MARSH & MCLENNAN COMPANIES, INC. (Form: 10-Q, Received: 05/10/2007 15:57:09)

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the quarter ended March 31, 2007

Marsh & McLennan Companies, Inc.
1166 Avenue of the Americas
New York, New York 10036
(212) 345-5000

Commission file number 1-5998
State of Incorporation: Delaware
I.R.S. Employer Identification No. 36-2668272

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No ___.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer X . Accelerated Filer ___ Non-Accelerated Filer ___

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ___. No X .

As of April 30, 2007, there were outstanding 555,418,924 shares of common stock, par value $1.00 per share, of the registrant.

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements,” as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management’s current views concerning future events or results, use words like “anticipate,” “assume,” “believe,” “continue,” “estimate,” “expect,” “intend,” “plan,” “project” and similar terms, and future or conditional tense verbs like “could,” “should,” “will” and “would.” For example, we may use forward-looking statements when addressing topics such as: the timing and expected impact of acquisitions and dispositions; future actions by regulators; the outcome of contingencies; changes in our business strategy; changes in our business practices and methods of generating revenue; the development and performance of our services and products; market and industry conditions, including competitive and pricing trends; changes in the composition or level of MMC’s revenues; our cost structure and the outcome of restructuring and other cost-saving initiatives; share repurchase programs; and MMC’s cash flow and liquidity.

Forward-looking statements are subject to inherent risks and uncertainties. Factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements include:

the economic and reputational impact of litigation and regulatory proceedings described in the notes to our financial statements;
the fact that MMC's agreement to sell Putnam, announced on February 1, 2007, is subject to a number of closing conditions, some of which are outside of MMC's control, and we cannot be certain that the transaction will close as planned or that the announced sale price will not be adjusted pursuant to the terms of the sale agreement;
Putnam’s performance between now and the closing of the announced sale later in 2007, including the actual and relative investment performance of Putnam’s mutual funds and institutional and other advisory accounts, Putnam’s net fund flows and the level of Putnam’s assets under management;
our ability to effectively deploy MMC’s proceeds from the sale of Putnam, and the timing of our use of those proceeds;
the fact that our estimate of the dilutive impact of the sale of Putnam on MMC’s future earnings per share is necessarily based on a set of current management assumptions, including assumptions about MMC’s use of sale proceeds and the operating results of Putnam and MMC’s other subsidiaries;
our ability to achieve profitable revenue growth in our risk and insurance services segment by providing both traditional insurance brokerage services and additional risk advisory services;
our ability to retain existing clients and attract new business, and our ability to retain key employees;
revenue fluctuations in risk and insurance services relating to the net effect of new and lost business production and the timing of policy inception dates;
the impact on risk and insurance services commission revenues of changes in the availability of, and the premiums insurance carriers charge for, insurance and reinsurance products, including the impact on premium rates and market capacity attributable to catastrophic events such as hurricanes;
the impact on renewals in our risk and insurance services segment of pricing trends in particular insurance markets, fluctuations in the general level of economic activity and decisions by insureds with respect to the level of risk they will self-insure;
the impact on our consulting segment of pricing trends, utilization rates, legislative changes affecting client demand, and the general economic environment;
our ability to implement our restructuring initiatives and otherwise reduce or control expenses and achieve operating efficiencies, including our ability to generate anticipated savings and operational improvements from the actions we announced in September 2006;
the impact of competition, including with respect to pricing and the emergence of new competitors;
fluctuations in the value of Risk Capital Holdings’ investments;

our ability to make strategic acquisitions and dispositions and to integrate, and realize expected synergies, savings or strategic benefits from, the businesses we acquire;
our exposure to potential liabilities arising from errors and omissions claims against us;
our ability to meet our financing needs by generating cash from operations and accessing external financing sources, including the potential impact of rating agency actions on our cost of financing or ability to borrow;
the impact on our operating results of foreign exchange fluctuations;
changes in applicable tax or accounting requirements, including any potential income statement effects from the application of FIN 48 (“Accounting for Uncertainty in Income Taxes”) and SFAS 142 (“Goodwill and Other Intangible Assets”); and
the impact of, and potential challenges in complying with, legislation and regulation in the jurisdictions in which we operate, particularly given the global scope of our businesses and the possibility of conflicting regulatory requirements across the jurisdictions in which we do business.

The factors identified above are not exhaustive. MMC and its subsidiaries operate in a dynamic business environment in which new risks may emerge frequently. Accordingly, MMC cautions readers not to place undue reliance on its forward-looking statements, which speak only as of the dates on which they are made. MMC undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date on which it is made . Further information concerning MMC and its businesses, including information about factors that could materially affect our results of operations and financial condition, is contained in MMC’s filings with the Securities and Exchange Commission.

PART I, ITEM 1, FINANCIAL INFORMATION

MARSH & McLENNAN COMPANIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

For the Three Months Ended March 31,
(In millions, except per share figures)			2007			2006
Revenue:
Service revenue			$	2,763		$	2,623
Investment income (loss)				49			51
Operating revenue				2,812			2,674
Expense:
Compensation and benefits				1,677			1,586
Other operating expenses				748			751
Operating expenses				2,425			2,337
Operating income				387			337
Interest income				19			15
Interest expense				(71	)		(78	)
Income before income taxes and minority interest				335			274
Income taxes				106			73
Minority interest, net of tax				1			1
Income from continuing operations				228			200
Discontinued operations, net of tax				40			216
Net Income			$	268		$	416
Basic net income per share	– Continuing operations		$	0.41		$	0.37
	– Net income		$	0.49		$	0.76
Diluted net income per share	– Continuing operations		$	0.41		$	0.36
	– Net income		$	0.47		$	0.75
Weighted average number of shares outstanding		– Basic		553			547
		– Diluted		562			555

The accompanying notes are an integral part of these consolidated statements.

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MARSH & McLENNAN COMPANIES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)

	March 31,			December 31,
(In millions of dollars)	2007			2006
ASSETS
Current assets:
Cash and cash equivalents	$	1,203		$	2,015
Receivables
Commissions and fees		2,499			2,340
Advanced premiums and claims		103			82
Other		488			452
		3,090			2,874
Less-allowance for doubtful accounts and cancellations		(186	)		(156	)
Net receivables		2,904			2,718
Assets of discontinued operations		1,579			1,921
Other current assets		318			322
Total current assets		6,004			6,976
Goodwill and intangible assets		7,593			7,595
Fixed assets		979			990
(net of accumulated depreciation and
amortization of $1,441 at March 31, 2007
and $1,416 at December 31, 2006)
Long-term investments		144			124
Pension related assets		647			613
Other assets		1,861			1,839
	$	17,228		$	18,137

The accompanying notes are an integral part of these consolidated statements.

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MARSH & McLENNAN COMPANIES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)

	March 31,			December 31,
(In millions of dollars)	2007			2006
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	1,045		$	1,111
Accounts payable and accrued liabilities		2,483			2,476
Regulatory settlements – current portion		178			178
Accrued compensation and employee benefits		663			1,230
Accrued income taxes		20			131
Dividends payable		106			-
Liabilities of discontinued operations		393			792
Total current liabilities		4,888			5,918
Fiduciary liabilities		4,126			3,587
Less – cash and investments held in
a fiduciary capacity		(4,126	)		(3,587	)
		-			-
Long-term debt		3,609			3,860
Regulatory settlements		174			173
Pension, postretirement and postemployment benefits		1,082			1,085
Liabilities for errors and omissions		636			624
Other liabilities		891			658
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $1 par value, authorized
6,000,000 shares, none issued		-			-
Common stock, $1 par value, authorized
1,600,000,000 shares, issued 560,641,640
shares at March 31, 2007 and December 31, 2006		561			561
Additional paid-in capital		1,071			1,138
Retained earnings		5,734			5,691
Accumulated other comprehensive loss		(1,244	)		(1,272	)
		6,122			6,118
Less – treasury shares, at cost,
5,825,472 shares at March 31, 2007 and
8,727,764 shares at December 31, 2006		(174	)		(299	)
Total stockholders’ equity		5,948			5,819
	$	17,228		$	18,137

The accompanying notes are an integral part of these consolidated statements.

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MARSH & McLENNAN COMPANIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

For the Three Months Ended March 31,	2007			2006
(In millions of dollars)
Operating cash flows:
Net income	$	268		$	416
Adjustments to reconcile net income to cash used for
operations:
Depreciation and amortization of fixed assets and capitalized software		100			98
Amortization of intangible assets		20			23
Provision for deferred income taxes		38			50
Gains on investments		(57	)		(56	)
Disposition of assets		7			(172	)
Accrual of stock-based compensation		27			38
Changes in assets and liabilities:
Net receivables		(196	)		(123	)
Other current assets		277			(31	)
Other assets		(54	)		(61	)
Accounts payable and accrued liabilities		(146	)		(76	)
Accrued compensation and employee benefits		(751	)		(657	)
Accrued income taxes		64			(41	)
Other liabilities		23			86
Effect of exchange rate changes		(3	)		(11	)
Net cash used for operations		(383	)		(517	)
Financing cash flows:
Net increase in commercial paper		65			-
Proceeds from issuance of debt		215			229
Repayments of debt		(599	)		(355	)
Issuance of common stock		99			90
Dividends paid		(105	)		(93	)
Net cash used for financing activities		(325	)		(129	)
Investing cash flows:
Capital expenditures		(86	)		(66	)
Net purchases of long-term investments		(23	)		(3	)
Proceeds from sales related to fixed assets		-			1
Dispositions		-			364
Acquisitions		-			(78	)
Other, net		(7	)		(7	)
Net cash (used for) provided by investing activities		(116	)		211
Effect of exchange rate changes on cash and cash equivalents		7			4
Decrease in cash and cash equivalents		(817	)		(431	)
Cash and cash equivalents at beginning of period		2,089			2,033
Cash and cash equivalents at end of period		1,272			1,602
Cash and cash equivalents – reported as discontinued operations		(69	)		(144	)
Cash and cash equivalents – continuing operations	$	1,203		$	1,458

The accompanying notes are an integral part of these consolidated statements.

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MARSH & McLENNAN COMPANIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.	Nature of Operations

	Marsh & McLennan Companies, Inc. (“MMC”), a global professional services firm, is organized based on the different services that it offers. Under this organizational structure, MMC’s business segments are risk and insurance services, risk consulting & technology, consulting and investment management.

	The risk and insurance services segment provides risk management and insurance broking, reinsurance broking and insurance program management services for businesses, public entities, insurance companies, associations, professional services organizations, and private clients. MMC conducts business in this segment through Marsh, Guy Carpenter and Risk Capital Holdings.

	The risk consulting & technology segment provides various risk consulting and related risk mitigation services to corporate, government, institutional and individual clients. These services fall into two main business groups: consulting, which includes corporate advisory & restructuring services, consulting services and security services; and technology-enabled services. MMC conducts business in this segment through Kroll.

	The consulting segment provides advice and services to the managements of organizations in the areas of Human Resource Consulting, comprising retirement and investments, health & benefits, outsourcing and talent; and Specialty Consulting, comprising management consulting, organization design and change management, and economic consulting. MMC conducts business in this segment through Mercer HR and Specialty.

	MMC conducts business in its investment management segment through Putnam. On February 1, 2007, MMC announced that it had entered into an agreement with Great-West Lifeco Inc. (“GWL”), a majority-owned subsidiary of Power Financial Corporation, pursuant to which GWL agreed to purchase Putnam Investments Trust for $3.9 billion in cash. The sale includes Putnam’s interest in the T.H. Lee private equity business. The purchase price is subject to possible adjustment based on (i) changes in Putnam’s adjusted stockholders’ equity between September 30, 2006 and closing and (ii) any decline below an agreed threshold in Putnam’s adjusted asset management revenue between December 31, 2006 and closing. MMC expects the sale of Putnam to close in the second quarter of 2007. The 2007 and comparative results of Putnam are included in discontinued operations in the accompanying consolidated statements of income and consolidated balance sheets. Putnam comprises the entire investment management segment.

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2.	Principles of Consolidation

	The consolidated financial statements included herein have been prepared by MMC pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been omitted pursuant to such rules and regulations, although MMC believes that the information and disclosure presented are adequate to make such information and disclosure not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in MMC's Annual Report on Form 10-K for the year ended December 31, 2006 (the “2006 10-K”).

	The financial information contained herein reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the three-month periods ended March 31, 2007 and 2006.

	The caption “Investment income (loss)” in the consolidated statements of income comprises realized and unrealized gains and losses from investments recognized in current earnings. It includes other than temporary declines in the value of available for sale securities, the change in value of trading securities and the change in value of MMC’s holdings in certain private equity funds. MMC’s investments may include seed shares for funds, direct investments in insurance, consulting or investment management companies and investments in private equity funds.

3.	Fiduciary Assets and Liabilities

	In its capacity as an insurance broker or agent, MMC collects premiums from insureds and, after deducting its commissions, remits the premiums to the respective insurance underwriters. MMC also collects claims or refunds from underwriters on behalf of insureds. Unremitted insurance premiums and claims are held by MMC in a fiduciary capacity. Interest income on these fiduciary funds, included in service revenue, amounted to $48 million and $41 million for the three-month periods ended March 31, 2007 and 2006, respectively. Since fiduciary assets are not available for corporate use, they are shown in the consolidated balance sheets as an offset to fiduciary liabilities. At March 31, 2007, Putnam managed the investment of approximately $1.4 billion of the fiduciary assets.

	Net uncollected premiums and claims and the related payables amounted to $9.6 billion at March 31, 2007 and $8.7 billion at December 31, 2006, respectively. MMC is not a principal to the contracts under which the right to receive premiums or the right to receive reimbursement of insured losses arise. Net uncollected premiums and claims and the related payables are, therefore, not assets and liabilities of MMC and are not included in the accompanying consolidated balance sheets.

	In certain instances, MMC advances premiums, refunds or claims to insurance underwriters or insureds prior to collection. These advances are made from corporate funds and are reflected in the accompanying consolidated balance sheets as receivables.

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4. Per Share Data

Basic net income per share and income from continuing operations per share are calculated by dividing the respective after tax income by the weighted average number of shares of MMC’s common stock outstanding, excluding unvested restricted stock. Diluted net income per share and income from continuing operations per share are calculated by dividing the respective after tax income by the weighted average common shares outstanding, which have been adjusted for the dilutive effect of potentially issuable common shares. Reconciliation of net income to net income for diluted earnings per share and basic weighted average common shares outstanding to diluted weighted average common shares outstanding is presented below. The reconciling items related to the calculation of diluted weighted average common shares outstanding is the same for continuing operations.

For the Three Months Ended March 31,
(In millions, except per share figures)		2007		2006
Net Income		$ 268		$ 416
Less:	Potential minority interest expense associated with
	Putnam Class B Common Shares	(2	)	(2	)
Net income for diluted earnings per share		$ 266		$ 414
Basic weighted average common shares outstanding		553		547
Dilutive effect of potentially issuable common shares		9		8
Diluted weighted average common shares outstanding		562		555
Average stock price used to calculate common stock equivalents		$29.88		$30.76

5. Supplemental Disclosures to the Consolidated Statements of Cash Flows

The following schedule provides additional information concerning interest and income taxes paid for the three-month periods ended March 31, 2007 and 2006.

(In millions of dollars)	2007		2006
Interest paid	$112		$116
Income taxes paid	$ 50		$105

The consolidated cash flow statements include the cash flow impact of discontinued operations in each cash flow category. The cash flow impact of discontinued operations from the operating, financing and investing cash flow categories for the three–month period ended March 31, 2007 and 2006 is as follows:

(In millions of dollars)	2007		2006
Net cash (used for) provided by operations	$(2	)	$9
Net cash used for financing activities	$ -		$ -
Net cash used for investing activities	$(3	)	$(7)

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6.		Comprehensive Income

		The components of comprehensive income for the three-month periods ended March 31, 2007 and 2006 are as follows:

(In millions of dollars)	2007			2006
Foreign currency translation adjustments	$	5		$	9
Unrealized investment holding gains,
net of income taxes		1			-
Less: Reclassification adjustment for realized gains
included in net income, net of income taxes		(2	)		-
Adjustments to pension/retiree plans		(11	)		3
Other comprehensive (loss)/gain		(7	)		12
Net income		268			416
Comprehensive income	$	261		$	428

7.		Acquisitions

		During the first quarter of 2007, MMC made no acquisitions.

8.		Discontinued Operations

		On February 1, 2007, MMC announced that it had entered into an agreement with Great-West Lifeco Inc. (“GWL”), a majority-owned subsidiary of Power Financial Corporation, pursuant to which GWL agreed to purchase Putnam Investments Trust. MMC expects the sale of Putnam to close in the second quarter of 2007. The account balances and activities of Putnam were segregated and reported as discontinued operations in the accompanying consolidated balance sheets at March 31, 2007 and December 31, 2006 and the accompanying consolidated statements of income for the three-month periods ended March 31, 2007 and 2006.

		In the fourth quarter of 2006, Kroll completed the sale of Kroll Security International (“KSI”), its international high-risk asset and personal protection business. The financial results of KSI for 2006 are included in discontinued operations.

		In the first quarter of 2006, MMC determined that Price Forbes, its U.K.-based insurance wholesale operation, met the criteria for classification as a discontinued operation. The 2006 results of Price Forbes, which include a charge to reduce the carrying amount of its assets to fair value less cost to sell, are included in discontinued operations. MMC completed the sale of Price Forbes in September 2006.

		MMC sold its majority interest in Sedgwick CMS Holdings (“SCMS”), a provider of claims management and associated productivity services, on January 31, 2006. The account balances and activities of SCMS were segregated and reported as discontinued operations in the accompanying consolidated statements of income for the three months ended March 31, 2006.

		Price Forbes and SCMS were part of MMC’s risk and insurance services segment, while KSI was part of MMC’s risk consulting & technology segment. Putnam represents the entire investment management segment.

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Summarized Statements of Income data for discontinued operations is as follows:

For the Three Months Ended March 31,
(In millions of dollars)	2007		2006
Total Revenue	$	356	$	400
Income before provision for income tax	$	74	$	64
Provision for income tax		34		24
Income from discontinued operations, net of tax		40		40
Gain on disposal of discontinued operations		-		306
Provision for income tax		-		130
Gain on disposal of discontinued operations, net of tax		-		176
Discontinued operations, net of tax	$	40	$	216

Summarized Balance Sheet data for discontinued operations is as follows:

	March 31,		December 31,
(In millions of dollars)	2007		2006
Assets of discontinued operations:
Current assets	$	602	$	779
Fixed assets, net		48		53
Goodwill and intangible assets		176		180
Long-term investments		356		473
Other assets		397		436
Total assets of discontinued operations	$	1,579	$	1,921
Liabilities of discontinued operations	$	393	$	792

9.		Goodwill and Other Intangibles

		MMC is required to assess goodwill and any indefinite-lived intangible assets for impairment annually or more frequently if circumstances indicate impairment may have occurred. MMC performs the annual impairment test for each of its reporting units during the third quarter of each year.

		Changes in the carrying amount of goodwill are as follows:

(In millions of dollars)	2007			2006
Balance as of January 1,	$	7,206		$	7,121
Goodwill acquired		-			77
Disposals		-			(11	)
Purchase accounting adjustments		9			-
Other adjustments		(3	)		2
Balance as of March 31,	$	7,212		$	7,189

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Goodwill allocable to each of MMC’s reportable segments is as follows: Risk and Insurance Services, $3.7 billion; Risk Consulting & Technology, $1.6 billion; and Consulting, $1.9 billion.

Amortized intangible assets consist of the cost of client lists, client relationships and trade names acquired. The gross cost and accumulated amortization is as follows:

	March 31, 2007			December 31, 2006
			Net			Net
	Gross	Accumulated	Carrying	Gross	Accumulated	Carrying
(In millions of dollars)	Cost	Amortization	Amount	Cost	Amortization	Amount
Amortized intangibles	$662	$281	$381	$ 655	$266	$389

Aggregate amortization expense for the three months ended March 31, 2007 and 2006, was $16 million and $19 million, respectively, and the estimated future aggregate amortization expense is as follows:

For the Years Ending March 31,
(In millions of dollars)	Estimated Expense
2007	$	44
2008		54
2009		45
2010		38
2011		34
Subsequent years		166
	$	381

10.		Retirement Benefits

		MMC maintains qualified and non-qualified defined benefit pension plans for its U.S. and non-U.S. eligible employees. MMC’s policy for funding its tax qualified defined benefit retirement plans is to contribute amounts at least sufficient to meet the funding requirements set forth by U.S. law and the laws of the non-U.S. jurisdictions in which MMC offers defined benefit plans.

		The target asset allocation for the U.S. Plan is 70% equities and 30% fixed income, and for the U.K. Plan, which comprises approximately 85% of non-U.S. Plan assets, is 58% equities and 42% fixed income. As of the measurement date, the actual allocation of assets for the U.S. Plan was 74% to equities and 26% to fixed income, and for the U.K. Plan was 63% to equities and 37% to fixed income.

