EXHIBIT 10.19
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
DIRECTORS' EQUITY CAPITAL ACCUMULATION PLAN
(as amended and restated October 3, 1997)
SECTION 1. PURPOSE
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Morgan Stanley, Dean Witter, Discover & Co., a Delaware corporation (the
"Company"), hereby adopts the Morgan Stanley, Dean Witter, Discover & Co.
Directors' Equity Capital Accumulation Plan (the "Plan"). The purpose of the
Plan is to promote the long-term growth and financial success of the Company by
attracting, motivating and retaining non-employee directors of outstanding
ability and assisting the Company in promoting a greater identity of interest
between the Company's non-employee directors and its stockholders.
SECTION 2. ELIGIBILITY
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Only directors of the Company who are not employees of the Company or any
affiliate of the Company ("Eligible Directors") shall participate in the Plan.
SECTION 3. PLAN OPERATION
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(a) Administration. Other than as provided in Section 5(i) of the Plan,
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the Plan requires no discretionary action by any administrative body with regard
to any transaction under the Plan. To the extent, if any, that questions of
administration arise, these shall be resolved by the Board of Directors of the
Company. The Board may, in its discretion, delegate to the Chief Financial
Officer or the Chief Legal Officer of the Company any or all authority and
responsibility to act pursuant to this Plan. All references to the "Plan
Administrators" in this Plan shall refer to the Board, or the Chief Financial
Officer or Chief Legal Officer if the Board has delegated its authority pursuant
to this Section 3(a). The determination of the Plan Administrators on all
matters within their authority relating to the Plan shall be conclusive.
(b) No Liability. The Plan Administrators shall not be liable for any
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action or determination made in good faith with respect to the Plan or any award
hereunder, and the Company shall indemnify and hold harmless the Plan
Administrators from all losses and expenses (including reasonable attorneys'
fees) arising from the assertion or judicial determination of any such
liability.
SECTION 4. SHARES OF STOCK SUBJECT TO THE PLAN
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(a) Stock. Awards under the Plan shall relate to shares of common stock,
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par value $.01 per share, of the Company and any other shares into which such
stock shall thereafter be changed by reason of any merger, reorganization,
recapitalization, consolidation, split-up, combination of shares or similar
event as set forth in and in accordance with this Section 4 (the "Stock").
(b) Shares Available for Awards. Subject to Section 4(c) (relating to
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adjustments upon changes in capitalization), as of any date, the total number of
shares of Stock
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with respect to which awards may be granted under the Plan shall be equal to the
excess (if any) of (i) 350,000 shares over (ii) the sum of (a) the number of
shares subject to outstanding awards granted under the Plan and (b) the number
of shares previously issued pursuant to the Plan. In accordance with (and
without limitation upon) the preceding sentence, shares of Stock covered by
awards granted under the Plan that are forfeited or expire unexercised shall
again become available for awards under the Plan. Shares of Stock that shall be
issuable pursuant to the awards granted under the Plan shall be authorized and
unissued shares, treasury shares or shares of Stock purchased by, or on behalf
of, the Company in open-market transactions.
(c) Adjustments. In the event of any merger, reorganization,
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recapitalization, consolidation, sale or other distribution of substantially all
of the assets of the Company, any stock dividend, split, spin-off, split-up,
split-off, distribution of cash, securities or other property by the Company, or
other change in the Company's corporate structure affecting the Stock, then the
following shall be automatically adjusted in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be awarded under
the Plan:
(i) the aggregate number of shares of Stock reserved for issuance
under the Plan,
(ii) the number of shares of Stock subject to outstanding awards,
(iii) the number of "Stock Units" credited pursuant to Section
7(b) of the Plan,
(iv) the per share purchase price of Stock subject to Elective
Options and Director Options,
(v) the number of shares to be granted as Director Stock pursuant
to Section 6(b), and
(vi) the number of shares with respect to which Director Options
are granted pursuant to Section 5(a).
