Jaffe, et al v. Morgan Stanley DW, Inc.

Filing 250

ORDER GRANTING RECONSIDERATION OF COURT'S JULY 7, 2008 ORDER CONFIRMING FINAL CLASS CERTIFICATION AND GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT. Signed by Judge Thelton E. Henderson on 10/22/08. (Attachments: # 1 Exhibit Revised Settlement Agreement, # 2 Exhibit Exhibits to Revised Settlement Agreement)(tehlc4, COURT STAFF) (Filed on 10/22/2008)

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

Daisy Jaffe, Denise Williams, and Margaret Benay Curtis-Bauer, on behalf of themselves and all others similarly situated, Plaintiffs, v. Morgan Stanley & Co. Incorporated, formerly known as Morgan Stanley DW Inc., Defendant.

) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. C-06-3903 (TEH)

CLASS ACTION

SETTLEMENT AGREEMENT

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TABLE OF CONTENTS Page

I. II. III.

INTRODUCTION ....................................................................................................1 NATURE AND RESOLUTION OF THE CASE.....................................................1 GENERAL TERMS OF THE SETTLEMENT AGREEMENT ..............................5 A. B. C. D. Definitions.........................................................................................5 Duration of the Settlement ................................................................8 Cooperation.......................................................................................9 Persons Covered by this Settlement Agreement ...............................9 Jurisdiction and Venue......................................................................9 Preliminary Approval......................................................................10 Notice and Settlement Hearing .......................................................10

IV.

COURT APPROVAL/NOTICE AND FAIRNESS HEARING...............................9 A. B. C.

V.

RELEASE/BAR OF CLAIMS................................................................................15 A. B. Class Member Release ................................................................................15 Named Plaintiff Release..............................................................................15

VI. VII.

NO ADMISSION, NO DETERMINATION..........................................................17 PROGRAMMATIC RELIEF .................................................................................18 A. B. C. D. E. F. G. H. Communications .............................................................................18 Hiring ..............................................................................................18 Branch Management/Mobility and Training...................................19 Account Distribution.......................................................................21 Development Opportunities ............................................................28 Complaint Process and Training .....................................................28 Appointments ..................................................................................29 General Non-Discrimination Provisions .........................................34 Settlement Fund ..............................................................................35 Administration by Trustee ..............................................................36 -i-

VIII.

MONETARY RELIEF ...........................................................................................35 A. B.

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TABLE OF CONTENTS (continued) Page

C. D. E. F. G. IX.

Claims Filing Procedures for Settlement of Claims of Named Plaintiff and Class Members ...........................................................36 Allocation Formula .........................................................................38 Non-Admissibility of Fact of Award (or Non-Award) ...................41 Tax Treatment .................................................................................41 Morgan Stanley Has No Further Obligation, Liability or Responsibility..................................................................................44 Data Collection ...............................................................................45 Monitoring System..........................................................................46 Reports ............................................................................................46 Meetings..........................................................................................46 No Third Parties ..............................................................................46 Dispute Resolution ..........................................................................47 Documents and Information Produced by Morgan Stanley and Class Counsel ...........................................................................47 Return or Disposal of Confidential Documents and Information......................................................................................47

MONITORING .......................................................................................................45 A. B. C. D.

X.

ENFORCEMENT ...................................................................................................46 A. B.

XI.

CONFIDENTIALITY.............................................................................................47 A. B.

XII. XIII.

ATTORNEYS' FEES AND EXPENSES OF CLASS COUNSEL........................49 GOVERNING LAW...............................................................................................50 A. B. C. D. E. Exhibits ...........................................................................................50 Notices to Counsel ..........................................................................50 Failure to Insist on Strict Compliance.............................................51 Settlement Agreement Binding .......................................................51 Modifications to this Agreement.....................................................51 -ii-

XIV. OTHER CONDITIONS OF SETTLEMENT .........................................................50

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TABLE OF CONTENTS (continued) Page

F. G. H. I. J. K.

No Drafting Presumption ................................................................51 Dispute As To Meaning of Agreement Terms................................51 Interpretation of Terms ...................................................................52 Paragraph and Section Headings.....................................................52 Counterparts ....................................................................................52 Agreement Binding .........................................................................52

-iii-

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I.

INTRODUCTION Subject to approval by the United States District Court for the Northern District of

California (the "Court"), this Settlement Agreement ("Settlement Agreement," "Settlement" or "Agreement") sets forth the full and final terms by which Margaret Benay Curtis-Bauer (the "Named Plaintiff"), on behalf of herself and members of the Class defined herein, and Defendant Morgan Stanley & Co. Incorporated, formerly known as Morgan Stanley DW Inc. ("Morgan Stanley," "Defendant," "Firm," or "Company")1 have settled and resolved all claims that have been raised in the Second Amended Complaint filed by the Named Plaintiff on August 1, 2007. This Action and Settlement applies to African American and Latino Financial Advisors and Registered Financial Advisor Trainees in the Global Wealth Management Group of Morgan Stanley ("MS-GWMG") and its predecessor(s). II. NATURE AND RESOLUTION OF THE CASE A. After filing an administrative complaint with the United States Equal

Employment Opportunity Commission ("EEOC"), Daisy Jaffe filed a Complaint with the Court, on June 22, 2006, on behalf of herself as an individual and on behalf of a nationwide class of women employees against Morgan Stanley, pursuant to Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000(e), et seq., ("Title VII"), and for a California Class under California state law prohibiting sex discrimination. In addition to these class claims, Ms. Jaffe asserted an individual, non-class age discrimination claim.

1

Following the filing of the Complaint in June 2006, Morgan Stanley DW Inc. merged into Morgan Stanley & Co. Incorporated. The Named Plaintiff and the Class Members all work or worked as Financial Advisors or Registered Financial Advisor 1

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B.

