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Large Accelerated Filer
x
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Accelerated Filer
¨
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Non-Accelerated Filer
¨
(Do not check if a smaller reporting company)
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Smaller Reporting Company
¨
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▪
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our exposure to potential liabilities arising from errors and omissions claims against us, particularly in our Marsh and Mercer businesses;
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▪
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our ability to make strategic acquisitions and dispositions and to integrate, and realize expected synergies, savings or strategic benefits from the businesses we acquire;
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▪
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changes in the funded status of our global defined benefit pension plans and the impact of any increased pension funding resulting from those changes;
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▪
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the impact of any regional, national or global political, economic, regulatory or market conditions on our results of operations and financial condition, including the European debt crisis and market perceptions concerning the instability of the Euro;
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▪
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the impact on our net income caused by fluctuations in foreign currency exchange rates;
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▪
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the impact on our net income or cash flows and our effective tax rate in a particular period caused by settled tax audits and expired statutes of limitation;
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▪
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the extent to which we retain existing clients and attract new business, and our ability to incentivize and retain key employees;
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▪
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our exposure to potential criminal sanctions or civil remedies if we fail to comply with foreign and U.S. laws and regulations that are applicable to our international operations, including import and export requirements, anti-corruption laws such as the U.S. Foreign Corrupt Practices Act and the UK Bribery Act 2010, local laws prohibiting corrupt payments to government officials, as well as various trade sanctions laws;
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▪
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the impact of competition, including with respect to our geographic reach, the sophistication and quality of our services, our pricing relative to competitors, our customers' option to self-insure or utilize internal resources instead of consultants, and our corporate tax rates relative to our competitors;
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▪
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the potential impact of rating agency actions on our cost of financing and ability to borrow, as well as on our operating costs and competitive position;
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▪
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our ability to successfully recover should we experience a disaster or other business continuity problem;
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▪
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our ability to maintain adequate physical, technical and administrative safeguards to protect the security of our data;
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▪
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changes in applicable tax or accounting requirements; and
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▪
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potential income statement effects from the application of FASB's ASC Topic No. 740 (“Income Taxes”) regarding accounting treatment of uncertain tax benefits and valuation allowances, including the effect of any subsequent adjustments to the estimates we use in applying this accounting standard.
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ITEM 1.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 1.
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ITEM 1A.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 5.
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ITEM 6.
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Item 1.
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Financial Statements.
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For the Three Months Ended March 31,
|
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||||||
(In millions, except per share figures)
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2012
|
|
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2011
|
|
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Revenue
|
$
|
3,051
|
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$
|
2,884
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Expense:
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|
|
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||||
Compensation and benefits
|
1,796
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1,721
|
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Other operating expenses
|
728
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691
|
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Operating expenses
|
2,524
|
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2,412
|
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Operating income
|
527
|
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472
|
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Interest income
|
6
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|
7
|
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Interest expense
|
(46
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)
|
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(51
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)
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Investment income (loss)
|
20
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|
|
19
|
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Income before income taxes
|
507
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|
|
447
|
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Income tax expense
|
153
|
|
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128
|
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Income from continuing operations
|
354
|
|
|
319
|
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||
Discontinued operations, net of tax
|
—
|
|
|
12
|
|
||
Net income before non-controlling interests
|
354
|
|
|
331
|
|
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Less: Net income attributable to non-controlling interests
|
7
|
|
|
6
|
|
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Net income attributable to the Company
|
$
|
347
|
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$
|
325
|
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Basic net income per share – Continuing operations
|
$
|
0.64
|
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$
|
0.57
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– Net income attributable to the Company
|
$
|
0.64
|
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$
|
0.59
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Diluted net income per share – Continuing operations
|
$
|
0.63
|
|
|
$
|
0.56
|
|
–
Net income attributable to the Company
|
$
|
0.63
|
|
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$
|
0.58
|
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Average number of shares outstanding – Basic
|
542
|
|
|
544
|
|
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– Diluted
|
551
|
|
|
552
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Shares outstanding at March 31,
|
546
|
|
|
548
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For the Three Months Ended March 31,
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(In millions, except per share figures)
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2012
|
|
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2011
|
|
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Net income before non-controlling interests
|
$
|
354
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|
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$
|
331
|
|
Other Comprehensive Income (loss), before tax:
|
|
|
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||||
Foreign currency translation adjustments
|
162
|
|
|
173
|
|
||
Unrealized investment loss
|
(1
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)
|
|
(4
|
)
|
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Gain (loss) related to pension/post-retirement plans
|
14
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|
|
(64
|
)
|
||
Other comprehensive income, before tax
|
175
|
|
|
105
|
|
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Income tax expense (credit) on other comprehensive income
|
10
|
|
|
(12
|
)
|
||
Other comprehensive income, net of tax
|
165
|
|
|
117
|
|
||
Comprehensive income
|
519
|
|
|
448
|
|
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Less: Comprehensive income attributable to non-controlling interests
|
(7
|
)
|
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(6
|
)
|
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Comprehensive income attributable to the Company
|
$
|
512
|
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$
|
442
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(In millions of dollars)
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March 31,
2012 |
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December 31,
2011 |
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ASSETS
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|
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Current assets:
|
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Cash and cash equivalents
|
$
|
1,410
|
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$
|
2,113
|
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Receivables
|
|
|
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Commissions and fees
|
2,787
|
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2,676
|
|
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Advanced premiums and claims
|
94
|
|
|
86
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|
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Other
|
233
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|
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249
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3,114
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3,011
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Less-allowance for doubtful accounts and cancellations
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(106
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)
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(105
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)
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Net receivables
|
3,008
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2,906
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Current deferred tax assets
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390
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376
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Other current assets
|
227
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|
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253
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Total current assets
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5,035
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5,648
|
|
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Goodwill and intangible assets
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7,129
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6,963
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Fixed assets
(net of accumulated depreciation and amortization of $1,535 at March 31, 2012 and $1,469 at December 31, 2011)
|
795
|
|
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804
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Pension related assets
|
67
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|
|
39
|
|
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Deferred tax assets
|
1,143
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1,205
|
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Other assets
|
841
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|
|
795
|
|
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$
|
15,010
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$
|
15,454
|
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(In millions of dollars)
|
March 31,
2012 |
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December 31,
2011 |
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LIABILITIES AND EQUITY
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Current liabilities:
|
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|
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Short-term debt
|
$
|
259
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$
|
260
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Accounts payable and accrued liabilities
|
1,873
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|
2,016
|
|
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Accrued compensation and employee benefits
|
699
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1,400
|
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Accrued income taxes
|
80
|
|
|
63
|
|
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Dividends payable
|
121
|
|
|
—
|
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Total current liabilities
|
3,032
|
|
|
3,739
|
|
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Fiduciary liabilities
|
4,284
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|
|
4,082
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Less – cash and investments held in a fiduciary capacity
|
(4,284
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)
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(4,082
|
)
|
||
|
—
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—
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Long-term debt
|
2,664
|
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|
2,668
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Pension, postretirement and postemployment benefits
|
1,606
|
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|
1,655
|
|
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Liabilities for errors and omissions
|
472
|
|
|
468
|
|
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Other liabilities