SECTION 5. DIRECTOR OPTIONS; ELECTION TO RECEIVE OPTIONS.
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(a) Awards. Subject to the provisions of this Section 5, each Eligible
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Director shall receive the following options to purchase Stock for service as a
director of the Company (the "Director Options"):
(i) Initial Awards. If a person is elected, appointed or
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otherwise becomes an Eligible Director, then such Eligible Director shall
receive a Director Option to purchase 4,000 shares of Stock on the first day of
the calendar month following the month in which such Eligible Director first
becomes an Eligible Director; provided, however, that if a person is elected,
appointed or otherwise becomes an Eligible Director during a period 60 days
prior to the Company's annual meeting of its stockholders (the "Annual Meeting")
in any year, then such Eligible Director shall receive no Director Option
pursuant to this Section 5(a)(i).
(ii) Subsequent Awards. As of the date of each Annual Meeting,
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each Eligible Director shall automatically receive a Director Option to purchase
4,000 shares of Stock provided that such Eligible Director shall continue to
serve as a director of the Company after such Annual Meeting.
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(b) Election to Receive Options. An Eligible Director may elect (an
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"Option Election") to receive options to purchase Stock ("Elective Options") in
lieu of all (but not a portion) of the amount of the Eligible Director's annual
cash retainer for services as a member of the Board (the "Retainer") by
submitting an Option Election Form (an "Option Election Form") to the Company's
Secretary indicating that the Eligible Director elects to receive Elective
Options in lieu of Retainer. An Option Election shall become effective only
with respect to the Retainer earned after the date on which the Option Election
Form is received by the Secretary; provided, however, that to the extent
required by the then applicable Rule 16b-3: (i) no Option Election shall take
effect until at least six (6) months after the Option Election Form is received
by the Secretary; and (ii) each Option Election, once made, shall be
irrevocable. Notwithstanding the foregoing, an Option Election may be superseded
with respect to future payments of Retainer by submitting a new Option Election
Form to the Secretary; provided, however, that to the extent required by the
then applicable Rule 16b-3, such new Option Election shall not take effect until
at least six months after such new Option Election Form has been received by the
Secretary.
(c) Award of Elective Option. Upon receipt by the Company's Secretary of
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an effective Option Election Form from an Eligible Director, such Eligible
Director shall receive Elective Options to acquire whole shares of Stock (but
not fractional shares) in lieu of the Retainer elected to be received in
Elective Options. Each such Option shall be awarded on the date on which the
Eligible Director becomes entitled to the payment of the Retainer, or if such
date is not a business day, then on the next succeeding business day. The
number of shares of Stock subject to each such Option shall be the number of
whole shares of Stock determined by multiplying (i) the number three (3) by (ii)
the quotient obtained by dividing the amount of the Retainer by the Fair Market
Value of a share of Stock on the award date, provided that (x) in no
circumstances shall the Eligible Director be entitled to receive, or the Company
have any obligation to issue to the Eligible Director, any Elective Option in
respect of any fractional share of Stock and (y) in lieu of any Elective Option
in respect of any fractional share of stock, such Eligible Director shall be
entitled to receive, and the Company shall be obligated to pay to such Eligible
Director, cash equal to the value of any fractional share of Stock.
(d) Exercise Price. The purchase price of Stock subject to a Director
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Option or an Elective Option shall be the Fair Market Value (as defined in
Section 9) of the Stock on the date such Option is granted, rounded up to the
nearest whole cent.
(e) Nontransferability. No Director Option or Elective Option granted
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pursuant to this Plan shall be sold, assigned or otherwise transferred by an
Eligible Director other than by will or the laws of descent or distribution and
may be exercised during the Eligible Director's lifetime only by such Eligible
Director.
(f) Limitation on Exercise. Director Options and Elective Options may not
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be exercised for a period of six (6) months from the date such Options are
granted.
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(g) Effect of Termination.