On October 12, 2006, Ms. Jaffe and Denise Williams filed an Amended

Complaint against Morgan Stanley adding additional allegations that the Company had discriminated against Ms. Williams on the basis of her race in violation of Title VII, 42 U.S.C. § 1981 and Michigan state law with regard to several aspects of her employment. Ms. Williams also filed an administrative complaint with the EEOC in October of 2006. On December 5, 2006 Ms. Williams received a Notice of Right to Sue from the EEOC. C. On August 2, 2007, Ms. Jaffe, Ms. Williams and Margaret Benay Curtis-

Bauer filed a Second Amended Complaint in this action, in which Ms. Williams and Ms. Curtis-Bauer collectively alleged, among other things, on behalf of themselves and members of the Class defined herein, that African Americans and Latinos who are or were employed with MS-GWMG as Financial Advisors or Registered Financial Advisor Trainees have been and are afforded fewer business opportunities than comparable white Financial Advisors and Registered Financial Advisor Trainees, and that they experienced race and color discrimination in numerous aspects of their employment. The Named Plaintiff has further alleged, on behalf of herself and members of the Class defined herein, that aspects of her employment in which she has experienced race and color discrimination include, but are not limited to, career advancement, distribution of accounts, work assignments, compensation, and/or other terms and conditions of employment and/or termination. The class-wide gender discrimination claims of Jaffe and Williams will be addressed in connection with the recently announced settlement of the nationwide Augst-

Trainees in what is now referred to as the Global Wealth Management Group. 2

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Johnson gender class action in the District of Columbia. Thus, Jaffe and Williams will no longer pursue their gender discrimination claims or seek certification of a class of female Morgan Stanley FAs in this matter. D. Morgan Stanley denies the allegations in the administrative charges, the

Complaint, the Amended Complaint and the Second Amended Complaint, and in connection therewith denies any liability under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §1981 as amended, or any other federal, state or local laws, and specifically denies that Morgan Stanley unlawfully discriminated against Plaintiff or Class Members on the basis of race or color, or that Plaintiff or Class Members are otherwise entitled to the relief requested. E. This Settlement was reached under the supervision of experienced mediator

Hunter Hughes, Esq. Counsel for the parties are experienced class action lawyers who retained Mr. Hughes for his expertise in mediating many complex class actions, including those involving race discrimination in employment. Mr. Hughes also has familiarity with Morgan Stanley's practices through his work as mediator in the Augst-Johnson action, a related gender discrimination class action against Morgan Stanley. Mr. Hughes conducted multiple mediation sessions between the parties here, both in San Francisco and New York. At all times during this process, counsel bargained vigorously and at arms' length on behalf of their clients. F. In order to facilitate settlement discussions, the parties executed tolling

agreements and stipulated to court ordered stays of the action for the time period through August 2, 2007, at which point the Second Amended Complaint in this Action was filed. G. The parties to this Agreement have conducted a thorough examination and 3

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investigation of the facts and law relating to the subject matters set forth in the Second Amended Complaint and the claims set forth therein. In order to evaluate Settlement positions, Class Counsel requested and Morgan Stanley provided substantial documents (including vast amounts of data) from which Class Counsel conducted expert data analyses. This information, along with witness interviews and information regarding

Morgan Stanley's policies and practices, informed counsel regarding the strengths and weaknesses of their respective positions and provided them a full opportunity to assess the litigation risks presented in this case. H. Class Counsel and counsel for Morgan Stanley recognize the costs and risks

of prosecuting this litigation through class certification, summary judgment, trial, and appeal. Class Counsel believe that it is in the interest of all members of the Settlement Class to resolve finally and completely the potential claims of the Class Members against Morgan Stanley. Class Counsel believe that the terms of the Settlement Agreement are in the best interests of the Class and are fair, reasonable, and adequate. Morgan Stanley wishes to bring the litigation to a conclusion on the terms set forth in this Settlement Agreement. I. Without any admission or concession by Morgan Stanley of any liability or

wrongdoing with respect to the allegations in any administrative charge or in the Complaint, the Amended Complaint and the Second Amended Complaint, all released claims shall be finally and fully compromised, settled, and released subject to the terms and conditions of this Settlement Agreement, which were the subject of negotiation and agreement by the parties.

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III.

GENERAL TERMS OF THE SETTLEMENT AGREEMENT A. Definitions. In addition to terms identified and defined elsewhere in this

Settlement Agreement, and as used in this Settlement Agreement, the terms below shall have the following meanings: 1. "Action" means the lawsuit described above and the allegations

contained in the Second Amended Complaint filed on August 1, 2007. 2. "Amended Complaint" means the First Amended Complaint filed in

this Action on October 12, 2006. 3. "Augst-Johnson Action" or "Augst-Johnson matter" means Joanne

Augst-Johnson, et. al. v. Morgan Stanley & Co. Incorporated, Case No. 1:06-CU-01142 (RWR) (D.D.C.). 4. "Claims Administrator" means Settlement Services, Inc. ("SSI")

which has been jointly designated by counsel for the parties to administer the Settlement Fund pursuant to Section VIII below and orders of the Court. 5. "Claim Form" means the form agreed to by the parties and attached

to the Notice. The Claim Form must be submitted by eligible Class Members to the Claims Administrator as part of the claims process. 6. Claim Form. 7. "Class Counsel" means the law firms of Lieff Cabraser Heimann & "Claimant" means a Class Member who has submitted a timely

Bernstein, LLP, Altshuler Berzon, LLP, and Outten & Golden, LLP. 8. "Class Member" means any person who meets the criteria set forth

in the definition of "Settlement Class" below. 5

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9.

"Class Member Release" means the Release and Indemnification

Agreement in the form agreed to by counsel for the parties, and attached hereto as Exhibit A, with respect to those Class Members other than Plaintiff Curtis-Bauer, as referenced in Section V.A. hereof. 10. 2006. 11. District of California. 12. "Defendant" or "Morgan Stanley" or "Firm" or "Company" means "Court" means the United States District Court for the Northern "Complaint" means the Complaint filed in this Action on June 22,

Morgan Stanley & Co. Incorporated and its predecessors in interest. 13. Bockius LLP. 14. "Depository Bank" means Citibank or another bank jointly selected "Defendant's Counsel" means the law firm of Morgan, Lewis &

by counsel for the parties to receive, hold, invest, and disburse the Settlement Fund, subject to the direction of the Claims Administrator. 15. "Diversity Monitor" means the individual appointed to carry out the

duties specified in Section VII.G.1. of this Agreement. 16. "Effective Date" means the date on which all of the following have

occurred: (1) the Court has finally approved this Settlement Agreement and has signed and entered an order so indicating; (2) the Court has entered an Order and Judgment dismissing the Action with prejudice, with continuing jurisdiction limited to enforcing this Settlement Agreement; and (3) the time for appeal has either run without an appeal being filed or any appeal (including any requests for rehearing en banc, petitions for certiorari or appellate 6

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review) has been finally resolved. 17. "Final Approval" means the date on which the United States District

Court grants final approval of the Settlement. 18. Financial Advisor. 19. "Lead Class Counsel" means Lieff Cabraser Heimann & Bernstein "Financial Advisor" means a person employed by MS-GWMG as a

