or necessity outside of the Participant's control
affecting the Participant's personal or family affairs. Such payment will be
made only at the Participant's written request and with the express approval of
the Administrator, and in the case of an Officer of ML & Co., with the approval
of the Committee, and will be made on the date selected by the Administrator in
his sole discretion. The Account Balances remaining, if any, will continue to be
governed by the terms of the Plan. Hardship shall be deemed to exist only on
account of expenses for medical care (described in Code Section 213(d)) of the
Participant, the Participant's spouse or the Participant's dependents (described
in Code Section 152); payment of unreimbursed tuition and related educational
fees for the Participant, the Participant's spouse or the Participant's
dependents; the need to prevent the Participant's eviction from or, foreclosure
on, the Participant's principal residence; unreimbursed damages resulting from a
natural disaster; or such other financial need deemed by the Administrator in
his sole discretion to be immediate and substantial.

6.7 Domestic Relations Orders.

Notwithstanding the Participant's elections hereunder, ML & Co. will pay
to, or to the Participant for the benefit of, the Participant's spouse or former
spouse the portion of the Participant's Account Balances specified in a valid
court order entered in a domestic relations proceeding involving the
Participant's divorce or legal separation. Such payment will be made net of any
amounts the Company may be required to withhold under applicable federal, state
or local law.

ARTICLE VII

ADMINISTRATION OF THE PLAN

7.1 Powers of the Committee and the Administrator.

(a) General. The Committee and the Administrator shall administer the Plan
in accordance with its terms, and will have all powers necessary to accomplish
said purpose. The Administrator shall have full power, discretion and authority
to interpret and construe, and to administer all aspect of the Plan that do not
relate to Executive Officers of the Company. The Administrator shall administer
the Plan so as to ensure that it provides deferred compensation for the
Participant as a member of a select group of management or highly compensated
employees within the meaning of Title I of ERISA. The Administrator's
interpretations and construction hereof, and actions hereunder, including any
determinations regarding the amount or recipient of any payments, will be
binding and conclusive on all persons for all purposes.

(b) Limitation of Liability. Each member of the Committee and the
Administrator shall be entitled to, in good faith, rely or act upon any report
or other information furnished to him or her by any officer or other employee of
the Company, independent certified accountants, consultants, legal counsel or
other professional retained by the Company to assist in the administration of
the Plan. No member of the Committee, the Administrator, or any officers or
employee of the Company acting on behalf of the Committee shall be personally
liable for any action, determination, or interpretation taken or made in good
faith with respect to the Plan, and such persons shall, to the extent permitted
by law, be fully indemnified and protected by the Company with respect to such
action determination or interpretation.

7.2 Optional Rabbi Trust

Creation of Trust. The Administrator, at any time, may authorize the
establishment of a Rabbi Trust to hold shares representing the shares deferred
under this Plan on such terms and conditions as the Administrator shall approve.
The trustee of the Rabbi Trust shall be a party unaffiliated with the Company.
If a Rabbi Trust has been established, upon any Deemed Exercise, a number of
shares equal to the number of Stock Units credited in Section 4.1 hereof shall
be delivered by the Company to the Rabbi Trust.

7.3 Payments on Behalf of an Incompetent.

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

7.4 Corporate Books and Records Controlling.

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

ARTICLE VIII

MISCELLANEOUS PROVISIONS

8.1 Litigation.

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

8.2 Headings Are Not Controlling.

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

8.3 Governing Law.

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

8.4 Amendment and Termination.

ML & Co. reserves the right to amend or terminate the Plan at any time
through the Administrator, except that no such amendment or termination shall
adversely affect the right of the Participant to his or her Account Balance(s)
as of the date of such amendment or termination. In addition, this Plan may be
terminated by the Company and all deferrals hereunder will be rescinded in the
event that the Administrator determines in good faith, after consultation with
the Controller of ML & Co. (or such person's functional successor) and the
Company's independent public accountants, that generally accepted accounting
principles are likely to require the Company to recognize the net exercise value
of such Stock Options as a charge to Earnings on ML & Co.'s consolidated
financial statements. In the event such termination, the Account Balances will
be paid to the Participant as soon as practicable.

Exhibit A

MERRILL LYNCH & CO., INC.
Agreement for the Deferral of Stock Option Gains

Agreement, made as of ______________, between Merrill Lynch & Co., Inc. (ML &
Co.) and _________________

I. Stock Option Deferral Conversions

The Participant hereby irrevocably elects (a "Deferral Election") to defer,
pursuant to this Agreement the outstanding nonqualified stock options ("Stock
Options") specified in Section II, and upon Deemed Exercise of such Stock
Options, receive an unfunded and unsecured right to receive shares of Common
Stock otherwise issuable upon the exercise of the Stock Options ("Shares") as
deferred compensation.

For the specified Stock Options, the term "Deemed Exercise" will be used to
describe the process where instructions are received from the Participant to
convert these Stock Options on a specific day into a right to receive Shares
from ML & Co. on a deferred basis.

II. Election of Covered Options

Each Deferral Election must be made at least 90 days prior to the Deemed
Exercise of the Covered Options to which it the Deferral Election relates and
must specify the particular Stock Options (including the date of grant) to which
such Deferral Election relates and the number of Shares issuable upon exercise
of such Stock Options.

To be effective each Deferral Election must be made must be made (A) in or prior
to the taxable year immediately prior to the expiration of such Covered Option
and (B) at least six (6) months prior to the date of such expiration.

To make a Deferral Election, the Participant shall select by grant year the
number of Stock Options (minimum 1,000 options for each grant) from which the
gain will be deferred. Such options must be then currently outstanding and will
be deferred in accordance with this Agreement and the Merrill Lynch & Co., Inc.
Program for the Deferral of Stock Option Gains. The irrevocable election made in
Section I above shall cover the Stock Option grants selected by the Participants
and the selected Option grants shall be referred to collectively as the "Covered
Options". This election is irrevocable unless your employment terminates prior
to the Deemed Exercise.

I elect to defer the gain from the Deemed Exercise of my stock option grants as
follows:

Option # of Options
Grant Date (Minimum 1,000)
---------- ---------------

------------------------ ---------------------------

------------------------ ---------------------------

------------------------ ---------------------------

III. Form of Distribution

Check one of the following boxes and, if applicable, enter the number of
installment payments.


|_| Lump Sum

|_| Annual Installments for |_| |_| years (maximum of 15)

|_| Modified Installment payments for |_| |_| years (minimum of 11;
maximum of 15)

IV. Timing of Distribution

Check one of the following boxes and, if applicable, enter the specific month
and year in which you want to receive your distribution.

Note: If you selected Modified Installment Payments in Section III, do not fill
out this section. Your annual

distributions will commence on the last business day of the sixth month
following your retirement or death. You do not have the option of specifying
some other time for commencement of payment.

I elect that my benefits under the plan be distributed as soon as practicable in
(or beginning):

|_| The sixth month following my retirement.

|_| The month of ________________ in the calendar year following my
retirement, but no earlier than six months after my retirement.

|_| The month and year of ____________________ , _______________, which will
not be earlier than six months after my retirement.
- --------------------------------------------------------------------------------

By executing this Agreement, the Employee acknowledges that he or she will not
exercise Covered Options in any manner other than as specified herein and that
the Employee had read the Merrill Lynch & Co., Inc. Program for the Deferral of
Stock Option Gains ("Plan") and agrees that the terms and conditions of such
Plan are incorporated herein by reference and made part of this Agreement.

- ------------------ -------------------- --------------
Employee Name Employee Signature Date