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(i) If an Eligible Director's service as a director of the
Corporation terminates for a reason other than for cause, then the Director
Options and the Elective Options granted to such Eligible Director shall remain
exercisable following the date of such Eligible Director's termination of
service in accordance with the following provisions:
(A) Disability. If service terminates by reason of
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Disability (as hereinafter defined), until the earlier of three years after the
termination date and the expiration date of the Option; provided, however, that
upon the death of such Eligible Director, all outstanding Director Options and
Elective Options held by such Eligible Director shall remain exercisable until
the earlier of three years following such Eligible Director's death or the
expiration date of the Options. With respect to any Eligible Director,
"Disability" shall mean a "permanent and total disability" as defined in Section
22(e)(3) of the Internal Revenue Code of 1986, as amended.
(B) Normal Retirement. If service terminates by reason of
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Normal Retirement (as hereinafter defined), until the earlier of three years
following such termination by reason of Normal Retirement and the expiration
date of the Options; provided, however, that upon the death of such Eligible
Director, all outstanding Director Options and Elective Options held by such
Eligible Director shall remain exercisable until the earlier of three years
following such Eligible Director's death or the expiration date of the Options.
With respect to any Eligible Director, "Normal Retirement" shall mean the
termination of service for retirement at or after attaining age 65.
(C) Death While in Office. If an Eligible Director dies
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while in office, all Director Options and Elective Options granted to the
Eligible Director before death shall be exercisable by the personal
representative of the Eligible Director's estate or by the person to whom such
Options pass under the Eligible Director's will (or, if applicable, pursuant to
the laws of descent or distribution) until the earlier of three years after the
Eligible Director's death or the expiration date of the Options.
(D) Other. If service terminates for any other reason
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(except for Cause (as defined below)), until the earlier of ninety days after
the termination date and the expiration date of the Option.
(ii) If an Eligible Director is terminated for Cause, all Director
Options and Elective Options granted to such Eligible Director shall be
forfeited and shall no longer be exercisable, effective on the date of such
Eligible Director's Termination for Cause. For purposes of this Plan,
"Termination for Cause" means, with respect to any Eligible Director,
termination on account of any act of (A) fraud or intentional misrepresentation,
or (B) embezzlement, misappropriation or conversion of assets or opportunities
of the Company or any affiliate.
(h) Expiration Date of Options. All Director Options and Elective Options
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shall expire on the tenth anniversary of the date on which they are granted.
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(i) Notwithstanding any other provision hereof, the Board of Directors of
the Company shall have the authority, in its discretion, to amend any
outstanding Director Option or Elective Option granted pursuant to this Plan to
extend the exercisability thereof, provided, however, that no such amendment
shall cause such Option to remain exercisable beyond the original expiration
date of such Option.
SECTION 6. DIRECTOR STOCK
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(a) Awards. Each Eligible Director shall receive the following shares of
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Stock for service as a director of the Company (the "Director Stock"):
(i) Initial Awards. If a person is elected, appointed or
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otherwise becomes an Eligible Director, then such Eligible Director shall
receive 600 shares of Director Stock on the first day of the calendar month
following the month in which such Eligible Director becomes an Eligible
Director; provided, however, that if a person is elected, appointed or otherwise
becomes an Eligible Director during a period of 60 days prior to the Annual
Meeting in any year, then such Eligible Director shall receive no Director Stock
pursuant to this Section 6(a)(i).
(ii) Subsequent Awards. As of the date of each Annual Meeting,
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each Eligible Director shall automatically receive 600 shares of Director Stock,
provided that such Eligible Director shall continue to serve as a director of
the Company after such Annual Meeting.
(b) Limitation on Transfer. Director Stock may not be sold, transferred,
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pledged, assigned or otherwise conveyed by an Eligible Director for a period of
six (6) months from the date such Stock is awarded.