LLP, Altshuler Berzon, LLP, and Outten & Golden, LLP. 20. "MS-GWMG" means the Global Wealth Management Group of

Morgan Stanley & Co. Incorporated and its predecessor, Morgan Stanley DW Inc. 21. "Named Plaintiff Release" means the General Release and

Indemnification Agreement in the form, attached hereto as Exhibit B, agreed to by counsel for the parties with respect to Plaintiff Curtis-Bauer as referenced in Section V.B. 22. "Notice" means the Notice of Class Action, Proposed Settlement

Agreement, and Settlement Hearing, which is to be mailed directly to Class Members, substantially in the form attached hereto as Exhibit C. 23. "Notice of Award" means the letter sent to each eligible Claimant

specifying the amount of that Claimant's award, as determined by the Special Master. 24. "Plaintiff" or "Named Plaintiff" means Margaret Benay Curtis-

Bauer named in the caption of the Second Amended Complaint. 25. "Preliminary Approval" means the Order of the Court preliminarily

certifying the Settlement Class and preliminarily approving this Settlement Agreement and the form of Notice to be sent to Class Members. 26. "Registered Financial Advisor Trainee" means a person employed 7

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by

MS-GWMG as a registered financial advisor trainee who has not yet become a

Financial Advisor. 27. "Second Amended Complaint" means the Second Amended

Complaint filed in this Action on August 1, 2007. 28. "Settlement," "Agreement," and "Settlement Agreement" each mean

the settlement as reflected in this Settlement Agreement. 29. "Settlement Class" or "Class" means the class that the parties jointly

seek to have certified, solely for the purposes of this Settlement Agreement, which is defined as all African Americans and Latinos employed as Financial Advisors or Registered Financial Advisor Trainees in MS-GWMG or its predecessor at any time between October 12, 2002 and the date of preliminary approval. 30. "Settlement Fund" or "Fund" means the settlement monies

transferred by Morgan Stanley to the Depository Bank, pursuant to this Settlement Agreement, including all interest earned thereon, to be held, invested, administered, and disbursed pursuant to this Settlement Agreement. 31. "Settlement Hearing" means the hearing at which the Court will

consider final approval of this Settlement Agreement and related matters. 32. "Special Master" means the individual jointly selected by counsel

for the parties, and approved by the Court, who is charged with carrying out the Special Master duties set forth in Section VIII of this Agreement. B. Duration of the Settlement. The programmatic relief embodied in this

Settlement Agreement and the agreements incorporated in it shall remain binding on the parties and their agents and successors for a five-year period following the Effective Date. 8

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C.

Cooperation. The parties agree that they will cooperate to effectuate and

implement all terms and conditions of this Settlement Agreement, and exercise good faith efforts to accomplish the terms and conditions of this Settlement Agreement. The parties agree to accept non-material and procedural changes to this Settlement Agreement if so required by the Court in connection with Final Approval of the Settlement, but are not obligated to accept any changes in the monetary amount of relief or the substantive programmatic relief provided for herein, or any other substantive change. D. Persons Covered by this Settlement Agreement 1. Definition of "Settlement Class," "Class" or "Class Members."

Solely for purposes of Settlement and judicial approval of this Settlement Agreement, the parties stipulate to the certification of the following Settlement Class: All African Americans and Latinos who were employed as Financial Advisors or Registered Financial Advisor Trainees in the Global Wealth Management Group of Morgan Stanley & Co. Incorporated or its predecessor(s) at any time between October 12, 2002 and the date of preliminary approval. 2. Certification. The Class will be certified pursuant to Fed. R. Civ.

P. 23(b)(2) and 23(b)(3). IV. COURT APPROVAL/NOTICE AND FAIRNESS HEARING A. Jurisdiction and Venue 1. The parties agree that the Court has jurisdiction over the parties and The Court shall retain

the subject matter of this Action and that venue is proper.

jurisdiction of this Action for five years from the Effective Date of the Settlement Agreement solely for the purpose of entering all orders and judgments authorized 9

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hereunder that may be necessary to implement and enforce the relief provided herein. B Preliminary Approval 1. Prior to execution of this Settlement Agreement, the parties have

agreed upon a form for written Notice of this Settlement Agreement to Class Members, subject to Court approval. 2. Within forty-five (45) days after the execution of this Settlement

Agreement, the parties shall petition the Court for the following orders: (a) preliminarily certifying the Settlement Class; preliminarily approving this Settlement Agreement; approving the Notice to be sent to Class Members describing the terms of the Settlement and informing them of their rights to submit objections and to opt out; and (b) Pending Final Approval, preliminarily enjoining each member of the Settlement Class, including any members who make an irrevocable election to exclude themselves from the monetary relief provisions of the Settlement, from commencing, prosecuting or maintaining in any court other than this Court any claim, action or other proceeding that challenges or seeks review of or relief from any order, judgment, act, decision or ruling of the Court in connection with this Settlement Agreement. Effective as of the date specified for class members to opt out of the settlement, further enjoining any member of the Settlement Class who has not made an irrevocable election to exclude themself from the monetary relief provisions of the Settlement from commencing, prosecuting or maintaining either directly, representatively or in any other capacity any claim that is subsumed within the Settlement Agreement. C. Notice and Settlement Hearing 10

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1.

MS-GWMG shall identify all Class Members and will provide to the

Claims Administrator, within ten (10) days after Preliminary Approval of this Settlement Agreement, the name, social security number, and last known address of each Class Member. MS-GWMG will ask each Class Member who is a current employee of MSGWMG via electronic mail to confirm that the Firm has their current home address. The Claims Administrator shall utilize Class Members' social security numbers only for the purpose of locating and identifying Class Members and shall keep those social security numbers confidential. 2. Within twenty (20) days after Preliminary Approval of the

Settlement Agreement, the Claims Administrator will mail the Notice to each Class Member in the form agreed upon by the parties or such other form as approved by the Court. The parties intend to provide actual notice to each Class Member, to the extent practicable. The Claims Administrator shall mail a Claim Form to each Class Member at the same time the Notice is sent. 3. The Claims Administrator shall provide to Lead Class Counsel a list

of those Class Members who have not been located and the Claims Administrator may engage third party vendors in order to locate Class Members. The Claims Administrator will maintain a log of its activities undertaken pursuant to this section. 4. Class Member objections to this Settlement Agreement must be

submitted in writing, and must include a detailed description of the basis of the objection. Objections must be filed with the Court, with copies served on Lead Class Counsel and counsel for Morgan Stanley, within forty-five (45) days after the Notice is mailed to Class Members. No one may appear at the Settlement Hearing for the purpose of objecting to 11