|
971
|
|
|
984
|
|
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Commitments and contingencies
|
|
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|
||||
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, 2012 and December 31, 2011
|
561
|
|
|
561
|
|
||
Additional paid-in capital
|
1,018
|
|
|
1,156
|
|
||
Retained earnings
|
8,053
|
|
|
7,949
|
|
||
Accumulated other comprehensive loss
|
(3,023
|
)
|
|
(3,188
|
)
|
||
Non-controlling interests
|
67
|
|
|
57
|
|
||
|
6,676
|
|
|
6,535
|
|
||
Less – treasury shares, at cost, 14,711,644 shares at March 31, 2012 and 21,463,226 shares at December 31, 2011
|
(411
|
)
|
|
(595
|
)
|
||
Total equity
|
6,265
|
|
|
5,940
|
|
||
|
$
|
15,010
|
|
|
$
|
15,454
|
|
For the Three Months Ended March 31,
|
|
|
|
||||
(In millions of dollars)
|
2012
|
|
|
2011
|
|
||
Operating cash flows:
|
|
|
|
||||
Net income before non-controlling interests
|
$
|
354
|
|
|
$
|
331
|
|
Adjustments to reconcile net income to cash used for operations:
|
|
|
|
||||
Depreciation and amortization of fixed assets and capitalized software
|
66
|
|
|
67
|
|
||
Amortization of intangible assets
|
17
|
|
|
16
|
|
||
Provision for deferred income taxes
|
35
|
|
|
110
|
|
||
Gain on investments
|
(20
|
)
|
|
(19
|
)
|
||
Loss on disposition of assets
|
12
|
|
|
—
|
|
||
Stock option expense
|
11
|
|
|
7
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Net receivables
|
(101
|
)
|
|
(172
|
)
|
||
Other current assets
|
151
|
|
|
(73
|
)
|
||
Other assets
|
(213
|
)
|
|
(45
|
)
|
||
Accounts payable and accrued liabilities
|
(136
|
)
|
|
68
|
|
||
Accrued compensation and employee benefits
|
(702
|
)
|
|
(627
|
)
|
||
Accrued income taxes
|
17
|
|
|
(20
|
)
|
||
Other liabilities
|
26
|
|
|
50
|
|
||
Effect of exchange rate changes
|
(20
|
)
|
|
(69
|
)
|
||
Net cash used for operations
|
(503
|
)
|
|
(376
|
)
|
||
Financing cash flows:
|
|
|
|
||||
Proceeds from issuance of debt
|
248
|
|
|
—
|
|
||
Repayments of debt
|
(252
|
)
|
|
(2
|
)
|
||
Purchase of non-controlling interests
|
—
|
|
|
(13
|
)
|
||
Shares withheld for taxes on vested units – treasury shares
|
(84
|
)
|
|
(85
|
)
|
||
Issuance of common stock
|
77
|
|
|
89
|
|
||
Contingent payments for acquisitions
|
(13
|
)
|
|
—
|
|
||
Dividends paid
|
(121
|
)
|
|
(117
|
)
|
||
Net cash used for financing activities
|
(145
|
)
|
|
(128
|
)
|
||
Investing cash flows:
|
|
|
|
||||
Capital expenditures
|
(51
|
)
|
|
(67
|
)
|
||
Net purchases of long-term investments
|
(5
|
)
|
|
—
|
|
||
Proceeds from sales of fixed assets
|
1
|
|
|
1
|
|
||
Dispositions
|
—
|
|
|
1
|
|
||
Acquisitions
|
(60
|
)
|
|
(104
|
)
|
||
Other, net
|
(1
|
)
|
|
1
|
|
||
Net cash used for investing activities
|
(116
|
)
|
|
(168
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
61
|
|
|
108
|
|
||
Decrease in cash and cash equivalents
|
(703
|
)
|
|
(564
|
)
|
||
Cash and cash equivalents at beginning of period
|
2,113
|
|
|
1,894
|
|
||
Cash and cash equivalents at end of period
|
$
|
1,410
|
|
|
$
|
1,330
|
|
For the Three Months Ended March 31,
|
|
|
|
||||
(In millions, except per share figures)
|
2012
|
|
|
2011
|
|
||
COMMON STOCK
|
|
|
|
||||
Balance, beginning and end of year
|
$
|
561
|
|
|
$
|
561
|
|
ADDITIONAL PAID-IN CAPITAL
|
|
|
|
||||
Balance, beginning of year
|
$
|
1,156
|
|
|
$
|
1,185
|
|
Change in accrued stock compensation costs
|
(118
|
)
|
|
(129
|
)
|
||
Issuance of shares under stock compensation plans and employee stock purchase plans and related tax impact
|
(20
|
)
|
|
(6
|
)
|
||
Balance, end of period
|
$
|
1,018
|
|
|
$
|
1,050
|
|
RETAINED EARNINGS
|
|
|
|
||||
Balance, beginning of year
|
$
|
7,949
|
|
|
$
|
7,436
|
|
Net income attributable to the Company
|
347
|
|
|
325
|
|
||
Dividend equivalents declared (per share amounts: $0.44 in 2012 and $0.42 in 2011)
|
(3
|
)
|
|
(4
|
)
|
||
Dividends declared – (per share amounts: $0.44 in 2012 and $0.42 in 2011)
|
(240
|
)
|
|
(229
|
)
|
||
Balance, end of period
|
$
|
8,053
|
|
|
$
|
7,528
|
|
ACCUMULATED OTHER COMPREHENSIVE GAIN (LOSS)
|
|
|
|
||||
Balance, beginning of year
|
$
|
(3,188
|
)
|
|
$
|
(2,300
|
)
|
Foreign currency translation adjustments
|
162
|
|
|
171
|
|
||
Unrealized investment holding losses, net of reclassification adjustments
|
(2
|
)
|
|
(3
|
)
|
||
Net changes under benefit plans, net of tax
|
5
|
|
|
(51
|
)
|
||
Balance, end of period
|
$
|
(3,023
|
)
|
|
$
|
(2,183
|
)
|
TREASURY SHARES
|
|
|
|
||||
Balance, beginning of year
|
$
|
(595
|
)
|
|
$
|
(514
|
)
|
Issuance of shares under stock compensation plans and employee stock purchase plans
|
184
|
|
|
187
|
|
||
Balance, end of period
|
$
|
(411
|
)
|
|
$
|
(327
|
)
|
NON-CONTROLLING INTERESTS
|
|
|
|
||||
Balance, beginning of year
|
$
|
57
|
|
|
$
|
47
|
|
Net income attributable to non-controlling interests
|
7
|
|
|
6
|
|
||
Other changes
|
3
|
|
|
5
|
|
||
Balance, end of period
|
$
|
67
|
|
|
$
|
58
|
|
TOTAL EQUITY
|
$
|
6,265
|
|
|
$
|
6,687
|
|
Basic EPS Calculation -
Continuing Operations
|
|
|
|
||||
For the Three Months Ended March 31,
|
|
||||||
(In millions, except per share figures)
|
2012
|
|
|
2011
|
|
||
Net income from continuing operations
|
$
|
354
|
|
|
$
|
319
|
|
Less: Net income attributable to non-controlling interests
|
7
|
|
|
6
|
|
||
Net income from continuing operations attributable to the Company
|
347
|
|
|
313
|
|
||
Less: Portion attributable to participating securities
|
2
|
|
|
3
|
|
||
Net income attributable to common shares for basic earnings per share
|
$
|
345
|
|
|
$
|
310
|
|
Basic weighted average common shares outstanding
|
542
|
|
|
544
|
|
Basic EPS Calculation -
Net Income
|
|
||||||
For the Three Months Ended March 31,
|
|
||||||
(In millions, except per share figures)
|
2012
|
|
|
2011
|
|
||
Net income attributable to the Company
|
$
|
347
|
|
|
$
|
325
|
|
Less: Portion attributable to participating securities
|
1
|
|
|
3
|
|
||
Net income attributable to common shares for basic earnings per share
|
$
|
346
|
|
|
$
|
322
|
|
Basic weighted average common shares outstanding
|
542
|
|
|
544
|
|
Diluted EPS Calculation -
Continuing Operations
|
|
||||||
For the Three Months Ended March 31,
|
|
|
|
||||
(In millions, except per share figures)
|
2012
|
|
|
2011
|
|
||
Net income from continuing operations
|
$
|
354
|
|
|
$
|
319
|
|
Less: Net income attributable to non-controlling interests
|
7
|
|
|
6
|
|
||
Net income from continuing operations attributable to the Company
|
347
|
|
|
313
|
|
||
Less: Portion attributable to participating securities
|
2
|
|
|
3
|
|
||
Net income attributable to common shares for diluted earnings per share
|
$
|
345
|
|
|
$
|
310
|
|
Basic weighted average common shares outstanding
|
542
|
|
|
544
|
|
||
Dilutive effect of potentially issuable common shares
|
9
|
|
|
8
|
|
||
Diluted weighted average common shares outstanding
|
551
|
|
|
552
|
|
||
Average stock price used to calculate common stock equivalents
|
$
|
31.95
|
|
|
$
|
28.90
|
|
Diluted EPS Calculation -
Net Income
|
|
||||||
For the Three Months Ended March 31,
|
|
|
|
||||
(In millions, except per share figures)
|
2012
|
|
|
2011
|
|
||
Net income attributable to the Company
|
$
|
347
|
|
|
$
|
325
|
|
Less: Portion attributable to participating securities
|
1
|
|
|
3
|
|
||
Net income attributable to common shares for diluted earnings per share
|
$
|
346
|
|
|
$
|
322
|
|
Basic weighted average common shares outstanding
|
542
|
|
|
544
|
|
||
Dilutive effect of potentially issuable common shares
|
9
|
|
|
8
|
|
||
Diluted weighted average common shares outstanding
|
551
|
|
|
552
|
|
||
Average stock price used to calculate common stock equivalents
|
$
|
31.95
|
|
|
$
|
28.90
|
|
(In millions of dollars)
|
2012
|
|
|
2011
|
|
||
Assets acquired, excluding cash
|
$
|
93
|
|
|
$
|
124
|
|
Liabilities assumed
|
(27
|
)
|
|
(21
|
)
|
||
Contingent/deferred purchase consideration
|
(13
|
)
|
|
(13
|
)
|
||
Net cash outflow for current year acquisitions
|
53
|
|
|
90
|
|
||
Deferred purchase consideration from prior years' acquisitions
|
7
|
|
|
14
|
|
||
Net cash outflow for acquisitions
|
$
|
60
|
|
|
$
|
104
|
|
(In millions of dollars)
|
2012
|
|
|
2011
|
|
||
Interest paid
|
$
|
65
|
|
|
$
|
72
|
|
Income taxes paid
|
$
|
79
|
|
|
$
|
85
|
|
For the Three Months Ended March 31,
|
2012
|
|
2011
|
||||||||||||||||
(In millions of dollars)
|
Pre-Tax
|
|
Tax Expense
|
Net of Tax
|
|
Pre-Tax
|
|
Tax Expense
|
Net of Tax
|
||||||||||
Foreign currency translation adjustments
|
$
|
162
|
|
$
|
—
|
|
$
|
162
|
|
|
$
|
173
|
|
$
|
2
|
|
$
|
171
|
|
Unrealized investment gains (losses)
|
(1
|
)
|
1
|
|
(2
|
)
|
|
(4
|
)
|
(1
|
)
|
(3
|
)
|
||||||
Pension/post-retirement plans:
|
|
|
|
|
|
|
|
||||||||||||
Amortization of losses (gains) included in net periodic pension cost:
|
|
|
|
|
|
|
|
||||||||||||
Prior Service gains
|
(8
|
)
|
(5
|
)
|
(3
|
)
|
|
(8
|
)
|
(2
|
)
|
(6
|
)
|
||||||
Net actuarial losses
|
66
|
|
42
|
|
24
|
|
|
55
|
|
12
|
|
43
|
|
||||||
Subtotal
|
58
|
|
37
|
|
21
|
|
|
47
|
|
10
|
|
37
|
|
||||||
Foreign currency translation adjustments
|
(44
|
)
|
(28
|
)
|
(16
|
)
|
|
(111
|
)
|
(23
|
)
|
(88
|
)
|
||||||
Pension/post-retirement plans (gains) losses
|
14
|
|
9
|
|
5
|
|
|
(64
|
)
|
(13
|
)
|
(51
|
)
|
||||||
Other comprehensive income (loss)
|
$
|
175
|
|
$
|
10
|
|
$
|
165
|
|
|
$
|
105
|
|
$
|
(12
|
)
|
$
|
117
|
|
For the Three Months Ended March 31,
|
|
||
(Amounts in millions)
|
2012
|
|
|
Cash (includes $62 million held in escrow at 12/31/11)
|
$
|
135
|
|
Estimated fair value of contingent consideration
|
13
|
|
|
Total Consideration
|
$
|
148
|
|
Allocation of purchase price:
|
|
||
Cash and cash equivalents
|
$
|
20
|
|
Accounts receivable, net
|
3
|
|
|
Property, plant, and equipment
|
2
|
|
|
Intangible assets
|
66
|
|
|
Goodwill
|
89
|
|
|
Other assets
|
6
|
|
|
Total assets acquired
|
186
|
|
|
Current liabilities
|
6
|
|
|
Other liabilities
|
32
|
|
|
Total liabilities assumed
|
38
|
|
|
Net assets acquired
|
$
|
148
|
|
For the Three Months Ended March 31,
|
|
||||||
(In millions, except per share data)
|
2012
|
|
|
2011
|
|
||
Revenue
|
$
|
3,058
|
|
|
$
|
2,929
|
|
Income from continuing operations
|
$
|
355
|
|
|
$
|
315
|
|
Net income attributable to the Company
|
$
|
348
|
|
|
$
|
321
|
|
Basic net income per share:
|
|
|
|
||||
– Continuing operations
|
$
|
0.64
|
|
|
$
|
0.56
|
|
– Net income attributable to the Company
|
$
|
0.64
|
|
|
$
|
0.59
|
|
Diluted net income per share:
|
|
|
|
||||
– Continuing operations
|
$
|
0.63
|
|
|
$
|
0.56
|
|
– Net income attributable to the Company
|
$
|
0.63
|
|
|
$
|
0.58
|
|
For the Three Months Ended March 31,
|
|
||||||
(In millions of dollars except per share figures)
|
2012
|
|
|
2011
|
|
||
Disposals of discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
Income tax (credit) expense
|
—
|
|
|
(12
|
)
|
||
Disposals of discontinued operations, net of tax
|
—
|
|
|
12
|
|
||
Discontinued operations, net of tax
|
$
|
—
|
|
|
$
|
12
|
|
Discontinued operations, net of tax per share
|
|
|
|
||||
– Basic
|
$
|
—
|
|
|
$
|
0.02
|
|
– Diluted
|
$
|
—
|
|
|
$
|
0.02
|
|
March 31,
|
|
|
|
||||
(In millions of dollars)
|
2012
|
|
|
2011
|
|
||
Balance as of January 1, as reported
|
$
|
6,562
|
|
|
$
|
6,420
|
|
Goodwill acquired
|
89
|
|
|
68
|
|
||
Other adjustments
(a)
|
24
|
|
|
69
|
|
||
Balance at March 31,
|
$
|
6,675
|
|
|
$
|
6,557
|
|
(a)
|
Primarily foreign exchange.
|
|
March 31, 2012
|
|
December 31, 2011
|
||||||||||||||||||||
(In millions of dollars)
|
Gross
Cost
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
|
Gross
Cost
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
||||||
Amortized intangibles
|
$
|
746
|
|
|
$
|
292
|
|
|
$
|
454
|
|
|
$
|
666
|
|
|
$
|
265
|
|
|
$
|
401
|
|
For the Years Ending December 31,
|
|
||
(In millions of dollars)
|
Estimated Expense
|
|
|
2012 (excludes amortization through March 31, 2012)
|
$
|
52
|
|
2013
|
64
|
|
|
2014
|
60
|
|
|
2015
|
58
|
|
|
2016
|
48
|
|
|
Subsequent years
|
172
|
|
|
|
$
|
454
|
|
Level 1.
|
Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or
|
Level 2.
|
Assets and liabilities whose values are based on the following:
|
a)
|
Quoted prices for similar assets or liabilities in active markets;
|
b)
|
Quoted prices for identical or similar assets or liabilities in non-active markets (examples include corporate and municipal bonds, which trade infrequently);
|
c)
|
Pricing models whose inputs are observable for substantially the full term of the asset or liability (examples include most over-the-counter derivatives, including interest rate and currency swaps); and
|
d)
|
Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full asset or liability (for example, certain mortgage loans).
|
Level 3.
|
Assets and liabilities whose values are based on prices, or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability (examples include private equity investments, certain commercial mortgage whole loans, and long-dated or complex derivatives including certain foreign exchange options and long-dated options on gas and power).
|
|
Identical Assets
(Level 1)
|
|
Observable Inputs
(Level 2)
|
|
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||||||||||||||||||
(In millions of dollars)
|
03/31/12
|
|
|
12/31/11
|
|
|
03/31/12
|
|
|
12/31/11
|
|
|
03/31/12
|
|
|
12/31/11
|
|
|
03/31/12
|
|
|
12/31/11
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial instruments owned:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Exchange traded equity securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mutual funds
(a)
|
135
|
|
|
134
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
135
|
|
|
134
|
|
||||||||
Money market funds
(b)
|
173
|
|
|
226
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
173
|
|
|
226
|
|
||||||||
Interest rate swap derivatives
(c)
|
—
|
|
|
—
|
|
|
6
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
7
|
|
||||||||
Total assets measured at fair value
|
$
|
308
|
|
|
$
|
360
|
|
|
$
|
6
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
314
|
|
|
$
|
367
|
|
Fiduciary Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
State and local obligations (including non-U.S. locales)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
13
|
|
Other sovereign government obligations and supranational agencies
|
—
|
|
|
—
|
|
|
34
|
|
|
47
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|
47
|
|
||||||||
Corporate and other debt
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||||
Money market funds
|
170
|
|
|
186
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
170
|
|
|
186
|
|
||||||||
Total fiduciary assets measured at fair value
|
$
|
170
|
|
|
$
|
186
|
|
|
$
|
42
|
|
|
$
|
62
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
212
|
|
|
$
|
248
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent consideration liability
(d)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
108
|
|
|
$
|
110
|
|
|
$
|
108
|
|
|
$
|
110
|
|
Senior Notes due 2014
(e)
|
—
|
|
|
—
|
|
|
256
|
|
|
257
|
|
|
—
|
|
|
—
|
|
|
256
|
|
|
257
|
|
||||||||
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
256
|
|
|
$
|
257
|
|
|
$
|
108
|
|
|
$
|
110
|
|
|
$
|
364
|
|
|
$
|
367
|
|
(a)
|
Included in other assets in the consolidated balance sheets.