(c) Deferral of Awards. An Eligible Director may elect to defer the
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receipt of all or a portion of the Director Stock by making an election pursuant
to Section 7(a), in which case there shall be credited to the Eligible
Director's Stock Unit Account (as defined in Section 7(b)) a number of units
equal to the number of shares of Director Stock being deferred.
SECTION 7. ELECTIVE DEFERRALS
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(a) Election. Each Eligible Director may elect to defer (a "Deferral
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Election") all or part of: (i) the Retainer; (ii) the fees payable for meetings
of the Board or any committee thereof ("Meeting Fees"); or (iii) shares of
Director Stock. An Eligible Director may make a Deferral Election by submitting
a Deferral Election Form (a "Deferral Election Form") to the Secretary of the
Company, indicating: (i) the percentage of the Retainer, Meeting Fees and
Director Stock to be deferred (the "Deferred Amount"); (ii) the date on which
distribution of Deferred Amounts should begin the ("Distribution Date"); (iii)
whether distributions are to be made in a lump sum, installments or a
combination thereof; (iv) the percentage of deferred Retainer and Meeting Fees
to be credited to the Stock Unit Account (as hereinafter defined) and the Cash
Account (as hereinafter defined); and (v) from which Account each distribution
is to be made. A Deferral Election shall be effective only with respect to the
Retainer, Meeting Fees and
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Director Stock which are earned after the Deferral Election is made; provided,
however, that to the extent required by the then applicable Rule 16b-3: (i) no
Deferral Election shall take effect until a date at least six months after the
Deferral Election Form is received by the Secretary and (ii) all Deferral
Elections, once made, shall be irrevocable. Notwithstanding the foregoing, a
Deferral Election may be superseded with respect to future payments of Retainer
and Meeting Fees and grants of Director Stock by submitting a new Deferral
Election Form to the Secretary; provided, however, that to the extent required
by the then applicable Rule 16b-3: (i) no revocation shall be effective to make
any change with respect to Deferred Amounts previously deferred; (ii) no change
in Deferred Amount shall take effect until a date at least six months after such
new Deferral Election Form has been received by the Secretary; (iii) any such
Deferral Election shall be irrevocable; and (iv) any change in a beneficiary
(described in the next sentence) shall become effective immediately upon receipt
by the Secretary. An Eligible Director may designate, in any Deferral Election
Form, one or more beneficiaries to receive any distributions under the Plan upon
the Eligible Director's death, and may change such designation at any time by
submitting a new Deferral Election Form to the Secretary.
(b) Stock Unit Deferral. An Eligible Director may elect to have all or
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part of the Deferred Amount credited to an account (a "Stock Unit Account") in
units which are equivalent in value to shares of Stock ("Stock Units"), except
that an Eligible Director who defers the receipt of Director Stock shall have
credited to the Stock Unit Account a number of Stock Units equal to the number
of shares of Director Stock being deferred. The Deferred Amount allocated to the
Stock Unit Account shall be credited to the Stock Unit Account as of the date on
which the Eligible Director becomes entitled to payment or receipt of the
Deferred Amount. The number of Stock Units credited to the Stock Unit Account on
account of deferred Retainer and Meeting Fees shall be an amount equal to the
result obtained by dividing (i) such Deferred Amount by (ii) the Fair Market
Value of a share of Stock on the date on which the Eligible Director becomes
entitled to payment of such Deferred Amount (or if such date is not a business
day, then on the next succeeding business day). If Stock Units exist in an
Eligible Director's Stock Unit Account on a dividend record date for the
Company's Stock, the Stock Unit Account shall be credited, on the dividend
payment date related to such dividend record date, with an additional number of
Stock Units equal to (i) the cash dividend paid on one share of Stock,
multiplied by (ii) the number of Stock Units in the Stock Unit Account on the
dividend record date, divided by (iii) the Fair Market Value of a share of Stock
on the dividend payment date.
