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earlier time as is requested by the Company or you. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this paragraph 10, shall be paid by the Company to you within 5 business days of the receipt of the Accounting Firm’s determination and in any event not later than the last day of the calendar year after the calendar year in which the applicable Excise Tax is paid. If the Accounting Firm determines that no Excise Tax is payable by you or that a reduction is required, it shall so indicate to you in writing.

   (iv) Any determination by the Accounting Firm shall be binding upon the Company and you (absent manifest error), provided that, in the event that your tax advisor delivers to the Accounting Firm and the Company a written opinion that the actual Excise Tax payable by you is greater than the Excise Tax amount initially determined by the Accounting Firm by reason of (A) manifest error, (B) any Payment the existence or amount of which could not have been, or was not, determined or known at the time the Excise Tax was initially determined or (C) any determination, claim or assertion made by any tax authority that the actual Excise Tax is greater than the amount initially determined by the Accounting Firm, then, in any such case, the Accounting Firm shall recalculate the amount of the Excise Tax and any required (or additional) Gross-Up Payment or reduction in Payments. Any such additional calculation or determination shall be performed consistent with this paragraph 10, including your right to deliver the notice from your tax advisor described above. Any disputes between the parties over such calculations and determinations shall be resolved in accordance with paragraph 14(ii).

   (v)  You shall notify the Company in writing of any written claim by the Internal Revenue Service that, if successful, would require the payment by the Company of a Gross-Up Payment. You shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. You shall not pay such claim prior to the expiration of the 30-day period following the date on which you give such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies you in writing prior to the expiration of such period that the Company desires to Contest such claim, you shall (i) give the Company any information reasonably requested by the Company relating to such claim, (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including accepting legal representation with respect to such claim by an attorney reasonably selected by the Company, (iii) cooperate with the Company in good faith in order effectively to contest such claim and (iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that (A) the Company shall bear and pay directly all costs and expenses (including additional income taxes, interest and penalties) incurred in connection with such contest, and shall indemnify and hold you harmless, on an after-tax basis, for any Excise Tax or income tax (including interest or penalties) imposed as a result of such representation and payment of costs and expenses and (B) your obligation to cooperate with the Company shall not require you to take any action, or forego taking any action, that would have an adverse effect on your overall tax position.

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          11. Indemnification and Insurance. During and after the Term, the Company shall indemnify you in your capacity as a director and officer of the Company to the fullest extent permitted by applicable law and the Company’s charter and by-laws and shall provide you with director and officer liability insurance coverage on the same basis as the Company’s other directors and senior executive officers.

          12. Legal Fees. The Company shall reimburse you for the reasonable legal fees and expenses incurred by you in connection with the review and negotiation of this Agreement and the equity award agreements described herein. The Company shall also reimburse you for all reasonable legal fees and expenses that you may incur during the Term or within ten years after the expiration thereof in connection with any dispute between you and the Company involving this Agreement, your employment with the Company or the termination thereof, but only in the event that you are the prevailing party in such dispute. All reimbursements described in this paragraph shall be made promptly after demand is made by you and your provision to the Company of reasonably satisfactory evidence of such fees and expenses, but no later than the last day of the calendar year following the calendar year in which you incur such fees and expenses. You right to reimbursement under this paragraph in any calendar year shall not affect the amount eligible for reimbursement in any other calendar year and shall not be subject to liquidation or exchange.

          13. Other Agreements. Promptly after the date hereof and prior to the Start Date, you agree to enter into (i) equity award agreements, having the terms and conditions described herein, to document the Replacement Options, Replacement RSUs, Sign-on Options and Sign-on RSUs and (ii) the Company’s standard covenant agreement for executive officers.

          14. Miscellaneous. (i) This Agreement shall be governed by and construed in accordance with the laws of the State of New York (other than its choice of laws rules).

   (ii) All controversies, claims or disputes arising out of or related to this Agreement shall be settled under the rules of the American Arbitration Association then in effect in the State of New York, as the sole and exclusive remedy of either party, and judgment upon such award rendered by the arbitrator(s) may be entered in any court of competent jurisdiction in the State of New York.

   (iii) This Agreement constitutes the entire understanding and agreement between the parties with respect to the subject matter hereof, and supersedes any prior discussions, negotiations or other written materials in respect of the subject matter hereof. This Agreement may not be amended, unless such amendment is in writing and signed by both of the parties hereto.

   (iv) All amounts payable to you hereunder shall be subject to any required deductions or withholdings from, and the Executive shall be responsible for, any applicable taxes (including any taxes under Section 409A of the Code).

   (v) To the extent that you are a “specified employee” (within the meaning of the final regulations promulgated under Section 409A of the Code) as of the date of your “separation from service” (within the meaning of

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Section 409A of the Code) from the Company, no amount that constitutes a deferral of compensation that is payable upon such separation from service and is subject to the six-month delay rule of Section 409A(a)(2)(B)(i) of the Code shall be paid to you before the date (the “Delayed Payment Date”) that is the first day of the seventh month after the date of your separation from service or, if earlier, the date of your death following such separation from service. All such amounts that would, but for this paragraph 14(v), become payable prior to the Delayed Payment Date will be accumulated and paid on the Delayed Payment Date. The Company intends that income provided to you pursuant to this Agreement will not be subject to taxation under Section 409A of the Code. The provisions of this Agreement shall be interpreted and construed in favor of satisfying any applicable requirements of Section 409A of the Code and the final regulations promulgated thereunder. The Company Stock Plan, as applicable to equity awards thereunder granted to you, and such equity awards granted to you, will, to the extent not exempt from the requirements of Section 409A of the Code, comply with the documentary requirements of Section 409A of the Code by the documentary compliance effective date thereof and operationally comply at all times from and after the date of grant of such equity awards, and you agree to accept any amendments of such equity awards reasonably required to effect such compliance, which amendments will not adversely impact the value of such awards to you.

   (vi) The Company represents and warrants that it is fully authorized and empowered to enter into this Agreement and to perform its obligations hereunder, including the grants of the Replacement Options, the Replacement RSUs, the Sign-on Options and the Sign-on RSUs.

   (vii) The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement and your employment with the Company to the extent necessary to preserve the intended rights and obligations of the parties.

   (viii) The invalidity or unenforceability of any provision of this Agreement, or any provisions of any agreement referred to herein, shall not affect the validity or enforceability of any other provision herein or therein.

   (ix) For purposes of this Agreement, the term “including” shall mean “including, without limitation”.

(x)
This Agreement may be executed in one or more counterparts,

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including by fax or PDF, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

Sincerely,

MERRILL LYNCH & CO., INC.,

by:
  /s/  Peter R. Stingi

  Peter R. Stingi
  Senior Vice President

Acknowledged and Agreed:

by:
/s/  John A. Thain

John A. Thain