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The components of the net periodic benefit cost for defined benefit and other postretirement plans are as follows:

Combined U.S. and significant non-U.S. Plans
For the Three Months Ended March 31,	Pension Benefits						Postretirement Benefits
(In millions of dollars)	2007			2006			2007			2006
Service cost	$	54		$	56		$	1		$	1
Interest cost		137			115			4			4
Expected return on plan assets		(194	)		(166	)		-			-
Amortization of prior service credit		(13	)		(13	)		(4	)		(4	)
Recognized actuarial loss		50			55			1			1
Net Periodic Benefit Cost	$	34		$	47		$	2		$	2
Curtailment loss		-			3			-			-
Settlement loss		-			5			-			-
Special termination benefits		2			3			-			-
Total Expense	$	36		$	58		$	2		$	2


U.S. Plans only
For the Three Months Ended March 31,	Pension Benefits						Postretirement Benefits
(In millions of dollars)	2007			2006			2007			2006
Service cost	$	21		$	22		$	1		$	1
Interest cost		49			44			3			3
Expected return on plan assets		(67	)		(63	)		-			-
Amortization of prior service credit		(13	)		(13	)		(4	)		(4	)
Recognized actuarial loss		20			22			1			1
Net Periodic Benefit Cost	$	10		$	12		$	1		$	1


Significant non-U.S. Plans only
For the Three Months Ended March 31,	Pension Benefits						Postretirement Benefits
(In millions of dollars)	2007			2006			2007			2006
Service cost	$	33		$	34		$	-		$	-
Interest cost		88			71			1			1
Expected return on plan assets		(127	)		(103	)		-			-
Recognized actuarial loss		30			33			-			-
Net Periodic Benefit Cost	$	24		$	35		$	1		$	1
Curtailment loss		-			3			-			-
Settlement loss		-			5			-			-
Special termination benefits		2			3			-			-
Total Expense	$	26		$	46		$	1		$	1

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The weighted average actuarial assumptions utilized to calculate the net periodic benefit costs for the U.S. and significant non-U.S. defined benefit plans are as follows:

Combined U.S. and significant non-U.S. Plans
	Pension Benefits		Postretirement Benefits
	2007	2006	2007	2006
Weighted average assumptions:
Expected return on plan assets	8.2%	8.4%	–	–
Discount rate	5.4%	5.1%	5.8%	5.6%
Rate of compensation increase	3.8%	3.8%	–	–

11.		Debt

		MMC’s outstanding debt is as follows:

	March 31,		December 31,
(In millions of dollars)	2007		2006
Short-term:
Commercial paper	$	65	$	-
Bank borrowings		223		8
Current portion of long-term debt		757		1,103
	$	1,045	$	1,111
Long-term:
Senior notes – 7.125% due 2009	$	399	$	399
Senior notes – 5.375% due 2007 (4.0% effective interest rate)		-		501
Senior notes – 6.25% due 2012 (5.1% effective interest rate)		261		262
Senior notes – 3.625 % due 2008		250		250
Senior notes – 4.850% due 2013		249		249
Senior notes – 5.875% due 2033		295		295
Senior notes – 5.375% due 2014		647		647
Senior notes – 3 year floating rate note due 2007 (5.50% at
March 31, 2007)		500		500
Senior notes – 5.15% due 2010		548		548
Senior notes – 5.75% due 2015		746		746
Mortgage – 5.70% due 2035		466		467
Bank borrowings - International		-		94
Other		5		5
		4,366		4,963
Less current portion		757		1,103
	$	3,609	$	3,860

The weighted average interest rates on MMC’s outstanding short-term debt (excluding current portion of long-term debt) at March 31, 2007 and December 31, 2006 are 5.8% and 6.2%, respectively.

During the first quarter of 2007, MMC’s 5.375%, $500 million senior notes matured. MMC used commercial paper and bank borrowings, as well as cash on hand to manage liquidity, including the funding of the maturing bond. Commercial paper borrowings at March 31, 2007 were $65 million.

In December 2005, MMC and certain of its foreign subsidiaries entered into a $1.2 billion multi-currency revolving credit facility. Subsidiary borrowings under the facility are unconditionally guaranteed by MMC. The facility expires in December 2010. The interest rate on this facility varies based upon the level of usage of the facility and MMC’s credit ratings. The facility requires MMC to maintain certain coverage and leverage ratios tested quarterly. At March 31, 2007, approximately $215 million was outstanding under this facility.

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12.		Restructuring Costs

		2006 Plan

		In September 2006, MMC announced that it would undertake restructuring activities designed to enhance operational efficiencies and improve profitability (the “2006 Plan”). The restructuring activities are expected to be implemented in several phases – the first phase which began in September and is expected to be completed over the next two quarters, and one or more additional phases. In connection with Phase 1 of the 2006 Plan, MMC incurred net restructuring charges of $4 million during first quarter of 2007, as follows: risk and insurance services, $3 million, primarily related to severance; and consulting, $1 million. Utilization of the 2006 Plan charges for Phase 1 is summarized as follows:

									Additions/
									Changes
	Accrued			Utilized			Utilized		in	Remaining
	in			in			in		Estimates	Liability at
(In millions of dollars)	2006			2006			2007		2007	3/31/07
Severance and benefits	$	59		$	(21	)	$(16	)	$ 2	$24
Future rent on non-cancelable leases		6			(6	)	-		-	-
Other exit costs (credits)		(55	)		58		(5	)	2	-
	$	10		$	31		$(21	)	$ 4	$24

As part of its ongoing review of operations, Marsh identified additional actions that are expected to result in the elimination of 170 employee positions through staff reductions and attrition. These actions are expected to result in annualized savings of approximately $40 million and charges of approximately $45 million related to severance and exit costs for facilities. In the first quarter of 2007, Marsh incurred costs of $22 million related to these actions, primarily related to severance and exit costs for facilities and utilization of the charges is as follows:

					Additions/
	Accrued		Utilized		Changes	Remaining
	in		in 2006		in	Liability at
(In millions of dollars)	2006		and 2007		Estimates	3/31/07
Severance and benefits	$	7	$ (5	)	$21	$23
Future rent on non-cancelable leases		7	(2	)	1	6
	$	14	$ (7	)	$22	$29

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2005 Plan

In March 2005, MMC announced that it would undertake restructuring initiatives involving staff reductions and consolidations of facilities in response to MMC’s business environment (the “2005 Plan”). In connection with the 2005 Plan, MMC recorded a credit of $2 million in the three months ended March 31, 2007, in risk and insurance services. Utilization of the 2005 Plan charges is summarized as follows:

	Accrued
	in			Additions /
	2005	Utilized		Changes in			Utilized		Remaining
	and	in		Estimates			in		Liability at
(In millions of dollars)	2006	2005 and 2006		2007			2007		3/31/07
Severance and benefits	$228	$(215	)	$	1		$(4	)	$10
Future rent on non-cancelable leases	145	(80	)		(1	)	(3	)	61
Other exit costs	3	6			(2	)	2		9
	$376	$(289	)	$	(2	)	$(5	)	$80

		The expenses associated with the restructuring plans are included in Compensation and benefits or in Other operating expenses in the consolidated statements of income, and liabilities associated with these initiatives are classified on the consolidated balance sheets as Accounts payable, Other liabilities, or Accrued salaries, depending on the nature of the items.

13.		Common Stock

		MMC made no share repurchases in the first quarter of 2007.

		In the second quarter of 2007, the MMC Board of Directors approved a $500 million share repurchase program.


14.		Claims, Lawsuits and Other Contingencies

		MMC and Marsh Litigation and Regulatory Matters

		Brokerage Compensation Practices Settlement

		In January 2005, MMC and its subsidiary Marsh Inc. (“Marsh”) entered into an agreement (the “Settlement Agreement”) with the New York State Attorney General (“NYAG”) and the New York State Insurance Department (“NYSID”) to settle a civil complaint filed in New York State court by NYAG in October 2004 (the “NYAG Lawsuit”) and a related citation (the “Citation”) issued by NYSID at approximately the same time. Among other things, the NYAG Lawsuit and the Citation had alleged that Marsh’s use of market service agreements with various insurance companies entailed fraudulent business practices, bid-rigging, illegal restraint of trade and other violations of the New York business and insurance statutes, and was not adequately disclosed to Marsh’s clients or MMC’s investors. Following the announcement of the NYAG Lawsuit and related actions taken by MMC, MMC’s stock price dropped from approximately $45 per share to a low of approximately $22.75 per share.

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Pursuant to the Settlement Agreement, MMC established a fund of $850 million (the “Fund”), payable over four years, for policyholder clients in the U.S. who placed insurance through Marsh between 2001 and 2004. Approximately 70,000 eligible policyholders have elected to receive an aggregate distribution of approximately $750 million under the Fund. Clients who elected to participate in the Fund tendered a release relating to the matters alleged in the NYAG Lawsuit and the Citation, except for claims that are based upon, arise out of or relate to the purchase or sale of MMC securities. No portion of the Fund represents a fine or penalty against MMC or Marsh and no portion of the Fund will revert to MMC or Marsh.

The Settlement Agreement does not relate to any former or current employees of Marsh. Since the filing of the NYAG Lawsuit, 12 former Marsh employees have pleaded guilty to New York criminal charges relating to the matters described therein. In September 2005, eight former Marsh employees (including one individual who has since pleaded guilty) were indicted on various counts relating to these same matters. The trial against two of these individuals began in April 2007.

Related Litigation

Numerous lawsuits have been commenced against MMC, one or more of its subsidiaries, and their current and former directors and officers, relating to matters alleged in the NYAG Lawsuit, including the following:

Various putative class actions purportedly brought on behalf of policyholders were filed in or removed to several federal courts across the country. All of these federal putative class actions were transferred to the District of New Jersey for consolidated pretrial proceedings (the "MDL Cases").

In August 2005, two consolidated amended complaints were filed in the MDL Cases (one on behalf of a purported class of "commercial" policyholders and the second on behalf of a purported class of "employee benefit" policyholders), which as against MMC and certain affiliates allege statutory claims for violations of the Racketeering Influenced and Corrupt Organizations (“RICO”) Act and federal and state antitrust laws, together with common law claims for breach of fiduciary duty and unjust enrichment. The complaints seek a variety of remedies, including unspecified monetary damages, treble damages, disgorgement, restitution, punitive damages, declaratory and injunctive relief, and attorneys' fees and costs. The class periods alleged in the MDL Cases begin on August 26, 1994 and purport to continue to the date of any class certification. The plaintiffs have moved for class certification; a hearing on this motion has not yet been scheduled. On April 5, 2007, the district court dismissed without prejudice plaintiffs’ RICO and federal antitrust claims, as well as their state law claims. The Court gave plaintiffs leave to file an amended complaint.

Four class or representative actions on behalf of policyholders are pending in state courts. There are also 23 actions brought by individual policyholders and others in federal and state courts relating to matters alleged in the NYAG Lawsuit. MMC expects that all policyholder actions filed in the U.S. federal courts will be transferred to the District of New Jersey as described above. In addition, two putative class actions and one individual policyholder action are pending in Canada.

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In January 2005, the State of Connecticut brought an action against MMC, Marsh and certain Marsh subsidiaries in Connecticut Superior Court. As subsequently amended, the State’s complaint alleges that the defendants violated Connecticut’s Unfair Trade Practices Act by accepting $50,000 from an insurer in connection with a placement Marsh made for the State; violated Connecticut’s antitrust and unfair trade practices acts by engaging in bid rigging and other improper conduct that purportedly damaged particular customers and inflated insurance premiums; improperly accepted contingent commissions and concealed these commissions from their clients; and engaged in negligent misrepresentation and breach of fiduciary duty. The State seeks various monetary damages and injunctive relief. Discovery has been stayed pending motions and related proceedings on the pleadings.
On March 14, 2006, the State of Florida brought an action against MMC, Marsh and certain Marsh subsidiaries in Florida state court, alleging that the defendants violated Florida’s RICO and antitrust laws by engaging in bid rigging and other improper conduct which inflated insurance premiums, and by receiving undisclosed additional compensation. The complaint alleges that these actions caused damage to the State, Florida governmental entities and Florida businesses and residents, and seeks the forfeiture of all undisclosed compensation, treble damages, civil penalties, attorneys’ fees and costs and injunctive and other equitable relief. Discovery has commenced in this action.
A consolidated purported class action is pending in the United States District Court for the Southern District of New York on behalf of individuals and entities who purchased or acquired MMC’s publicly-traded securities during the purported class period of October 14, 1999 to October 13, 2004 (the “MMC SDNY Securities Case”). The pending complaint of the lead plaintiffs in this action names MMC, Marsh, MMC’s former CEO and one former Marsh officer as defendants. The plaintiffs allege, among other things, that MMC artificially inflated its share price by making misrepresentations and omissions relating to Marsh’s market service agreements and business practices. Plaintiffs allege that MMC also failed to disclose alleged anti-competitive and illegal practices at Marsh, such as “bid rigging” and soliciting fictitious quotes.

The complaint includes factual allegations similar to those asserted in the NYAG Lawsuit, as well as factual allegations concerning alleged misconduct at MMC’s subsidiaries Mercer and Putnam, and alleged conflicts of interest associated with MMC’s former private equity subsidiary, MMC Capital. The complaint includes claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Sections 11 of the Securities Act of 1933, based on MMC’s allegedly false or incomplete disclosures. MMC has responded to the complaint and formal discovery in this matter has commenced. The federal securities claims in a separate shareholder action were transferred for consideration in connection with the federal securities claims asserted in the MMC SDNY Securities Case. The plaintiff in this separate action has purported to assert an individual claim under Section 14(a) of the Securities Exchange Act of 1934.
A number of individual shareholder actions against MMC and others are pending in various state courts. One such action filed in California state court has been removed and transferred for inclusion in the MMC SDNY Securities case. Two related shareholder actions are pending in New York state court; and individual shareholder actions are also pending in Oregon and California state courts.

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Several shareholder derivative actions are pending against MMC’s current and former directors and officers. Six have been consolidated as a single action in the Court of Chancery of the State of Delaware (the “Delaware Derivative Action”), and five have been consolidated as a single action in the United States District Court for the Southern District of New York (the “Federal Derivative Action”). One action is pending in the New York Supreme Court for New York County. These shareholder derivative actions allege, among other things, that current and former directors and officers of MMC breached their fiduciary duties with respect to the alleged misconduct described in the NYAG Lawsuit, are liable to MMC for damages arising from their alleged breaches of fiduciary duty, and must contribute to or indemnify MMC for any damages MMC has suffered. The derivative action pending in the New York Supreme Court has been stayed pending resolution of the Federal Derivative Action. The Federal Derivative Action has been stayed in favor of the Delaware Derivative Action, which remains in its preliminary stages.

MMC has also received six demand letters from stockholders asking the MMC Board of Directors to take appropriate legal action against those directors and officers who are alleged to have caused damages to MMC based on the facts alleged in the NYAG Lawsuit. MMC has advised the stockholders making demands that their demands remain under consideration by the MMC Board of Directors.
A proceeding consolidating twenty purported class actions alleging violations of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), is pending in the United States District Court for the Southern District of New York on behalf of participants and beneficiaries of the Marsh & McLennan Companies Stock Investment Plan (the “Plan”). The consolidated class action complaint names MMC and various current and former employees, officers and directors as defendants and alleges, among other things, that in view of the purportedly fraudulent bidding activity and the receipt of contingent commissions pursuant to the market service agreements referred to above, the defendants knew or should have known that the investment of the Plan’s assets in MMC stock was imprudent. The consolidated complaint also asserts that certain defendants failed to provide the Plan’s participants with complete and accurate information about MMC stock, that certain defendants responsible for selecting, removing and monitoring other fiduciaries did not comply with ERISA, and that MMC knowingly participated in other defendants’ breaches of fiduciary duties. The consolidated complaint seeks, among other things, unspecified compensatory damages, injunctive relief and attorneys’ fees and costs. The amount of Plan assets invested in MMC stock at October 13, 2004 (immediately prior to the announcement of the NYAG Lawsuit) was approximately $1.2 billion. The consolidated complaint alleges that during the purported class period, which extends from July 1, 2000 until January 31, 2005, MMC’s stock price fell from $52.22 to $32.50. In December 2006, the court granted in part and denied in part the motions to dismiss filed by MMC and the other defendants. Discovery is commencing in this matter.

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In February 2005, the plaintiffs in a shareholder derivative suit pending in the Delaware Court of Chancery (the “AIG Delaware Suit”) against the directors and officers of American International Group, Inc. (“AIG”) filed a consolidated complaint which, as subsequently amended, names as additional defendants MMC, Marsh, Marsh USA Inc., Marsh Global Broking Inc. (collectively, the “MMC Corporate Defendants”), MMC’s former CEO, and five former Marsh employees who have pleaded guilty to certain criminal charges (the former CEO and former employees, together with the MMC Corporate Defendants, the “MMC Defendants”). The AIG Delaware Suit alleges, among other things, that the MMC Defendants, certain AIG employees and others engaged in conspiracy and common law fraud with respect to the alleged misconduct described in the NYAG Lawsuit, including, but not limited to, illegal bid rigging and kickback schemes, and that AIG was harmed thereby. This action further alleges that the MMC Corporate Defendants aided and abetted the current and former directors and officers of AIG in breaching their fiduciary duties to AIG with respect to AIG’s participation in the alleged misconduct and that the MMC Corporate Defendants were unjustly enriched. The consolidated complaint asserts that the MMC Defendants are liable to AIG for damages and also seeks the return of all contingent commission payments made by AIG to the MMC Corporate Defendants.

In May 2005, the plaintiffs in a shareholder derivative suit pending in the United States District Court for the Southern District of New York (the “AIG Federal Suit”) against the directors and officers of AIG filed a consolidated complaint naming MMC, Marsh USA, Inc., Marsh Global Broking, Inc. and MMC’s former CEO as additional defendants. Based on similar factual allegations as in the AIG Delaware Suit, the plaintiffs assert claims against MMC and the former CEO for allegedly aiding and abetting breaches of fiduciary duties by AIG's directors and officers and for unjust enrichment, and seek damages and the disgorgement of contingent commissions. Both the AIG Delaware Suit and the AIG Federal Suit are stayed by orders of the respective courts pending review by a special litigation committee formed by the AIG board of directors. In addition, plaintiffs’ counsel in a federal securities fraud purported class action against AIG and others (to which MMC is not a party) relating to price declines in AIG’s stock has indicated that plaintiffs may assert claims against MMC in that action.

Related Regulatory Matters

Following the filing of the NYAG Lawsuit, MMC and certain of its subsidiaries received notices of investigations and inquiries, together with requests for documents and information, from attorneys general, departments of insurance and other state and federal governmental entities in a number of jurisdictions (other than New York) that relate to the allegations in the NYAG Lawsuit. MMC and its subsidiaries have cooperated with these requests from regulators. MMC has been contacted by certain of the above state entities indicating that they may file civil actions or otherwise seek additional monetary or other remedies from MMC.
In September 2005, the National Association of Insurance Commissioners (the “NAIC”) issued a press release indicating that over 30 state insurance regulators (including several referred to in the preceding paragraph) working collaboratively through the NAIC had reached a multi-state regulatory settlement with MMC and Marsh. The NAIC settlement agreement reaffirms MMC’s commitment, under the Settlement Agreement with NYAG and the NYSID, to establish a no-fault compensation fund for policyholder clients across the United States, and provides for state-by-state enforcement of the business reforms agreed to be implemented pursuant to the Settlement Agreement. The NAIC settlement agreement has been executed by MMC and Marsh, and the NAIC has advised that the agreement has been adopted by insurance commissioners in 33 states, the District of Columbia and Guam.

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Putnam-Related Matters

On January 31, 2007, MMC entered into a stock purchase agreement (the “Putnam Sale Agreement”) with Great-West Lifeco Inc. (“GWL”), a majority-owned subsidiary of Power Financial Corporation, pursuant to which GWL has agreed to purchase Putnam Investments Trust. The Putnam Sale Agreement provides that MMC will indemnify GWL with respect to certain Putnam-related litigation and regulatory matters following the closing of this transaction. Certain of the matters described below are subject to this indemnification provision, as further indicated below. MMC expects the sale of Putnam to close in mid-2007. A copy of the Putnam Sale Agreement is attached as Exhibit 10.1 to the Current Report on Form 8-K filed by MMC with the SEC on February 1, 2007.

Regulatory Matters

In 2003 and 2004, Putnam entered into settlements (the “Putnam Trading Settlements”) with the Securities and Exchange Commission (the “SEC”) and the Commonwealth of Massachusetts (the "Massachusetts Securities Division") with respect to excessive short-term trading by certain former Putnam employees in shares of the Putnam mutual funds (the “Putnam Funds”). Under the Putnam Trading Settlements, Putnam agreed to pay a total of $193.5 million ($108.5 million in restitution and $85 million in civil fines and penalties). In addition to the $108.5 million in restitution, Putnam Funds shareholders will receive a distribution of $45 million from the civil penalty Putnam previously paid to the SEC. An independent distribution consultant has developed a proposed plan that provides for the distribution of the restitution amounts to Putnam Funds shareholders. The proposed plan is currently being reviewed by the staffs of the SEC and the Massachusetts Securities Division. On March 30, 2007, the SEC published the proposed plan for a public comment period ending on April 30, 2007. Putnam will incur additional costs in connection with implementing the distribution plan.
Commencing in July 2004, the Enforcement Staff of the SEC’s Boston Office inquired into the calculation of certain cost reimbursements paid by the Putnam Funds to Putnam for transfer agent services relating to defined contribution operations within Putnam Fiduciary Trust Company (“PFTC”). Following review by Putnam and the Trustees of the Putnam Funds, Putnam paid the Putnam Funds approximately $37 million to resolve these issues.
In October 2004, the Department of Labor (“DOL”) indicated its preliminary belief that Putnam may have violated certain provisions of ERISA related to investments by the Putnam Profit Sharing Retirement Plan and certain discretionary ERISA accounts in Putnam Funds that pay 12b-1 fees. In December 2004 and April 2007, Putnam made written submissions to the DOL addressing these issues. Putnam and the DOL have entered into a tolling agreement and are exchanging further information pertaining to this issue.