(c) Cash Deferral. An Eligible Director may elect to have all or part of
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the Deferred Amount derived from Retainer or Meeting Fees credited to a cash
account (a "Cash Account"). The Deferred Amount allocated to the Cash Account
shall be credited thereto on the date on which the Eligible Director becomes
entitled to payment of such Deferred Amount. As of the last day of each fiscal
quarter and the date of termination of the Eligible Director's service on the
Company's Board of Directors (the "Service Termination Date") the Eligible
Director's Cash Account will be credited with an additional amount equal to (i)
the "Rate of Interest", multiplied by (ii) the Average Daily Cash Balance,
multiplied by (iii) the number of days during which such Cash Account had a
positive balance, divided by (iv) 365. The "Rate of Interest" shall equal the
time weighted average interest rate paid by the Company for such quarter, or
shorter period ending on the Service Termination Date, to institutions from
which it borrows funds. The "Average Daily Cash Balance" shall equal the sum of
the daily balances for such
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Cash Account for such quarter or shorter period, divided by the number of days
on which a positive balance existed in such Cash Account.
(d) Distributions.
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(i) Distribution Date. Each Eligible Director shall designate
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on the Deferral Election Form one of the following dates as a Distribution Date
with respect to amounts credited to the Stock Unit Account or Cash Account
thereafter: (A) the first day of the calendar month following the date of the
Eligible Director's death; (B) the first day of the calendar month following the
Service Termination Date; (C) the first day of a calendar month specified by the
Eligible Director, provided that, to the extent necessary to adhere to the
requirements of Rule 16b-3 in effect from time to time under the Securities
Exchange Act of 1934 in effect from time to time (the "1934 Act"), such day is
at least six months after the date on which the Secretary receives the Deferral
Election Form; or (D) the earlier to occur of (A), (B) or (C). Unless a Deferral
Election Form designates a different Distribution Date for the Eligible
Director's Stock Unit Account than for the Eligible Director's Cash Account, the
Eligible Director shall be deemed to have selected the same Distribution Date
for each such Account.
(ii) Distribution Method. An Eligible Director shall request on
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the Deferral Election Form that distributions which are subject to such Deferral
Election Form be made in (A) a lump sum, (B) no more than 120 monthly, 40
quarterly or 10 annual installments or (C) in part as provided in clause (A) and
in part as provided in clause (B). The amount to be distributed in any
installment pursuant to a specific Deferral Election Form shall be determined by
dividing the balance in the Cash Account or the number of Stock Units in the
Stock Unit Account, as the case may be, that are subject to such Deferral
Election Form by the number of remaining installments. If an Eligible Director
receives a distribution on an installment basis, undistributed Deferred Amounts
shall remain subject to the provisions of Section 7.
(iii) Form of Distributions. All distributions from the Cash
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Account shall be paid in cash. Distributions made from the Stock Unit Account
shall be in the form of a certificate for a number of whole shares of Stock
equal to the number of whole Stock Units to be distributed and cash in lieu of
any fractional share (determined by using the Fair Market Value of a share of
Stock on the date on which such distributions are distributed, but if such date
is not a business day, then on the next preceding business day).
SECTION 8. ELECTION TO RECEIVE STOCK.
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(a) Election. An Eligible Director may elect (a "Stock Election") to
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receive all or a portion of the Eligible Director's Retainer and Meeting Fees in
shares of Stock by submitting a Stock Election Form (a "Stock Election Form") to
the Company's Secretary indicating the percentage of the Retainer and the
percentage of Meeting Fees to be paid in Stock. A Stock Election shall become
effective with respect to the Retainer and Meeting Fees, respectively, accruing
on and after the first day of the fiscal quarter and fiscal month, respectively,
following the date on which the Stock Election Form is received by the
Secretary; provided, however, that to the extent required by the then applicable
Rule 16b-3: (i) no Stock Election shall take effect until at least six months
after the Stock Election Form is received by the Secretary; and (ii) each Stock
Election, once made, shall be irrevocable. Notwithstanding
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the foregoing, a Stock Election may be superseded with respect to future
payments of Retainer and Meeting Fees by submitting a new Stock Election Form to
the Secretary; provided, however, that to the extent required by the then
applicable Rule 16b-3, such new Stock Election shall not take effect until at
least six months after such new Stock Election Form has been received by the
Secretary.