|
(In millions of dollars)
|
Fair Value,
December 31, 2011
|
|
Additions
|
|
Payments
|
|
Revaluation
Impact
|
|
Fair Value,
March 31, 2012
|
|||||||
Contingent consideration
|
$
|
110
|
|
|
10
|
|
|
(13
|
)
|
|
1
|
|
|
$
|
108
|
|
Combined U.S. and significant non-U.S. Plans
|
Pension
|
|
Postretirement
|
||||||||||||
For the Three Months Ended March 31,
|
Benefits
|
|
Benefits
|
||||||||||||
(In millions of dollars)
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
||||
Service cost
|
$
|
61
|
|
|
$
|
56
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Interest cost
|
148
|
|
|
152
|
|
|
3
|
|
|
3
|
|
||||
Expected return on plan assets
|
(226
|
)
|
|
(221
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(5
|
)
|
|
(5
|
)
|
|
(3
|
)
|
|
(3
|
)
|
||||
Recognized actuarial loss
|
66
|
|
|
55
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost
|
$
|
44
|
|
|
$
|
37
|
|
|
$
|
2
|
|
|
$
|
2
|
|
U.S. Plans only
|
Pension
|
|
Postretirement
|
||||||||||||
For the Three Months Ended March 31,
|
Benefits
|
|
Benefits
|
||||||||||||
(In millions of dollars)
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
||||
Service cost
|
$
|
24
|
|
|
$
|
21
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
57
|
|
|
58
|
|
|
2
|
|
|
2
|
|
||||
Expected return on plan assets
|
(81
|
)
|
|
(79
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(4
|
)
|
|
(4
|
)
|
|
(3
|
)
|
|
(3
|
)
|
||||
Recognized actuarial loss
|
37
|
|
|
26
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost
|
$
|
33
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
Significant non-U.S. Plans only
|
Pension
|
|
Postretirement
|
||||||||||||
For the Three Months Ended March 31,
|
Benefits
|
|
Benefits
|
||||||||||||
(In millions of dollars)
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
||||
Service cost
|
$
|
37
|
|
|
$
|
35
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
91
|
|
|
94
|
|
|
1
|
|
|
1
|
|
||||
Expected return on plan assets
|
(145
|
)
|
|
(142
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Recognized actuarial loss
|
29
|
|
|
29
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost
|
$
|
11
|
|
|
$
|
15
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Combined U.S. and significant non-U.S. Plans
|
Pension
Benefits
|
|
Postretirement
Benefits
|
||||||||
March 31,
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
Weighted average assumptions:
|
|
|
|
|
|
|
|
||||
Expected return on plan assets
|
8.04
|
%
|
|
8.18
|
%
|
|
—
|
%
|
|
—
|
%
|
Discount rate
|
4.91
|
%
|
|
5.59
|
%
|
|
5.05
|
%
|
|
5.84
|
%
|
Rate of compensation increase
|
3.09
|
%
|
|
4.09
|
%
|
|
—
|
%
|
|
—
|
%
|
(In millions of dollars)
|
March 31,
2012 |
|
|
December 31,
2011 |
|
||
Short-term:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
259
|
|
|
$
|
260
|
|
Long-term:
|
|
|
|
||||
Senior notes – 6.25% due 2012 (5.1% effective interest rate)
|
$
|
—
|
|
|
$
|
250
|
|
Senior notes – 4.850% due 2013
|
250
|
|
|
251
|
|
||
Senior notes – 5.875% due 2033
|
296
|
|
|
296
|
|
||
Senior notes – 5.375% due 2014
|
326
|
|
|
326
|
|
||
Senior notes – 5.75% due 2015
|
479
|
|
|
479
|
|
||
Senior notes – 2.30% due 2017
|
248
|
|
|
—
|
|
||
Senior notes – 9.25% due 2019
|
398
|
|
|
398
|
|
||
Senior notes – 4.80% due 2021
|
496
|
|
|
496
|
|
||
Mortgage – 5.70% due 2035
|
429
|
|
|
431
|
|
||
Other
|
1
|
|
|
1
|
|
||
|
2,923
|
|
|
2,928
|
|
||
Less current portion
|
259
|
|
|
260
|
|
||
|
$
|
2,664
|
|
|
$
|
2,668
|
|
Income statement classification
(In millions of dollars)
|
Loss on
Swaps
|
|
Gain on
Notes
|
|
Net
Income
Effect
|
||||||
Other Operating Expenses
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
—
|
|
(In millions of dollars)
|
Liability at 1/1/11
|
|
Amounts
Accrued
|
|
|
Cash
Paid
|
|
|
Other
|
|
|
Liability at 12/31/11
|
|
Amounts
Accrued
|
|
|
Cash
Paid
|
|
|
Other
|
|
|
Liability at 3/31/12
|
||||||||||||
Severance
|
$
|
40
|
|
|
$
|
29
|
|
|
$
|
(40
|
)
|
|
$
|
(2
|
)
|
|
$
|
27
|
|
|
$
|
4
|
|
|
$
|
(20
|
)
|
|
$
|
6
|
|
|
$
|
17
|
|
Future rent under non-cancelable leases and other costs
|
171
|
|
|
22
|
|
|
(42
|
)
|
|
3
|
|
|
154
|
|
|
—
|
|
|
(9
|
)
|
|
(3
|
)
|
|
142
|
|
|||||||||
Total
|
$
|
211
|
|
|
$
|
51
|
|
|
$
|
(82
|
)
|
|
$
|
1
|
|
|
$
|
181
|
|
|
$
|
4
|
|
|
$
|
(29
|
)
|
|
$
|
3
|
|
|
$
|
159
|
|
|
March 31, 2012
|
|
December 31, 2011
|
||||||||||||
(In millions of dollars)
|
Carrying
Amount
|
|
|
Fair
Value
|
|
|
Carrying
Amount
|
|
|
Fair
Value
|
|
||||
Cash and cash equivalents
|
$
|
1,410
|
|
|
$
|
1,410
|
|
|
$
|
2,113
|
|
|
$
|
2,113
|
|
Long-term investments
|
$
|
61
|
|
|
$
|
61
|
|
|
$
|
58
|
|
|
$
|
58
|
|
Short-term debt
|
$
|
259
|
|
|
$
|
267
|
|
|
$
|
260
|
|
|
$
|
261
|
|
Long-term debt
|
$
|
2,664
|
|
|
$
|
2,954
|
|
|
$
|
2,668
|
|
|
$
|
2,958
|
|
▪
|
Risk and Insurance Services
, comprising insurance services (Marsh) and reinsurance services (Guy Carpenter); and
|
▪
|
Consulting
, comprising Mercer and Oliver Wyman Group
|
For the Three Months Ended March 31,
(In millions of dollars)
|
Revenue
|
|
|
Operating
Income
(Loss)
|
|
||
2012 –
|
|
|
|
||||
Risk and Insurance Services
|
$
|
1,747
|
|
(a)
|
$
|
417
|
|
Consulting
|
1,313
|
|
(b)
|
159
|
|
||
Total Operating Segments
|
3,060
|
|
|
576
|
|
||
Corporate / Eliminations
|
(9
|
)
|
|
(49
|
)
|
||
Total Consolidated
|
$
|
3,051
|
|
|
$
|
527
|
|
2011–
|
|
|
|
||||
Risk and Insurance Services
|
$
|
1,634
|
|
(a)
|
$
|
383
|
|
Consulting
|
1,261
|
|
(b)
|
128
|
|
||
Total Operating Segments
|
2,895
|
|
|
511
|
|
||
Corporate / Eliminations
|
(11
|
)
|
|
(39
|
)
|
||
Total Consolidated
|
$
|
2,884
|
|
|
$
|
472
|
|
(a)
|
Includes inter-segment revenue of
$1 million
in both
2012
and
2011
, interest income on fiduciary funds of
$11 million
and
$12 million
in
2012
and
2011
, respectively, and equity method income of
$1 million
and
$2 million
in
2012
and
2011
, respectively.
|
(b)
|
Includes inter-segment revenue of $
8 million
and $
10 million
in
2012
and
2011
, respectively, and interest income on fiduciary funds of $
1 million
in both
2012
and
2011
.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
For the Three Months Ended March 31,
|
|
|
||||
(In millions, except per share figures)
|
2012
|
|
2011
|
|
||
Revenue
|
$
|
3,051
|
|
$
|
2,884
|
|
Expense:
|
|
|
||||
Compensation and Benefits
|
1,796
|
|
1,721
|
|
||
Other Operating Expenses
|
728
|
|
691
|
|
||
Operating Expenses
|
2,524
|
|
2,412
|
|
||
Operating Income
|
527
|
|
472
|
|
||
Income from Continuing Operations
|
354
|
|
319
|
|
||
Discontinued Operations, net of tax
|
—
|
|
12
|
|
||
Net Income Before Non-Controlling Interest
|
354
|
|
331
|
|
||
Net Income Attributable to the Company
|
$
|
347
|
|
$
|
325
|
|
Income From Continuing Operations Per Share:
|
|
|
||||
Basic
|
$
|
0.64
|
|
$
|
0.57
|
|
Diluted
|
$
|
0.63
|
|
$
|
0.56
|
|
Net Income Per Share Attributable to the Company:
|
|
|
||||
Basic
|
$
|
0.64
|
|
$
|
0.59
|
|
Diluted
|
$
|
0.63
|
|
$
|
0.58
|
|
Average Number of Shares Outstanding:
|
|
|
||||
Basic
|
542
|
|
544
|
|
||
Diluted
|
551
|
|
552
|
|
||
Shares Outstanding at March 31,
|
546
|
|
548
|
|
For the Three Months Ended March 31,
|
|
|
%
Change
GAAP
Revenue
|
|
|
Components of Revenue Change*
|
|||||||||||||
Currency
Impact
|
|
|
Acquisitions/
Dispositions
Impact
|
|
|
Underlying
Revenue
|
|
||||||||||||
(In millions of dollars)
|
2012
|
|
|
2011
|
|
|
|||||||||||||
Risk and Insurance Services
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Marsh
|
$
|
1,379
|
|
|
$
|
1,282
|
|
|
8
|
%
|
|
(1
|
)%
|
|
2
|
%
|
|
7
|
%
|
Guy Carpenter
|
357
|
|
|
340
|
|
|
5
|
%
|
|
(1
|
)%
|
|
(1
|
)%
|
|
7
|
%
|
||
Subtotal
|
1,736
|
|
|
1,622
|
|
|
7
|
%
|
|
(1
|
)%
|
|
1
|
%
|
|
7
|
%
|
||
Fiduciary Interest Income
|
11
|
|
|
12
|
|
|
|
|
|
|
|
|
|
||||||
Total Risk and Insurance Services
|
1,747
|
|
|
1,634
|
|
|
7
|
%
|
|
(1
|
)%
|
|
1
|
%
|
|
7
|
%
|
||
Consulting
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Mercer
|
957
|
|
|
922
|
|
|
4
|
%
|
|
(1
|
)%
|
|
1
|
%
|
|
4
|
%
|
||
Oliver Wyman Group
|
356
|
|
|
339
|
|
|
5
|
%
|
|
(1
|
)%
|
|
—
|
|
|
6
|
%
|
||
Total Consulting
|
1,313
|
|
|
1,261
|
|
|
4
|
%
|
|
(1
|
)%
|
|
—
|
|
|
4
|
%
|
||
Corporate/Eliminations
|
(9
|
)
|
|
(11
|
)
|
|
|
|
|
|
|
|
|
||||||
Total Revenue
|
$
|
3,051
|
|
|
$
|
2,884
|
|
|
6
|
%
|
|
(1
|
)%
|
|
1
|
%
|
|
6
|
%
|
*
|
Components of revenue change may not add due to rounding.
|
For the Three Months Ended March 31,
|
|
|
%
Change
GAAP
Revenue
|
|
|
Components of Revenue Change*
|
|||||||||||||
Currency
Impact
|
|
|
Acquisitions/
Dispositions
Impact
|
|
|
Underlying
Revenue
|
|
||||||||||||
(In millions of dollars)
|
2012
|
|
|
2011
|
|
|
|||||||||||||
Marsh:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
EMEA
|
$
|
577
|
|
|
$
|
551
|
|
|
5
|
%
|
|
(4
|
)%
|
|
3
|
%
|
|
5
|
%
|
Asia Pacific
|
142
|
|
|
125
|
|
|
14
|
%
|
|
3
|
%
|
|
1
|
%
|
|
10
|
%
|
||
Latin America
|
74
|
|
|
61
|
|
|
22
|
%
|
|
4
|
%
|
|
—
|
|
|
18
|
%
|
||
Total International
|
793
|
|
|
737
|
|
|
8
|
%
|
|
(2
|
)%
|
|
3
|
%
|
|
7
|
%
|
||
U.S. / Canada
|
586
|
|
|
545
|
|
|
7
|
%
|
|
—
|
|
|
1
|
%
|
|
6
|
%
|
||
Total Marsh
|
$
|
1,379
|
|
|
$
|
1,282
|
|
|
8
|
%
|
|
(1
|
)%
|
|
2
|
%
|
|
7
|
%
|
Mercer:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Retirement
|
$
|
278
|
|
|
$
|
281
|
|
|
(1
|
)%
|
|
(2
|
)%
|
|
1
|
%
|
|
—
|
|
Health and Benefits
|
253
|
|
|
237
|
|
|
7
|
%
|
|
(1
|
)%
|
|
1
|
%
|
|
6
|
%
|
||
Talent, Rewards & Communications
|
125
|
|
|
117
|
|
|
7
|
%
|
|
(1
|
)%
|
|
3
|
%
|
|
5
|
%
|
||
Outsourcing
|
177
|
|
|
176
|
|
|
0
|
%
|
|
1
|
%
|
|
(5
|
)%
|
|
4
|
%
|
||
Investments
|
124
|
|
|
111
|
|
|
12
|
%
|
|
—
|
|
|
4
|
%
|
|
7
|
%
|
||
Total Mercer
|
$
|
957
|
|
|
$
|
922
|
|
|
4
|
%
|
|
(1
|
)%
|
|
1
|
%
|
|
4
|
%
|
Underlying revenue measures the change in revenue using consistent currency exchange rates, excluding the impact of certain items such as: acquisitions, dispositions and transfers among businesses.