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"Market-Timing"-Related Litigation

MMC and Putnam have received a substantial number of civil complaints, filed in various state and federal courts, based on allegations of "market-timing" and, in some cases, “late trading” activities. All of the actions filed in federal court have been transferred, along with actions against other mutual fund complexes, to the United States District Court for the District of Maryland for coordinated or consolidated pretrial proceedings. The lead plaintiffs in those cases filed consolidated amended complaints in September 2004. MMC and Putnam moved to dismiss the various complaints pending in federal court in Maryland, which are described below:

Putnam is a defendant in a complaint filed on behalf of a putative class of investors in certain Putnam Funds (the “Putnam Class Action”). A separate complaint filed by certain fund investors purporting to assert derivative claims on behalf of all Putnam Funds (the “Putnam Derivative Action”) named as defendants MMC, Putnam, various Putnam affiliates, certain trustees of the Putnam Funds, certain present and former Putnam officers and employees, and persons and entities that allegedly engaged in or facilitated market-timing or late trading activities in the Putnam Funds. Both suits seek to recover unspecified damages allegedly suffered by the funds and their shareholders as a result of purported market-timing and late trading activity that allegedly occurred in certain Putnam Funds. The Putnam Derivative Action seeks additional relief, including termination of the investment advisory contracts between Putnam and the Funds, cancellation of the Funds’ 12b- 1 plans and the return of all advisory and 12b-1 fees paid by the Funds over a certain period of time. In the Putnam Derivative Action, the court has dismissed all claims against MMC and all claims against Putnam except a claim under Section 36(b) of the Investment Company Act. The complaint in the Putnam Class Action, which has been amended following the court’s dismissal of certain other claims in the initial complaint (including all claims against MMC), asserts against Putnam claims under Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, Section 20(a) of the Exchange Act, and Section 36(b) of the Investment Company Act of 1940. Putnam has answered this amended complaint and the parties are engaged in fact discovery in this matter.
A complaint asserting shareholder derivative claims, purportedly on behalf of MMC, was filed against current and former members of MMC’s Board of Directors, two of Putnam’s former officers, and MMC as a nominal defendant (the “MMC Derivative Action”). The MMC Derivative Action generally alleges that the members of MMC’s Board of Directors violated the fiduciary duties they owed to MMC and its shareholders by failing to provide oversight regarding market-timing in the Putnam Funds, as a result of which MMC suffered damages. The suit seeks unspecified damages and equitable relief. Pursuant to an agreement of the parties, the MMC Derivative Action was stayed in May 2005.
MMC, Putnam, and various of their current and former officers, directors and employees have been named as defendants in two consolidated amended complaints that purportedly assert class action claims under ERISA (the "ERISA Actions"). The ERISA Actions, which have been brought by participants in MMC's Stock Investment Plan and Putnam's Profit Sharing Retirement Plan, allege, among other things, that, in view of the market-timing trading activity that was allegedly allowed to occur at Putnam, the defendants knew or should have known that the investment of the plans' funds in MMC stock and the Putnam Funds was

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imprudent and that the defendants breached their fiduciary duties to the plan participants in making these investments. The ERISA Actions seek unspecified damages and equitable relief, including the restoration to the plans of all profits the defendants allegedly made through the use of the plans’ assets, an order compelling the defendants to make good to the plans all losses to the plans allegedly resulting from defendants’ alleged breaches of their fiduciary duties, and the imposition of a constructive trust on any amounts by which any defendant allegedly was unjustly enriched at the expense of the plans. On September 15, 2006, the ERISA Action regarding the Putnam Profit Sharing Retirement Plan was dismissed against all defendants. The plaintiff has appealed that decision. In November 2006 the parties agreed to stay the ERISA Action regarding the MMC Stock Investment Plan.

A number of the Putnam Funds have been named as defendants in a purported class action brought on behalf of certain holders of the funds' Class B shares who either (i) held such shares and were subject to certain contingent deferred sales charges ("CDSCs") as of October 28, 2003, or (ii) were assessed a CDSC for redeeming such shares on or after October 28, 2003. Plaintiff alleges that Putnam engaged in misconduct constituting a breach of contract and breach of the covenant of good faith and fair dealing with purported class members by allowing market-timing. Plaintiff seeks, among other things, actual damages or statutory damages of $25 for each class member (whichever is greater) and relief from paying a CDSC for redeeming Class B shares. In August 2005, this action was transferred to the consolidated proceedings in the United States District Court for the District of Maryland, described above.
Certain Putnam entities have been named as defendants in a suit brought in the District Court of Travis County, Texas by a former institutional client, the Employee Retirement System of Texas. Plaintiff alleges that Putnam breached its investment management advisory agreement and did not make appropriate disclosures at the time the investment management advisory agreement was executed.

Putnam has agreed to indemnify the Putnam Funds for any liabilities arising from market-timing activities, including those that could arise in the above securities litigations, and MMC has agreed to guarantee Putnam's obligations in that regard.

As discussed more fully in Article 11.02(a)(iii) of the Putnam Sale Agreement, MMC will indemnify GWL for any Damages (as defined in the Putnam Sale Agreement) arising from any claim, action, suit, investigation, proceeding or inquiry currently pending or arising before December 31, 2008, that results from any alleged “market timing” activity in trading by any person in the Putnam Funds (including frequent trading and late trading), as that term was used in the proceedings brought by the SEC and the Massachusetts Securities Division that were the subject of the Putnam Trading Settlements, to the extent the alleged activity occurs before the closing of the sale of Putnam.

Other Putnam Litigation

Putnam Investment Management LLC and Putnam Retail Management Limited Partnership have been sued in the United States District Court for the District of Massachusetts for alleged violations of Section 36(b) of the Investment Company Act of 1940 in connection with the receipt of purportedly excessive advisory and distribution fees paid by certain Putnam Funds in which plaintiffs purportedly owned shares (the “Putnam Excessive Fee Litigation”). Plaintiffs seek, among other things, to recover certain advisory and distribution fees paid to defendants, rescission of the management and distribution agreements between defendants and the funds, and a prospective reduction in fees. The parties are engaged in fact discovery.

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As described more fully in Section 11.02(a)(iii) of the Putnam Sale Agreement, MMC will indemnify GWL for any Damages (as defined in the Putnam Sale Agreement) arising under (i) the Putnam Excessive Fee Litigation and (ii) any further claim, action, suit, investigation, proceeding or inquiry arising before the third anniversary of the closing of the sale of Putnam that results from the same specific conduct ( i.e. , the same particular actions or conduct at the same particular time and involving the same mutual funds) involving “excessive fees” purportedly violating Section 36(b) of the Investment Company Act that is the subject of the Putnam Excessive Fee Litigation.

Other Governmental Inquiries Relating to MMC and its Subsidiaries

Since early 2003, the SEC has issued two subpoenas to MMC or its affiliates and has made additional requests for information relating to the SEC's investigation of loss mitigation products. MMC and its subsidiaries have received similar inquiries from regulators and other authorities in several states. In April 2005, the Office of Insurance Regulation in the State of Florida issued a subpoena to MMC’s subsidiary Guy Carpenter & Company, Inc. concerning certain reinsurance products. In May 2005, the Office of Insurance and Fire Safety Commissioner in the State of Georgia issued a subpoena to MMC that requested, among other things, information relating to finite insurance placements. In May 2005, the Office of the Attorney General in the State of Connecticut issued a subpoena to MMC concerning finite insurance. MMC and its subsidiaries are cooperating with these and other informal inquiries relating to loss mitigation products.
In February 2005, the DOL served a subpoena on MMC seeking documents pertaining to services provided by MMC subsidiaries to employee benefit plans, including documents relating to how such subsidiaries have been compensated for such services. The request also sought information concerning market service agreements and the solicitation of bids from insurance companies in connection with services to employee benefit plans. MMC is cooperating with the DOL.
In December 2004, MMC received a request for information pursuant to a formal investigation commenced by the SEC. The request for information seeks documents concerning related-party transactions of MMC or MMC subsidiaries in which transactions a director, executive officer or 5% stockholder of MMC had a direct or indirect material interest. In April 2005, MMC received a subpoena from the SEC broadening the scope of the original request. MMC is cooperating in the investigation. Certain current and former employees of MMC have been deposed in connection with this matter.

Other Matters Relating to MMC and its Subsidiaries

The governor of Alaska has introduced a bill in the state legislature seeking funding to institute a lawsuit against Mercer HR. Mercer understands that the lawsuit, if instituted, would seek potentially significant damages relating to Mercer HR's performance of consulting services for Alaska's public employee pension fund.

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MMC and its subsidiaries are subject to a significant number of other claims, lawsuits and proceedings in the ordinary course of business. Such claims and lawsuits consist principally of alleged errors and omissions (known as E&O’s) in connection with the performance of professional services. Some of these claims seek damages, including punitive damages, in amounts that could, if awarded, be significant. MMC provides for these exposures by a combination of third-party insurance and self-insurance. For policy years 2000-2001 and prior, substantial third-party insurance is in place above the annual aggregate limit of MMC’s self- insured retention, which was $50 million annually for policy years 1998-1999, 1999-2000 and 2000-2001. To the extent that expected losses exceed MMC’s self-insured retention in any policy year, MMC records an asset for the amount that MMC expects to recover under its third-party insurance programs. The policy limits and coverage terms of the third-party insurance vary to some extent by policy year, but MMC is not aware of coverage defenses or other obstacles to coverage that would limit recoveries in those years in a material amount. In policy years subsequent to 2000-2001, the availability of third-party insurance has declined substantially, which has caused MMC to assume increasing levels of self- insurance. MMC utilizes internal actuarial and other estimates, and case level reviews by inside and outside counsel, to establish loss reserves which it believes are adequate to provide for this self-insured retention. These reserves are reviewed quarterly and adjusted as developments warrant.
In connection with its acquisition of U.K.-based Sedgwick Group in 1998, MMC acquired several insurance underwriting businesses that were already in run-off, including River Thames Insurance Company Limited (“River Thames”), which MMC sold in 2001. Sedgwick guaranteed payment of claims on certain policies underwritten through the Institute of London Underwriters (the “ILU”) by River Thames (such guarantee being hereinafter referred to as the “ILU Guarantee”). The policies covered by the ILU Guarantee are reinsured up to £40 million by a related party of River Thames. Payment of claims under the reinsurance agreement is collateralized by segregated assets held in a trust. As of March 31, 2007, the reinsurance coverage exceeded the best estimate of the projected liability of the policies covered by the ILU Guarantee. To the extent River Thames or the reinsurer is unable to meet its obligations under those policies, a claimant may seek to recover from MMC under the ILU Guarantee.
From 1980 to 1983, MMC owned indirectly the English & American Insurance Company (“E&A”), which was a member of the ILU. The ILU required MMC to guarantee a portion of E&A’s obligations. After E&A became insolvent in 1993, the ILU agreed to discharge the guarantee in exchange for MMC’s agreement to post an evergreen letter of credit that is available to pay claims by policyholders on certain E&A policies issued through the ILU and incepting between July 3, 1980 and October 6, 1983. In April, 2006, a lawsuit was commenced in the Commercial Court in London against MMC and the ILU by an assignee of an E&A policyholder that purports to have a claim against the MMC letter of credit in the amount of approximately $8.5 million and seeks a judicial declaration of its rights as an assignee of a policyholder claim. MMC is contesting the claim. MMC anticipates that additional claimants may seek to recover against the letter of credit.

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		The proceedings and other matters described in this Note 14 on Claims, Lawsuits and Other Contingencies may expose MMC to liability for significant monetary damages and other forms of relief. Where a loss is both probable and reasonably estimable, MMC has established reserves in accordance with SFAS No. 5, “Accounting for Contingencies”. Except as specifically set forth above, MMC's management is unable, at the present time, to provide a reasonable estimate of the range of possible loss attributable to the foregoing matters or the impact they may have on MMC's consolidated results of operations or financial position (over and above MMC’s existing loss reserves) or MMC’s cash flows (to the extent not covered by insurance). The principal reasons for this are that many of these cases, particularly the matters related to “market service agreements” and “market-timing”, remain in their early stages and only limited discovery, if any, has taken place. Thus, at this time, it is not possible to reasonably estimate the possible loss or range of loss on these matters. Adverse determinations in one or more of the matters discussed above could have a material impact on MMC's financial condition or the results of MMC’s operations in a future period.

15.		Variable Interest Entities

		Putnam manages $6.2 billion in the form of collateralized debt obligations (“CDOs”), collateralized loan obligations (“CLOs”) and collateralized bond obligations (“CBOs”). Separate limited liability companies were established to issue the notes and to hold the underlying collateral, which consists of high-yield bonds and other securities. Putnam serves as the collateral manager for the CDOs, CLOs and CBOs. The maximum loss exposure related to the CDOs, CLOs and CBOs is limited to Putnam’s investment totaling $4.5 million, and certain of these CDOs and CLOs are reflected in assets of discontinued operations in the consolidated balance sheets at March 31, 2007. MMC has concluded it is not the primary beneficiary of these structures under FIN 46(R) “Consolidation of Variable Interest Entities” (“FIN 46(R)”).

		In January 2007, MMC, through a subsidiary, invested approximately $25 million in MaRI Ltd. (“MaRI”) a Bermuda-domiciled reinsurance company. MaRI was created to provide reinsurance capacity for specified windstorm and earthquake risks for Marsh clients for a specifically defined underwriting period. MMC, through its subsidiary Victor O. Schinnerer & Company (Bermuda) Ltd., will also provide underwriting management services to MaRI. MMC’s maximum exposure to loss from MaRI is limited to its $25 million investment. MMC has concluded that it is not the primary beneficiary of MaRI under FIN 46(R).

16.		Segment Information

		MMC is organized based on the types of services provided. Under this organizational structure, MMC’s business segments are:

Risk and Insurance Services , comprising insurance services (Marsh), reinsurance services (Guy Carpenter), and Risk Capital Holdings;
Risk Consulting and Technology (Kroll);
Consulting , comprising Mercer Human Resource Consulting and Mercer’s Specialty Consulting businesses; and
Investment Management (Putnam)

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The accounting policies of the segments are the same as those used for the consolidated financial statements described in Note 1. The information in the following tables excludes the results of Putnam, Kroll Securities International, Price Forbes and SCMS, which are classified as discontinued operations. Revenues are attributed to geographic areas on the basis of where the services are performed. Segment performance is evaluated based on segment operating income, which includes investment income and losses attributable to each segment, directly related expenses, and charges or credits related to integration and restructuring but not MMC corporate-level expenses.

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Selected information about MMC's operating segments for the three-month periods ended March 31, 2007 and 2006 follows:

				Operating
(In millions of dollars)	Revenue			Income
2007 –
Risk and Insurance Services	$	1,483	^(a)	$	259
Risk Consulting & Technology		235	^(b)		26
Consulting		1,129	^(c)		138
Total Operating Segments	$	2,847		$	423
Corporate / Eliminations		(35	)		(36	)
Total Consolidated	$	2,812		$	387

2006 –
Risk and Insurance	$	1,473	^(a)	$	268
Risk Consulting & Technology		234	^(b)		24
Consulting		1,001	^(c)		113
Total Operating Segments	$	2,708		$	405
Corporate / Eliminations		(34	)		(68	)
Total Consolidated	$	2,674		$	337

^(a)		Includes interest income on fiduciary funds of $44 million in 2007 and $38 million in 2006, respectively.
^(b)		Includes inter-segment revenue of $3 million and $2 million in 2007 and 2006, respectively.
^(c)		Includes inter-segment revenue of $33 million and $32 million in 2007 and 2006, respectively and interest income on fiduciary funds of $4 million in 2007 and $3 million in 2006, respectively.

Operating segment revenue by product for the three-month periods ended March 31, 2007 and 2006 is as follows:

(In millions of dollars)	2007			2006
Risk and Insurance Services
Insurance Services	$	1,142		$	1,146
Reinsurance Services		292			281
Risk Capital Holdings		49			46
Total Risk and Insurance Services		1,483			1,473
Risk Consulting & Technology		235			234
Consulting
Human Resource Consulting		800			739
Specialty Consulting		329			262
Total Consulting		1,129			1,001
Total Operating Segments		2,847			2,708
Corporate Eliminations		(35	)		(34	)
Total	$	2,812		$	2,674

17. New Accounting Pronouncements

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This interpretation requires that MMC recognize in its consolidated financial statements the impact of a tax position when it is more likely than not that the tax position would be sustained upon examination by the tax authorities based on the technical merits of the position. As a result of the implementation of FIN 48, the Company recognized an increase in the liability for unrecognized tax benefits of approximately $13 million, which is accounted for as a reduction to the January 1, 2007 balance of retained earnings. The term “unrecognized tax benefits” in FIN 48 primarily refers to the differences between a tax position taken or expected to be taken in a tax return and the benefit measured and recognized in the financial statements in accordance with the guidelines of FIN 48. Including this increase, MMC had approximately $272 million of total gross unrecognized tax benefits at the beginning of 2007. Of this total, $218 million represents the amount of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate in any future periods.

MMC classifies interest and penalties relating to uncertain tax positions in the financial statements as income taxes. The total gross amount of such accrued interest and penalties, before any applicable federal benefit, at January 1, 2007 was $40 million.

MMC is routinely examined by the jurisdictions in which it has significant operations. The Internal Revenue Service is examining tax years 2003 through 2005. New York is examining years 2000 through 2005 for various subsidiaries. California is examining years 2003 through 2005 and years 1997 through 2002 are in various stages of appeal. Massachusetts is examining years 1997 through 2004 for various subsidiaries. Inland Revenue in the United Kingdom is examining tax years 2002 through 2004 for various subsidiaries. Earlier years are closed in all of the foregoing jurisdictions. MMC regularly considers the likelihood of assessments in each of the taxing jurisdictions resulting from examinations and has established appropriate liabilities in relation to the potential assessments. MMC believes the resolution of tax matters will not have a material effect on the consolidated financial condition of MMC, although a resolution could have a material impact on MMC’s net income or cash flows and on its effective tax rate in a particular future period.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”), which defines fair value, establishes a framework for measuring fair value, and expands required disclosures about fair value measurements. The provisions of SFAS 157 are effective as of the beginning of MMC’s 2008 fiscal year. MMC is currently evaluating the impact of adopting SFAS 157 on its consolidated financial statements.

In February 2007, the FASB issued SFAS 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 permits an entity to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The adjustment to reflect the difference between fair value and the carrying amount would be accounted for as a cumulative effect adjustment to retained earnings as of the date of adoption. The Company is currently assessing the impact of SFAS 159 on its consolidated financial position and results of operations.

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Items 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. See “Information Concerning Forward-Looking Statements” at the outset of this report. This Form 10-Q should be read in conjunction with MMC’s Annual Report on Form 10-K for the year ended December 31, 2006 (the “2006 10-K”).

General
Marsh & McLennan Companies, Inc. and Subsidiaries (“MMC”) is a global professional services firm. MMC subsidiaries include Marsh Inc. (“Marsh”), the world’s largest risk and insurance services firm; Kroll Inc. (“Kroll”), the world’s leading risk consulting company; Mercer Inc. (“Mercer”), a major global provider of human resource and specialty consulting services; and Putnam Investments (“Putnam”), one of the largest investment management companies in the United States. Approximately 55,000 employees worldwide provide analysis, advice and transactional capabilities to clients in over 100 countries.

MMC’s business segments are based on the services provided. Risk and Insurance Services includes risk management and insurance and reinsurance broking and services, provided primarily by Marsh and Guy Carpenter. Risk Consulting and Technology, conducted through Kroll, includes risk consulting and related investigative, intelligence, financial, security and technology services. Consulting, which comprises the activities of Mercer Human Resource Consulting and Mercer’s Specialty Consulting Businesses, includes human resource consulting and related services, and specialized management and economic consulting services. We conduct Investment Management through Putnam. Please see Note 8 to the consolidated financial statements, which discusses MMC’s agreement to sell its interest in Putnam to Great-West Lifeco Inc. As a result of the agreement to sell Putnam,the financial results of Putnam are recorded as discontinued operations in the consolidated income statements and consolidated balance sheets.

As described more fully below, results of operations in the first quarter of 2007 and 2006 reflect, among other items:

the classification of Putnam as a discontinued operation during the first quarter of 2007;
the sale of Sedgwick Claims Management Services in the first quarter of 2006, the gain on which appears in discontinued operations;
restructuring savings and charges under MMC’s 2005 and 2006 restructuring plan;
the classification of Price Forbes, MMC’s U.K.-based wholesale brokerage business as a discontinued operation in the first quarter of 2006. The 2006 results of Price Forbes include a charge to reduce the carrying amount of its assets to fair value; and
the classification of Kroll Security International (“KSI”), Kroll’s international high-risk asset and personal protection business, as a discontinued operation during the first quarter of 2007.

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Critical Accounting Policies

For a description of critical accounting policies, including those which involve significant management judgment, see Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 1 to the consolidated financial statements in MMC’s Annual Report on Form 10-K for the year ended December 31, 2006 (“2006 10-K”).

