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PRESS RELEASE
7-12-04

EEOC AND MORGAN STANLEY ANNOUNCE SETTLEMENT OF SEX DISCRIMINATION LAWSUIT

WASHINGTON - The U.S. Equal Employment Opportunity Commission (EEOC) and Morgan Stanley (NYSE: MWD) today announced a $54 million settlement of a sex discrimination lawsuit under Title VII of the 1964 Civil Rights Act filed on behalf of a class of female officers and women eligible for officer promotion in the firm's Institutional Equity Division. As part of the settlement, at least $2 million will be provided for diversity programs designed to enhance the compensation and promotional opportunities for female employees within Morgan Stanley.

EEOC's lawsuit, filed on September 10, 2001, alleged that Morgan Stanley discriminated against women in its Institutional Equity Division (IED) with respect to promotion, compensation and the terms, conditions and privileges of employment. Commenting on the settlement, EEOC Chair Cari M. Dominguez, said: "We are pleased that Morgan Stanley worked cooperatively with us to resolve this litigation. With this settlement, Morgan Stanley has taken an important leadership step in adopting progressive programs to promote diversity that should serve as a model for the financial services industry."

Morgan Stanley denies the allegations and any liability and contends that it has, at all times, treated its women employees fairly and equitably. Philip J. Purcell, Chairman & Chief Executive Officer of Morgan Stanley, said: "We are proud of our commitment to diversity, and would like to thank the EEOC staff for working with us to conclude this matter in such a positive way. We look forward to working with the EEOC in accomplishing our common goals."

Under the terms of the settlement, in the form of a Consent Decree, present and former female employees of the IED who believe they were the subject of discrimination will have the opportunity to make claims to a specially established fund of $40 million.

The parties have selected as a Special Master retired federal circuit judge Abner J. Mikva, who will decide the amount, if any, each claimant will receive. Any money remaining in the fund will be used for scholarship programs for female students pursuing careers in the financial services industry.

Pursuant to the Consent Decree, Morgan Stanley will, among other things, appoint an internal ombudperson and an outside monitor; implement management training on the federal anti-discrimination laws; perform promotion and compensation analyses; maintain a complaint data base; and implement programs to address the promotion and retention of women.

Lead plaintiff Allison Schieffelin said: "I am happy that this case has been settled to the satisfaction of all the parties."

Wall Street-based Morgan Stanley is a global financial services firm and a market leader in securities, investment management and credit services, with more than 600 offices in 27 countries. Additional information about the firm can be found on its web site at www.morganstanley.com.

The EEOC enforces Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination based on race, color, religion, sex, and national origin; the Age Discrimination in Employment Act, which prohibits discrimination against individuals 40 years of age or older; sections of the Civil Rights Act of 1991; the Equal Pay Act; Title I of the Americans with Disabilities Act, which prohibits discrimination against people with disabilities in the private sector and state and local governments; and the Rehabilitation Act's prohibitions against disability discrimination in the federal government. Further information about the agency is available on its web site at www.eeoc.gov.