|
|
*
|
Components of revenue change may not add due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31,
|
|
|
|
||||
(In millions of dollars)
|
2012
|
|
|
2011
|
|
||
Revenue
|
$
|
1,313
|
|
|
$
|
1,261
|
|
Compensation and Benefits
|
807
|
|
|
794
|
|
||
Other Expenses
|
347
|
|
|
339
|
|
||
Expense
|
1,154
|
|
|
1,133
|
|
||
Operating Income
|
$
|
159
|
|
|
$
|
128
|
|
Operating Income Margin
|
12.1
|
%
|
|
10.2
|
%
|
For the Three Months Ended March 31,
|
|
|
|
||||
(In millions of dollars)
|
2012
|
|
|
2011
|
|
||
Corporate and Other:
|
|
|
|
||||
Corporate Advisory and Restructuring Operating Income
|
$
|
1
|
|
|
$
|
3
|
|
Corporate Expense
|
(50
|
)
|
|
(42
|
)
|
||
Total Corporate and Other
|
$
|
(49
|
)
|
|
$
|
(39
|
)
|
For the Three Months Ended March 31,
|
|
||||||
(In millions of dollars, except per share figures)
|
2012
|
|
|
2011
|
|
||
Disposals of discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
Income tax (credit) expense
|
—
|
|
|
(12
|
)
|
||
Disposals of discontinued operations, net of tax
|
—
|
|
|
12
|
|
||
Discontinued operations, net of tax
|
$
|
—
|
|
|
$
|
12
|
|
Discontinued operations, net of tax per share
|
|
|
|
||||
– Basic
|
—
|
|
|
$
|
0.02
|
|
|
– Diluted
|
—
|
|
|
$
|
0.02
|
|
|
Payment due by Period
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
|
Within
1 Year
|
|
|
1-3 Years
|
|
|
4-5 Years
|
|
|
After
5 Years
|
|
|||||
Current portion of long-term debt
|
$
|
259
|
|
|
$
|
259
|
|
|
$ —
|
|
|
$ —
|
|
|
$ —
|
|
|||
Long-term debt
|
2,671
|
|
|
—
|
|
|
340
|
|
|
752
|
|
|
1,579
|
|
|||||
Interest on long-term debt
|
1,220
|
|
|
163
|
|
|
296
|
|
|
227
|
|
|
534
|
|
|||||
Net operating leases
|
2,293
|
|
|
353
|
|
|
575
|
|
|
423
|
|
|
942
|
|
|||||
Service agreements
|
325
|
|
|
91
|
|
|
102
|
|
|
79
|
|
|
53
|
|
|||||
Other long-term obligations
|
198
|
|
|
72
|
|
|
125
|
|
|
1
|
|
|
—
|
|
|||||
Total
|
$
|
6,966
|
|
|
$
|
938
|
|
|
$
|
1,438
|
|
|
$
|
1,482
|
|
|
$
|
3,108
|
|
Item 3.
|
Qualitative and Quantitative Disclosures About Market Risk
|
(In millions of dollars)
|
March 31,
2012 |
|
|
Cash and cash equivalents invested in money market funds, certificates of deposit and time deposits
|
$
|
1,410
|
|
Fiduciary cash and investments
|
$
|
4,284
|
|
Period
|
(a)
Total
Number of
Shares (or
Units)
Purchased
|
|
|
(b)
Average
Price
Paid per
Share
(or Unit)
|
|
(c)
Total Number of
Shares (or
Units)
Purchased as
Part of Publicly
Announced
Plans or
Programs
|
|
|
(d)
Maximum
Number (or
Approximate
Dollar Value) of
Shares (or
Units) that May
Yet Be
Purchased
Under the Plans
or Programs
|
|
|
Jan 1 - 31, 2012
|
__
|
|
|
__
|
|
__
|
|
|
$
|
553,488,567
|
|
Feb 1 - 29, 2012
|
__
|
|
|
__
|
|
__
|
|
|
$
|
553,488,567
|
|
Mar 1 - 31, 2012
|
__
|
|
|
__
|
|
__
|
|
|
$
|
553,488,567
|
|
Total Q1 2012
|
—
|
|
|
__
|
|
—
|
|
|
$
|
553,488,567
|
|
For the Year Ended December 31,
|
|||||||||||
(In millions of dollars)
|
2011
|
|
|
2010
|
|
|
2009
|
|
|||
Net income before non-controlling interests
|
$
|
1,015
|
|
|
$
|
871
|
|
|
$
|
241
|
|
Other Comprehensive Income (loss), before tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(100
|
)
|
|
(34
|
)
|
|
400
|
|
|||
Unrealized investment loss
|
(9
|
)
|
|
(11
|
)
|
|
(3
|
)
|
|||
Losses related to pension/post-retirement plans
|
(1,114
|
)
|
|
(146
|
)
|
|
(589
|
)
|
|||
Other comprehensive loss, before tax
|
(1,223
|
)
|
|
(191
|
)
|
|
(192
|
)
|
|||
Income tax credit on other comprehensive income
|
335
|
|
|
62
|
|
|
119
|
|
|||
Other comprehensive loss, net of tax
|
(888
|
)
|
|
(129
|
)
|
|
(73
|
)
|
|||
Comprehensive income
|
127
|
|
|
742
|
|
|
168
|
|
|||
Less: Comprehensive income attributable to non-controlling interests
|
(22
|
)
|
|
(16
|
)
|
|
(14
|
)
|
|||
Comprehensive income attributable to the Company
|
$
|
105
|
|
|
$
|
726
|
|
|
$
|
154
|
|
Date:
|
May 8, 2012
|
/s/ J. Michael Bischoff
|
|
|
J. Michael Bischoff
|
|
|
Chief Financial Officer
|
|
|
|
Date:
|
May 8, 2012
|
/s/ Robert J. Rapport
|
|
|
Robert J. Rapport
|
|
|
Senior Vice President & Controller
|
|
|
(Chief Accounting Officer)
|
Exhibit No.
|
|
Exhibit Name
|
|
|
|
10.1
|
|
Form of 2012 Long-term Incentive Award under the Marsh & McLennan Companies, Inc. 2011 Incentive and Stock Award Plan
|
|
|
|
10.2
|
|
Form of Deferred Stock Unit Award, dated as of February 24, 2012, under the Marsh & McLennan Companies, Inc. 2011 Incentive and Stock Award Plan
|
|
|
|
10.3
|
|
Letter Agreement, effective as of April 20, 2011, between Marsh & McLennan Companies, Inc. and Peter Zaffino
|
|
|
|
10.4
|
|
Letter Agreement, effective as of April 20, 2011, between Marsh & McLennan Companies, Inc. and Alexander Moczarski
|
|
|
|
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
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
I.
|
BACKGROUND 1
|
II.
|
AWARDS 1
|
A.
|
General 1
|
1.
|
Award Acceptance 1
|
2.
|
Rights of Award Holders 1
|
3.
|
Restrictive Covenants Agreement 1
|
B.
|
Stock Units 1
|
1.
|
General 1
|
2.
|
Vesting 2
|
3.
|
Dividend Equivalents – Accrual and Vesting 2
|
4.
|
Delivery 2
|
C.
|
Satisfaction of Tax Obligations 2
|
1.
|
Personal Tax Advisor 2
|
2.
|
U.S. Employees 2
|
3.
|
Non-U.S. Employees 3
|
a.
|
Stock Units 3
|
b.
|
Withholding 3
|
III.
|
EMPLOYMENT EVENTS 3
|
A.
|
Death 3
|
B.
|
Permanent Disability 3
|
C.
|
Termination by the Company Other Than for Cause 3
|
1.
|
General 3
|
2.
|
Important Notes 3
|
a.
|
Sale of Business Unit 3
|
b.
|
Constructive Discharge 3
|
D.
|
All Other Terminations 4
|
E.
|
Date of Termination of Employment 4
|
F.
|
Conditions to Vesting of Award Prior to the Scheduled Vesting Date 4
|
1.
|
Restrictive Covenants Agreement 4
|
2.
|
Waiver and Release and Restrictive Covenants Agreement 4
|
G.
|
Determination of Pro-Rata Vesting upon Termination of Employment 5
|
H.
|
Section 409A of the Code 5
|
IV.
|
CHANGE IN CONTROL PROVISIONS 6
|
V.
|
DEFINITIONS 6
|
VI.
|
ADDITIONAL PROVISIONS 8
|
A.
|
Additional Provisions – General 8
|
1.
|
Administrative Rules 8
|
2.
|
Amendment 8
|
3.
|
Limitations 8
|
4.
|
Cancellation or Clawback of Awards 8
|
5.
|
Choice of Forum 9
|
6.
|
Severability; Captions 9
|
B.
|
Additional Provisions – Outside of the United States 9
|
1.
|
Changes to Delivery 9
|
2.
|
Amendment and Modification 9
|
VII.
|
QUESTIONS AND ADDITIONAL INFORMATION
10
|
I.
|
BACKGROUND
|
II.
|
AWARDS
|
A.
|
General.
|
1.
|
Award Acceptance.
The grant of this Award is contingent upon your acceptance, by the date and in the manner specified in the Grant Documentation, of these Terms and Conditions, the Country-Specific Notices (if applicable) and a Restrictive Covenants Agreement as described in Section II.A.3. If you decline the Award or if you do not accept the Award and any applicable documents described in the preceding sentence by the date and in the manner specified in the Grant Documentation, then the Award will be cancelled as of the grant date of the Award.
|
2.
|
Rights of Award Holders.
Unless and until the vesting conditions of the Award have been satisfied and cash or shares of Common Stock, as applicable, have been delivered to you in accordance with the Award Documentation, you have only the rights of a general unsecured creditor of Marsh & McLennan Companies. Unless and until shares of Common Stock have been delivered to you, you have none of the rights of ownership to such shares (e.g., units cannot be used as payment for stock option exercises; units may not be transferred or assigned; units have no voting rights).
|
3.
|
Restrictive Covenants Agreement.
As described in Section II.A.1., a Restrictive Covenants Agreement in a form determined by Marsh & McLennan Companies (“
Restrictive Covenants Agreement
”) must be in place in order to accept the Award and you must execute or reaffirm, as determined by Marsh & McLennan Companies, in its sole discretion, the Restrictive Covenants Agreement in order for the Award to vest pursuant to certain employment events as described in Section III. Failure to timely execute the Restrictive Covenants Agreement by the date specified in the Grant Documentation or failure to timely execute or reaffirm and comply with the Restrictive Covenants Agreement as described in Section III.F.1. or 2., as applicable, will result in cancellation or forfeiture of any rights, title and interest in and to the Award.
|
B.
|
Stock Units.
|
1.
|
General.
A deferred stock unit (“
Stock Unit
”) represents an unfunded and unsecured
|
2.
|
Vesting.
Subject to your continued employment, [PERCENTAGE] of the Stock Units will vest on the 15th of the month in which [VESTING DATE(S)] of the grant date of the Award occurs. The date on which a Stock Unit is scheduled to vest pursuant to this Section II.B.2. is the “
Scheduled Vesting Date
.” In the event of your termination of employment or the occurrence of your Permanent Disability (as defined in Section V.D.) prior to the Scheduled Vesting Date, your right to any Stock Units that are unvested immediately prior to your termination of employment or occurrence of your Permanent Disability, as applicable, will be determined in accordance with Section III. below. For the avoidance of doubt, the date of your termination of employment for purposes of determining vesting under this Section II.B.2. will be determined in accordance with Section III.E.
|
3.
|
Dividend Equivalents – Accrual and Vesting.
For each outstanding Stock Unit covered by the Award, an amount equal to the dividend payment (if any) made in respect of one share of Common Stock (a “
Dividend Equivalent
”) will accrue in U.S. dollars on each dividend record date that occurs on or after the grant date of the Award while the Award is outstanding. Accrued Dividend Equivalents will vest when the Stock Units in respect of which such Dividend Equivalents were accrued vest. Accrued Dividend Equivalents will not be paid, and no further Dividend Equivalents will accrue, on Stock Units that do not vest or are cancelled or forfeited.
|
4.
|
Delivery.
|
a.
|
Shares of Common Stock deliverable in respect of the Stock Units covered by the Award shall be delivered to you as soon as practicable after vesting, and in no event later than 60 days after vesting.
|
b.
|
The value of vested Dividend Equivalents will be delivered to you in cash as soon as practicable after vesting and in no event later than 60 days after vesting.
|
c.
|
The delivery of shares of Common Stock and/or cash or other property that may be deliverable under these Terms and Conditions, is conditioned on the satisfaction or withholding of any applicable tax obligations, as described in Section II.C.
|
d.
|
Any shares of Common Stock and/or cash or other property that may be deliverable 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 (as defined in Section V.B.) obligations under the Award.
|
C.
|
Satisfaction of Tax Obligations.
|
1.
|
Personal Tax Advisor.