Consolidated Results of Operations

(In millions, except per share figures )	2007		2006
Revenue:
Service Revenue	$	2,763	$	2,623
Investment Income (Loss)		49		51
Operating Revenue		2,812		2,674
Expense:
Compensation and Benefits		1,677		1,586
Other Operating Expenses		748		751
Operating Expense		2,425		2,337
Operating Income	$	387	$	337
Income From Continuing Operations	$	228	$	200
Discontinued Operations, net of tax		40		216
Net Income	$	268	$	416
Income from Continuing Operations Per Share:
Basic		$0.41		$0.37
Diluted		$0.41		$0.36
Net Income Per Share:
Basic		$0.49		$0.76
Diluted		$0.47		$0.75
Weighted Average Number of Shares Outstanding:
Basic		553		547
Diluted		562		555

Consolidated operating income in the first quarter of 2007 increased 15% to $387 million, resulting from a 5% increase in revenue, partly offset by a 4% increase in operating expense. The increase in revenue was primarily due to a 13% increase in consulting revenue, reflecting a 7% increase in underlying revenue and the impact of foreign exchange translation. The expense increase reflects higher compensation and benefit costs, primarily in the consulting segment, plus the impact of foreign exchange translation, partly offset by cost savings from restructuring activities.

Putnam’s results of operations for the three-month periods ended March 31, 2007 and 2006 are segregated and reported as discontinued operations in the accompanying consolidated statements of income.

In 2006, MMC sold its majority interest in SCMS, a provider of claims management and associated productivity services; Price Forbes, its U.K.-based insurance wholesale operation; and Kroll Security International (“KSI”), its international high-risk asset and personal protection business. The operating results for these companies, as well as the gain on disposal of SCMS and the charge to reduce the carrying value of Price Forbes to fair value, are included in discontinued operations in the accompanying consolidated statement of income for the three months ended March 31, 2006.

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Consolidated Revenue and Expense

Revenue for the quarter of $2.8 billion was 5% higher than the same period in the prior year. Revenue increased in all business segments, led by the consulting segment, which increased 13% versus last year. Revenue increased 1% versus prior year on an underlying basis, which measures the change in revenue before the impact of acquisitions and dispositions and using consistent currency exchange rates.

MMC has offices in many countries, as a result of which the impact of foreign exchange rate movements may distort period-to-period comparison of revenue. Similarly, the revenue impact of acquisitions and dispositions may impact period-over-period comparisons of revenue. Underlying revenue measures the change in revenue from one period to another by isolating these impacts. The impact of foreign currency translation, acquisitions and dispositions on MMC’s operating revenues by segment for the three month period ended March 31, 2007 compared to the same period in 2006 is as follows:

							Components of Revenue Change
	Three Months Ended				% Change				Acquisitions/
	March 31,				GAAP		Currency		Dispositions		Underlying
(In millions, except percentage figures)	2007		2006		Revenue		Impact		Impact		Revenue
Risk and Insurance Services
Insurance Services	$ 1,142		$1,146		-		3	%	-		(3	)%
Reinsurance Services	292		281		4	%	2	%	-		2	%
Risk Capital Holdings (a)	49		46		9	%	-		-		9	%
Total Risk and Insurance Services	1,483		1,473		1	%	3	%	-		(2	)%
Risk Consulting & Technology (b)	235		234		1	%	3	%	(2	)%	-
Consulting
Human Resource Consulting	800		739		8	%	4	%	-		4	%
Specialty Consulting	329		262		25	%	5	%	5	%	15	%
Total Consulting	1,129		1,001		13	%	4	%	2	%	7	%
Total Operating Segments (b)	2,847		2,708		5	%	3	%	1	%	1	%
Corporate Eliminations	(35	)	(34	)
Total Revenue (b)	$2,812		$2,674		5	%	3	%	1	%	1	%

(a)		Risk Capital Holdings owns MMC’s investments in private equity funds and insurance and financial services firms.
(b)		Certain reclassifications have been made to prior year amounts to conform with current presentation. The data presented excludes Putnam and KSI, a business of Kroll, which is included in discontinued operations.

Revenue in the risk and insurance services segment increased 1% from the same period in 2006. Underlying revenue decreased 2%, driven by a 3% decline at Marsh due to lower renewal revenues in the Americas, predominantly in the United States. This decrease was partly offset by a 2% underlying increase at Guy Carpenter due to new business and a 9% underlying increase at Risk Capital Holdings derived from its private equity fund investments. Revenue increased 1% in risk consulting & technology. Consulting revenue increased 13%, resulting from a 25% increase in Mercer’s specialty consulting businesses and 8% growth in human resource consulting. On an underlying basis, Consulting revenue increased 7%, 15% in Mercer’s specialty consulting businesses and 4% in Mercer HR.

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Consolidated operating expenses in the first quarter of 2007 increased 4% from the same period in 2006. The increase in operating expenses is due to higher compensation and benefit costs, primarily in the consulting segment, plus the impact of foreign exchange translation, partly offset by cost savings from restructuring initiatives.

Restructuring and Related Activities

2006 Plan

In September 2006, MMC announced cost savings initiatives related to firm-wide infrastructure, organization structure and operating company business processes, expected to result in annualized savings of approximately $350 million when fully implemented by the end of 2008, and entailing restructuring and related costs of approximately $225 million. These cost savings initiatives will be implemented in several phases; Phase 1 began in September 2006. The discussion below identifies the areas impacted and savings expected from various phases of the 2006 Plan.

Phase 1 of the 2006 Plan is expected to result in cost savings of approximately $160 million, comprised of $70 million from operating company process improvements and $90 million from corporate infrastructure and process improvements in IT, real estate and corporate functions. Restructuring costs incurred from the inception of the 2006 Plan through March 31, 2007 were $14 million, and related charges totaled $24 million. These restructuring charges include a $74 million credit from the gain on the sale of 5 floors of MMC's New York headquarters building recorded in the fourth quarter of 2006. In the first quarter of 2007, MMC incurred restructuring costs of $4 million and related charges of $11 million, primarily related to accelerated amortization of leasehold improvements. The actions under Phase 1 completed through March 31, 2007 are expected to result in annualized savings of approximately $125 million. Phase 1 is expected to be completed by the second quarter of 2007, except for certain actions related to MMC's headquarters building.

MMC expects additional savings under one or more future phases of the 2006 Plan, resulting from infrastructure improvements in information technology, procurement, human resources, finance and real estate, as well as organizational structure and business process improvements. Detailed plans relating to these future phases are not yet complete, and may impact the timing and amount of expected savings, expected costs or both that will result from these planned actions.

In addition to the initiatives MMC announced in September 2006, Marsh has identified actions that are expected to result in the elimination of 170 employee positions through staff reductions and attrition. These actions are expected to result in annualized savings of approximately $40 million and result in additional charges of approximately $45 million related to severance and exit costs for facilities. Through March 31, 2007 these actions by Marsh have resulted in expected annual savings of $28 million and charges of $36 million; $22 million of which were recorded in the first quarter of 2007.

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Businesses Exited in 2006

In December 2006, Kroll completed the sale of KSI, its international security operation, that provided high-risk asset and personal protection services. The financial results of KSI are included in discontinued operations.

In the first quarter of 2006, MMC determined that Price Forbes, its U.K.-based insurance wholesale operation, met the criteria for classification as a discontinued operation. The 2006 results of Price Forbes, which includes a charge to reduce the carrying amount of its assets to fair value less cost to sell, are included in discontinued operations in the consolidated statement of income. MMC completed the sale of Price Forbes in September 2006.

The sale of SCMS was completed on January 31, 2006, and the associated gain on the sale was recorded in the first quarter of 2006 and included in discontinued operations.

Putnam Sale Agreement

On February 1, 2007, MMC announced that it entered into a stock purchase agreement with Great-West Lifeco Inc. (“GWL”), a majority-owned subsidiary of Power Financial Corporation, pursuant to which GWL agreed to purchase Putnam Investments Trust for $3.9 billion in cash. The sale agreement includes Putnam’s interest in the T.H. Lee private equity business. The after-tax cash proceeds to MMC are expected to be approximately $2.5 billion, subject to possible adjustments based on (i) changes in Putnam’s adjusted stockholders’ equity between September 30, 2006 and closing and (ii) any decline below an agreed threshold in Putnam’s adjusted asset management revenue between December 31, 2006 and closing. For further information and a copy of the stock purchase agreement, please see our Form 8-K filed on February 1, 2007. The 2007 and comparative results of Putnam are included in discontinued operations in the accompanying consolidated statements of income and consolidated balance sheets. MMC expects the sale of Putnam to close in the second quarter of 2007.

Risk and Insurance Services

The results of operations for the risk and insurance services segment are presented below:

(In millions of dollars)	2007			2006
Service Revenue	$	1,434		$	1,423
Investment Income		49			50
Revenue		1,483			1,473
Compensation and Benefits		820			811
Other Expenses		404			394
Expense		1,224			1,205
Operating Income	$	259		$	268
Operating Income Margin		17.5	%		18.2	%

Revenue

Revenue in the risk and insurance services segment increased 1% in the first quarter of 2007 compared with the first quarter of 2006, primarily resulting from a 4% increase in reinsurance services revenue. Insurance services revenue was flat compared with prior year. Underlying revenue for the segment decreased 2%, and the impact of foreign currency exchange rates increased revenue by 3%.

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In insurance services, underlying revenue decreased 3% for the quarter, due to lower renewal revenues, predominantly in the United States. New business increased 7% versus the same period last year, reflecting 5% growth in the Americas, 8% growth in EMEA, and 17% in Asia Pacific. Premium rate declines continued through the first quarter in the commercial insurance marketplace.

Reinsurance services revenue increased 4% from prior year, primarily due to an 11% increase in new business. On an underlying basis, revenue increased 2% for the quarter. These results were achieved in a reinsurance marketplace environment where U.S. property catastrophe rates were down from peak levels at mid-2006 renewals and where higher client risk retentions continued.

Risk Capital Holdings revenue increased 9% in the first quarter of 2007. Risk Capital Holdings’ revenue in the first quarter of 2007 relates primarily to mark-to-market gains on private equity fund investments.

Expense

Expenses in the risk and insurance services segment increased 2% in the first quarter 2007, compared with the same period in the prior year. The increase in expenses reflects the impact of foreign currency translations, partly offset by cost savings from restructuring activities.

In the first three months of 2007 charges of $24 million related to the 2006 restructuring plan were incurred. Additional restructuring charges of approximately $25 million are expected to be incurred related to phase 1 of the 2006 Plan and the additional actions initiated by Marsh.

Risk Consulting & Technology

The results of operations for the risk consulting & technology segment are presented below:

(In millions of dollars)	2007			2006
Revenue		$235			$234
Compensation and Benefits		119			114
Other Expenses		90			96
Expense		209			210
Operating Income		$ 26			$ 24
Operating Income Margin		11.1	%		10.3	%

Revenue

Risk consulting and technology revenues increased 1% for the quarter and were flat on an underlying basis. Kroll’s technology enabled solutions business produced a 14% revenue growth due to continued strong performance in background screening and growth in the electronic discovery business. Revenues in Kroll’s consulting business decreased 12% due to the combined impact of continued softness in the corporate advisory and restructuring markets both in North America and increasingly in Europe with bankruptcy filings at a cyclical low, and the transfer of a business to Marsh in 2007.

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Expense

Risk consulting and technology expenses in the first quarter of 2007 were essentially the same as the prior year. Higher compensation costs in Ontrack and the background screening businesses were offset by lower expenses resulting from a $2.8 million insurance settlement and the transfer of a business to insurance services in 2007.

Consulting

The results of operations for the consulting segment are presented below:

(In millions of dollars)	2007			2006
Service Revenue	$	1,129		$	1,000
Investment Income		-			1
Revenue		1,129			1,001
Compensation and Benefits		695			619
Other Expenses		296			269
Expense		991			888
Operating Income	$	138		$	113
Operating Income Margin		12.2	%		11.3	%

Revenue

Consulting revenue in the first quarter of 2007 increased 13% compared with the same period in 2006. On an underlying basis, revenue increased 7%. Within human resource consulting, underlying revenue increased 4% reflecting growth in retirement and investment of 6%, outsourcing of 4% and talent of 3%. In specialty consulting, revenue increased 25%, or 15% on an underlying basis as each of the Mercer specialty companies contributed to the continuing strong revenue growth.

Expense

Consulting expenses increased 12% in the first quarter of 2007 compared with the same period in 2006, reflecting higher compensation costs due to an increased volume of business and the impact of foreign currency translation.

Discontinued Operations

Results of discontinued operations includes Putnam’s operating income in 2007 and the operating income from Putnam, SCMS, Kroll and Price Forbes in 2006. In addition, discontinued operations in 2006 also includes the gain on disposal of SCMS and a charge to reduce the company value of Price Forbes’ asset to fair value.

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The following reflects the results of operations for Putnam, MMC’s investment management segment, that are included in discontinued operations.

	Three Months Ended
	March 31,
	2007		2006
Putnam:
Revenue	$ 356		$345
Expense	281		281
Net Operating Income	75		64
Minority interest and other discontinued operations	(1	)	-
Provision for income tax	34		24
Income from discontinued operations, net of tax	40		40
Gain on disposal of discontinued operations	-		306
Provision for income tax	-		130
Gain on disposal of discontinued operations, net of tax	-		176
Discontinued operations, net of tax	$ 40		$216

Putnam's revenue increased 3% in the first quarter of 2007. Assets under management averaged $189 billion in the first quarter of 2007 versus $190 billion managed in the first quarter of 2006. Assets under management aggregated $188 billion at March 31, 2007, compared with $189 billion at March 31, 2006 and $192 billion at December 31, 2006. Net redemptions of $6 billion in the first quarter of 2007 were offset by the impact of market performance. Putnam expenses in the first quarter of 2007 were the same as 2006.

In 2006, discontinued operations included an after tax net gain of $176 million related to SCMS and Price Forbes, which increased diluted earnings per share for the quarter by approximately $0.32.

Corporate Expenses

Corporate expenses of $36 million in the first three months of 2007 were $32 million lower than the same period in the prior year. The decrease is due to lower expenses for restructuring costs and a credit from an accrual adjustment related to the separation of former MMC senior executives.

In the first quarter of 2007, MMC corporate recorded $6 million of restructuring charges for consulting fees related to corporate infrastructure and process improvements. In the first quarter of 2006, MMC corporate recorded restructuring charges of $26 million, primarily related to future rent on non-cancelable leases for three floors in its headquarters building in New York that it vacated.

Interest

Interest income earned on corporate funds amounted to $19 million in the first quarter of 2007, an increase of $4 million from the first quarter of 2006. The increase in interest income reflected generally higher average interest rates in 2007 compared with the prior year. Interest expense of $71 million in the first quarter of 2007 decreased from $78 million in the first quarter of 2006. The decrease in interest expense is primarily due to a decrease in the average level of debt compared with the prior year.

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Income Taxes

MMC's consolidated effective tax rate was 31.6% in the first quarter of 2007, an increase from 26.6% in the first quarter of 2006. The increase in the effective tax rate was primarily due to the favorable resolution of tax issues in certain jurisdictions in 2006. The effective tax rate on ongoing operations is expected to be 33% for the remainder of 2007.

Liquidity and Capital Resources

Operating Cash Flows

MMC used $383 million of cash for operations for the three months ended March 31, 2007, compared with $517 million of cash used for operations for the same period in 2006. These amounts reflect the net income earned by MMC during those periods, excluding gains or losses from the disposition of businesses, adjusted for non-cash charges and changes in working capital which relate, primarily, to the timing of payments of accrued liabilities or receipts of assets. Cash generated from the disposition of businesses is included in investing cash flows. MMC’s cash flow from operations is typically negative in the first quarter of each year, resulting from the payment of accrued incentive compensation.

As discussed in Note 15 to the consolidated financial statements, in January 2005 MMC reached a settlement with the NYAG and NYSID that resolved the actions they had commenced against MMC and Marsh in October 2004. As a result of this agreement, MMC recorded a charge in 2004 for an $850 million fund to compensate policyholder clients, of which $510 million was paid through June 1, 2006, and $170 million will be paid to the fund on or before each of June 1, 2007 and 2008, respectively. These amounts are included in Regulatory Settlements on the Consolidated Balance Sheets.

Financing Cash Flows

Net cash used for financing activities increased to $325 million for the period ended March 31, 2007 from $129 million for the same period in 2006, largely due to payment of maturing senior notes, discussed below.

MMC paid dividends of approximately $105 million ($0.19 per share) in the first quarter of 2007 as compared to $93 million ($0.17 per share) in the first quarter of 2006. MMC made no share repurchases in 2006 or in the first quarter of 2007.

In the second quarter of 2007, the MMC Board of Directors approved a $500 million share repurchase program that is expected to be completed promptly.

In the first quarter of 2007, MMC utilized commercial paper and bank borrowings, as well as cash on hand, to manage liquidity, including the funding of a maturing long-term debt issuance in the amount of $500 million. At March 31, 2007, commercial paper outstanding was $65 million.

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MMC’s senior debt is currently rated Baa2 by Moody’s and BBB by Standard & Poor’s. MMC’s short term debt is currently rated P-2 by Moody’s and A-2 by Standard & Poor’s. MMC carries a negative outlook from both Moody’s and Standard & Poor’s.

Investing Cash Flows

Cash used for investing activities amounted to $116 million in the first three months of 2007 compared to cash provided of $211 million for the same period in 2006. Cash generated by the sale of SCMS totaled $326 million in 2006. There was no cash generated by or used for acquisitions during the first quarter of 2007. Cash used for acquisitions in the first quarter of 2006 totaled $78 million. Remaining deferred cash payments of $64 million for acquisitions completed in the first quarter of 2007 and in prior years are recorded in accounts payable and accrued liabilities or other liabilities in the consolidated balance sheet at March 31, 2007. MMC's additions to fixed assets and capitalized software, which amounted to $86 million in the first three months of 2007 and $66 million in the three months of 2006, primarily related to computer equipment purchases, the refurbishing and modernizing of office facilities and software development costs.

MMC has committed to potential future investments of approximately $219 million in connection with various private equity funds and other MMC investments. The commitment comprises $82 million related to Trident II and other funds managed by Stone Point Capital and $137 million related to possible investments by Putnam. At March 31, 2007, MMC has no future commitments related to Trident III, as those commitments were assumed by MMC’s U.K. pension plan when the investment in Trident III was contributed to the plan in December 2006. The majority of MMC’s other investment commitments for funds managed by Stone Point are related to Trident II, the investment period for which is now closed for new investments. Any remaining capital calls for Trident II would relate to follow-on investments in existing portfolio companies or for management fees or other partnership expenses. Significant future capital calls related to Trident II are not expected. Although it is anticipated that Trident II will be harvesting its remaining portfolio in 2007 and thereafter, the timing of any portfolio company sales and capital distributions is unknown and not controlled by MMC.

Putnam has investment commitments of $137 million for three active Thomas H. Lee (“THL”) funds, of which Putnam believes approximately $43 million will not be called. Putnam is authorized to commit to invest up to $187 million in future THL investment funds, but is not required to do so. At March 31, 2007 none of that additional $187 million is committed. These commitments will remain with Putnam when the anticipated sale of Putnam closes.

Approximately $3 million was invested in 2007 related to all of the commitments discussed above.

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Commitments and Obligations

MMC’s contractual obligations were comprised of the following as of March 31, 2007 (dollars in millions):

	Payment due by Period
			Within						After
Contractual Obligations	Total		1 Year		1-3 Years		4-5 Years		5 years
Commercial Paper	$	65	$	65	$	-	$	-	$	-
Bank Borrowings-International		223		223		-		-		-
Current portion of long-term debt		757		757		-		-		-
Long-term debt		3,615		-		419		816		2,380
NYAG/NYSID settlement		340		170		170		-		-
Net operating leases		3,292		430		711		550		1,601
Service agreements		203		86		84		25		8
Other long-term obligations		76		68		8		-		-
Total	$	8,571	$	1,799	$	1,392	$	1,391	$	3,989

New Accounting Pronouncements

New accounting pronouncements are discussed in Note 1 to MMC’s consolidated financial statements.

On January 1, 2007, MMC adopted the provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109” (“FIN 48”), which clarifies the accounting for uncertainty in income tax positions. This interpretation requires that MMC recognize in its consolidated financial statements the impact of a tax position when it is more likely than not that the tax position would be sustained upon examination by the tax authorities based on the technical merits of the position. As a result of the implementation of FIN 48, the Company recognized an increase in the liability for unrecognized tax benefits of approximately $13 million, which is accounted for as a reduction to the January 1, 2007 balance of retained earnings. The term “unrecognized tax benefits” in FIN 48 primarily refers to the differences between a tax position taken or expected to be taken in a tax return and the benefit measured and recognized in the financial statements in accordance with the guidelines of FIN 48. Including this increase, MMC had approximately $272 million of total gross unrecognized tax benefits at the beginning of 2007. Of this total, $218 million represents the amount of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate in any future periods.

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assessments in each of the taxing jurisdictions resulting from examinations. MMC has established appropriate liabilities for uncertain tax positions in relation to the potential assessments. MMC believes the resolution of tax matters will not have a material effect on the consolidated financial condition of MMC, although a resolution could have a material impact on MMC’s net income or cash flows and on its effective tax rate in a particular future period.

In February 2007, the FASB issued SFAS 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 permits an entity to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The adjustment to reflect the difference between fair value and the carrying amount would be accounted for as a cumulative-effect adjustment to retained earnings as of the date of adoption. The Company is currently assessing the impact of SFAS 159 on its consolidated financial position and results of operations.