(b) Payment in Stock. Upon receipt by the Company's Secretary of an
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effective Stock Election Form from an Eligible Director, such Eligible Director
shall thereafter receive whole shares of Stock (but not fractional shares) in
lieu of Retainer and Meeting Fees elected to be received in Stock (the "Stock
Amounts"). The number of shares of Stock to be received by an Eligible Director
with respect to any Stock Amount shall be the number of whole shares of Stock
determined by dividing the Stock Amount by the Fair Market Value of a share of
Stock on the date on which the Eligible Director becomes entitled to payment of
the Stock Amount (or if such date is not a business day, then on the next
succeeding business day), provided that (i) in no circumstances shall the
Eligible Director be entitled to receive, or the Company have any obligation to
issue to the Eligible Director, any fractional share of Stock and (ii) in lieu
of any fractional share of Stock, such Eligible Director shall be entitled to
receive, and the Company shall be obligated to pay to such Eligible Director,
cash equal to the value of any fractional share of Stock. A certificate
representing such whole shares of Stock shall be issued to such Eligible
Director promptly after such date, and such Eligible Director shall be deemed to
own such number of whole shares of Stock, including without limitation for
purposes of dividends and voting, as of such date.
SECTION 9. FAIR MARKET VALUE
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"Fair Market Value" shall mean, with respect to each share of Stock for any
day:
(a) if the Stock is listed for trading on the New York Stock Exchange, the
closing price, regular way, of the Stock as reported on the New York Stock
Exchange Composite Tape, rounded up to the nearest whole cent, or if no such
reported sale of the Stock shall have occurred on such date, on the next
preceding date on which there was such a reported sale, or
(b) if the Stock is not so listed, but is listed on another national
securities exchange or authorized for quotation on the NASDAQ National Market
System ("NMS"), the closing price, regular way, of the Stock on such exchange or
NMS, rounded up to the nearest whole cent, as the case may be, on which the
largest number of shares of Stock have been traded in the aggregate on the
preceding twenty trading days, or, if no such reported sale of the Stock shall
have occurred on such date on such exchange or NMS, as the case may be, on the
next preceding date on which there was such a reported sale on such exchange or
NMS, as the case may be, or
(c) if the Stock is not listed for trading on a national securities
exchange or authorized for quotation on NMS, the average of the closing bid and
asked prices as reported by the National Association of Securities Dealers
Automated Quotation System, rounded up to the nearest whole cent, or, if no such
prices shall have been so reported for such date, on the next preceding date for
which such prices were so reported.
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SECTION 10. ISSUANCE OF CERTIFICATES
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(a) Restrictions on Transferability. All shares of Stock delivered under
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the Plan shall be subject to such stop-transfer orders and other restrictions as
the Company may deem advisable or legally necessary under any laws, statutes,
rules, regulations and other legal requirements, including, without limitation,
those of any stock exchange upon which the Stock is then listed and any
applicable federal, state or foreign securities law.
(b) Compliance with Laws. Anything to the contrary herein notwithstanding,
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the Company shall not be required to issue any shares of Stock under the Plan
if, in the opinion of legal counsel to the Company, the issuance and delivery of
such shares would constitute a violation by the Eligible Director or the Company
of any applicable law or regulation of any governmental authority, including,
without limitation, federal and state securities laws, or the regulations of any
stock exchanges on which the Company's securities may then be listed.
SECTION 11. WITHHOLDING TAXES
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The Company shall require as a condition of delivery of any shares of Stock
that the Eligible Director remit an amount sufficient to satisfy all foreign,
federal, state, local and other governmental withholding tax requirements
relating thereto (if any) and any or all indebtedness or other obligation of the
Eligible Director to the Company or any of its subsidiaries.