Neither the Company nor any Company employee is authorized to provide personal tax advice to you. It is recommended that you consult with your personal tax advisor for more detailed information regarding the tax treatment of the Award, especially before making any decisions that rely on that tax treatment.
|
2.
|
U.S. Employees.
Applicable employment taxes are required by law to be withheld when a Stock Unit or Dividend Equivalent vests. Applicable income taxes are required by law to be withheld when shares of Common Stock in respect of Stock Units or cash in respect of Dividend Equivalents are delivered to you. A sufficient number of whole
|
3.
|
Non-U.S. Employees.
|
a.
|
Stock Units.
In most countries, the value of a Stock Unit is generally not taxable on the grant date. If the value of the Stock Unit is not taxable on the grant date, it will, in most countries, be taxed at a later time, for example, upon delivery of a share of Common Stock in respect of the Stock Unit that vests, and/or the subsequent sale of the share of Common Stock received in connection with the vesting of the Stock Unit or upon delivery of cash in respect of a Dividend Equivalent.
|
b.
|
Withholding.
Marsh & McLennan Companies and/or your local employer shall have the power and the right to deduct and withhold from the Award and other compensation or to require you to remit to Marsh & McLennan Companies and/or to your local employer, an amount sufficient to satisfy any taxes that Marsh & McLennan Companies considers are payable under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, capital gain taxes, transfer taxes, social security contributions, and National Insurance Contributions with respect to the Award, including any and all associated tax events derived therefrom. If applicable, Marsh & McLennan Companies and/or your local employer may retain and sell a sufficient number of whole shares of Common Stock distributable in respect of the Award for this purpose.
|
III.
|
EMPLOYMENT EVENTS
|
A.
|
Death.
In the event your employment is terminated because of your death, the unvested Stock Units will fully vest at such termination of employment and will be distributed as described in Section II.B.4.
|
B.
|
Permanent Disability.
Upon the occurrence of your Permanent Disability, the unvested Stock Units will fully vest and will be distributed as described in Section II.B.4., provided that you satisfy the conditions to vesting described in Section III.F.1.
|
C.
|
Termination by the Company Other Than for Cause.
|
1.
|
General
. Except as otherwise provided in Section IV., in the event the Company, in its sole discretion, determines that your employment is terminated by the Company other than for Cause (as defined in Section V.A.), the unvested Stock Units will vest at such termination of employment on a pro-rata basis as described in Section III.G. and will be distributed as described in Section II.B.4., provided that you satisfy the conditions to vesting described in Section III.F.2.
|
2.
|
Important Notes.
|
a.
|
Sale of Business Unit
. For purposes of this Award, 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 or affiliate of Marsh & McLennan Companies, 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 or similar transaction.
|
b.
|
Constructive Discharge
. The Award will not vest, whether on a pro-rata or full
|
D.
|
All Other Terminations.
For all other terminations of employment not described in Sections III.A. through C. or Section IV. (including, but not limited to, a termination by the Company for Cause or a resignation by you of your employment with the Company), any rights, title and interest in and to any remaining unvested portion of the Award shall be cancelled as of the date your employment is treated as having terminated as described in Section III.E.
|
E.
|
Date of Termination of Employment.
|
1.
|
If Section III.E.2. does not apply to you, then for purposes of determining vesting under Section II.B.2. and the number of unvested Stock Units that vest on a pro-rata basis as described in Section III.G., your employment will be treated as having terminated on your last day of employment with the Company
.
|
2.
|
If you are a Guy Carpenter employee in the United States who is obligated to provide the Company at least 60 days advance written notice of your intention to terminate your employment for any reason, then, if your employment terminates pursuant to Section III.D., your employment will be treated as having terminated for purposes of determining vesting under Section II.B.2. on the date that is 60 days prior to your last day of employment with the Company. Notwithstanding the foregoing, if your employment is terminated after providing notice pursuant to the preceding sentence but prior to the intended termination date provided in such notice (i) by the Company other than for Cause or (ii) pursuant to a written agreement, the terms of which provide that your termination of employment has been by mutual agreement between you and the Company, then the Company may, in its sole discretion, determine that for purposes of determining vesting under Section II.B.2. your employment will be treated as having terminated on a date later than the date that is 60 days prior to your last day of employment with the Company, but in no event later than your last day of employment with the Company.
|
F.
|
Conditions to Vesting of Award Prior to the Scheduled Vesting Date.
|
1.
|
Restrictive Covenants Agreement.
In the event of the occurrence of your Permanent Disability as described in Section III.B., you will be required to execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, and return to Marsh & McLennan Companies (or an agent appointed by Marsh & McLennan Companies) a Restrictive Covenants Agreement. Failure to (a) execute or reaffirm such an agreement by the date specified by the Company, which shall be in no event later than 60 days following the occurrence of your Permanent Disability as described in Section III.B., or (b) comply with the Restrictive Covenants Agreement, will result in the cancellation or forfeiture of any rights, title and interest in and to the Award.
|
2.
|
Waiver and Release and Restrictive Covenants Agreement.
In the event of your termination of employment by the Company other than for Cause as described in Section III.C., you will be required to (i) execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, and return to Marsh & McLennan Companies (or an agent appointed by Marsh & McLennan Companies) a Restrictive Covenants Agreement and (ii) execute and not revoke a waiver and release agreement, if provided to you by the Company at the time of your termination of employment. Failure to meet these requirements by the date specified by the Company, which shall be in no event later than 60 days following your termination of employment, or failure to comply with the waiver
|
G.
|
Determination of Pro-Rata Vesting upon Termination of Employment.
|
A
|
= the number of Stock Units covered by the Award;
|
B
|
= the number of days in the period beginning on the grant date of the Award and ending on the date of your termination of employment, as determined in accordance with Section III.E.1.;
|
C
|
= the number of days in the period beginning on the grant date of the Award and ending on the Scheduled Vesting Date; and
|
D
|
= the number of Stock Units that have previously vested.
|
H.
|
Section 409A of the Code.
|
1.
|
Notwithstanding any other provision herein, the Award may be subject to additional restrictions to ensure compliance with the requirements of Section 409A of the U.S. Internal Revenue Code of 1986, as amended, and regulations thereunder (regarding nonqualified deferred compensation) (“
Section 409A of the Code
”). The Compensation Committee of the Board of Directors of Marsh & McLennan Companies (the “
Committee
”) intends to administer the Award in accordance with Section 409A of the Code and reserves the right to make changes in the terms or operations of the Award (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 the Award Documentation that do not reflect Section 409A of the Code. If the Award is not in compliance with Section 409A of the Code, you may be subject to immediate taxation of all unpaid awards under the Plan that are subject to Section 409A of the Code at your regular income tax rate, plus a 20% additional tax, plus interest at the underpayment rate plus 1%.
|
2.
|
Notwithstanding any other provision herein, if any portion of the Award is determined to be nonqualified deferred compensation subject to Section 409A of the Code, any references to “termination of employment,” or “when you are no longer employed” in these Terms and Conditions shall have the following meaning:
|
3.
|
Notwithstanding any other provision herein, if at the time of your termination of employment you are a “specified employee” (as defined in Section 409A of the Code) no portion of the Award that is determined to be nonqualified deferred compensation subject to Section 409A of the Code shall be distributed until the first day of the seventh month after your termination of employment and any such distributions to which you would otherwise be entitled during the first six months following your termination of employment will be accumulated and paid without interest on the first day of the seventh month after your termination of employment. The provisions of this subparagraph will only apply if and to the extent required to avoid any “additional tax” under Section 409A of the Code.
|
4.
|
Nothing in this Section III.H. is intended to nor does it guarantee that the Award will not be subject to “additional tax” or other adverse tax consequences under Section 409A of the Code.
|
IV.
|
CHANGE IN CONTROL PROVISIONS
|
A.
|
Upon the occurrence of a “Change in Control”, as defined in the Plan, the Award will continue to vest in accordance with the vesting schedule specified in Section II.B.2. and subject to earlier vesting or forfeiture pursuant to Section III., provided that the Award will become fully vested at your termination of employment by the Company other than for Cause, or by you for Good Reason (as defined in Section V.C.), during the 24-month period following such Change in Control and will be distributed as described in Section II.B.4., provided that you satisfy the conditions to vesting described in Section IV.B. Notwithstanding the foregoing, if the Award is not assumed, converted or replaced in connection with a Change in Control on an equivalent basis, the Award will fully vest immediately prior to the Change in Control and will be distributed as described in Section II.B.4.
|
B.
|
As a condition to vesting of any unvested portion of the Award, in the event of your termination of employment by the Company other than for Cause or by you for Good Reason during the 24-month period following such Change in Control, you will be required to execute and not revoke a waiver and release agreement, if provided by the Company at the time of your termination of employment. Failure to meet these requirements by the date specified by the Company, which shall be in no event later than 60 days following your termination of employment, or failure to comply with the waiver and release agreement, if applicable, will result in the cancellation or forfeiture of any rights, title and interest in and to the Award.
|
V.
|
DEFINITIONS
|
A.
|
“Cause”
shall mean:
|
1.
|
willful failure to substantially perform the duties consistent with your position which is not remedied within 30 days after receipt of written notice from the Company specifying such failure;
|
2.
|
willful violation of any written Company policies including but not limited to, the Marsh & McLennan Companies code of business conduct and ethics;
|
3.
|
commission at any time of any act or omission that results in a conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated probation for any felony
|
4.
|
unlawful use (including being under the influence) or possession of illegal drugs;
|
5.
|
any gross negligence or willful misconduct resulting in a material loss to the Company, or material damage to the reputation of the Company; or
|
6.
|
any violation of any statutory or common law duty of loyalty to the Company, including the commission at any time of any act of fraud, embezzlement, or material breach of fiduciary duty against the Company.
|
B.
|
“Company”
shall mean Marsh & McLennan Companies or any of its subsidiaries or affiliates.
|
C.
|
“Good Reason”
shall mean any one of the following events without your written consent:
|
1.
|
a material reduction in your base salary;
|
2.
|
material reduction in your annual incentive opportunity (including a material adverse change in the method of calculating your annual incentive);
|
3.
|
material diminution of your duties, responsibilities or authority; or
|
4.
|
a relocation of more than 50 miles from your principal place of employment immediately prior to the Change in Control;
|
D.
|
“Permanent Disability”
will be deemed to occur when it is determined (by Marsh & McLennan Companies’ disability carrier for the primary long-term disability plan or program applicable to you because of your employment with the Company) that you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.
|
E.
|
Additional Definitions.
|
VI.
|
ADDITIONAL PROVISIONS
|
A.
|
Additional Provisions—General
|
1.
|
Administrative Rules.
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 the Award Documentation and Grant Documentation 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.
|
2.
|
Amendment.
The Committee may, in its sole discretion, amend the terms of the Award; provided, however, that if the Committee concludes, in its sole discretion, that such amendment is likely to materially impair your rights with respect to the Award, such amendment shall not be implemented with respect to the Award without your consent, except to the extent that any such action is made to cause the Award to comply with applicable law, stock market or exchange rules and regulations, or accounting or tax rules and regulations, or is otherwise made in accordance with Section VI.A.4.
|
3.
|
Limitations.
Payment of the Award is not secured by trust, insurance contract or other funding medium, and you do not have any interest in any fund or specific asset of Marsh & McLennan Companies by reason of the Award. Your right to payment of the Award is the same as the right of an unsecured general creditor of Marsh & McLennan Companies.
|
4.
|
Cancellation or Clawback of Awards
.
|
a.
|
Marsh & McLennan Companies may, to the extent permitted or required by any applicable law, stock exchange rules, or any applicable Company policy or arrangement in effect prior to the vesting of any unvested portion of the Award, or as specified in the Award Documentation or Grant Documentation, cancel, reduce or require reimbursement of the Award.
|
b.
|
If (i) Section III.E.2. is applicable to you, (ii) you terminate your employment with the Company under Section III.D. and such termination of employment occurs within 60 days following the Scheduled Vesting Date, (iii) you receive delivery of the portion of the Award that was thought to have vested on the Scheduled Vesting Date pursuant to Section II.B.4. and (iv) the date of your termination of employment as determined pursuant to Section III.E.2. is before the Scheduled Vesting Date, then you will be required to reimburse the Company for the portion of the Award you received following the Scheduled Vesting Date.
|
c.
|
If you fail to repay any amount due pursuant to this Section VI.A.4., the Company may bring an action in court to recover the amount due. You acknowledge that, by accepting the Award, you agree to pay all costs, expenses and attorney’s fees incurred by the Company in any proceeding for the collection of amounts due pursuant to this Section VI.A.4., provided that the Company prevails in whole or in part in any such proceeding. The Company may also, to the extent permitted by applicable law, reduce any amounts owed to you by the Company in an amount up to the full amount of the repayment due.
|
5.
|
Choice of Forum
. The Company and you each hereby irrevocably and unconditionally submits to the exclusive jurisdiction of any New York state court or federal court of the United States of America sitting in the State of New York, and any appellate court thereof, in any action or proceeding arising out of or relating to this Award or for recognition or enforcement of any judgment relating thereto, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York state court or, to the extent permitted by law, in such federal court. The Company and you agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
|
6.
|
Severability; Captions
. In the event that any provision of this Award is determined to be invalid or unenforceable, in whole or in part, the remaining provisions of this Award will be unaffected thereby and will remain in full force and effect to the fullest extent permitted by law. The captions of this Award are not part of the provisions of this Award and will have no force or effect.
|
B.
|
Additional Provisions—Outside of the United States
|
1.
|
Changes to Delivery.