Item 3. Qualitative and Quantitative Disclosures About Market Risk

Market Risk

Certain of MMC's revenues, expenses, assets and liabilities are exposed to the impact of interest rate changes and fluctuations in foreign currency exchange rates and equity markets.

Interest Rate Risk

MMC manages its net exposure to interest rate changes by utilizing a mixture of variable and fixed rate borrowings to finance MMC's asset base. Interest rate swaps are used on a limited basis to manage MMC’s exposure to interest rate movements on its cash and investments, as well as interest expense on borrowings, and are only executed with counterparties of high creditworthiness.

Foreign Currency Risk

The translated values of revenue and expense from MMC's international operations are subject to fluctuations due to changes in currency exchange rates. Forward contracts and options are periodically utilized by MMC to limit foreign currency exchange rate exposure on net income and cash flows for specific, clearly defined transactions arising in the ordinary course of its business.

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Equity Price Risk

MMC holds investments in both public and private companies as well as certain private equity funds, including the Trident funds. Publicly traded investments of $47 million are classified as available for sale under SFAS No. 115. Non-publicly traded investments of $97 million are accounted for using the cost method and $303 million are accounted for under APB Opinion No. 18, “The Equity Method of Accounting for Investments in Common Stock”. Changes in value of trading securities are recognized in income when they occur. The investments that are classified as available for sale or that are not publicly traded are subject to risk of changes in market value, which if determined to be other than temporary, could result in realized impairment losses. MMC periodically reviews the carrying value of such investments to determine if any valuation adjustments are appropriate under the applicable accounting pronouncements.

Other

A significant number of lawsuits and regulatory proceedings are pending. See Note 15 to the Consolidated Financial Statements.

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Part I – Item 4. Controls & Procedures

a. Evaluation of Disclosure Controls and Procedures
Based on their evaluation, as of the end of the period of this report, the Company’s Chief Executive Officer and Chief Financial Officer have concluded the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective.

b. Changes in Internal Controls
There were no changes in MMC’s internal controls over financial reporting that were identified in connection with the evaluation referred to under Part I – Item 4a above that occurred during MMC’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, MMC’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

The information set forth in Note 14 to the financial statements provided in Part I of this Report is incorporated herein by reference.

Item 1A. Risk Factors.

MMC and its subsidiaries face a number of risks and uncertainties. In addition to the other information in this report and our other filings with the SEC, the risk factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2006, should be carefully considered in evaluating MMC and its subsidiaries. The risks and uncertainties described in our Annual Report on Form 10-K are not the only ones facing MMC and its subsidiaries. Additional risks and uncertainties, not presently known to us or otherwise, may also impair our business operations. If any of the risks described in our Annual Report on Form 10-K or such other risks actually occur, our business, financial condition or results of operations could be materially and adversely affected.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The following table sets forth information regarding MMC's purchases of its common stock on a monthly basis during the first quarter of 2007. Share repurchases are recorded on a trade date basis.

Issuer Repurchases of Equity Securities (1)

Period	(a)	(b)	(c)	(d)
			Total Number of	Maximum
	Total	Average Price	Shares	Number of
	Number of	Paid per	Purchased as	Shares that
	Shares	Share	Part of Publicly	May Yet Be
	Purchased		Announced	Purchased
			Plans or	Under the Plans
			Programs (1)	or Programs
January 1, 2007 -	0	--	0	49,904,636
January 31, 2007
February 1, 2007 –	0	--	0	49,904,636
February 28, 2007
March 1, 2007 -	0	--	0	49,904,636
March 31, 2007
Total	0	--	0	49,904,636

(1) In May 2007, MMC’s board of directors approved a $500 million stock repurchase program which supersedes all previous stock repurchase authorizations and contains no expiration date. MMC expects to execute this program promptly.

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Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information.

None.

Item 6. Exhibits.

	10.1		Form of 2007 Long-term Incentive Award under the 2000 Senior Executive Incentive and Stock Award Plan and the 2000 Employee Incentive and Stock Award Plan

	10.2		Employment Agreement, dated as of July 1, 2005, by and between Marsh & McLennan Companies, Inc. and David H. Spiller

	10.3		Marsh & McLennan Companies, Inc. Directors Stock Compensation Plan

	10.4		Description of compensation arrangements for non-executive directors of MMC

	12.1		Statement Re: Computation of Ratio of Earnings to Fixed Charges

	31.1		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

	31.2		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

	32.1		Section 1350 Certifications

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MARSH & McLENNAN COMPANIES, INC.



Date: May 10, 2007	/s/ Matthew B. Bartley
	Name:	Matthew B. Bartley
	Title:	Chief Financial Officer

EXHIBIT INDEX

Exhibit No.			Exhibit Name

10.1			Form of 2007 Long-term Incentive Award under the 2000 Senior Executive Incentive and Stock Award Plan and the 2000 Employee Incentive and Stock Award Plan

10.2			Employment Agreement, dated as of July 1, 2005, by and between Marsh & McLennan Companies, Inc. and David H. Spiller

10.3			Marsh & McLennan Companies, Inc. Directors Stock Compensation Plan

10.4			Description of compensation arrangements for non-executive directors of MMC

12.1			Statement Re: Computation of Ratio of Earnings to Fixed Charges

31.1			Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

31.2			Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

32.1			Section 1350 Certifications

Exhibit 10.1

This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of 1933.

The date of this prospectus is [Date].

MARSH & McLENNAN COMPANIES, INC.

2000 SENIOR EXECUTIVE INCENTIVE AND STOCK AWARD PLAN

AND

2000 EMPLOYEE INCENTIVE AND STOCK AWARD PLAN

Terms and Conditions of [Year] Annual Long-Term Incentive Award

to U.S. Award Recipients

This [Year] Annual Long Term Incentive Award has been granted to you on [Date] (the “ Grant Date ”) under the Marsh & McLennan Companies, Inc. 2000 Senior Executive Incentive and Stock Award Plan or the Marsh & McLennan Companies, Inc. 2000 Employee Incentive and Stock Award Plan (as applicable to you, the “ Plan ”) as set forth in the Grant Letter (as defined below). For purposes of these Terms and Conditions, “ MMC ” means Marsh & McLennan Companies, Inc. and any successor thereto.

I.	GRANT, VESTING, EXERCISABILITY AND DISTRIBUTION OF AWARD; RESTRICTIVE COVENANTS AGREEMENT

Grant of Award

Your [Year] Annual Long Term Incentive Award consists of one or more of the following types of equity-based awards: performance contingent nonqualified stock options, restricted stock units, and performance based restricted stock units. The letter delivered to you from [Name], dated [Date], announcing the grant of your [Year] Annual Long Term Incentive Award (the “ Grant Letter ”) sets forth each type of equity-based award and the number of shares of MMC common stock covered by such equity-based award that comprises your individual award (the “ Award ”). These Terms and Conditions describe the terms and conditions of all three types of equity-based awards that may comprise a [Year] Annual Long Term Incentive Award even though your Award may consist of fewer types of equity-based awards, in which case, only the portions of these Terms and Conditions that describe or relate to those types of equity-based awards shall pertain to your Award. The description of a type of equity-based award in these Terms and Conditions that is not a part of your Award does not give or imply any right to such type of equity-based award. You must execute a Restrictive Covenants Agreement (as described in Section I.E.) by the date specified in the Grant Letter to accept the Award.

Performance Contingent Nonqualified Stock Option

General . A performance contingent nonqualified stock option (“ Option ”) represents the right to purchase the number of shares of MMC common stock specified in the Grant Letter (the “ Option Shares ”) at the exercise price specified in the Grant Letter.

Vesting . Subject to your continued employment, twenty-five percent (25%) of the Option Shares covered by the Option will vest on each of the first four anniversaries of the Grant Date. If your employment terminates prior to [Date], your right to the unvested portion of the Option will be determined in accordance with Section IV below.

Exercisability . Except as provided in Section V.A, the Option will become exercisable with respect to vested Option Shares on the trading day following the tenth consecutive trading day that the closing price of a share of MMC common stock on the New York Stock Exchange exceeds the grant price of the Option by fifteen percent (15%) or more (the “ Performance Contingency ”) and will remain exercisable until the expiration date of the grant unless such Option is subject to an earlier expiration date or forfeited in accordance with Section IV. The Option may not be exercised with respect to Option Shares for which the Performance Contingency is not satisfied following vesting.

Restricted Stock Units

General . A restricted stock unit (“ RSU ”) represents an unfunded and unsecured promise to deliver (or cause to be delivered) to you, subject to these Terms and Conditions and the terms and conditions of the Plan, one (1) share of MMC common stock as soon as practicable after vesting or as otherwise provided herein.

Vesting . Subject to your continued employment, thirty-three and one-third percent (33 1/3%) of the RSUs are scheduled to vest on each of the first three anniversaries of the Grant Date (each an “ RSU Scheduled Vesting Date ”). If your employment terminates prior to the RSU Scheduled Vesting Date, your right to the RSUs will be determined in accordance with Section IV below.

Delivery of Shares . Shares of MMC common stock in respect of the RSUs covered by the Award shall be distributed to you as soon as practicable after vesting, and in no event later than 60 days after vesting. The delivery of shares in respect of the RSUs is conditioned on your satisfaction of any applicable tax withholding with respect to the Award.

Performance Based Restricted Stock Units

General . A performance based restricted stock unit (“ PRU ”) represents an unfunded and unsecured promise to deliver (or cause to be delivered) to you, subject to these Terms and Conditions and the terms and conditions of the Plan, as soon as

practicable after vesting or as otherwise provided herein, a minimum of [Number] share of MMC common stock up to a maximum of [Number] shares of MMC common stock, depending on the actual achievement, as determined by the Compensation Committee of the MMC Board of Directors (the “ Committee ”), of [performance objectives]; provided that if you are one of [Group], the minimum number of shares of MMC common stock in respect of a PRU shall be [Number]; provided further that if your employment terminates prior to the PRU Scheduled Vesting Date (defined below), the number of shares of MMC common stock deliverable in respect of a PRU shall be determined as provided by Section IV below.

Vesting . Subject to your continued employment, the PRUs are scheduled to vest on the third anniversary of the Grant Date (the “ PRU Scheduled Vesting Date ”). If your employment terminates prior to the PRU Scheduled Vesting Date, your right to the PRUs, and the number of shares delivered in respect of each PRU, will be determined in accordance with Section IV below.

Delivery of Shares . Shares of MMC common stock in respect of the PRUs covered by the Award that vest on the PRU Scheduled Vesting Date shall be distributed to you as soon as practicable after vesting, and in no event later than 60 days after vesting. If your employment terminates prior to the PRU Scheduled Vesting Date, shares of MMC common stock in respect of the PRUs covered by the Award that vest on such termination of employment shall be distributed to you as provided in Section IV.I. The delivery of shares in respect of the PRUs are conditioned on your satisfaction of any applicable tax withholding with respect to the Award. The aggregate number of shares of MMC common stock delivered in respect of PRUs covered by the Award shall be rounded up to the nearest whole share.

Restrictive Covenants Agreement

As provided in these Terms and Conditions, you must execute a restrictive covenants agreement in a form determined by MMC (“ Restrictive Covenants Agreement ”) to accept the Award, to exercise an Option and for your Award to vest upon certain terminations of employment. The Restrictive Covenants Agreement generally applies for a period of one year commencing with your termination of employment. You may obtain a copy of the Restrictive Covenants Agreement from MMC or an agent appointed by MMC. You may wish to consider consulting an attorney at your own expense before signing the Restrictive Covenants Agreement. Please retain a copy of your signed Restrictive Covenants Agreement for your records.

II.	RIGHTS OF RESTRICTED STOCK UNITS AND PERFORMANCE BASED RESTRICTED STOCK UNITS

Unless and until both the vesting conditions of the Award have been satisfied and shares of MMC common stock have been delivered to you in accordance with the terms and conditions described herein, you have only the rights of a general unsecured creditor and

you have none of the attributes of ownership to such shares of stock (e.g., units cannot be used as payment for stock option exercises; units may not be transferred or assigned; units have no voting rights).

Dividend equivalents are payable on each RSU and PRU, at or after the time of distribution of any dividend paid by MMC in respect of a share of its common stock (a “ Dividend Payment Date ”), the record date of which occurs on or after the Grant Date. You shall be entitled to receive an amount (less applicable withholding) equal to such dividend payment as would have been made in respect of one (1) share of MMC common stock for each RSU or PRU covered by the Award. Payment of a dividend equivalent shall be made only with respect to RSUs or PRUs that are outstanding on the Dividend Payment Date.

III.	METHOD OF EXERCISE OF A PERFORMANCE CONTINGENT NONQUALIFIED STOCK OPTION

General Procedures

An Option may be exercised by written notice to MMC or an agent appointed by MMC, in form and substance satisfactory to MMC, which must state the election to exercise such Option, the number of Option Shares for which such Option is being exercised and such other representations and agreements as may be required pursuant to the provisions of these Terms and Conditions and the Plan (the “ Exercise Notice ”). The Exercise Notice must be accompanied by (i) any required income tax forms and (ii) a reaffirmation of the Restrictive Covenants Agreement, unless the Option is being exercised after your death in accordance with Section IV.A.1.

Payment of Exercise Price

Payment of the aggregate exercise price may be made with U.S. dollars or by tendering shares of MMC common stock (including shares acquired from a stock option exercise or a stock award vesting) which you have owned for at least six months prior to the exercise date having a value equal to or greater than the aggregate exercise price.

Satisfaction of Income and Social Security Tax Withholding Obligation

Applicable taxes (including payroll and FICA taxes) are required by law to be withheld when an Option is exercised. A sufficient number of shares of MMC common stock resulting from the Option exercise will be retained by MMC to satisfy the tax-withholding obligation unless you elect in the Exercise Notice to satisfy all applicable tax withholding by check.

Registration and Distribution of Option Shares

The shares from your Option exercise will be registered as specified in the Exercise Notice, as of the date of exercise. The shares may be registered only in (i) your name or (ii) your name and your spouse’s name as joint tenants with rights of survivorship.

The shares from the Option exercise will be distributed as specified in the Exercise Notice, after you have satisfied your tax withholding obligation.

You will receive written confirmation of the Option exercise by mail at your home address on file, generally within a week following the exercise date.

IV.	TERMINATION OF EMPLOYMENT

If your employment with MMC or any of its subsidiaries or affiliates (the “ Company ”) terminates, the following shall apply:

Death

Performance Contingent Nonqualified Stock Option . In the event your employment is terminated because of your death, the Option will vest with respect to any unvested Option Shares at such termination of employment and will become exercisable upon the satisfaction of the Performance Contingency. The person or persons to whom your rights under the Option shall pass by will or the laws of descent and distribution shall be entitled to exercise such Option with respect to vested Option Shares (and any Option Shares that were vested at the time of your death and for which the Performance Contingency is satisfied) within two years after the date of death, but in no event shall the Option be exercised beyond the expiration date of the Award.

Restricted Stock Units . In the event your employment is terminated because of your death, the RSUs will vest at such termination of employment and will be distributed as described in Section I.C.3.

Performance Based Restricted Stock Units . In the event your employment is terminated because of your death, the PRUs will vest at such termination of employment and will be distributed as described in Section IV.I.1.

Permanent Disability

Performance Contingent Nonqualified Stock Option . In the event your employment is terminated due to total and permanent disability as determined under MMC’s long-term disability program, the Option will vest with respect to any unvested Option Shares at such termination of employment provided that you satisfy the condition to vesting described in Section IV.G and will become exercisable upon the satisfaction of the Performance Contingency. Such vested Option Shares (and any Option Shares that were vested at the time of your termination of employment and for which the Performance Contingency is satisfied) shall be exercisable for two years following

your termination of employment, but in no event shall the Option be exercised beyond the expiration date of the Award.

Restricted Stock Units . In the event your employment is terminated due to total and permanent disability as determined under MMC’s long-term disability program, the RSUs will vest at such termination of employment provided that you satisfy the condition to vesting described in Section IV.G and will be distributed as described in Section I.C.3.

Performance Based Restricted Stock Units . In the event your employment is terminated due to total and permanent disability as determined under MMC’s long-term disability program, the PRUs will vest at such termination of employment provided that you satisfy the condition to vesting described in Section IV.G and will be distributed as described in Section IV.I.1.

Normal Retirement

Performance Contingent Nonqualified Stock Option . In the event you retire from the Company on or after your Normal Retirement Date, the Option will vest with respect to any unvested Option Shares at such termination of employment provided that you satisfy the condition to vesting described in Section IV.G and will become exercisable upon the satisfaction of the Performance Contingency. Such vested Option Shares (and any Option Shares that were vested at the time of your termination of employment and for which the Performance Contingency is satisfied) shall be exercisable until the earlier of the fifth anniversary of your termination of employment and the expiration date of the Award.

Restricted Stock Units . In the event you retire from the Company on or after your Normal Retirement Date, the RSUs will vest at such termination of employment provided that you satisfy the condition to vesting described in Section IV.G and will be distributed as described in Section I.C.3.

Performance Based Restricted Stock Units . In the event you retire from the Company on or after your Normal Retirement Date, the PRUs will vest at such termination of employment provided that you satisfy the condition to vesting described in Section IV.G and will be distributed as described in Section IV.I.1.

Early Retirement

Performance Contingent Nonqualified Stock Option . In the event you retire from the Company on or after your Early Retirement Date and before your Normal Retirement Date, the Option will vest as provided in the first sentence of Section I.B.2, without regard to such termination of employment provided that you satisfy the condition to vesting described in Section IV.G and will become exercisable upon the satisfaction of the Performance Contingency. Such vested Option Shares (and any Option Shares that were vested at the time of your termination of employment and for which the

Performance Contingency is satisfied) shall be exercisable until the earlier of the fifth anniversary of your termination of employment and the expiration date of the Award.

Restricted Stock Units . In the event you retire from the Company on or after your Early Retirement Date and before your Normal Retirement Date, the RSUs will vest as provided in the first sentence of Section I.C.2, without regard to such termination of employment provided that you satisfy the condition to vesting described in Section IV.G and will be distributed as described in Section I.C.3.

Performance Based Restricted Stock Units . In the event you retire from the Company on or after your Early Retirement Date and before your Normal Retirement Date, the PRUs will vest as provided in the first sentence of Section I.D.2, without regard to such termination of employment provided that you satisfy the condition to vesting described in Section IV.G and will be distributed as described in Section IV.I.2.

By the Company Other Than For Cause

Termination Other Than For Cause

Performance Contingent Nonqualified Stock Options . In the event your employment is terminated by the Company other than for Cause (as defined below), all of your rights, title and interest in and to any unvested Option Shares will be forfeited upon such termination of employment. Any Option Shares that were vested at the time of your termination of employment and for which the Performance Contingency is satisfied shall be exercisable until the earlier of ninety (90) days following your termination of employment and the expiration date of the Award.

Restricted Stock Units . In the event your employment is terminated by the Company other than for Cause, the RSUs will vest at such termination of employment on a pro rata basis as described in Section IV.H.1 provided that you satisfy the condition to vesting described in Section IV.G and will be distributed as described in Section I.C.3.

Performance Based Restricted Stock Units . In the event your employment is terminated by the Company other than for Cause, the PRUs will vest at such termination of employment on a pro rata basis as described in Section IV.H.2 provided that you satisfy the condition to vesting described in Section IV.G and will be distributed as described in Section IV.I.2.

Definition of Cause

For purposes of these Terms and Conditions, “ Cause ” shall mean misappropriation of assets of the Company or any of its subsidiaries or affiliates; willful misconduct in the performance of the employee’s duties; continued failure after notice, or refusal, to perform the duties of the employee; violation of a written code of conduct applicable

to the employee; willful violation of an important policy of the Company or any of its subsidiaries or affiliates; breach of fiduciary duty or breach of trust; conviction of a felony, or of any other crime involving moral turpitude; imprisonment for any crime; or any other action likely to bring substantial discredit to the Company or any of its subsidiaries or affiliates.

For the avoidance of doubt, in the event of a sale or similar transaction involving the business unit for which you work (“ Employing Company ”) as a result of which the Employing Company ceases to be a subsidiary of MMC, your employment will be deemed terminated by the Company other than for Cause, even if your employment with the Employing Company continues after the sale.

All Other Employment Terminations

For all other terminations of employment, all of your rights, title and interest in and to the Award, whether vested or unvested, shall be forfeited on the date of such termination of employment, except to the extent that the Committee may determine otherwise.

For purposes of these Terms and Conditions, your employment will be treated as terminated when you are no longer employed by MMC or any affiliate or subsidiary of MMC.

Condition to Vesting of Award Upon Termination of Employment

In the event of your termination of employment due to total and permanent disability, Early Retirement or Normal Retirement, or your termination of employment other than for Cause as described in Sections IV.B. through E, any unvested portion of the Award will vest as provided in the applicable portion of Section IV; provided that you execute and return to MMC (or an agent appointed by MMC) a Restrictive Covenants Agreement within 30 days following your termination of employment. Failure to timely execute and comply with the Restrictive Covenants Agreement will result in forfeiture of all of your rights, title and interest in and to the Award, whether vested or unvested.

Determination of Pro-Rata Vesting Upon Termination of Employment

The number of RSUs that vest at such termination of employment on a pro rata basis is equal to the sum of the “Pro Rata RSUs” for each RSU Scheduled Vesting Date following your termination of employment. The “Pro Rata RSUs” with respect to any such RSU Scheduled Vesting Date is the product of the number of RSUs covered by the Award that would vest on the RSU Scheduled Vesting Date and a fraction, the numerator of which is the number of days from the Grant Date to the date of your termination of employment, and the denominator of which is the number of days from the Grant Date to such RSU Scheduled Vesting Date.