SECTION 12. PLAN AMENDMENTS AND TERMINATION
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The Board of Directors of the Company may suspend or terminate the Plan at
any time and may amend it at any time and from time to time, in whole or in
part.
SECTION 13. LISTING, REGISTRATION AND LEGAL COMPLIANCE
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If the Plan Administrators shall at any time determine that any Consent (as
hereinafter defined) is necessary or desirable as a condition of, or in
connection with, the granting of any award under the Plan, the issuance or
purchase of shares or other rights hereunder or the taking of any other action
hereunder (each such action being hereinafter referred to as a "Plan Action"),
then such Plan Action shall not be taken, in whole or in part, unless and until
such Consent shall have been effected or obtained. The term "Consent" as used
herein with respect to any Plan Action means (i) the listing, registrations or
qualifications in respect thereof upon any securities exchange or under any
foreign, federal, state or local law, rule or regulation, (ii) any and all
consents, clearances and approvals in respect of a Plan Action by any
governmental or other regulatory bodies, or (iii) any and all written
agreements and representations by an Eligible Director with respect to the
disposition of Stock or with respect to any other matter, which the Plan
Administrators shall deem necessary or desirable in order to comply with the
terms of any such listing, registration or qualification or to obtain an
exemption from the requirement that any such listing, qualification or
registration be made.
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SECTION 14. RIGHT OF DISCHARGE RESERVED
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Nothing in the Plan shall confer upon any Eligible Director the right to
continue as a director of the Company or affect any right that the Company or
any Eligible Director may have to terminate the service of such Eligible
Director.
SECTION 15. RIGHTS AS A STOCKHOLDER
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An Eligible Director shall not, by reason of any Director Option, Elective
Option, Stock Unit or Stock Amount, have any rights as a stockholder of the
Company until Stock has been delivered to such Eligible Director upon the
exercise of such Director Option or Elective Option or the distribution
regarding such Stock Unit or Stock Amount. An Eligible Director shall, with
respect to all shares of Director Stock, be entitled to all the rights
(including dividend and voting rights) of a stockholder of Stock.
SECTION 16. UNFUNDED PLAN
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The Plan shall be unfunded and shall not create (or be construed to create)
a trust or a separate fund or funds. The Plan shall not establish any fiduciary
relationship between the Company and any Eligible Director or other person. To
the extent any person holds any rights by virtue of a pending grant or deferral
under the Plan, such rights shall be no greater than the rights of an unsecured
general creditor of the Company.
SECTION 17. GOVERNING LAW
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The Plan is deemed adopted, made and delivered in Delaware and shall be
governed by the laws of the State of Delaware applicable to agreements made and
to be performed entirely within such state.
SECTION 18. SEVERABILITY
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If any part of the Plan is declared by any court or governmental authority
to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate
any portion of the Plan not declared to be unlawful or invalid. Any Section or
part of a Section so declared to be unlawful or invalid shall, if possible, be
construed in a manner which will give effect to the terms of such Section or
part of a Section to the fullest extent possible while remaining lawful and
valid.
SECTION 19. NOTICES
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All notices and other communications hereunder shall be given in writing
and shall be deemed given when personally delivered against receipt or five days
after having been mailed by registered or certified mail, postage prepaid,
return receipt requested, addressed as follows: (a) if to the Company, Morgan
Stanley, Dean Witter, Discover & Co., 1585 Broadway, New York, New York 10036,
Attention: Corporate Secretary; and (b) if to an Eligible Director,
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at the Eligible Director's principal residential address last furnished to the
Company. Either party may, by notice, change the address to which notice to such
party is to be given.
SECTION 20. SECTION HEADINGS
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The Section headings contained herein are for the purposes of convenience
only and are not intended to define or limit the contents of said Sections.
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