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the Settlement Agreement without first having filed and served his or her objection(s) in writing within forty-five (45) days after the Notice was mailed to Class Members. 5. Any Class Member who wishes to opt out of the Settlement Class

must mail to Lead Class Counsel and counsel for Morgan Stanley a written, signed statement that she or he is opting out, as set forth below. Lead Class Counsel shall file with the Court all opt-out statements that are timely received. The Settlement Class will not include those individuals who file and serve a timely opt-out statement, and individuals who opt out are not entitled to any monetary award under this Settlement Agreement. With respect to each such individual, the statute of limitations for them to assert any claims for individual relief will resume running on the postmark date when he or she mails his or her signed, written statement that he or she is opting out of the Settlement Class. The Notice mentioned above shall include the following language: "Any Class Member who wishes to opt out of the Settlement Class must mail a written, signed statement that he or she is opting out of the Settlement Class to Lead Class Counsel and counsel for Morgan Stanley at the addresses as listed in the Notice. To be effective, this opt-out statement must be received by Lead Class Counsel and counsel for Morgan Stanley on or before forty-five (45) days after the Notice is to be mailed to Class Members. To be effective, the opt-out letter and statement must include the language specified in the Notice confirming that the individual is aware that by opting out he or she will forego the opportunity to receive monetary benefits from this Settlement. Class Members who file opt-outs may rescind their opt-outs. To be effective, such rescissions must be in writing and must be received by either Lead Class Counsel, counsel for Morgan Stanley, or the Claims Administrator on or before sixty (60) days from the date that the Notice is to be mailed to the class. 12

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6.

Upon Preliminary Approval, a briefing schedule and Settlement The parties' Motion for Final

Hearing date will be set at the Court's convenience.

Approval and for Certification of the Settlement Class will be due no earlier than thirty (30) days following the close of the objection and opt-out period, and the Settlement Hearing will be held no earlier than forty-five (45) days following the close of the objection and opt-out period. 7. The time periods referenced in this Section IV.C. are guidelines;

actual dates will be inserted in the Preliminary Approval Order by the Court. 8. In the event that this Settlement Agreement does not become final

and binding, no party shall be deemed to have waived any claims, objections, rights or defenses, or legal arguments or positions, including, but not limited to, claims or objections to class certification, and claims and defenses on the merits. Neither this Settlement Agreement nor the Court's Preliminary or Final Approval hereof shall be admissible in any court regarding the propriety of class certification or regarding any other issue or subject (except for the purpose of enforcing this Settlement Agreement). Each party reserves the right to prosecute or defend this Action in the event that the Settlement Agreement does not become final and binding. 9. If the number of Class Members who have duly requested exclusion

from the Settlement Class in the manner provided in the Court's Preliminary Approval Order equals or exceeds the numbers set forth in Appendix 1 filed with the Court under seal concurrently with this Settlement Agreement, Morgan Stanley shall have the right, for thirty (30) days after the deadline for Class Members to opt out, to either withdraw from and fully terminate this Settlement Agreement by providing written notice to Class 13

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Counsel and the Court, or not to withdraw from this Settlement Agreement and take the opt out credit described below. Failure to provide written notice to withdraw within the aforesaid thirty (30) day period constitutes a waiver and termination of Morgan Stanley's right to withdraw pursuant to this paragraph. The opt out credit to which Morgan Stanley is entitled shall be a pro rata share of the Settlement Fund based on the number of Class Members who have opted out in relation to the total number of Class Members. Regardless of the number of Class Members who opt out, Morgan Stanley shall also have no obligation to pay the employer's share of taxes and contributions pertaining to such opt outs, as discussed in Section VIII.F.2 of this Settlement Agreement. 10. If Morgan Stanley exercises its option to withdraw from the

Settlement or if this Settlement Agreement is not approved by the Court or for any other reason is terminated or fails to become effective in accordance with its terms (or, if following approval by this Court, such approval is reversed or substantively modified), the parties shall be restored to their respective positions that existed in this Action prior to entering into this Settlement Agreement; the terms and provisions of this Settlement Agreement shall have no force or effect and shall not be used in this Action or in any proceeding for any purpose; the Settlement Fund shall be returned to Morgan Stanley, including the interest earned by the Settlement Fund through the date of termination (after deducting all costs and expenses, including costs of providing Notice to Class Members, paid or incurred by the Claims Administrator as of the date of termination); any Judgment entered by the Court in accordance with the terms of this Settlement Agreement shall be treated as vacated, nunc pro tunc; and the litigation of the Action will resume as if there had been no Settlement Agreement, with no stipulated Class. The parties retain all rights, 14

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claims, and defenses as to class certification and otherwise as to any of the allegations asserted in this Action. This Settlement Agreement will not be considered an admission of liability by Morgan Stanley nor represent a cap on damages available to the Named Plaintiff or the Class. V. RELEASE/BAR OF CLAIMS A. Class Member Release. All Class Members, other than the Named

Plaintiff, as a condition of receiving a monetary payment in conjunction with this Settlement Agreement, will be required to execute and deliver to the Claims Administrator a Class Member Release in the form agreed to by counsel for the parties and attached hereto as Exhibit A. The Class Members, excluding the Named Plaintiff, will release all claims, known and unknown, existing through the date of preliminary approval, under any federal, state or local legal theory, for race and/or color discrimination based on allegations in the Second Amended Complaint, including facts or circumstances relating to compensation, production, account distribution, team or partnership formation, allocation of support or business opportunities or other allegations in the Second Amended Complaint. Termination and advancement into management claims for race and/or color discrimination arising out of low production, failure to satisfy position requirements, failure to satisfy requirements of the training program, production related reductions-inforce, other production based performance related terminations and any claims for constructive discharge based on the same set of facts or circumstances shall be released but any other termination, advancement into management, constructive discharge or harassment claims shall not. B. Named Plaintiff Release. The Named Plaintiff, as a condition of receiving 15

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a monetary payment in conjunction with this Settlement Agreement, will be required to execute and deliver to the Claims Administrator the Named Plaintiff Release in the form agreed to by counsel for the parties and attached hereto as Exhibit B. The Named Plaintiff Release is not a limited release of claims of race or color discrimination but instead releases all claims of any nature against Morgan Stanley under federal, state and local laws for any period up through the date of Preliminary Approval. C. The Claims Administrator shall provide all Class Members with the Class