The number of PRUs that vest at such termination of employment on a pro rata basis is equal to the product of the number of PRUs covered by the Award and a fraction, the

numerator of which is the number of days from the Grant Date to the date of your termination of employment, and the denominator of which is the number of days from the Grant Date to the PRU Scheduled Vesting Date.

Distribution in Respect of Performance Based Restricted Stock Units that Vest Upon Termination of Employment

Termination of Employment Because of Death, Total and Permanent Disability or Normal Retirement

In the event of your termination of employment due to your death, total and permanent disability or Normal Retirement as described in Section IV.A, B or C, you will receive, promptly following such termination of employment, one (1) share of MMC common stock in respect of each PRU covered by the Award that vests upon your termination of employment.

Termination of Employment Due to Early Retirement or Termination Other Than For Cause

In the event of your termination of employment due to Early Retirement or your termination of employment other than for Cause as described in Section IV.D or E, you will receive, promptly following the PRU Scheduled Vesting Date, the number of shares of MMC common stock determined under Section I.D.1 in respect of the number of vested PRUs determined under Section IV.H.

Definitions

As used in these terms and conditions, the terms “ Normal Retirement Date ” and “ Early Retirement Date ” shall have the respective meanings given such terms (or any comparable substitute terms or concepts) set forth in MMC’s primary retirement plan applicable to you upon your termination of employment.

V.	CHANGE IN CONTROL PROVISIONS

Change in Control

Upon the occurrence of a “ Change in Control ” of MMC, as defined in the Plan, the Award will become fully vested on the date of the Change in Control.

Performance Contingent Nonqualified Stock Options . Any Option covered by the Award shall become exercisable beginning on the date of the Change in Control until the expiration date of the grant.

Restricted Stock Units . Except as provided in Section V.A.5, one (1) share of MMC common stock will be distributed to you in respect of each RSU covered by the Award as soon as practicable following the earlier of the next RSU Scheduled Vesting Date

and your termination of employment but in no event later than 60 days following such event.

Performance Based Restricted Stock Units . Except as provided in Section V.A.5, one (1) share of MMC common stock will be distributed to you in respect of each PRU covered by the Award as soon as practicable following the earlier of the PRU Scheduled Vesting Date and your termination of employment but in no event later than 60 days following such event.

If in the Change in Control transaction shareholders of MMC receive consideration consisting of cash or other property (including securities of a successor or parent corporation), there shall be delivered to you the consideration which you would have received in such transaction had you been, immediately prior to such transaction, a holder of that number of shares of MMC common stock equal to the number of shares of MMC common stock deliverable upon a Change in Control in respect of any RSUs or PRUs covered by the Award.

Additional Payment

The value of the accelerated vesting of the Award because of a Change in Control (the “ Accelerated Award ”) may be subject to a 20% federal excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended (the “ Code ”) (the “ Excise Tax ”). The Excise Tax is imposed on a select group of highly-compensated employees when the value, as determined by applicable regulations, of payments in the nature of compensation contingent on a Change in Control (including an amount reflecting the value of the accelerated vesting of the Award) equals or exceeds three times the average of your last five years’ W-2 earnings.

If a Change in Control occurs and vesting of the Award is accelerated, MMC will determine if the Excise Tax is payable by you. If the Excise Tax is payable by you, MMC will pay to you, within five days of making the determination, an amount of money (the “ Additional Payment ”) such that after payment of applicable federal, state and local income taxes, employment taxes and any Excise Tax imposed upon the Additional Payment, you will retain an amount of the Additional Payment equal to the Excise Tax imposed in respect of the Accelerated Award. If the Additional Payment, after payment of applicable taxes, is later determined to be less than the amount necessary to reimburse you for the Excise Tax you owe in respect of the Accelerated Award, a further payment will be made to you. If the Additional Payment, after payment of applicable taxes, is later determined to be more than the amount necessary to reimburse you for the Excise Tax you owe in respect of the Accelerated Award, you will be required to reimburse MMC for such excess.

VI.	ADDITIONAL PROVISIONS APPLICABLE TO COVERED EMPLOYEES

Notwithstanding any other provision herein, for any employee determined by the Committee to be likely to be a covered employee within the meaning of Section 162(m)(3) of the Code in

the year the Award vests, delivery of shares in respect of the Award shall be postponed until the earlier of (i) the earliest date at which the Committee reasonably anticipates that the deduction of the payment of such Award will not be limited or eliminated by application of Section 162(m) of the Code or (ii) the calendar year in which such employee terminates employment. According to Internal Revenue Service regulations, “covered employees” include (1) the chief executive officer of MMC as of the last day of the year and (2) the four highest-paid executive officers of the Company, other than the chief executive officer of MMC, who are employed on the last day of the year.

VII.	OTHER PROVISIONS

No Right to Continued Employment. The granting of the Award or any exercise thereof does not give you any right to continue to be employed by the Company for any specific duration, or restrict, in any way, your right or the right of your employer to terminate your employment at any time for any reason, with or without cause or prior notice.

During your lifetime, an Option shall be exercisable only by you, and no right hereunder related to an Award shall be transferable except by will or the laws of descent and distribution. Any shares that may be deliverable to you following your death shall be delivered to the person or persons to whom your rights pass by will or the law of descent and distribution, and such delivery shall completely discharge the Company’s obligations under the Award.

Neither you nor any person entitled to exercise your rights in the event of your death shall have any of the rights of a stockholder with respect to the Option Shares subject to an Option, unless, and until, you (or such person) have exercised the Option, paid the full exercise price thereof, and have received the shares so acquired.

The Company is not liable for the non-issuance or non-transfer, nor for any delay in the issuance or transfer, of any shares of MMC common stock subject to an option, unit or otherwise pursuant to the Plan due to you which results from the inability of the Company to obtain, or in any delay in obtaining, from each regulatory body having jurisdiction, all requisite authority to issue or transfer shares of MMC common stock, if counsel for the Company deems such authority necessary for the lawful issuance or transfer of any such shares.

The Award is subject to all of these Terms and Conditions and to the terms and conditions of the Plan and to the terms and conditions of any employment agreement or offer letter between you and the Company regarding the treatment of equity-based awards upon certain terminations of employment (“ Contractual Provisions ”), and your acceptance of the Award shall constitute your agreement to the terms and conditions of the Plan and the administrative regulations of the Committee. In the event of any inconsistency between these Terms and Conditions, the Contractual Provisions and the provisions of the Plan, the provisions of the Plan shall prevail. In the event of any inconsistency between these Terms and Conditions and any Contractual Provisions, the Contractual Provisions shall prevail. Your acceptance of the Award constitutes your agreement that the shares of MMC

common stock acquired hereunder, if any, will not be sold or otherwise disposed of by you in violation of any applicable securities laws or regulations.

The Award shall be subject to such additional administrative regulations as the Committee may, from time to time, adopt. All decisions of the Committee upon any questions arising under these Terms and Conditions or the Plan shall be conclusive and binding. The Committee may delegate to any other individual or entity the authority to perform any or all of the functions of the Committee under the Award, and references to the Committee shall be deemed to include any such delegate.

The Committee may, in its sole discretion, amend the terms of the Award; provided, however, that if the Committee concludes that such amendment is likely to materially impair your rights with respect to the Award, such amendment shall not be implemented with respect to your Award without your consent.

The Committee has full discretion and authority to control and manage the operation and administration of the Awards and the Plan. The Committee is comprised of at least two members of the MMC Board of Directors.

The Plan, and the granting of Awards and exercising of Options thereunder, and the obligations of the Company and employees under the Plan, shall be subject to all applicable governmental laws, rules and regulations, and to such approvals by any regulatory or governmental agency as may be required, including, but not limited to, tax and securities regulations.

The MMC Board of Directors may amend, alter, suspend, discontinue or terminate the Plan or the Committee’s authority to grant awards under the Plan; except that, without the consent of an affected participant, no such action may materially adversely affect the rights of such participant under any award theretofore granted to him or her. Following the occurrence of a Change in Control (as defined in the Plan), the MMC Board of Directors may not terminate the Plan or amend the Plan with respect to awards that have already been granted in any manner adverse to employees.

Awards relating to not more than eighty million (80,000,000) shares of MMC common stock (par value $1.00 per share), plus such number of shares authorized and reserved for awards pursuant to certain preexisting share resolutions adopted by the MMC Board of Directors, may be made over the life of the Marsh & McLennan Companies, Inc. 2000 Employee Incentive and Stock Award Plan. Awards relating to not more than eight million (8,000,000) shares of MMC common stock (par value $1.00 per share), plus such number of shares remaining unused under preexisting stock plans approved by MMC’s stockholders, may be issued under the Marsh & McLennan Companies, Inc. 2000 Senior Executive Incentive and Stock Award Plan. Employees of the Company will be eligible for awards under the Plan. MMC common stock is traded on the New York Stock Exchange under the symbol “MMC” and is subject to market price fluctuation. Shares of MMC common stock delivered in respect of the Award may be obtained through open market purchases, treasury stock or newly issued shares.

The Plan is not qualified under Section 401(a) of the Code and is not subject to the provisions of the Employee Retirement Income Security Act of 1974. Your right to payment of your Award is the same as the right of an unsecured general creditor of the Company.

There are no investment fees associated with your Award, and MMC pays all administrative expenses associated with your Award, although you will be responsible for any fees associated with the sale of any shares of MMC common stock delivered in respect of the Award.

Please retain this document in your permanent records. If you have any questions regarding the Plan or your Award or would like an account statement detailing each type of equity-based award and the number of shares covered by such equity-based award that comprises your Award, and the exercise price, vesting date(s) and expiration date of such equity-based awards that comprise your Award or any other information, please contact:

MMC Global Compensation

Marsh & McLennan Companies, Inc.

1166 Avenue of the Americas

New York, New York l0036-2774

Telephone Number: (212) 345-5000

Facsimile Number: (212) 345-4767

VIII.

FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of the United States Federal income tax consequences of the equity-based awards that may comprise your Award. This discussion does not address all aspects of the U.S. Federal income tax consequences that may be relevant to you in light of your personal investment or tax circumstances and does not discuss any state or local tax consequences of your Award. This section is based on the Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations under the Code, and published rulings and court decisions, all as currently in effect. These laws are subject to change, possibly on a retroactive basis. Please consult your own tax advisor concerning the application of the U.S. Federal income tax laws to your particular situation, as well as the applicability and effect of any state or local tax laws before taking any actions with respect to your Award.

Performance Contingent Nonqualified Stock Option

You will not be subject to tax upon the grant of a performance contingent nonqualified stock option. Upon exercise of a performance contingent nonqualified stock option, an amount equal to the excess of the fair market value of the shares of common stock acquired on the date of exercise over the exercise price paid is taxable to you as ordinary income. This amount of income will be subject to income and employment tax withholding. Your basis in the shares of common stock received will equal the fair market value of the shares of common stock on the date of exercise, and your holding

period in such shares will begin on the day following the date of exercise. Upon the subsequent disposition of shares of common stock acquired upon the exercise of a performance contingent nonqualified stock option, you will recognize capital gain or loss based upon the difference between the amount realized on such disposition and your basis in such shares, and such amount will be long-term capital gain or loss if such shares were held for more than 12 months. In the taxable year in which you recognize ordinary income upon the exercise of a performance contingent nonqualified stock option, the Company generally will be entitled to a deduction equal to the amount of income recognized by you.

Restricted Stock Units and Performance Based Restricted Stock Units

You will not be subject to tax upon the grant of a restricted stock unit or a performance based restricted stock unit. Upon vesting of restricted stock units or a performance based restricted stock units, the fair market value of the shares of common stock covered by the Award on the vesting date will be subject to FICA employment tax withholding. Upon distribution of the shares of common stock (or, in the event Section V.A.5 is applicable, cash or other property) underlying the restricted stock units or performance based restricted stock units, you will recognize as ordinary income an amount equal to the fair market value on the date of distribution of the shares of common stock (and/or cash or other property) received. This amount of income will be subject to income tax withholding on the date of distribution. Your basis in any shares of common stock received will be equal to the fair market value of the shares of common stock on the date of distribution, and your holding period in such shares will begin on the day following the date of distribution. If any dividend equivalents are paid to you, they will be includible in your income as additional compensation (and not as dividend income) and will be subject to income and employment tax withholding. In the taxable year in which you recognize ordinary income on account of shares of common stock awarded to you, the Company generally will be entitled to a deduction equal to the amount of income recognized by you.

Section 409A

Notwithstanding any other provision herein, your Award may be subject to additional restrictions to ensure compliance with the requirements of Section 409A of the Code (regarding nonqualified deferred compensation) and regulations thereunder. The Committee intends to administer the Awards in accordance with Section 409A of the Code and reserves the right to make changes in the terms or operations of the Awards (including changes that may have retroactive effect) deemed necessary or desirable to comply with Section 409A of the Code. This means, for example, that the timing of distributions may be different from those described in this document or in other materials relating to the Award or the Plan that do not yet reflect Section 409A of the Code and the regulations thereunder. If your Award is not in compliance with Section 409A of the Code, you may be subject to immediate taxation of all vested but unpaid awards under the Plan that are subject to Section 409A of the Code, plus interest at the underpayment rate plus 1%, plus a 20% penalty.

IX.	RESALE RESTRICTIONS

If you are an “affiliate” of MMC at the time you exercise an option and/or receive shares of MMC common stock in respect of the Award, your ability to resell those shares may be restricted. In order to resell such shares, you will be required either to observe the resale limitations of Rule 144 of the Securities Act of 1933, as amended (the “ Securities Act ”), or offer your shares for resale in compliance with another applicable exemption from the registration requirements of the Securities Act.

An “affiliate” is defined, for purposes of the Securities Act, as a person who directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, MMC. A “person” is defined to include any relative or spouse of the person and any relative of the person’s spouse who has the same home as the person, any trust, estate, corporation or other organization in which the person or any of the foregoing persons has collectively more than 10% beneficial interest, and any trust or estate for which the person or any of the foregoing persons serves as trustee, executor or in any similar capacity. A person “controls, is controlled by or is under common control” with MMC when that person directly or indirectly possesses the power to direct or cause the direction of the management and policies of MMC whether through the ownership of voting securities, by contract or otherwise.

X.	INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The Annual Report on Form 10-K of MMC for its last fiscal year, MMC’s Registration Statement on Form 8 dated February 3, 1987, describing MMC common stock, including any amendment or reports filed for the purpose of updating such description, and MMC’s Registration Statement on Form 8-A/A dated January 26, 2000, describing the Preferred Stock Purchase Rights attached to the common stock, including any further amendment or reports filed for the purpose of updating such description, which have been filed by MMC under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), are incorporated by reference herein.

All documents subsequently filed by MMC pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, subsequent to the end of MMC’s last fiscal year and prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such documents.

The Annual Report can be viewed on MMC’s website at http://www.mmc.com/investors/current.php. Participants may receive without charge, upon written or oral request, a copy of any of the documents incorporated herein by reference and any other documents that constitute part of this Prospectus by contacting MMC Global Compensation as indicated above.

Exhibit 10.2

[Guy Carpenter letterhead]

PERSONAL AND CONFIDENTIAL

July 1, 2005

Mr. David Spiller

Dear David:

This will confirm the terms under which Guy Carpenter & Company, Inc. has agreed to employ you.

Position; Reporting; Compensation . You will be employed as the President of Guy Carpenter & Company, Inc. (the “Company”) working from the New York headquarters. In that capacity, you will report directly to the Chief Executive Officer of Guy Carpenter. Furthermore, you will be appointed Chief Executive Officer of the Company no later than the later of: (a) July 1, 2006 or (b) six months after your employment start date. As Chief Executive Officer, you will report directly to the Chairman of Guy Carpenter or the Chief Executive Officer of Marsh & McLennan Companies, Inc. (“MMC”). You will also serve, without additional compensation, as a director of the Company provided that the Company shall indemnify you for such service in accordance with its bylaws. Excluding any periods of disability, vacation and sick leave to which you are entitled, you shall devote all of your attention and time during working hours to the affairs and business of the Company and shall use your best efforts to discharge your responsibilities hereunder. During your employment with the Company, you will not be permitted to serve on outside corporate, civic or charitable boards or committees without the prior written consent of the Company .

Base Salary. Your base salary will be $700,000 per year and will be paid in accordance with normal payroll practices. Your base salary shall be reviewed annually and may be increased as deemed appropriate.

Annual Bonus. You will be eligible for an annual bonus beginning in 2006. The actual bonus paid will be based on performance including, but not limited to, the overall performance of Company, the performance of areas under your supervision and your individual performance on both an objective and subjective basis. Performance will be measured against various objectives (established in consultation with you) and on a subjective basis, as evaluated by the Company, including management characteristics and behaviors. All bonuses will be paid in accordance with applicable policy of MMC for similarly situated executives with respect to the form and timing of the bonus. Provided you are employed at the time of payment, or as otherwise provided herein, you will have the following guaranteed minimum annual bonuses:

2006 Performance

$1,250,000

2007 Performance

$1,250,000

2008 Performance

Minimum of $750,000 (Target bonus will be 200% of base salary with actual bonus based on Company and individual performance).

Contract Term . The parties acknowledge that your employment shall not commence until the first date (or such later date to which we agree) after such time as you have satisfied all obligations under that certain service agreement, dated August 18, 1998, between yourself and Benfield Greig Group PLC. The agreement shall terminate on December 31, 2008; provided, however that the contract term shall be automatically extended for one year unless written notice of desire not to renew is provided, by either party, not later than 120 days prior to the scheduled expiration of the contract term.

Long-Term Incentive Compensation . You will be eligible to participate in the Marsh & McLennan Companies, Inc. (“MMC”) long-term incentive compensation plans. Subject to your continuous employment with the Company, the total value at grant of long-term incentive compensation awards will be guaranteed for 2006 and 2007 performance years. The value at grant for 2006 and 2007 awards, which are expected to be granted in the first quarter of the year following the performance year, will be $1.5 million for each of these years. These awards will have vesting and other terms and conditions that are consistent with that provided to similarly situated executives receiving awards of the same type at the same time. For valuation purposes, restricted shares/units and stock options/stock appreciation rights will have a value based on the market price of a share of MMC common stock at the time of grant (FMV). The value of restricted shares/units will be equal to 100% of the FMV at the time of grant while stock options/stock appreciation rights with a ten year exercise period have a value equal to 1/3 of the FMV at the time of grant. The Long-Term Incentive shall be payable at the same time that long-term incentives are paid to similarly situated executives of the Company, subject to your continued employment through the date on which the Long-Term Incentive is awarded.

Signing Bonus Award . At the first regularly scheduled meeting of the Compensation Committee of the MMC Board of Directors following your start date, you will be granted restricted shares of MMC common stock or restricted units (Shares) with a value at grant equal to $3 million. These shares will be granted to you pursuant to MMC’s long-term incentive plans and will vest on the earlier of: December 31, 2008 or the third anniversary of grant (or upon your death, if earlier) or in accordance with paragraph 8 below. Upon vesting, you will receive unrestricted common stock of MMC less applicable payroll and withholding taxes.

Make–up Award . Subject to you providing the Company with appropriate supporting documentation as set forth below, you will be entitled to a make-up award totaling $4,265,319: provided, however, that such amount shall be reduced as follows (a) stock options granted by your former employer which are scheduled to vest in June 2006 are not forfeited ($1,423,317), and (b) on a dollar for dollar basis, to the extent (i) you are not required to forfeit any amount of the deferred portion of your 2004 annual bonus (ii), you receive an annual bonus with respect to the 2005 performance year, (iii) you are not required to forfeit your matching shares acquired under the Share Match Plan of your former employer or (iv) you receive a severance payment or other termination payment from your employer in connection with your termination of employment. You agree to provide the Company with appropriate supporting documentation supporting the forfeiture of the amounts identified above when and if such documentation becomes available. In addition, you agree to provide the Company with a copy of any written termination agreement between you and your former employer.

Severance If the Company terminates your employment without Cause, or you resign for Good Reason, during the term of this agreement, in addition to the payment of all salary and other benefits earned prior to such termination (and reimbursement for all covered business expenses incurred prior to termination) (a) the Company, in lieu of any other severance payments except as provided herein, shall pay to you quarterly in arrears over the Applicable Non-Solicitation Period the sum of: (1) two times your current base salary plus (2) two times (i) with respect to any such termination prior to December 31, 2007, the higher of your actual bonus for the year preceding the year of termination, if any or $1,250,000 or (ii) with respect to any such termination of employment occurring after December 31, 2007, your actual bonus for the year preceding the year of termination, plus (b) the signing bonus award set forth in paragraph 6 above shall be fully vested, plus (c) pro-rata vesting of guaranteed awards of restricted shares/units under paragraph 5 above (based on duration of employment during the vesting period, provided that, solely for purposes of determining the pro-rata vesting in this subsection (c), the vesting period of such restricted shares/units shall be deemed to not exceed 3 years) plus (d) the Company shall continue to pay, or reimburse you for, the Company’s cost (as if your were an active employee of the Company) of continuation of group medical benefit coverage as provided under COBRA for a period of 18 months after termination of employment. All other awards will be subject to the normal terms and conditions of the plans under which they are granted. The payments and benefits to be provided under clauses (a) through (d) above are subject to your prior execution and non-revocation of a waiver and release agreement substantially in the form attached hereto as Exhibit A.