In the event that Marsh & McLennan Companies considers that due to legal, regulatory or tax issues the normal delivery of an Award to a participant outside the United States would not be appropriate, then Marsh & McLennan Companies may, in its sole discretion, determine how the value of the Award will be delivered. Without limitation, this may include making any payments due under the Award in cash instead of shares of Common Stock or in shares of Common Stock instead of cash, in an amount equivalent to the value of the Award on the date of vesting after payment of applicable taxes and fees. If the value of an Award is to be delivered in cash instead of shares of Common Stock, Marsh & McLennan Companies may sell any shares of Common Stock distributable in respect of the Award on your behalf and use the proceeds (after payment of applicable taxes and fees) to satisfy the Award.
|
2.
|
Amendment and Modification.
The Committee may modify the terms of any Award under the Plan granted to you in any manner deemed by the Committee to be necessary or appropriate in order for such Award to conform to laws, regulations, and customs of the country (other than the United States) in which you are then resident or primarily employed or were resident or primarily employed at the time of grant or during the term of the Award, or so that the value and other benefits of the Award to you, as affected by non-U.S. tax laws and other restrictions applicable as a result of your residence or employment outside of the United States, shall be comparable to the value of such an Award to an individual who is resident or primarily employed in the United States.
|
VII.
|
QUESTIONS AND ADDITIONAL INFORMATION
|
I.
|
BACKGROUND 1
|
II.
|
AWARDS 1
|
A.
|
General. 1
|
1.
|
Grant of Award and Award Types 1
|
2.
|
Award Acceptance 1
|
3.
|
Rights of Award Holders 1
|
4.
|
Restrictive Covenants Agreement 1
|
B.
|
Stock Units. 2
|
1.
|
General 2
|
2.
|
Vesting 2
|
3.
|
Dividend Equivalents 2
|
4.
|
Delivery 2
|
C.
|
Performance Stock Units. 3
|
1.
|
General 3
|
2.
|
Vesting 3
|
3.
|
Dividend Equivalents 3
|
4.
|
Delivery. 3
|
D.
|
Options. 4
|
1.
|
General 4
|
2.
|
Vesting 4
|
3.
|
Term 4
|
4.
|
Exercisability 4
|
5.
|
Method of Exercise of an Option 4
|
E.
|
Satisfaction of Tax Obligations 5
|
1.
|
Personal Tax Advisor 5
|
2.
|
U.S. Employees 5
|
3.
|
Non-U.S. Employees 5
|
II.
|
EMPLOYMENT EVENTS 6
|
A.
|
Death. 6
|
1.
|
Stock Units 6
|
2.
|
Performance Stock Units 6
|
3.
|
Options 6
|
B.
|
Permanent Disability 6
|
1.
|
Stock Units 6
|
2.
|
Performance Stock Units 6
|
3.
|
Options 6
|
C.
|
Termination by You Outside of the European Union – Age and Service Pro-Rata Vesting 7
|
1.
|
Stock Units 7
|
2.
|
Performance Stock Units 7
|
3.
|
Options 7
|
D.
|
Termination by You Outside of the European Union – Age and Service Full Vesting. 7
|
1.
|
Stock Units 7
|
2.
|
Performance Stock Units 7
|
3.
|
Options 7
|
E.
|
Termination by You Within the European Union – Retirement Treatment 8
|
1.
|
Stock Units 8
|
2.
|
Performance Stock Units 8
|
3.
|
Options 8
|
F.
|
Termination by the Company Other Than for Cause 8
|
1.
|
Stock Units 8
|
2.
|
Performance Stock Units 9
|
3.
|
Options 9
|
4.
|
Important Notes 10
|
G.
|
All Other Terminations. 10
|
H.
|
Date of Termination of Employment 10
|
I.
|
Conditions to Vesting of Award Prior to a Scheduled Vesting Date or the PSU
|
1.
|
Restrictive Covenants Agreement 11
|
2.
|
Waiver and Release and Restrictive Covenants Agreement 11
|
J.
|
Determination of Pro-Rata Vesting upon Termination of Employment. 11
|
K.
|
Distribution in Respect of Performance Stock Units 12
|
1.
|
Distribution Following Death, Permanent Disability, Termination by the
|
2.
|
Termination of Employment by You On or After Satisfaction of the Age
|
L.
|
Section 409A of the Code 13
|
IV.
|
CHANGE IN CONTROL PROVISIONS 14
|
A.
|
Treatment of Awards 14
|
1.
|
Stock Units 14
|
2.
|
Performance Stock Units 15
|
3.
|
Options 15
|
V.
|
DEFINITIONS 15
|
VI.
|
ADDITIONAL PROVISIONS 17
|
A.
|
Additional Provisions—General 17
|
1.
|
Administrative Rules 17
|
2.
|
Amendment 17
|
3.
|
Limitations 17
|
4.
|
Cancellation or Clawback of Awards 18
|
5.
|
Choice of Forum 18
|
6.
|
Severability; Captions 18
|
B.
|
Additional Provisions—Outside of the United States 18
|
1.
|
Changes to Delivery 18
|
2.
|
Amendment and Modification 19
|
VII.
|
QUESTIONS AND ADDITIONAL INFORMATION 19
|
A.
|
General.
|
1.
|
Grant of Award and Award Types.
The types of awards that may have been granted to you under the Plan are described below. The description of a type of award in these Terms and Conditions that is not part of the Award does not give or imply any right to such type of award.
|
2.
|
Award Acceptance.
The grant of this Award is contingent upon your acceptance, by the date and in the manner specified in the Grant Documentation, of these Terms and Conditions, the Country-Specific Notices (if applicable) and Restrictive Covenants Agreement as described in Section II.A.4. If you decline the Award or if you do not accept the Award and any applicable documents described in the preceding sentence by the date and in the manner specified in the Grant Documentation, then the Award will be cancelled as of the grant date of the Award.
|
3.
|
Rights of Award Holders.
Unless and until the vesting conditions of the Award have been satisfied and cash or shares of Common Stock, as applicable, have been delivered to you in accordance with the Award Documentation, you have only the rights of a general unsecured creditor of Marsh & McLennan Companies. Unless and until shares of Common Stock have been delivered to you, you have none of the rights of ownership to such shares (e.g., units cannot be used as payment for stock option exercises; units may not be transferred or assigned; units have no voting rights).
|
4.
|
Restrictive Covenants Agreement.
As described in Section II.A.2., a Restrictive Covenants Agreement in a form determined by Marsh & McLennan Companies (“
Restrictive Covenants Agreement
”) must be in place in order to accept the Award, you must execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, the Restrictive Covenants Agreement in order for the Award to vest pursuant to certain employment events as described in Section III., and you must further execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, the
|
B.
|
Stock Units.
|
1.
|
General.
A restricted stock unit (“
Stock Unit
”) represents an unfunded and unsecured promise to deliver (or cause to be delivered) to you, subject to the terms of the Award Documentation, one share of Common Stock after vesting.
|
2.
|
Vesting.
Subject to your continued employment, 33-1/3% of the Stock Units will vest on [DATE] of [YEAR], [YEAR] and [YEAR]. Each date on which a Stock Unit is scheduled to vest pursuant to this Section II.B.2. is a “
Scheduled Vesting Date
.” In the event of your termination of employment or the occurrence of your Permanent Disability (as defined in Section V.G.) prior to a Scheduled Vesting Date, your right to any Stock Units that are unvested immediately prior to your termination of employment or occurrence of your Permanent Disability, as applicable, will be determined in accordance with Section III. below. For the avoidance of doubt, the date of your termination of employment for purposes of determining vesting under this Section II.B.2. will be determined in accordance with Section III.H.
|
3.
|
Dividend Equivalents.
For each outstanding Stock Unit covered by the Award, an amount equal to the dividend payment (if any) made in respect of one share of Common Stock (a “
Dividend Equivalent
”) will accrue in U.S. dollars on each dividend record date that occurs on or after the grant date of the Award while the Award is outstanding. Accrued Dividend Equivalents will vest when the Stock Units in respect of which such Dividend Equivalents were accrued vest. Accrued Dividend Equivalents will not be paid, and no further Dividend Equivalents will accrue, on Stock Units that do not vest or are cancelled or forfeited.
|
4.
|
Delivery.
|
a.
|
Shares of Common Stock deliverable in respect of the Stock Units covered by the Award shall be delivered to you as soon as practicable after vesting, and in no event later than 60 days after vesting.
|
b.
|
The value of vested Dividend Equivalents will be delivered to you in cash as soon as practicable after vesting and in no event later than 60 days after vesting.
|
c.
|
The delivery of shares of Common Stock and/or cash or other property that may be deliverable under these Terms and Conditions, is conditioned on the satisfaction or withholding of any applicable tax obligations, as described in Section II.E.
|
d.
|
Any shares of Common Stock and/or cash or other property that may be deliverable 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.
|
C.
|
Performance Stock Units.
|
1.
|
General.
A performance stock unit (“
PSU
”) represents an unfunded and unsecured promise to deliver (or cause to be delivered) to you, subject to the terms of the Award Documentation, a minimum of zero (0) and up to a maximum of two (2) shares of Common Stock after vesting, depending on the achievement, as determined by the Compensation Committee of the Board of Directors of Marsh & McLennan Companies (the “
Committee
”), of the financial performance objectives established by the Committee for the Performance Period (as defined in Section V.F.). In the event of your termination of employment or occurrence of your Permanent Disability prior to the PSU Scheduled Vesting Date (defined below), the number of shares of Common Stock deliverable in respect of a PSU shall be determined as provided in Section III. below.
|
2.
|
Vesting.
Subject to your continued employment, the PSUs are scheduled to vest on [DATE] (the “
PSU Scheduled Vesting Date
”). In the event of your termination of employment or occurrence of your Permanent Disability prior to the PSU Scheduled Vesting Date, your right to the PSUs, and the number of shares of Common Stock delivered in respect of each PSU, will be determined in accordance with Section III. below. For the avoidance of doubt, the date of your termination of employment for purposes of this Section II.C.2. will be determined in accordance with Section III.H.
|
3.
|
Dividend Equivalents.
Dividend Equivalents (if any) will be paid for each share of Common Stock that is determined under Section II.C.1. to be delivered in respect of a vested PSU. Dividend Equivalents will be calculated as if such share that is to be delivered in respect of a vested PSU was outstanding as of each dividend record date that occurs on or after the grant date of the Award while the Award is outstanding. Dividend Equivalents will vest when the PSUs, in respect of which such Dividend Equivalents were calculated, vest. Dividend Equivalents will not be paid on PSUs that do not vest or are cancelled or forfeited.
|
4.
|
Delivery.
|
a.
|
Shares of Common Stock deliverable in respect of the PSUs covered by the Award that vest on the PSU Scheduled Vesting Date shall be delivered to you as soon as practicable after vesting, and in no event later than 60 days after vesting. In the event of your termination of employment or occurrence of your Permanent Disability prior to the PSU Scheduled Vesting Date, shares of Common Stock in respect of the PSUs covered by the Award that vest on your termination of employment or occurrence of your Permanent Disability shall be distributed to you as provided in Section III.
|
b.
|
The value of vested Dividend Equivalents that vest on the PSU Scheduled Vesting Date will be delivered to you in cash as soon as practicable after vesting, and in no event later than 60 days after vesting. In the event of your termination of employment or occurrence of your Permanent Disability prior to the PSU Scheduled Vesting Date, vested Dividend Equivalents shall be distributed to you as provided for PSUs in Section III.
|
c.
|
The delivery of shares of Common Stock and/or cash or other property that may be
|
d.
|
Any shares of Common Stock and/or cash or other property that may be deliverable 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.
|
D.
|
Options.
|
1.
|
General.
A stock option (“
Option
”), whether qualified or nonqualified, represents the right to purchase the number of shares of Common Stock specified in the Grant Documentation (the “
Option Shares
”) each at the exercise price specified in the Grant Documentation.
|
2.
|
Vesting.
Subject to your continued employment, 25% of the Option Shares covered by the Option will vest on each of the first four anniversaries of the grant date of the Award. Each date on which an Option Share covered by the Option is scheduled to vest is a “
Scheduled Vesting Date
.”
In the event of your termination of employment or occurrence of your Permanent Disability prior to a Scheduled Vesting Date, your right to any Option Shares covered by the Option that are unvested immediately prior to your termination of employment or occurrence of your Permanent Disability, as applicable, will be determined in accordance with Section III. below. For the avoidance of doubt, the date of your termination of employment for purposes of this Section II.D.2. will be determined in accordance with Section III.H.
|
3.
|
Term.
Subject to your continued employment, the Option will expire on the day immediately preceding the tenth anniversary of the grant date of the Award (“
Option Expiration Date
”). If your employment terminates before the Option Expiration Date, your right to exercise any vested Option Shares covered by the Option will be determined in accordance with Section III. below.
|
4.
|
Exercisability.
The Option Shares covered by the Option will become exercisable when they vest.
|
5.
|
Method of Exercise of an Option.
|
a.
|
General Procedures.