Member Release at the time the Notice of Award is provided to them. D. The terms of the Releases, attached hereto as Exhibits A and B, are a

material part of this Settlement Agreement and are hereby incorporated as if fully set forth in the Settlement Agreement; if these Releases, attached hereto as Exhibits A and B, are not finally approved by the Court, or the Settlement Agreement cannot become effective for any reason and the Settlement set forth in this Settlement Agreement shall terminate as provided in Sections IV.C.8 and 10 of this Settlement Agreement, then the Named Plaintiff Releases and Class Member Releases shall terminate nunc pro tunc and be of no force and effect. E. In the event that any Class Member does not execute and timely deliver a

Class Member Release, or if any Named Plaintiff does not execute and timely deliver the Named Plaintiff Release, he or she shall be ineligible for, and forever barred from receiving, monetary relief under this Settlement Agreement, even if said Class Member or Named Plaintiff has not opted out. F. Class Members who neither timely opt out nor timely file a Claim Form

shall, upon the Effective Date, be ineligible to receive any monetary award pursuant to this 16

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Settlement Agreement and be deemed to have fully, finally and irrevocably waived, released and discharged Morgan Stanley from any and all claims of race discrimination, to the same extent as specified in Section V.A. above, whether known or unknown, actual or potential, from October 12, 2002 to the date of Preliminary Approval. VI. NO ADMISSION, NO DETERMINATION A. This Settlement Agreement does not, and is not intended to constitute, nor

shall it be deemed to constitute, an admission by any party as to the merits, validity or accuracy of any of the allegations, claims or defenses of any party in this case. The Class Members continue to assert the merits and validity of their claims under Title VII, 42 U.S.C. § 1981 or parallel state and local laws prohibiting race discrimination. By entering into this Agreement, Morgan Stanley does not admit or concede, expressly or impliedly, but denies that it has in any way violated Title VII, parallel state and local laws prohibiting race discrimination, the common law of any jurisdiction, or any other federal, state or local law, statute, ordinance, regulation, rule or executive order, or any obligation or duty at law or in equity. Neither the Court nor any other court has made any findings or expressed any opinion concerning the merits, validity or accuracy of any of the allegations, claims or defenses in this case. B. Nothing in this Settlement Agreement, nor any action taken in

implementation thereof, nor any statements, discussions or communications, nor any materials prepared, exchanged, issued or used during the course of the mediation or negotiations leading to this Settlement Agreement, is intended by the parties to, nor shall any of the foregoing constitute, be introduced, be used or be admissible in any way in this case or any other judicial, arbitral, administrative, investigative or other proceeding of 17

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whatsoever kind or nature (including, without limitation, the results of the Claims Process established under this Settlement Agreement) as evidence of discrimination, retaliation or racial harassment or as evidence of any violation of Title VII, parallel state and local laws prohibiting race discrimination, the common law of any jurisdiction, or any other federal, state or local law, statute, ordinance, regulation, rule or executive order, or any obligation or duty at law or in equity. Notwithstanding the foregoing, this Settlement Agreement may be used in any proceeding in the Court or in mediation or arbitration to enforce or implement any provision of this Settlement Agreement or implement any orders or judgments of the Court entered into in connection herewith. VII. PROGRAMMATIC RELIEF A. Communications. MS-GWMG shall distribute its Non-Discrimination and

Anti-Harassment Policy to all employees upon hire (in hard copy or by electronic mail) and then on an annual basis via email from Morgan Stanley's CEO. Employees shall be required to submit an acknowledgment of receipt. In addition, the President and COO of MS-GWMG shall issue a separate statement in support of the Policy and its underlying tenets. The Policy will be available on the Firm's intranet site and will be incorporated into various other Firm policies including its Code of Conduct and its Internet and Electronic Communications Usage Policy. The Non-Discrimination and Anti-Harassment Policy itself and the behaviors it seeks to promote and prevent shall be the subject of a mandatory training that all employees will be required to complete upon hire. B. Hiring: MS-GWMG agrees to maintain its commitment to increase

diversity in the Financial Advisor position including the representation rate of Latino and 18

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African American Financial Advisors.

MS-GWMG agrees to maintain a dedicated

position within MS-GWMG whose primary function is the sourcing and recruitment of qualified diverse candidates, including qualified Latinos and African Americans. MS-

GWMG further agrees to work with the Industrial Psychologists to identify and develop sourcing alternatives for qualified Latino and African American Financial Advisors, including but not limited to, developing relationships with organizations and educational institutions with high representation rates of Latinos and African Americans and historical connections with those communities. MS-GWMG agrees to continue to source qualified diverse candidates for its various entry level positions including the Summer Internship Program, the Richard B. Fischer Scholarship Program and/or successor or similar programs. Furthermore, MS-GWMG agrees to inform any third-party recruiter or

executive search firm which it utilizes in its sourcing efforts that MS-GWMG expects that the vendor will present a diverse slate of candidates, where possible. C. Branch Management/Mobility and Training. All available field sales

management positions will be posted on MS-GWMG's Internal Job Bank. These positions currently are titled: Branch Manager; Financial Advisor in Charge; Sales Manager; and Assistant Branch Manager. Minimum requirements for qualification for a management position are available on MS-GWMG's internal job bank. All positions will be posted for a minimum of five (5) business days. Either the hiring manager or Human Resources will follow up with each applicant/candidate in a timely manner. In addition, MS-GWMG shall develop and implement a computerized system to generate an electronic mail notification to Financial Advisors who request to be informed of new management job postings. MS-GWMG's Learning and Development department has developed and 19

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implemented a comprehensive management assessment and development program. The program will provide candidates with a formal and transparent path to assessment and selection as branch managers, and provide field management with an established and tested protocol for selection of high-potential candidates by trained assessors. MS-GWMG shall provide all management-level field personnel with diversity training no less than every other year. The format of such training may vary from jurisdiction to jurisdiction depending on the relevant legal requirements. However, all managers shall, at a minimum, be required to complete an interactive, customized, elearning training program. The positions to be trained are: Division Directors, Associate Division Directors, District Managers, Non-Producing and Producing Branch Managers, Financial Advisors in Charge, Risk Managers, Assistant Branch Managers, Sales Managers, and Service Managers. In addition, Morgan Stanley agrees to provide diversity related training to field sales branch management which incorporates elements of the Implicit Association Test or similar tool agreed upon by the parties. Morgan Stanley's Learning and Development Department will make available additional study materials and resources to assist the Financial Advisor Trainees in obtaining the Series 7 registration. Branch Manager compensation shall have a meaningful diversity component designed to measure and reward efforts at diversifying representation rates in the Financial Advisor position including the recruiting, training, and retaining qualified African American and Latino Financial Advisors. MS-GWMG agrees that it shall develop and implement a process whereby field sales management shall be required to report on their 20

