Memorandum September 26, 2008 To: From: All Employees John Mack I want to give you a quick update on some of the key initiatives that we have been working on this week. First, on our partnership with Mitsubishi UFJ Financial Group, the process to conclude the transaction is moving ahead as anticipated. We continue to identify new opportunities for our two companies to collaborate across the globe. As a global leader in commercial banking, Mitsubishi UFJ’s platform, expertise and insight will be invaluable as we transition our business under our new bank holding company structure. Since announcing the deal, we’ve had extremely positive reaction from our investors and clients – in part because of the tremendous opportunities that Morgan Stanley and Mitsubishi UFJ have together. Second, we are moving ahead on planning and strategy regarding our new bank holding structure. We have teams working in various parts of the Firm to explore the most attractive opportunities offered by this new structure. James Gorman and Ellyn McColgan, in particular, have been working aggressively on ways that this can further enhance our retail business – leveraging our 8,500 talented Financial Advisors and almost 500 retail branches. Our new status will allow us to expand the suite of banking services we already offer our roughly two million retail clients, including checking, cash management and lending services. We also have retained former Comptroller of the Currency Eugene Ludwig and his firm, Promontory Financial Group, to work with us on this transition and help us realize the many business opportunities that our new structure offers. Third, we are continuing to do everything we can to support Secretary Paulson’s proposal for the Troubled Asset Relief Program. While the debate is continuing, we remain confident that Congress will act to pass the plan, which will be a major step forward in restoring confidence to the credit markets. As always, it is critical that all of us stay close to our clients to help them navigate these challenging markets. I have no doubt that markets will remain volatile and stock prices – including our own – will continue to fluctuate. Times like these, however, are when market leaders stand out. Morgan Stanley has continued to pick up major new mandates – with 18 new advisory mandates coming in over the past week alone, including such high-profile assignments as the WaMu deal and Constellation Energy’s acquisition by Berkshire Hathaway. All of us need to make sure our clients continue to understand how Morgan Stanley’s unique market position, strong liquidity with full and permanent access to the Fed window, industry-leading Tier-1 capital ratio (more than 12 percent at quarter end) and unrivaled global platform can help them in these uncertain times.