For purposes of this agreement “Cause” shall mean:

willful failure to substantially perform the duties consistent with your position (other than any such failure resulting from your disability) which is not remedied within 30 days after receipt of written notice from the Company specifying such failure;

ii.

willful failure to carry out, or comply with, in any material respect any lawful and reasonable directive of the Company or MMC, which is not remedied within 30 days after receipt of written notice from the Company specifying such failure;

iii.

willful failure to materially cooperate with an investigation authorized by the Board, a self-regulatory organization empowered with self-regulatory responsibilities under federal securities or state laws or a governmental department or agency (an “Investigation”) or any attempt to influence, obstruct or impede an Investigation, which is not cured within 2 days after receipt of written notice from the Company specifying such failure;

iv.

willful attempt to withhold, remove, conceal, destroy, alter or by other means falsify any material which is requested in connection with an Investigation, or soliciting another to do so;

indictment or other criminal charge for any felony or crime involving moral turpitude;

vi.

habitual abuse of narcotics or alcohol or unlawful use (including being under the influence) or possession of illegal drugs;

vii.

the commission at any time of any act of fraud, embezzlement, misappropriation, or breach of fiduciary duty against the Company (or any predecessor thereto or successor thereof) or which would have a detrimental impact on the Company; or

viii.

any other act or omission which is materially injurious to the business reputation of the Company or any of its subsidiaries or affiliates, unless done in good faith and with reasonable belief that the act or omission is in the best interest of the Company.

For purposes of this agreement “Good Reason” shall be deemed to occur, in each event, only if you provide notice to the Company within 30 calendar days after the later of either the occurrence of any event or events or your knowledge of such event or events which you believe constitutes Good Reason for your resignation, specifying in reasonable detail the conduct constituting Good Reason, and the Company fails to cure and correct its conduct within 30 calendar days after receiving such notice. Subject to the foregoing, for purposes of this Agreement, “Good Reason” shall mean, without your prior consent:

the failure of the Company to make any material payment or provide any material benefit to you that is required to be made or provided under this agreement or the material breach of the terms of this Agreement by the Company;

ii.

relocation of your principal office location greater than fifty miles from the current company headquarters;

iii.

significant diminution of title, authority or responsibility;

iv.

failure to appoint you Chief Executive Officer of the Company no later than the later of: (a) July 1, 2006 or (b) six months after your employment start date with the Company.

Benefit Plans . During the Employment Period, you, your spouse and dependents, as the case may be, shall be eligible for participation in employee benefit and fringe benefit plans, practices, policies and programs provided by MMC on terms and conditions substantially similar to those generally provided to similarly situated executives, except that you waive participation in MMC’s U.S. Retirement and Stock Investment Plans, both qualified and non-qualified. You agree to sign a separate document waiving your participation in these plans. Subject to the receipt of this waiver, in lieu of your participation in these Plans, during your employment with the Company, it will credit you with non-qualified deferred compensation of $150,000 per year (pro-rata for partial years) in arrears under a non-qualified deferred compensation plan. The non-qualified deferred compensation is subject to 3-year cliff vesting and will be distributed to you in a single lump-sum within seven months (or such other period as may be required by Section 409A of the Internal Revenue Code) following your termination of employment provided you are vested at the time of termination. In addition, you shall be entitled to the benefits set forth on Exhibit B .

10.

Confidentiality . During the course of your employment with the Company, you will have access to confidential information, including, but not limited to, business plans and strategies, confidential customer information, prospecting plans, business systems, financial information, identity of customers and prospects to the extent that such identity is not generally known or ascertainable from public sources, pricing, costs, services provided to clients or customers of the Company, confidential information about personnel employed by the Company, and other information not generally known or ascertainable from public sources that, if disclosed to any third party, could have an adverse effect on the business or prospects of the Company (the “Confidential Information”). You shall not use, disclose, divulge, or make accessible to any third party any Confidential Information except (a) for the benefit of the Company in the course of performing your duties as an employee of the Company or (b) if, and only to the extent that, you

are required to do so by a final order of a court of competent jurisdiction or (c) if at the time of receipt or thereafter such information is publicly known through no wrongful act of your own. Notwithstanding the foregoing, “Confidential Information” shall not include (i) your personal rolodex or (ii) information in your possession as of the date of this agreement.

11.

Covenant Not to Compete . To protect the confidentiality of the Company’s proprietary information and the goodwill you have developed with insurance companies, wholesalers, clients and others during your employment with the Company, and in recognition of your unique skills and commercial value, you will not, during the Applicable Non-Competition Period (as defined below), on your own account or as an employee, consultant, independent contractor, reinsurance intermediary, partner, owner, agent, principal, officer, director or stockholder, directly or indirectly engage in, be connected with, have any interest in, or assist anyone else to engage in, be connected with, or have any interest in any business that competes with the Company in the insurance brokerage or risk management consulting business; provided that you may purchase securities in any corporation whose securities are listed or traded on a national securities exchange or in an over-the-counter securities market if such purchases do not result in your beneficial ownership at any time of one percent or more of the equity securities of any such corporation. Notwithstanding the foregoing, the acquisition of securities of your previous employer pursuant to pre-existing equity awards shall not be treated as a violation of this paragraph 11. The Applicable Non-Competition Period shall start on the date when this agreement is signed by both of us and shall end twelve months from the date when your employment with the Company terminates.

12.

Non-Solicitation of Employees, Officers, Consultants or Agents . During the Applicable Non-Solicitation Period (as defined below), you shall not, directly or indirectly, (i) induce or attempt to induce any employee, officer, consultant or agent of the Company or any affiliate thereof to leave the employ of or terminate any contractual, agency or other business relationship with the Company, or in any way interfere with the relationship between the Company and any employee, officer, agent, consultant thereof, or (ii) hire, contract with or otherwise engage or retain any person who was an employee, officer, consultant or agent of the Company on the date hereof to work for you or any other person or entity in competition with the Company. We agree and expressly declare our intention that the restrictions set forth in this paragraph 12 shall apply regardless of who initiates the discussions, a circumstance that shall conclusively be deemed irrelevant and immaterial in any action to enforce, or to recover damages for breach of, this Agreement. The Applicable Non-Solicitation Period shall start on the date when this agreement is signed by both of us and shall end on the later of (a) December 31, 2008 (or two years from the date you employment with the Company terminates, if earlier), or (b) twelve months from the date when your employment with the Company terminates.

13.

Non-Solicitation of Customers or Prospects; Non-Acceptance of Business . During the Applicable Non-Solicitation Period, you shall not, directly or indirectly, induce or attempt to induce any customer, client, or prospective customer or client of the Company to enter into any transaction or business relationship that would in any way diminish the value to the Company of the Company’s actual or prospective business relationship with any such client or customer or in any way interfere with the existing business or prospective economic relationship between any such entity or person, on the one hand, and the Company, on the other hand. We agree and expressly declare our intention that the restrictions set forth in this paragraph 13 shall apply regardless of who initiates the discussions, a circumstance that shall conclusively be deemed irrelevant and immaterial in any action to enforce, or to recover damages for breach of, this Agreement. In addition, during the Applicable Non-Solicitation Period, you shall not directly or indirectly accept

any payment from, nor perform services for, any customer, client or prospective customer or client of the Company if such direct or indirect acceptance of payment or performance of services would be in competition with the business of the Company.

14.

Geographic Scope of Restrictions . You acknowledge and agree that the duties of your employment with the Company will be international in geographic scope and, accordingly, the restrictions to which you agree under sections 10 through 13, above, shall apply anywhere in the world.

15.

Severability. It is expressly understood and agreed that, if any restriction contained in sections 10 through 13, above, is determined by a court of competent jurisdiction to be an unenforceable restriction on your activities, the provisions of sections 10 though 13 shall not be rendered void but shall be deemed amended to apply to maximum temporal, territorial and other extent as such court may deem reasonable. Alternatively, if a court of competent jurisdiction finds that any restriction contained in sections 10 through 13 is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any other restriction in this Agreement.

16.

Damages at Law Inadequate . You acknowledge and agree that the Company’s remedy at law for a breach or threatened breach of any of the provisions of Sections 10 through 13 of this Agreement would be inadequate and, in recognition of this fact, in the event of a breach or threatened breach by you of any of the provisions of this Agreement, you agree that the Company may withhold all amounts then or thereafter otherwise due to you and shall also be entitled to equitable relief in the form of specific performance, temporary restraining order, a temporary or permanent injunction or any other equitable remedy otherwise available. Nothing herein contained shall be construed as prohibiting the Company from pursuing, in addition, any other remedies available to it (including suing you for damages) for such breach or threatened breach. The waiver by the Company of a breach of any provision of this Agreement by you shall not operate or be construed as a waiver of a breach of any other provision of this Agreement or of any subsequent breach by you.

17.

Golden Parachute Excise Tax Gross-up. You will be provided with excise tax protection on the long term grants including the signing bonus award of restricted shares/units in the event there is a change of control of MMC within 3 years of your start date and you are subject to the excise tax imposed by Section 4999 of the Internal Revenue Code. Thereafter, you will be treated like similarly situated executives.

18.

Continuation of Employment . Unless you and the Company otherwise agree in writing, continuation of your employment with the Company beyond the expiration of the contract term set forth in paragraph 4 above shall be deemed an employment at will and shall not be deemed to extend any of the provisions of this Agreement, and your employment may thereafter be terminated at will by you or the Company at any time, with or without notice, for any reason or for no reason at all.

19.

Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to principles of conflict of laws.

20.

Entire Agreement/Amendments . This Agreement contains the entire understanding of the parties with respect to your employment by the Company. There are no restrictions, agreements, promises, warranties, covenants or undertakings between you and the Company with respect to the subject matter herein other than those expressly set forth herein. This Agreement may not be altered, modified, or amended except by written instrument signed by you and the Company. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

21.

Successor Employer . The Company shall obtain an agreement from any successor to the business of the Company to assume and agree to perform this Agreement.

Kindly signify your acceptance of this agreement by signing, and returning to me, one copy of this agreement.

Sincerely,

/s/ Salvatore D. Zaffino

Salvatore Zaffino

Chairman and Chief Executive Officer

Guy Carpenter & Company, Inc.

Agreed to and accepted

this 2nd day of July, 2005:

/s/ D. H. Spiller

D.H. Spiller

EXHIBIT A

GENERAL RELEASE OF ALL CLAIMS

1. For valuable consideration, the adequacy of which is hereby acknowledged, the undersigned (“Executive”), on his own behalf and on behalf of his heirs, executors, administrators, successors, representatives and assigns, does herein knowingly and voluntarily unconditionally release, waive, and fully discharge Guy Carpenter and Company, and its parent and subsidiaries (including successors and assigns thereof) (collectively, the “Company”), and all of their respective past and present employees, officers, directors, agents, affiliates, parents, predecessors, administrators, representatives, attorneys, and shareholders, and employee benefit plans and plan administrators, from any and all legal claims, liabilities, suits, causes of action (whether before a court or an administrative agency), damages, costs, attorneys’ fees, interest injuries, expenses, debts, or demands of any nature whatsoever, known or unknown, liquidated or unliquidated, absolute or contingent, at law or in equity, which were or could have been filed with any Federal, state, or local court, agency, arbitrator or any other entity, based directly or indirectly on Executive’s employment with and separation from Company or based on any other alleged act or omission by or on behalf of Company prior to Executive’s signing this General Release. Without limiting the generality of the foregoing terms, this General Release specifically includes all claims based on the terms, conditions, and privileges of employment, and those based on breach of contract (express or implied), tort, harassment, intentional infliction of emotional distress, defamation, negligence, privacy, employment discrimination, retaliation, discharge not for just cause, constructive discharge, wrongful discharge, the Age Discrimination in Employment Act of 1967, as amended (the “ADEA”), the Older Workers Benefit Protection Act of 1990, the Worker Adjustment and Retraining Notification Act, as amended, Executive Order 11,141 (age discrimination), Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Civil Rights Act of 1866 and 1871, Sections 1981 through 1988 of Title 42 of the United States code, as amended, 41 U.S.C. §1981 (discrimination), 29 U.S.C. §206(d)(1) (equal pay), Executive Order 11,246 (race, color, religion, sex and national origin discrimination), the National Labor Relations Act, the Fair Labor Standards Act, the Americans with Disabilities Act of 1990, the Occupational Safety and Health Act, as amended, the Family Medical Leave Act, the Immigration Reform and Control Act, as amended, the Vietnam Era Veterans Readjustment Assistance Act §§503-504 of the Rehabilitation Act of 1973 (handicap rehabilitation), the Employee Retirement Income Security Act of 1974, as amended, any federal, state or local fair employment, civil or human rights, wage and hour laws and wage payment laws, and any and all other Federal, state, local or other governmental statutes, laws, ordinances, regulations and orders, under common law, and under any Company policy, procedure, bylaw or rule. This General Release shall not waive or release any rights or claims that Executive may have which arise after the date of this General Release (including any rights of the Executive under that certain Employment Agreement entered into between the Company and the Executive, dated as of the 1st day of July 2005 (the “Employment Agreement”)) and shall not waive post-termination health-continuation insurance benefits required by state or Federal law and shall not waive any rights of the Executive under the Employment Agreement.

2. Executive intends this General Release to be binding on his successors, and Executive specifically agrees not to file or continue any claim in respect of matters covered by Section 1, above. Executive further agrees never to institute any suit, complaint, proceeding, grievance or action of any kind of law, in equity, or otherwise in any court of the United States or in any state, or in any administrative agency of the United States or any state, county or municipality, or before any other tribunal, public or private, against Company arising from or relating to his employment with or his termination of employment from Company and/or any other occurrences to the date of this General Release, other than a claim challenging the validity of this General Release under the ADEA or respecting any matters not covered by this General Release.

3. Executive is further waiving his right to receive money or other relief in any action instituted by him or on his behalf by any person, entity or governmental agency in respect of matters covered by this General Release. Nothing in this General Release shall limit the rights of any governmental agency or his right of access to, cooperation or participation with any governmental agency, including without limitation, the United States Equal Employment Opportunity Commission. Executive further agrees to waive his rights under any other statute or regulation, state or federal, which provides that a general release does not extend to claims which Executive does not know or suspect to exist in his favor at the time of executing this General Release, which if known to him must have materially affected his settlement with Company.

4. Executive agrees that Executive shall not be eligible and shall not seek or apply for reinstatement or re-employment with Company and agrees that any application for re-employment may be rejected without explanation or liability pursuant to this provision.

5. In further consideration of the promises made by Company in this General Release, Executive specifically waives and releases Company from all claims Executive may have as of the date of this General Release, whether known or unknown, arising under the ADEA. Executive further agrees that:

(a)

Executive’s waiver of rights under this General Release is knowing and voluntary and in compliance with the Older Workers Benefit Protection Act of 1990 (“OWBPA”);

(b)

Executive understands the terms of this General Release;

(c)

The consideration offered by Company under paragraph 8 of the Employment Agreement in exchange for the General Release represents consideration over and above that to which Executive would otherwise be entitled, and that the consideration would not have been provided had Executive not agreed to sign the General Release and did not sign the Release;

(d)

Company is hereby advising Executive in writing to consult with an attorney prior to executing this General Release;

(e)

Company is giving Executive a period of twenty-one (21) days within which to consider this General Release;

(f)

Following Executive’s execution of this General Release, Executive has seven (7) days in which to revoke this General Release by written notice. An attempted revocation not actually received by Company prior to the revocation deadline will not be effective; and

(g)

This General Release and all payments and benefits otherwise payable under paragraph 8 of the Employment Agreement (other than the Accrued Obligations) shall be void and of no force and effect if Executive chooses to so revoke, and if Executive chooses not to so revoke, this General Release shall then become effective an enforceable.

6. This General Release does not waive rights or claims that may arise under the ADEA after the date Executive signs this General Release. To the extent barred by the OWBPA, the covenant not to sue contained in Section 2 does not apply to claims under the ADEA that challenge the validity of this General Release.

7.	To revoke this General Release, Executive must send a written statement of revocation to:

[Address]

[Attn.: ]

The revocation must be received no later than 5:00p.m. on the seventh day following Executive’s execution of this General Release. If Executive does not revoke, the eighth day following Executive’s acceptance will be the “effective date” of this General Release.

8. This General Release shall be governed by the internal laws (and not the choice of laws) of the State of New York, except for the application of pre-emptive Federal law.

PLEASE READ THIS AGREEMENT CAREFULLY, IT CONTAINS A RELASE OF ALL KNOWN AND UNKNOWN CLAIMS.

EXHIBIT B

In addition to the participation in employee benefit and fringe benefit plans as set forth in section 9 of this Agreement, you will be entitled to the following:

Access to first class commercial air travel for flights over 3 hours for business travel.

You shall receive the standard executive relocation package, including tax gross-up, temporary housing for 90 days, and reimbursement for relocation to home country (under the MMC relocation policy) if your employment is terminated by the Company for other than Cause or by you for Good Reason within the initial three-year Contract Term.

Upon your commencement of employment with the Company, the Company will reimburse you for legal fees and expenses incurred in the negotiations, preparation and execution of the Employment Agreement, as well as separation from your current employer, up to an amount of $75,000.

The Company shall obtain at its own cost, with your full cooperation, all necessary immigration work papers, visas, permits, etc. as shall be required with respect to the your employment with the Company, and shall reimburse you for all costs and fees in connection therewith.

You shall be entitled to paid annual vacation of five weeks per year (pro-rated for partial years of employment), in accordance with the Company’s vacation policies applicable to other similarly situated executives.

[Guy Carpenter letterhead]

PERSONAL AND CONFIDENTIAL

July 1, 2005

Mr. David H. Spiller

Dear David:

We have been discussing the possibility of you joining Guy Carpenter (“the Company”) as its President, and your leaving employment with Benfield Greig Group plc (“Benfield Greig”).

As part of those negotiations you have raised with us your concern that Benfield Greig or its subsidiaries (collectively referred to in this letter as “Benfield”) or one or more of the shareholders of Benfield Greig (“the Shareholders”) may threaten or issue proceedings against you in connection with your departure. You have asked us to provide certain assurances to you, should this happen.

We are, in principle, prepared to provide these assurances to you on the conditions which we have set out below. However, we must make it clear that we are not asking you to break any of your terms of employment with Benfield nor any other legal obligations owed to Benfield or the Shareholders (“your obligations”). Indeed, we expressly wish to you comply fully with your obligations. You warrant to us that you have disclosed to us, fully and frankly, your express obligations to Benfield or the Shareholders, and any documents that contain your express obligations, in particular your Service Agreement.

If you accept our offer of employment at the same time as countersigning this letter and join us by no later than 15 July 2006, then the Company will indemnify you in respect of all Costs arising in relation to any threatened or actual claims by Benfield and/or any or all of the Shareholders against you in connection with your departure including (without limitation) claims to enforce your obligations and claims for damages for breach of your obligations. For these purposes, “Costs” means any damages which you are ordered to pay or any payment by way of settlement that you agree (with our prior express approval) together with your reasonable legal costs and disbursements (for which you will be indemnified as such costs are discharged by you) and including any legal costs of Benfield and/or the Shareholders that you are ordered to pay in relation to those proceedings. This indemnity will not apply in respect of any acts or omissions by you in connection with your departure which (a) have occurred prior to the date of this letter (and you have warranted to us that you are not in breach of any of your obligations as at the date of this letter); or (b) occur on or after the date of this letter save where they are, or arise out of, any actions or omissions approved or requested by us.

You undertake that you will obtain instructions from the Company on the conduct of any proceedings and will use your reasonable endeavours to comply with those instructions. You agree to take any action and give any information and assistance that we may reasonably request in respect of these proceedings and not to take any steps which will prejudice your ability either to defend or settle those proceedings without first obtaining our prior consent.

The Company’s obligation to indemnify you will only be to indemnify you for such sums as are due from you to Benfield and/or the Shareholders after deducting any sums received by you from any third parties in respect of such claims, by way of indemnification or contribution or otherwise, and if requested by the Company after you have taken all reasonable steps, in accordance with the instructions of the Company, to claim any rights to indemnification or contribution or other financial assistance in respect of matters covered by this side letter from any third party, including Benfield.

This side letter shall be governed by and construed in accordance with the laws of England and Wales.

If you are accepting our offer of employment, please also confirm the terms of this letter are acceptable by signing and returning the enclosed copy at the same time.

Sincerely,

/s/ Salvatore D. Zaffino

Salvatore Zaffino

Chairman and Chief Executive Officer

Guy Carpenter & Company, Inc.

Agreed to and accepted

this 2 ^nd day of July, 2005:

/s/ D. H. Spiller

D. H. Spiller

Exhibit 10.3

MARSH & McLENNAN COMPANIES, INC.

DIRECTORS’ STOCK COMPENSATION PLAN

May 15, 2003 Restatement

MARSH & McLENNAN COMPANIES, INC.

DIRECTORS’ STOCK COMPENSATION PLAN

May 15, 2003 Restatement

Purpose.

The Marsh & McLennan Companies, Inc. Directors’ Stock Compensation Plan is intended to provide an incentive to members of the Board of Directors of Marsh & McLennan Companies, Inc. who receive fees for their services, to remain in the service of the Company and to encourage such Directors to acquire additional stock ownership interests in the Company.

Definitions.

(a)

“Accounting Date” means June 1 ^st of each Plan Year.

(b) “Annual Share Fee” shall mean, the number of shares of Common Stock payable to each Director pursuant to Section 5(b) hereof, as shall be determined by the Committee in its discretion.