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best efforts and results in the areas of sourcing, recruiting, mentoring, training, and promoting a diverse workforce, including qualified African American and Latino Financial Advisors and Registered Financial Advisor Trainees, and whereby field sales management will be reviewed and held accountable by senior MS-GWMG management for these efforts. The Diversity Monitor will review the diversity-related quarterly self-assessment process for field sales management and the diversity component of the branch manager compensation process. D. Account Distribution 1. Since 2002, MS-GWMG has utilized a "Power Ranking" system to

rank Financial Advisors on performance factors to determine the distribution of the accounts of departing Financial Advisors. Under this Settlement, MS-GWMG has agreed to make significant changes to the Power Ranking system, including reducing reliance on historical factors and more heavily weighting criteria which reflect recent performance. MS-GWMG has also agreed to automate the account distribution process based on the revised Power Rankings and to limit the exceptions that can be made to the Power Rankings. The revised Power Ranking factors are set forth in Appendix 2 filed under seal along with this Settlement Agreement. 2. Power Rankings a. All Power Ranking factors that measure performance from

the previous twelve-month period will be adjusted to encompass a 12 month period exclusive of absence for parental leave or short-term disability leave. For example, if a Financial Advisor was on a leave of absence for four of the preceding 12 months, the previous 12 months measure will instead count the last 12 months that the employee was 21

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active. b. The methodology for calculating the Power Rankings will be

provided to each Financial Advisor, including the name of each factor, an explanation of each factor, and how each factor is weighted. Upon hire, each Financial Advisor will be individually provided with the methodology of the objective measures utilized in the Power Ranking calculation and the manner in which calculations are completed and this will be available to all Financial Advisors electronically. MS-GWMG agrees to provide notice to Financial Advisors regarding any modification to the Power Ranking methodology. c. MS-GWMG shall inform each Financial Advisor of his or

her individual ranking at the time any distribution is made. The actual distribution of a departing Financial Advisor's book will be made available to a Financial Advisor in the Branch confidentially upon request, and such communication shall include the rankings and (without identification of any particular Financial Advisor by name) the number of accounts and the assets distributed to each ranked Financial Advisor. d. Review of Account Distributions. After a full calendar year

has passed following implementation of these new Power Ranking criteria, the Industrial Psychologists to be appointed as set forth in Section VII.G.2 below will review how the process has been operating, including all exceptions and complaints. In addition, the Industrial Psychologists will also review annually the actual account distributions and related compensation data and the rankings of African American and Latino Financial Advisors on each of the individual factors and use such information in considering recommendations, if any, for changes to the Power Ranking formula. On an annual basis, 22

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the Industrial Psychologists shall report their findings and recommendations, if any, to the Diversity Monitor. Lead Class Counsel and counsel for Morgan Stanley will reconvene to discuss the findings of the Industrial Psychologists and whether further appropriate changes to the Power Ranking criteria or distribution process should be made. The parties recognize that the Power Ranking system is subject to the Settlement Agreement in both this case and the Augst-Johnson case pending in the United States District Court for the District of Columbia and that any material changes must be effectuated by mutual agreement among all parties. Notwithstanding this requirement, Morgan Stanley may petition the Courts for permission to modify the system if Lead Counsel in both cases do not agree to a proposed modification. 3. Account Distribution Policies a. MS-GWMG senior management will issue a comprehensive

account distribution policy statement, which shall include policies covering the distribution of the accounts of departing Financial Advisors, retiring Financial Advisors, departing partners, and leads, call-ins, and walk-ins. The statement shall be issued via email to all field employees and shall be posted on MS-GWMG's intranet site and shall include a prohibition on discrimination. In addition, MS-GWMG will train all current Branch Managers on account distribution policies and procedures at the time the settlement becomes effective, and will similarly train all new managers that are subsequently hired. b. Financial Advisors are not eligible for account distributions

if they are: (1) currently on "heightened supervision" consistent with industry standards; (2) subject to any regulatory action reportable as a `yes' answer on Form U-4 questions 14C-G; (3) subject to discipline reported on Form RE-3 in the last 12 months; or (4) 23

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subject to any written performance or workplace conduct warning in the last 90 days. Lateral recruits to MS-GWMG will be ineligible for account distributions during their first 12 months of employment with MS-GWMG. New hire Financial Advisor Trainees are ineligible until they have successfully satisfied the preliminary production thresholds established under the Training Program. Financial Advisors who are on parental or shortterm disability leave at the time an account distribution is made will participate as if they were not on leave, and the distributed accounts will be handled in the same manner as their other accounts are handled while on leave. c. Where an exception is made to the Power Ranking process

because of client choice (which choice cannot be based on race or color) or business exigency (such as client service needs) each individual exception shall be approved by the Complex or District Manager or his/her designee in writing, including the legitimate business reasons for the exception. Records of all such exceptions shall be kept for purposes of monitoring policy compliance. In addition, except for a lateral recruit who receives a distribution in his or her first 12 months of employment because of business exigencies including staffing or qualifications issues not satisfied by other eligible Financial Advisors in the Branch, the Financial Advisor receiving a distribution through an exception will be disqualified from receiving other distributions of approximately equal asset value in the same or subsequent distributions. An individual Financial Advisor who does not receive a specific distribution as a result of an exception shall receive additional accounts in the same or subsequent distributions of approximately equal asset value. d. MS-GWMG shall enhance its technology to allow its

account distribution process to be computer automated, subject to branch manager review 24

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to ensure compliance with regulatory requirements. Account distributions will be made through this automated process, subject to exceptions described in Section VII.D.3.c. above. The results of all account distributions shall be stored and readily retrievable for monitoring to ensure compliance with account distribution policies. 4. Retiring Financial Advisors a. The book of business formerly serviced by the retiring

Financial Advisor will be distributed through the Power Ranking system set forth in Sections VII.D.1. and VII.D.2. above unless a Joint Production Arrangement/Agreement (JPA) has been in effect for twenty-four (24) months or longer at the time of retirement. b. The Industrial Psychologists shall make recommendations

for increasing participation of African Americans and Latinos in the receipt of retiring Financial Advisor's books of business. These recommendations shall be made in accordance with Section VII.G.2. below. 5. Partnerships a. Unless a JPA has been in effect for twenty-four (24) months

or longer at the time of departure, the book of business formerly serviced by the departing Financial Advisor will be distributed through the Power Ranking system. b. The Industrial Psychologists shall make recommendations

for increasing participation of African Americans and Latinos in the partnerships. These recommendations shall be made in accordance with Section VII.G.2. below. c. For purposes of a Financial Advisor's Power Rankings, MS-

GWMG will count partnership assets under management based on the percentage of the commission split specified in the partnership agreement. 25

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6.