An Option may be exercised by written notice to Marsh & McLennan Companies or an agent appointed by Marsh & McLennan Companies, in form and substance satisfactory to Marsh & McLennan Companies, 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 the Award Documentation (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 (A) the Option is being exercised after your death in accordance with Section III. below or (B) as otherwise determined by Marsh & McLennan Companies.
|
b.
|
Payment of Exercise Price.
Payment of the aggregate exercise price may be made with U.S. dollars or by tendering shares of Common Stock (including shares of
|
c.
|
Distribution of Option Shares.
The shares of Common Stock from the Option exercise will be distributed as specified in the Exercise Notice, after you have satisfied applicable tax obligations, as described in Section II.E., and fees.
|
E.
|
Satisfaction of Tax Obligations.
|
1.
|
Personal Tax Advisor.
Neither the Company nor any Company employee is authorized to provide personal tax advice to you. It is recommended that you consult with your personal tax advisor for more detailed information regarding the tax treatment of the Award, especially before making any decisions that rely on that tax treatment.
|
2.
|
U.S. Employees.
|
a.
|
Stock Units, Performance Stock Units and Dividend Equivalents.
Applicable employment taxes are required by law to be withheld when a Stock Unit, PSU or Dividend Equivalent vests, or, if later, when the number of shares of Common Stock deliverable in respect of a PSU (or the amount of cash payable in respect of a Dividend Equivalent corresponding to a PSU) is determined. Applicable income taxes are required by law to be withheld when shares of Common Stock in respect of Stock Units, PSUs or cash in respect of Dividend Equivalents are delivered to you. A sufficient number of whole shares of Common Stock, cash or other property, as applicable, will be retained by Marsh & McLennan Companies to satisfy the tax-withholding obligation.
|
b.
|
Options.
Applicable taxes (including employment taxes) are required by law to be withheld when a nonqualified Option is exercised. A sufficient number of whole shares of Common Stock resulting from the Option exercise will be retained by Marsh & McLennan Companies to satisfy the tax-withholding obligation unless you elect in the Exercise Notice to satisfy all applicable tax withholding in another manner.
|
3.
|
Non-U.S. Employees.
|
a.
|
Stock Units, Performance Stock Units and Dividend Equivalents.
In most countries, the value of a Stock Unit, PSU or Dividend Equivalent is generally not taxable on the grant date. If the value of the Stock Unit, PSU or Dividend Equivalent is not taxable on the grant date, it will, in most countries, be taxed at a later time, for example, upon delivery of a share of Common Stock in respect of the Stock Unit or PSU that vests, and/or the subsequent sale of the share of Common Stock received in connection with the vesting of the Stock Unit or PSU, or upon delivery of cash in respect of a Dividend Equivalent.
|
b.
|
Options.
In most countries, the value of an Option is generally not taxable on the grant date. If the value of the Option is not taxable on the grant date, it will, in most countries, be taxed at a later time, for example, upon exercise of the Option and delivery of shares of Common Stock in respect of the Option, and/or the subsequent sale of the shares of Common Stock.
|
c.
|
Withholding.
Marsh & McLennan Companies and/or your local employer shall have the power and the right to deduct and withhold from the Award and other compensation or to require you to remit to Marsh & McLennan Companies and/or to your local employer, an amount sufficient to satisfy any taxes that Marsh & McLennan Companies considers are payable under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, capital gain taxes, transfer taxes, social security contributions and National Insurance Contributions with respect to the Award, including any and all associated tax events derived therefrom. If applicable, Marsh & McLennan Companies and/or your local employer may retain and sell a sufficient number of whole shares of Common Stock distributable in respect of the Award for this purpose.
|
A.
|
Death.
|
1.
|
Stock Units.
In the event your employment is terminated because of your death, the unvested Stock Units will fully vest at such termination of employment and will be distributed as described in Section II.B.4.
|
2.
|
Performance Stock Units.
In the event your employment is terminated because of your death, the PSUs will fully vest at such termination of employment and will be distributed as described in Section III.K.1.
|
3.
|
Options.
In the event your employment is terminated because of your death, the Option will fully vest with respect to any unvested Option Shares and will become exercisable at such termination of employment. 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 any Option Shares that vest (and any Option Shares that were already vested at the time of your death) within two years after the date of death, but in no event shall the Option be exercisable after the Option Expiration Date.
|
B.
|
Permanent Disability.
|
1.
|
Stock Units
. Upon the occurrence of your Permanent Disability, the unvested Stock Units will fully vest and will be distributed as described in Section II.B.4., provided that you satisfy the conditions described in Section III.I.1.
|
2.
|
Performance Stock Units.
Upon the occurrence of your Permanent Disability, the PSUs will fully vest and will be distributed as described in Section III.K.1., provided that you satisfy the conditions described in Section III.I.1.
|
3.
|
Options.
Upon the occurrence of your Permanent Disability, the Option will fully vest with respect to any unvested Option Shares and will become exercisable, provided that you satisfy the conditions described in Section III.I.1. Provided that you satisfy the conditions described in Section III.I.1., any such Option Shares that vest (and any Option Shares that were already vested at the time your Permanent Disability occurred) shall be exercisable for two years following the occurrence of your Permanent Disability, but in no event shall the Option be exercisable after the Option Expiration Date.
|
C.
|
Termination by You Outside of the European Union – Age and Service Pro-Rata Vesting.
If you have satisfied the Age and Service Criteria for Pro-Rata Vesting (as defined in Section V.B.) but do not satisfy the Age and Service Criteria for Full Vesting (as defined in Section V.A.) on or before you terminate your employment with the Company for any reason other than death or the occurrence of your Permanent Disability and you are determined by the Company, in its sole discretion, to be employed outside of the European Union, then this Section III.C. shall apply. For the avoidance of doubt, Section III.F. will govern the treatment of the Award in the event your employment is terminated by the Company other than for Cause (as defined in Section V.C.).
|
1.
|
Stock Units.
Upon such termination of employment, the unvested Stock Units will vest on a pro-rata basis as described in Section III.J. and will be distributed as described in Section II.B.4., provided that you satisfy the conditions described in Section III.I.1.
|
2.
|
Performance Stock Units.
Upon such termination of employment, the PSUs will vest on a pro-rata basis as described in Section III.J. and will be distributed as described in Section III.K.2., provided that you satisfy the conditions described in Section III.I.1.
|
3.
|
Options.
Upon such termination of employment, the Option will continue to vest with respect to any unvested Option Shares as provided in Section II.D.2. as if your employment had not terminated and the Option Shares will become exercisable as provided in Section II.D.4., provided that you satisfy the conditions described in Section III.I.1. Provided that you satisfy the conditions described in Section III.I.1., any such Option Shares that vest (and any Option Shares that were already vested at the time of your termination of employment) shall be exercisable until the earlier of the fifth anniversary of your termination of employment and the Option Expiration Date.
|
D.
|
Termination by You Outside of the European Union – Age and Service Full Vesting.
If you have satisfied the Age and Service Criteria for Full Vesting on or before you terminate your employment with the Company for any reason other than death or the occurrence of your Permanent Disability and you are determined by the Company, in its sole discretion, to be employed outside of the European Union, then this Section III.D. shall apply. For the avoidance of doubt, Section III.F. will govern the treatment of the Award in the event your employment is terminated by the Company other than for Cause.
|
1.
|
Stock Units.
Upon such termination of employment, the unvested Stock Units will fully vest and will be distributed as described in Section II.B.4., provided that you satisfy the conditions described in Section III.I.1.
|
2.
|
Performance Stock Units.
Upon such termination of employment, the PSUs will fully vest and will be distributed as described in Section III.K.2., provided that you satisfy the conditions described in Section III.I.1.
|
3.
|
Options.
Upon such termination of employment, the Option will continue to vest with respect to any unvested Option Shares as provided in Section II.D.2. as if your employment had not terminated and the Option Shares will become exercisable as provided in Section II.D.4., provided that you satisfy the conditions described in Section III.I.1. Provided that you satisfy the conditions described in Section III.I.1., any such Option Shares that vest (and any Option Shares that were already vested at the time of your
|
E.
|
Termination by You Within the European Union - Retirement Treatment.
If you are determined by the Retirement Treatment Committee (as defined in Section V.H.) to be eligible for retirement treatment on or following the time you terminate your employment with the Company for any reason other than death or the occurrence of your Permanent Disability and you are determined by the Company, in its sole discretion, to be employed within the European Union, then this Section III.E. shall apply. For the avoidance of doubt, Section III.F. will govern the treatment of the Award in the event your employment is terminated by the Company other than for Cause.
|
1.
|
Stock Units.
Upon the later to occur of such termination of employment or the determination by the Retirement Treatment Committee that you are eligible for retirement treatment, the unvested Stock Units will vest on a pro-rata basis as described in Section III.J. and will be distributed as described in Section II.B.4., provided that you satisfy the conditions described in Section III.I.1.
|
2.
|
Performance Stock Units.
Upon the later to occur of such termination of employment or the determination by the Retirement Treatment Committee that you are eligible for retirement treatment, the PSUs will vest on a pro-rata basis as described in Section III.J. and will be distributed as described in Section III.K.2., provided that you satisfy the conditions described in Section III.I.1.
|
3.
|
Options.
Upon such termination of employment, the Option will continue to vest with respect to any unvested Option Shares as provided in Section II.D.2. as if your employment had not terminated and the Option Shares will become exercisable as provided in Section II.D.4., provided that you satisfy the conditions described in Section III.I.1. Provided that you satisfy the conditions described in Section III.I.1., any such Option Shares that vest (and any Option Shares that were already vested at the time of your termination of employment) shall be exercisable until the earlier of the fifth anniversary of your termination of employment and the Option Expiration Date. For the avoidance of doubt, if a Scheduled Vesting Date occurs following the date that you terminate your employment but prior to the date the Retirement Treatment Committee determines that you are eligible for retirement treatment, the Options Shares that were scheduled to vest on such Scheduled Vesting Date will vest on the date you are determined by the Retirement Treatment Committee to be eligible for retirement treatment.
|
F.
|
Termination by the Company Other Than for Cause.
|
1.
|
Stock Units.
|
a.
|
General.
Except as otherwise provided in Sections III.F.1.b. and and IV., in the event the Company, in its sole discretion, determines that your employment is terminated by the Company other than for Cause, the unvested Stock Units will vest at such termination of employment on a pro-rata basis as described in Section III.J. and will be distributed as described in Section II.B.4., provided that you satisfy the conditions described in Section III.I.2. For the avoidance of doubt, this Section III.F.1.a. shall apply regardless of whether you are determined by the Retirement Treatment
|
b.
|
Termination by the Company Other Than for Cause After Satisfaction of Age and Service Criteria for Full Vesting.
In the event the Company, in its sole discretion, determines that your employment is terminated by the Company other than for Cause, and on or before your termination of employment you satisfy the Age and Service Criteria for Full Vesting, the unvested Stock Units will fully vest at such termination of employment and will be distributed as described in Section II.B.4., provided that you satisfy the conditions described in Section III.I.2.
|
2.
|
Performance Stock Units.
|
a.
|
General.
Except as otherwise provided in Sections III.F.2.b. and IV., in the event the Company, in its sole discretion, determines that your employment is terminated other than for Cause, the PSUs will vest at such termination of employment on a pro-rata basis as described in Section III.J. and will be distributed as described in Section III.K.1., provided that you satisfy the conditions described in Section III.I.2. For the avoidance of doubt, this Section III.F.2.a. shall apply regardless of whether you are determined by the Retirement Treatment Committee to be eligible for retirement treatment on or following your termination of employment or you have satisfied the Age and Service Criteria for Pro-Rata Vesting on or before your termination of employment by the Company.
|
b.
|
Termination by the Company Other Than for Cause After Satisfaction of Age and Service Criteria for Full Vesting.
In the event the Company, in its sole discretion, determines that your employment is terminated other than for Cause, and on or before such time you satisfy the Age and Service Criteria for Full Vesting, the PSUs will fully vest at such termination of employment and will be distributed as described in Section III.K.1., provided that you satisfy the conditions described in Section III.I.2.
|
3.
|
Options.
|
a.
|
General.
Except as otherwise provided in Sections III.F.3.b. and IV., in the event the Company, in its sole discretion, determines that your employment is terminated other than for Cause, your rights, title and interest in and to any unvested Option Shares will be canceled upon such termination of employment. Provided that you satisfy the conditions described in Section III.I.2., any Option Shares that were vested at the time of your termination of employment shall be exercisable until the earlier of 90 days following your termination of employment and the Option Expiration Date.
|
b.
|
Termination by the Company Other Than for Cause After Satisfaction of Age and Service Criteria for Pro-Rata Vesting or Full Vesting or You Are Determined to Be Eligible for Retirement Treatment.
In the event the Company, in its sole discretion, determines that your employment is terminated other than for Cause, and on or before such time you satisfy the Age and Service Criteria for Pro-Rata Vesting or the Age and Service Criteria for Full Vesting or you are determined by the Retirement Treatment Committee to be eligible for retirement treatment on or following your termination of
|
4.
|
Important Notes.
|
a.
|
Sale of Business Unit.
For purposes of this Award, 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 or affiliate of Marsh & McLennan Companies, 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 or similar transaction.
|
b.
|
Constructive Discharge.
The Award will not vest, whether on a pro-rata or full basis, upon a constructive discharge, including if any court or regulatory agency retroactively concludes or interprets events to have constituted a constructive discharge.
|
G.
|
All Other Terminations.