(c) “Basic Fee” means the annual retainer specified in a dollar amount payable to a Director during each Plan Year (at the rate in effect on the Accounting Date of such Plan Year) for such Director’s services on the Board (exclusive of the Annual Share Fee and of any amounts payable with respect to service on a committee of the Board or other committee of Directors or for attendance at Board or committee meetings).

(d)

“Board” means the Board of Directors of the Company.

(e) “Committee” means the Directors and Governance Committee of the Board.

(f) “Common Stock” means the common stock, par value $1.00 per share, of the Company.

(g) “Company” means Marsh & McLennan Companies, Inc., a Delaware corporation.

(h) “Deferral Election” has the meaning set forth in Section 5(d) hereof.

(i) “Deferred Shares” has the meaning set forth in Section 5(d) and 5(e) hereof. In addition, “Deferred Shares” include converted phantom stock units held as of June 1, 1995 by Directors pursuant to a deferral agreement or arrangement between the Company and the Director.

(j)

“Dividend Equivalents” has the meaning set forth in Section 5(e).

(k) “Director” means a member of the Board who receives fees for his or her services.

(l) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(m) “Fair Market Value” on any given date means, except as otherwise provided in Section 5(g) hereof, the average of the high and low prices of the Common Stock on the New York Stock Exchange on the last trading day preceding such date.

(n) “Maximum Cash Compensation” means the aggregate amount payable to a Director for such Director’s services on the Board (including any amounts payable with respect to service on a committee of the Board or other committee of Directors or for attendance at Board or committee meetings, but excluding (i) the Annual Share Fee and (ii) the portion of the Basic Fee with respect to which shares of Common Stock are issuable pursuant to Section 5(a) hereof).

(o) “Plan” means the Marsh & McLennan Companies, Inc. Directors’ Stock Compensation Plan, as in effect from time to time.

(p) “Plan Year” means the twelve-month period commencing June 1 ^st and ending on the following May 31 ^st .

Administration of the Plan.

The Plan shall be administered by the Committee. The Committee shall adopt such rules as it may deem appropriate in order to carry out the purpose of the Plan. All questions of interpretation, administration, and application of the Plan shall be determined by a majority of the members of the Committee, except that the Committee may authorize any one or more of its members, or any officer of the Company, to execute and deliver documents on behalf of the Committee. The determination of such majority shall be final and binding in all matters relating to the Plan. No member of the Committee shall be liable for any act done or omitted to be done by such member or by any other member of the Committee in connection with the Plan, except for such member’s own willful misconduct or as expressly provided by statute.

Common Stock Reserved for the Plan.

The number of shares of Common Stock authorized for issuance under the Plan, as adjusted pursuant to Section 6 hereof for events prior to the date of this May 15, 2003 restatement, is 1,500,000, including Deferred Shares, whether anticipated to be distributed as shares or paid in cash, subject to further adjustment pursuant to Section 6 hereof for events subsequent to May 15, 2003. Shares of Common Stock delivered hereunder may be either authorized but unissued shares or previously issued shares reacquired and held by the Company.

Terms and Conditions of Grants.

(a) Mandatory Portion of Basic Fee. On each Accounting Date each Director shall automatically receive a number of shares of Common Stock with a Fair Market Value on such Accounting Date equal to one-quarter (1/4) of his or her Basic Fee payable during the Plan Year which commences on such Accounting Date. Such shares of Common Stock (including fractional shares) shall be received in lieu of the payment of cash in respect of one-quarter (1/4) of such Basic Fee and shall be transferred on such Accounting Date in accordance with Section 5(f) hereof, except to the extent that a Deferral Election shall be in effect with respect to such shares or to the extent that Section 5(g) hereof applies.

(b) Annual Share Fee. On each Accounting Date, each Director shall automatically receive an Annual Share Fee as additional annual compensation for such Director’s services on the Board.

(c) Elective Portion of Maximum Cash Compensation. Each Director may elect that a designated percentage (in increments of 10%) of his or her future Maximum Cash Compensation be paid in shares of Common Stock. Such shares of Common Stock (including fractional shares) shall be received in lieu of the payment of cash in respect of the designated percentage of future Maximum Cash Compensation payable for services rendered in the quarters ended August 15 ^th , November 15 ^th , February 15 ^th and May 15 ^th , as the case may be. Such shares of Common Stock shall be transferred in accordance with Section 5(f) hereof, except to the extent that a Deferral Election shall be in effect with respect to such shares or to the extent that Section 5(g) hereof applies. An election hereunder shall be in the form of a document executed and filed with the Secretary of the Company and shall remain in effect until the effectiveness of any modification or revocation.

(d) Deferral Election. With respect to (i) the portion of the Basic Fee payable in Common Stock under Section 5(a) hereof, (ii) the Annual Share Fee payable in Common Stock under Section 5(b) hereof and (iii) the designated percentage of Maximum Cash Compensation payable in Common Stock under Section 5(c) hereof, each Director may elect to defer the receipt (a “Deferral Election”) of all or any portion of the shares of Common Stock otherwise transferable pursuant to Section 5(f) hereof. In

such event, there shall be credited to an account maintained on behalf of such Director, as of the date on which shares would otherwise be transferred hereunder, a number of Shares (“Deferred Shares”) equal to the number of shares otherwise transferable.

A Deferral Election or revocation hereunder shall be in the form of a document executed by the Director and filed with the Secretary of the Company prior to the time that the fees or compensation to which such election relates has been earned. Any such election may be modified or revoked at any time with respect to fees or compensation not yet earned, but will remain in effect until so modified or revoked. With respect to director fees or compensation already earned, deferral elections may be modified within the sole discretion of the Committee subject to such conditions and restrictions as the Committee determines are necessary or appropriate including, without limitation, to comply with federal income tax law and rules. Notwithstanding anything else in this Plan, the Committee may, in its sole discretion, accelerate the distribution of Deferred Shares in cases of extreme emergency or hardship.

The Director shall elect (a) that Deferred Shares be distributed in a lump sum or in annual installments (not exceeding 10), and (b) that the lump sum or first installment be distributed on the tenth day of the calendar year immediately following either (i) the year in which the Director ceases to be a Director of the Company or (ii) the earlier of the year in which the Director ceases to be a Director of the Company or a date designated by the Director; provided, however, that any such election shall be subject to Section 5(g) hereof. Installments subsequent to the first installment shall be distributed on the tenth day of each succeeding calendar year until all of the Director’s Deferred Shares shall have been distributed.

In the event the Director should die before all of the Director’s Deferred Shares have been distributed, the balance of the Deferred Shares shall be distributed in a lump sum to the beneficiary or beneficiaries designated in writing by the Director, or if no designation has been made, to the estate of the Director.

All lump sum distributions of Deferred Shares shall be in whole shares of Common Stock, with cash to be paid in lieu of fractional shares. The number of shares to be distributed on each installment date to a Director who has elected to receive shares in annual installments shall be determined by multiplying the number of Director’s remaining Deferred Shares by a fraction the numerator of which is one and the denominator of which is the then remaining number of annual installments (including the immediate installment); all such distributions shall be in whole shares of Common Stock, with cash to be paid in lieu of fractional shares for the final installment and fractional shares to be rounded to the nearest whole number for all other installments.

(e) Dividend Equivalents. Deferred Shares shall be credited with an amount equal to the dividends which would have been paid on an equal number of outstanding shares of Common Stock (“Dividend Equivalents”). Dividend Equivalents shall be credited (i) as of the payment date of such dividends, and (ii) only with respect to Deferred Shares credited to such Director prior to the record date of the dividend. Deferred Shares held pending distribution shall continue to be credited with Dividend Equivalents.

Dividend Equivalents so credited shall be converted into an additional number of Deferred Shares as of the payment date of the dividend (based on the Fair Market Value on such payment date). Such Deferred Shares shall thereafter be treated in the same manner as any other Deferred Shares under the Plan.

(f) Transfer of Shares. All shares transferable pursuant to this Section 5(f) will be so transferred unless the Director has made a Deferral Election pursuant to Section 5(d) hereof, in which case only those shares that are not subject to the Deferral Election will be so transferred.

Shares of Common Stock issuable to a Director under Sections 5(a) and 5(b) hereof shall be transferred to such Director as of each Accounting Date. The total number of shares of Common Stock to be so transferred under Section 5(a) hereof shall be determined by dividing (w) one-quarter (1/4) of such Director’s Basic Fee payable during the Plan Year commencing on such Accounting Date by (x) the Fair Market Value of a share of Common Stock on such Accounting Date. Shares of Common Stock issuable to a Director under Section 5(c) hereof shall be transferred to such Director on August 31 ^st , November 30 ^th , February 28 ^th and May 31 ^st of each Plan Year. The total number of shares of Common Stock to be so transferred on each such date shall be determined by dividing (y) the product of (1) the percentage specified by the Director pursuant to Section 5(c) hereof and (2) the Director’s Maximum Cash Compensation payable for services rendered in the quarter ending on August 15 ^th , November 15 ^th , February 15 ^th or May 15 ^th of such Plan Year, as the case may be, by (z) the Fair Market Value of a share of Common Stock on such date. The registrar for the Company will make an entry on its books and records evidencing that such shares (including any fractional shares) have been duly issued as of such dates; provided, however, that a Director may in the alternative elect in writing prior thereto to receive a stock certificate representing the number of whole such shares acquired plus cash in lieu of any fractional shares.

(g) Change in Control. Upon a Change in Control, all Deferred Shares, to the extent credited prior to the Change in Control, shall be paid immediately in cash. For purposes of this Section 5(g), with respect to determining the cash equivalent value of a Deferred Share, the Fair Market Value of such a Deferred Share shall be deemed to equal the greater of (i) the highest Fair Market Value per share at any time during the 60-day period preceding a Change in Control and (ii) the price of a share of

Common Stock which is paid or offered to be paid, by any person or entity, in connection with any transaction which constitutes a Change in Control pursuant to this Section 5(g).

For purposes of the Plan, a “Change in Control” shall have occurred if:

(i) any “person”, as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of Common Stock of the Company), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding voting securities;

(ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (i), (iii), or (iv) of this Section 5(g) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof;

(iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity (or any parent of the Company or such surviving entity) outstanding immediately after such merger or consolidation or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no “person” (as herein above defined) acquired more than 50% of the combined voting power of the Company’s then outstanding securities; or

(iv) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (or any transaction having a similar effect).

Effect of Certain Changes in Capitalization.

In the event of any recapitalization, stock split, reverse stock split, stock dividend, reorganization, merger, consolidation, spin-off, combination, repurchase, or share exchange, or other similar corporate transaction or event affecting the Common Stock, the maximum number or class of shares available under the Plan, and the number or class of shares of Common Stock to be delivered hereunder shall be adjusted by the Committee to reflect any such change in the number or class of issued shares of Common Stock.

Term of Plan.

The Plan shall remain in effect until all authorized shares have been issued, unless sooner terminated by the Board.

Amendment; Termination.

The Board may at any time and from time to time alter, amend, suspend, or terminate the Plan in whole or in part.

Rights of Directors.

Nothing contained in the Plan or with respect to any grant shall interfere with or limit in any way the right of the stockholders of the Company to remove any Director from the Board, nor confer upon any Director any right to continue in the service of the Company as a Director.

10.

General Restrictions.

(a) Investment Representations. The Company may require any Director to whom Common Stock is issued, as a condition of receiving such Common Stock, to give written assurances in substance and form satisfactory to the Company and its counsel to the effect that such person is acquiring the Common Stock for his own account for investment and not with any present intention of selling or otherwise distributing the same, and to such other effects as the Company deems necessary or appropriate in order to comply with Federal and applicable state securities laws.

(b) Compliance with Securities Laws. Each issuance shall be subject to the requirement that, if at any time counsel to the Company shall determine that the listing, registration or qualification of the shares upon any securities exchange or under any state or Federal law, or the consent or approval of any governmental or regulatory

body, is necessary as a condition of, or in connection with, the issuance of shares hereunder, such issuance may not be accepted or exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained on conditions acceptable to the Committee. Nothing herein shall be deemed to require the Company to apply for or to obtain such listing, registration or qualification.

(c) Nontransferability. Deferred Shares under the Plan shall not be transferable by a Director other than by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined in the Internal Revenue Code of 1986, as amended, or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder.

11.

Withholding.

The Company may defer making payments under the Plan until satisfactory arrangements have been made for the payment of any Federal, state or local income taxes required to be withheld with respect to such payment or delivery.

12.

Governing Law.

The Plan and all rights hereunder shall be construed in accordance with and governed by the laws of the State of Delaware.

13.

Headings.

The headings of sections and subsections herein are included solely for convenience of reference and shall not affect the meaning of any of the provisions of the Plan.

MARSH & McLENNAN COMPANIES, INC.

DIRECTORS’ STOCK COMPENSATION PLAN

ANNEX I

Purpose.

Pursuant to resolutions adopted by the Board of Directors of Marsh & McLennan Companies, Inc. on May 21, 1997, the Advisory Director program was discontinued and, in recognition of such discontinuance, those nine Directors who, as of May 20, 1997, had been receiving compensation for their services as members of the Board (the “Designated Directors”) with the reasonable expectation that they would participate in the Advisory Director program upon retirement from the Board, were each granted 2,000 shares of Common Stock (together with additional shares purchased with dividends as provided in Section 4 hereof, the “Supplemental Grant Shares”) to be held in a custodial account controlled by the Company for later delivery to the Designated Director. This Annex I to the Marsh & McLennan Companies, Inc. Director Stock Compensation Plan (the “Plan”) is intended to establish the terms and conditions under which the Supplemental Grant Shares are to be held and administered by the Company and distributed to the Designated Directors.

The Plan.

This Annex I to the Plan is a supplement to and is part of the Plan, applicable only to the Designated Directors (namely, Lewis W. Bernard, Robert F. Erburu, Ray J. Groves, Richard S. Hickok, Richard M. Morrow, George Putnam, Adele Smith Simmons, Frank J. Tasco and R.J. Ventres) and only with respect to the Supplemental Grant Shares. The Plan, exclusive of this Annex I, is hereinafter referred to as the “Basic Plan.” Unless otherwise specified herein or it is clear from the context, the provisions of, including the definitions contained in, the Basic Plan, as in effect from time to time, shall apply to this Annex I.

Common Stock Reserved.

The Supplemental Grant Shares shall be included in the shares of Common Stock authorized for issuance under the Plan pursuant to, and be subject to the numerical limitation contained in, Section 4 of the Basic Plan. However, the Supplemental Grant Shares to be delivered shall be exclusively previously issued shares reacquired and held by the Company, i.e., treasury shares.

Custodial Account; Distribution.

The Supplemental Grant Shares shall be held for each Designated Director in a custodial account maintained by the Company. Cash dividends paid with respect to Supplemental Grant Shares shall be used to purchase

from the Company additional shares to be included in the Designated Director’s account as additional Supplemental Grant Shares. Unless the Designated Director has elected to defer distribution as provided in Section 5 hereof, and subject to the provisions of Sections 6 and 7 hereof, the Supplemental Grant Shares shall be distributed to the Designated Director (in whole shares of Common Stock and cash in lieu of any fractional shares) on retirement from the Board on attaining the age of 72 years, whichever shall be later (the “Normal Distribution Date”).

Deferral Election.

A Designated Director, independent of any election made under the Basic Plan with respect to Deferred Shares, may elect to defer the receipt (a “Supplemental Deferral Election”) of all or any portion of the Supplemental Grant Shares otherwise distributable pursuant to Section 4 hereof by executing and filing with the Secretary of the Company a document (the “Supplemental Deferral Election Form”) as described below.

In such case, the Supplemental Grant Shares subject to the Supplemental Deferral Election (the “Supplemental Deferred Shares”) shall continue to be held in a custodial account maintained by the Company (and continue to be Supplemental Grant Shares as defined in this Annex I to the Plan). Subject to provisions of Sections 6 and 7 hereof, the Supplemental Deferred Shares shall be distributed to the Designated Director as set forth in the Supplemental Deferral Election Form. The Supplemental Deferral Election Form shall specify the percentage (in increments of 10%, the minimum being 10% and the maximum being 100%) of the Supplemental Grant Shares for which the Supplemental Deferral Election is being made and that distribution of the Supplemental Deferred Shares shall occur either in a lump sum on the tenth day of the calendar year next following the Normal Distribution Date or in annual installments (in such number, not exceeding ten, as the Designated Director shall elect) commencing on such tenth day and continuing on the tenth day of each succeeding calendar year until all of the Designated Director’s Supplemental Deferred Shares have been distributed. Notwithstanding the foregoing provisions of this Section 5, the Committee may, in its sole discretion, accelerate the distribution of Supplemental Deferred Shares in cases of extreme emergency or hardship. A lump sum distribution of Supplemental Deferred Shares shall be in whole shares of Common Stock, with cash to be paid in lieu of fractional shares. The number of shares to be distributed on each installment date to a Designated Director who has elected to receive shares in annual installments shall be determined by multiplying the number of the Designated Director’s remaining Supplemental Deferred Shares by a fraction the numerator of which is one and the denominator of which is the then remaining number of annual installments (including the immediate installment); except for distributions being made to a book-entry account maintained for the Designated Director which allows for fractional shares, all such distributions shall be in whole shares of Common Stock, with cash to be paid in lieu of fractional shares for the final installment and fractional shares to be rounded to the nearest whole number for all other installments.

Death.

In the event the Designated Director should die before all of his or her Supplemental Grant Shares have been distributed, all undistributed Supplemental Grant Shares shall be distributed in a lump sum (in whole shares of Common Stock and cash in lieu of any fractional shares) to the beneficiary or beneficiaries designated in writing by the Designated Director, or if no designation has been made, to the estate of the Designated Director. Any beneficiary designation in effect with respect to the Basic Plan, as provided in Section 5(d) thereof, shall be deemed to be a designation pursuant to this Section 6 as well, unless the Designated Director has made a separate designation pursuant hereto.

Change in Control.

Upon a Change in Control, the Supplemental Grant Shares shall be deemed to be “Deferred Shares” under the Basic Plan with respect to the provisions of Section 5(g) thereof, which section shall be deemed applicable to the Supplemental Grant Shares.

Nontransferability.

Until the Supplemental Grant Shares are delivered to the Designated Director, such shares shall not be transferable other than by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined in the Internal Revenue Code of 1986, as amended, or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder.

Exhibit 10.4

Description of Compensation Arrangements for Non-Executive Directors

Effective June 1, 2007, which is the start of the Board’s next annual pay cycle, Marsh & McLennan Companies, Inc. (“MMC”) will compensate its non-executive directors as follows:

Basic Annual Retainer. All non-executive directors will receive a basic annual retainer of $100,000. Under the terms of MMC’s Directors’ Stock Compensation Plan, directors will receive one-quarter of this retainer in the form of MMC common stock. Directors may elect to receive the remainder of the basic annual retainer in cash, common stock or a combination thereof.

Annual Stock Grant. On June 1 of each year, all non-executive directors will receive an annual grant of MMC common stock with a market value of $100,000 on the grant date.

Supplemental Annual Retainers for Committee Chairs. The chairs of the Board’s audit, compensation, compliance, and directors and governance committees will each receive a supplemental annual retainer of $15,000.

Supplemental Annual Retainer for Non-Executive Chairman. The Board’s non-executive chairman will receive a supplemental annual retainer of $150,000. The non-executive chairman may elect to receive this amount in cash, common stock or a combination thereof.

Exhibit 12.1

Marsh & McLennan Companies, Inc. and Subsidiaries
Ratio of Earnings to Fixed Charges
(In millions, except ratios)

	Three
	Months
	Ended
	March 31,
	2007		Years Ended December 31,
	(Unaudited)		2006		2005		2004		2003		2002
Earnings
Income before income taxes and
minority interest	$	335	$	912	$	302	$	300	$	1,771	$	1,520
Interest expense		71		303		332		218		185		160
Portion of rents representative of the
interest factor		47		162		161		157		142		113
	$	453	$	1,377	$	795	$	675	$	2,098	$	1,793
Fixed Charges
Interest expense	$	71	$	303	$	332	$	218	$	185	$	160
Portion of rents representative of the
interest factor		47		162		161		157		142		113
	$	118	$	465	$	493	$	375	$	327	$	273
Ratio of Earnings to Fixed Charges		3.8		3.0		1.6		1.8		6.4		6.6

Exhibit 31.1

CERTIFICATIONS

I, Michael G. Cherkasky, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Marsh & McLennan Companies, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2007 /s/ Michael G. Cherkasky

Michael G. Cherkasky

President and Chief Executive Officer

Exhibit 31.2

CERTIFICATIONS

I, Matthew B. Bartley, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Marsh & McLennan Companies, Inc. (the “registrant”);

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2007 /s/ Matthew B. Bartley

Matthew B. Bartley

Chief Financial Officer

Exhibit 32.1

Certification of Chief Executive Officer and Chief Financial Officer

The certification set forth below is being submitted in connection with the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2007 of Marsh & McLennan Companies, Inc. (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Michael G. Cherkasky, the President and Chief Executive Officer, and Matthew B. Bartley, the Chief Financial Officer, of Marsh & McLennan Companies, Inc. each certifies that, to the best of his knowledge:

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Marsh & McLennan Companies, Inc.

Date: May 10, 2007 /s/ Michael G. Cherkasky

Michael G. Cherkasky

President and Chief Executive Officer

Date: May 10, 2007 /s/ Matthew B. Bartley

Matthew B. Bartley

Chief Financial Officer