Leads, Call-ins, and Walk-ins a. Each Branch Office shall implement a "Financial Advisor of

the Day" program. Pursuant to this program, all client prospects who either walk in or telephone the branch and who are seeking a Financial Advisor shall be directed to the Financial Advisor serving as the Financial Advisor of the Day. The daily assignments shall be made alphabetically and announced on a monthly basis on or before the last day of the preceding month. The monthly roster shall be openly posted in a conspicuous location within the branch where all other Firm policies are posted. Participation among eligible Financial Advisors shall be voluntary each month. b. Each Financial Advisor of the Day shall complete a

"Financial Advisor of the Day Activity Log" that will detail all telephone calls and walk-in prospects fielded by the Financial Advisor and the disposition of each. The logs shall be maintained in a Branch Financial Advisor of the Day file for a three-year period. c. If a prospect insists on speaking to the Branch Manager, the

Branch Manager will direct the individual to the Financial Advisor of the Day. If the Financial Advisor of the Day is not qualified to handle the prospect's account, the Branch Manager shall ask the prospective client to interview a diverse slate of Financial Advisors, to the extent available. d. If the branch manager determines that the Financial Advisor

of the Day is not qualified to handle a walk-in prospect, the branch manager shall complete an exception report detailing the reason why the Financial Advisor of the Day was not selected. e. All Financial Advisors and Registered Financial Advisor 26

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Trainees who have successfully satisfied the preliminary production thresholds established under the Training Program shall be eligible to participate. f. Unauthorized failure to perform Financial Advisor of the

Day obligations as designated shall render a Financial Advisor ineligible to participate in the Program for a period of six (6) months. The branch shall maintain a list of those Financial Advisors who elected not to participate or who otherwise were ineligible. 7. Distribution Upon Transfer to Non-Producing Manager

Where no JPA has been in existence for at least 24 months at the time of transfer, the book of business serviced by a producing manager who is transferred to a nonproducing branch manager position or a Financial Advisor who moves to a non-producing sales manager position will be distributed through the Power Ranking system as set forth in Sections VII.D.1-5. above. 8. Disputes Concerning Account Distributions

The parties agree that if at any time during the term of this Settlement Agreement a dispute shall arise between MS-GWMG and a Financial Advisor or a Registered Financial Advisor Trainee concerning any account distribution, such dispute shall initially go through the MS-GWMG's internal complaint process which includes access to mediation under MS-GWG's alternative dispute resolution mechanism ("CARE"). As to claims arising out of MS-GWMG, MS-GWMG agree to continue the existing tolling provisions under the CARE program guidelines for the duration of this Agreement. However, nothing herein shall prevent any Class Member or Named Plaintiff from individually pursuing any legal claim not released under this Settlement through any applicable governmental agency or court of law if he or she is otherwise entitled to do so. 27

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E.

Development Opportunities.

MS-GWMG shall work with the jointly

appointed Industrial Psychologists to develop workplace initiatives designed to attract African Americans and Latinos to MS-GWMG as Financial Advisors, and to retain them and enhance their success, including targeted mentoring and training. Training and

mentoring may include but is not limited to training conference calls, online courses, and in person seminars. The Industrial Psychologists shall make recommendations for

increasing participation of African American and Latino Financial Advisors and Registered Financial Advisor Trainees in development opportunities. These recommendations will be made in accordance with Section VII.G.2. below. MS-GWMG additionally agrees to conduct exit interviews of Financial Advisors and Registered Financial Advisor Trainees who terminate voluntarily in order to gain a better understanding as to the reason for the departures. MS-GWMG shall report the results of the exit interviews of African American and Latino Financial Advisors and Registered Financial Advisor Trainees annually to the Industrial Psychologists, the Diversity Monitor and individuals within MS-GWMG responsible for hiring Financial Advisors and Registered Financial Advisor Trainees. MS-GWMG agrees to maintain its commitment to the biannual Minority Business Exchange. F. Complaint Process and Training. The complaint process, including MS-

GWMG's prohibition against retaliation, as provided in the Non-Discrimination and AntiHarassment Policy, shall be communicated in writing to all Financial Advisors and Financial Advisor Trainees upon hire, and annually to all Financial Advisors. New hires shall be required to submit an acknowledgment of receipt of this communication. 28

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MS-GWMG will provide its Human Resources staff supporting Financial Advisors and Registered Financial Advisor Trainees with appropriate training regarding compliance with state, federal, and local EEO laws; MS-GWMG's anti-discrimination and harassment policies; and this Settlement Agreement. MS-GWMG will provide its Human Resources staff supporting Financial Advisors and Registered Financial Advisor Trainees with appropriate training regarding best practices for complaint investigation and resolution. Human Resources will be trained to treat all complaints or inquiries as confidentially as legally possible and to carry out their duties in a manner consistent with the law. In addition, Human Resources will implement controls designed to ensure that only non-complaining employees or managers with a need-to-know will be advised of a complaint or investigation. In all instances, upon being informed of a complaint or investigation, the non-complaining employees and managers so informed will be reminded of MS-GWMG's policy against retaliation. MS-GWMG will retain documents sufficient to show complaints by African American and Latino Financial Advisors and Registered Financial Advisor Trainees of race or color discrimination, race or color bias, and/or retaliation related to such complaints for the term of the Settlement Agreement. G. Appointments. 1. Diversity Monitor. The parties shall jointly appoint a Diversity

Monitor, and have mutually agreed to the appointment of Fred W. Alvarez, Esq. The Diversity Monitor shall be external to and independent of the MS-GWMG, but will report directly to the COO and President of MS-GWMG. She or he shall monitor MS-GWMG's efforts to carry out the terms of the Settlement Agreement. 29 This shall include the

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following: a. The Diversity Monitor will receive monthly reports

regarding complaints of Financial Advisors and Registered Financial Advisor Trainees alleging race discrimination and resolution of investigations of such complaints through the CARE program or otherwise. b. The Diversity Monitor will review quarterly reports

regarding the branches in which Branch Managers have filed exception reports reflecting a deviation from the account distribution process. c. The Diversity Monitor will review account distribution data,

exception reports, and complaints to monitor policy compliance. If the Diversity Monitor identifies issues of potential non-compliance, the Diversity Monitor will inform MSGWMG and Lead Class Counsel. After consultation with Lead Class Counsel, MSGWMG will take appropriate corrective actions to address instances of non-compliance. MS-GWMG shall inform the Diversity Monitor and Lead Class Counsel of any such corrective action taken. Where potential non-compliance has been identified, the Diversity Monitor shall have the right to audit the activities in a branch, by reviewing documents, asking branch management to provide explanations and, if necessary, speaking to Financial Advisors in the branch. Nothing herein shall alter or restrict Lead Class Counsel's right to enforce this Settlement Agreement under the Dispute Resolution provisions of this Settlement Agreement. d. The Diversity Monitor will review the diversity-related

quarterly self-assessment process for field sales management and the diversity component of the branch manager compensation process. 30

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e.

The Diversity Monitor will monitor bi-annual training of

management on EEO policies, and policies against discrimination and retaliation, and ensure that the training agreed to was implemented. f. The Diversity Monitor will review how Human Resources

handles investigations and the resolution process for inquiries and complaints. g. The Diversity Monitor will review the annual results of the

exit interviews of African American and Latino Financial Advisors and Registered Financial Advisor Trainees. h. The Diversity Monitor will provide reports to Lead Class

Counsel and MS-GWMG at least semi-annually regarding the items monitored, including the analysis of the account distribution system. The Diversity Monitor shall report any incidents of potential material non-compliance with this Settlement Agreement to Lead Class Counsel and MS-GWMG and may do so on a more frequent basis than semiannually. i. this Settlement Agreement. 2. Industrial Psychologists a. The parties shall jointly appoint Industrial Psychologists The Diversity Monitor will maintain records for the term of

Dr. Kathleen Lundquist and Dr. Irwin Goldstein, who shall work with MS-GWMG and Class Counsel to develop innovative, meaningful, novel, state of the art programs, conduct a job analysis of the Financial Advisor position and make recommendations:
·

Concerning sourcing and recruitment strategies and programs to improve the representation rates of African Americans and Latinos in 31

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the Financial Advisor and Registered Financial Advisor Trainee positions;
· ·

For increasing the Series 7 passage rates of African American and Latino Financial Advisor Trainees. For increasing the production and earnings of African American and Latino Financial Advisors, including policies and practices with respect to training, development, and mentoring;

·

For increasing participation of African American and Latino Financial Advisors in the receipt of retiring Financial Advisors' books of business; For increasing participation of African American and Latino Financial Advisors in partnerships; Concerning policies and practices with respect to training, development, and mentoring, that will enhance opportunities for African American and Latino Financial Advisors and Financial Advisor Trainees. Training and development may include but is not limited to training conference calls, online courses, and in-person seminars; Concerning a mentoring program for all Registered Financial Advisor Trainees and Financial Advisors; and Concerning a system of semi-annual internal data collection and a monitoring process. b. The Industrial Psychologists shall monitor the actual

· ·

· ·

implementation of the programs, policies and initiatives which MS-GWMG is obligated to undertake by virtue of this Agreement and shall, on an annual basis, report MS-GWMG's process to the Diversity Monitor. In addition, the Industrial Psychologists shall monitor on an annual basis the increase in the representation rates of African Americans and Latinos in the Registered Financial Advisor Trainee and Financial Advisor positions and shall report MS-GWMG's progress to the Diversity Monitor. MS-GWMG shall report to the Diversity Monitor on an annual basis the efforts made to recruit African American and Latino 32

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candidates to the Registered Financial Advisor Trainee and Financial Advisor positions including its sourcing and recruiting strategies, including but not limited to, targeted marketing and recruiting efforts, relationship/networking building with diverse organizations and schools, diversity career nights, internships and other sponsorships and scholarship programs. c. The Industrial Psychologists shall present such

recommendations to a senior executive panel of MS-GWMG consisting of: the Senior Learning & Development officer; the Senior Diversity officer; the Senior Employment Attorney; the Senior Human Resources officer; and a representative from National Sales Management. A copy of the recommendations will also be provided to Lead Class Counsel. If MS-GWMG does not agree with the recommendations, but Lead Class Counsel still thinks they should be implemented notwithstanding MS-GWMG's objections, the Industrial Psychologists, along with Lead Class Counsel, will have the opportunity to present the recommendations to the COO and President of MS-GWMG or the then Head of National Sales for MS-GWMG. All recommendations of the Industrial Psychologists will be designed to advance the purposes of this Settlement Agreement consistent with MS-GWMG s business needs and objectives. d. The Industrial Psychologists shall provide the Diversity

Monitor with their findings of deviations from the account distribution system. e. Subject to signing an appropriate confidentiality agreement,

and upon reasonable advance notice, the Diversity Monitor and the Industrial Psychologists described in Sections VII.G.1. and VII.G.2. above will have reasonable access to relevant documents, data, and MS-GWMG employees. The Diversity Monitor 33

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and the Industrial Psychologists will be compensated by MS-GWMG. 3. If it becomes necessary to replace the Diversity Monitor or either

Industrial Psychologist, the parties shall jointly select a replacement by mutual agreement. H. General Non-Discrimination Provisions. Pursuant to MS-GWMG's Non-

Discrimination and Anti-Harassment Policy, African American and Latino Financial Advisors and Registered Financial Advisor Trainees will enjoy terms and conditions of employment comparable to their white counterparts. MS-GWMG shall assert the following general policies using a method agreed to by the parties: 1. Prohibition against discrimination on the basis of race or color in

hiring, compensation and business opportunity allocations. 2. Prohibition against retaliation for reporting race or color

discrimination, participating in the CARE program, participating in this or any discrimination settlement, filing a lawsuit or complaint with any outside agency or entity alleging race discrimination, or for refusing to participate in race discrimination. 3. The parties agree that it shall be a violation of this Settlement

Agreement for a Morgan Stanley supervisor to retaliate against any Class Member for his or her participation in the prosecution of the allegations contained in the charge underlying this Settlement or in the Settlement itself. H