For all other terminations of employment not described in Sections III.A. through F. or Section IV. (including, but not limited to, a termination by the Company for Cause, your resignation without having satisfied the Age and Service Criteria for Pro-Rata Vesting as described in Section III.C., your resignation without having satisfied the Age and Service Criteria for Full Vesting as described in Section III.D., or your resignation without having been determined by the Retirement Treatment Committee to be eligible for retirement treatment on or following your termination of employment as described in Section III.E.), any rights, title and interest in and to any remaining unvested portion of the Award shall be cancelled as of the date your employment is treated as having terminated as described in Section III.H.
|
H.
|
Date of Termination of Employment.
|
1.
|
If Section III.H.2. does not apply to you, then for purposes of determining vesting under Sections II.B.2., II.C.2. and II.D.2. and the number of unvested Stock Units or PSUs, as applicable, that vest on a pro-rata basis as described in III.J., your employment will be treated as having terminated on your last day of employment with the Company.
|
2.
|
If you are a Guy Carpenter employee in the United States who is obligated to provide the Company at least 60 days advance written notice of your intention to terminate your employment for any reason, then, if your employment terminates pursuant to Section III.G. your employment will be treated as having terminated for purposes of determining vesting under Sections II.B.2., II.C.2. and II.D.2. on the date that is 60 days prior to your last day of
|
I.
|
Conditions to Vesting of Award Prior to a Scheduled Vesting Date or the PSU Scheduled Vesting Date and Exercisability of Options Following Termination.
|
1.
|
Restrictive Covenants Agreement.
In the event of (i) the occurrence of your Permanent Disability as described in Section III.B., (ii) your termination of employment after satisfying the Age and Service Criteria for Pro-Rata Vesting or the Age and Service Criteria for Full Vesting as described in Sections III.C. and D. or (iii) a determination by the Retirement Treatment Committee that you are eligible for retirement treatment as described in Section III.E., you will be required to execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, and return to Marsh & McLennan Companies (or an agent appointed by Marsh & McLennan Companies) a Restrictive Covenants Agreement. Failure to (a) execute or reaffirm such an agreement by the date specified by the Company, which shall be in no event later than 60 days following the occurrence of your Permanent Disability or your termination of employment as described in Sections III.B. through E. or (b) comply with the Restrictive Covenants Agreement, will result in the cancellation or forfeiture of any rights, title and interest in and to the Award.
|
2.
|
Waiver and Release and Restrictive Covenants Agreement.
In the event of your termination of employment by the Company other than for Cause as described in Section III.F., you will be required to (a) execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, and return to Marsh & McLennan Companies (or an agent appointed by Marsh & McLennan Companies) a Restrictive Covenants Agreement and (b) execute and not revoke a waiver and release agreement, if provided to you by the Company at the time of your termination of employment. Failure to meet these requirements by the date specified by the Company, which shall be in no event later than 60 days following your termination of employment, or failure to comply with the waiver and release agreement or the Restrictive Covenants Agreement, as applicable, will result in the cancellation or forfeiture of any rights, title and interest in and to the Award.
|
J.
|
Determination of Pro-Rata Vesting upon Termination of Employment.
|
A
|
= the number of Stock Units or PSUs covered by the Award, as applicable;
|
B
|
= the number of days in the period beginning on the grant date of the Award and ending on the date of your termination of employment, as determined in accordance with Section III.H.1.;
|
C
|
= the number of days in the period beginning on the grant date of the Award and ending on the last Scheduled Vesting Date or the PSU Scheduled Vesting Date, as applicable; and
|
D
|
= the number of Stock Units or PSUs, as applicable, that have previously vested.
|
K.
|
Distribution in Respect of Performance Stock Units.
|
1.
|
Distribution Following Death, Permanent Disability, Termination by the Company Other Than for Cause, Certain Terminations Following a Change in Control or In Connection With a Change in Control, Whether or Not You Satisfy the Age and Service Criteria for Pro-Rata Vesting or Full Vesting or You Are Determined to Be Eligible for Retirement Treatment.
In the event of (i) your termination of employment due to your death, (ii) the occurrence of your Permanent Disability, (iii) termination of your employment by the Company other than for Cause, (iv) termination of your employment by the Company other than for Cause or by you for Good Reason (as defined in Section V.E.) within 24 months following a Change in Control or (v) the non-assumption, conversion or replacement of the Award in connection with a Change in Control as described in Section III.A.2., III.B.2., III.F.2. or IV.A.2., you will receive, as soon as practicable after such termination of employment, occurrence of Permanent Disability or Change in Control, and in no event later than 60 days following such termination of employment, occurrence of Permanent Disability or Change in Control, the number of shares of Common Stock determined under Section II.C.1. in respect of the number of PSUs that vested in accordance with such termination of employment, occurrence of Permanent Disability or Change in Control, as applicable, provided that, (A) in the event your termination of employment, the occurrence of your Permanent Disability or Change in Control occurs on or prior to December 31 of the year in which the PSUs are granted or (B) in the event a Change in Control occurs on or prior to December 31 of the year in which the PSUs are granted and your termination of employment or your Permanent Disability occurs following such Change in Control or the Award is not assumed, converted or replaced following the Change in Control, you will receive one (1) share of Common Stock in respect of each PSU covered by the Award that vests at your termination of employment, the occurrence of your Permanent Disability or Change in Control, as applicable.
|
2.
|
Termination of Employment by You On or After Satisfaction of the Age and Service Criteria for Pro-Rata Vesting or the Age and Service Criteria for Full Vesting or You Are Determined to Be Eligible for Retirement Treatment.
In the event you have satisfied the Age and Service Criteria for Pro-Rata Vesting or the Age and Service Criteria for Full Vesting on or prior to the date you terminate your employment as described in Section III.C.2. or III.D.2 or you are determined by the Retirement Treatment Committee to be eligible for retirement treatment on or following the date you terminate your employment, as described in Section III.E.2., you will receive, as soon as practicable after the PSU Scheduled Vesting Date and in no event later than 60 days following the PSU Scheduled Vesting Date, the number of shares of Common Stock determined under Section II.C.1. in respect of the number of PSUs that vested in accordance with such termination of employment, provided that, in the event a Change in Control occurs on or
|
L.
|
Section 409A of the Code.
|
1.
|
Notwithstanding any other provision herein, the Award may be subject to additional restrictions to ensure compliance with the requirements of Section 409A of the U.S. Internal Revenue Code of 1986, as amended, and regulations thereunder (regarding nonqualified deferred compensation) (“
Section 409A of the Code
”). The Committee intends to administer the Award in accordance with Section 409A of the Code and reserves the right to make changes in the terms or operations of the Award (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 the Award Documentation that do not reflect Section 409A of the Code. If the Award is not in compliance with Section 409A of the Code, you may be subject to immediate taxation of all unpaid awards under the Plan that are subject to Section 409A of the Code at your regular income tax rate, plus a 20% additional tax, plus interest at the underpayment rate plus 1%.
|
2.
|
Notwithstanding any other provision herein, if any portion of the Award is determined to be nonqualified deferred compensation subject to Section 409A of the Code, any references to “termination of employment,” or “when you are no longer employed” in these Terms and Conditions shall have the following meaning:
Your “termination of employment” (or similar terms) shall occur when you have incurred a “separation from service” within the meaning of Section 409A of the Code and as further defined herein. Specifically, you will have incurred a “separation from service” when the level of services you provide to Marsh & McLennan Companies or any of its affiliates in any capacity, including as an employee, director, independent contractor or consultant, does not exceed 20% of the average level of services that you provided to Marsh & McLennan Companies and its affiliates in the preceding 36 months (or shorter period of service if, for example, your total service with Marsh & McLennan Companies is less than 36 months), all as determined in accordance with Section 409A of the Code. In determining whether a “separation from service” has occurred, any period of up to six months during which you are on a bona fide leave of absence or up to 29 months during which you are absent from work due to a disability for which you are receiving Marsh & McLennan Companies long-term disability benefits will be ignored. |
3.
|
Notwithstanding any other provision herein, if at the time of your termination of employment you are a “specified employee” (as defined in Section 409A of the Code), no portion of the Award that is determined to be nonqualified deferred compensation subject to Section 409A of the Code shall be distributed until the first day of the seventh month after your termination of employment and any such distributions to which you would otherwise be entitled during the first six months following your termination of employment will be accumulated and paid without interest on the first day of the seventh month after your termination of employment. The provisions of this subparagraph will only apply if and to the extent required to avoid any “additional tax” under Section 409A of the Code.
|
4.
|
Notwithstanding any provision herein, if (i) a Change in Control occurs on or prior to December 31 of the second year of the three-year Performance Period and (ii) no earlier than in the third year of the three-year Performance Period, (A) you satisfy the Age and Service Criteria for Pro-Rata Vesting, (B) you satisfy the Age and Service Criteria for Full Vesting or (C) you are determined by the Retirement Treatment Committee to be eligible for retirement treatment on or following your termination of employment, then shares of Common Stock deliverable on the PSU Scheduled Vesting Date in respect of the PSUs covered by the Award shall be distributed to you as soon as practicable after that date, and in no event later than March 15 of that year.
|
5.
|
Notwithstanding any other provision herein with respect to Stock Units,
|
a.
|
If you have satisfied the Age and Service Criteria for Pro-Rata Vesting at any time prior to [DATE] and you do not satisfy the Age and Service Criteria for Full Vesting at any time prior to [DATE] then for each Scheduled Vesting Date following the date that you satisfy the Age and Service Criteria for Pro-Rata Vesting, shares of Common Stock and/or cash pursuant to Section II.B.4. will be delivered by March 15 of the year in which the Scheduled Vesting Date occurs.
|
b.
|
If you first satisfy the Age and Service Criteria for Full Vesting in calendar year [YEAR], then shares of Common Stock and/or cash pursuant to Section II.B.4. with respect to the [DATE] Scheduled Vesting Date will be delivered by [DATE].
|
6.
|
Nothing in Section III.L. is intended to nor does it guarantee that the Award will not be subject to “additional tax” or other adverse tax consequences under Section 409A of the Code.
|
A.
|
Treatment of Awards.
Upon the occurrence of a
“
Change in Control
”
, as defined in the Plan, the Award will continue to vest in accordance with the vesting schedule specified in Sections II.B.2, II.C.2 and II.D.2. and subject to earlier vesting or forfeiture pursuant to Section III., provided that the Award will become fully vested at your termination of employment by the Company other than for Cause, or by you for Good Reason, during the 24-month period following such Change in Control and will be treated as set forth below, provided that you satisfy the conditions described in Section IV.B. Notwithstanding the foregoing, if the Award is not assumed, converted or replaced in connection with a Change in Control on an equivalent basis, the Award will fully vest immediately prior to the Change in Control and will be treated as set forth below.
|
1.
|
Stock Units.
Any Stock Units covered by the Award will be distributed as described in Section II.B.4.
|
2.
|
Performance Stock Units.
Any PSUs covered by the Award will be distributed in accordance with Section III.K.1., provided that, if such Change in Control occurs on or prior to December 31 of the year in which the PSUs are granted, you will receive one (1) share of Common Stock in respect of each PSU covered by the Award that vests.
|
3.
|
Options.
Any such Option Shares that vest (and any Option Shares that were already vested at the time of your termination of employment) shall be exercisable until the earlier of 90 days following your termination of employment or the occurrence of the Change in Control, as applicable, and the Option Expiration Date.
|
B.
|
As a condition to vesting of any unvested portion of the Award, in the event of your termination of employment by the Company other than for Cause or by you for Good Reason during the 24-month period following such Change in Control, you will be required to execute and not revoke a waiver and release agreement, if provided by the Company at the time of your termination of employment. Failure to meet these requirements by the date specified by the Company, which shall be in no event later than 60 days following your termination of employment, or failure to comply with the waiver and release agreement, if applicable, will result in the cancellation or forfeiture of any rights, title and interest in and to the Award.
|
C.
|
For the avoidance of doubt, in the event of your termination of employment by the Company other than for Cause or by you for Good Reason during the 24-month period following such Change in Control and, on or before the date of your termination of employment you satisfy the Age and Service Criteria for Pro-Rata Vesting or the Age and Service Criteria for Full Vesting as described in Sections III.C. and D., or you are determined by the Retirement Treatment Committee to be eligible for retirement treatment on or following your termination of employment as described in Section III.E., any Stock Units, PSUs or Options covered by the Award will be treated as described in this Section IV., provided that you satisfy the conditions described in Section IV.B., provided further that any such Option Shares that vest (and any Option Shares that were already vested at the time of your termination of employment) shall be exercisable until the earlier of the fifth anniversary of your termination of employment and the Option Expiration Date.
|
A.
|
“Age and Service Criteria for Full Vesting”
means you are at least age 65 and have a minimum of one year of service with the Company.
|
B.
|
“Age and Service Criteria for Pro-Rata Vesting”
means you are at least age 55 but are not yet age 65 and have a minimum of five years of service with the Company.
|
C.
|
“Cause”
shall mean:
|
1.
|
willful failure to substantially perform the duties consistent with your position which is not remedied within 30 days after receipt of written notice from the Company specifying such failure;
|
2.
|
willful violation of any written Company policies including but not limited to, the Marsh & McLennan Companies code of business conduct and ethics;
|
3.
|
commission at any time of any act or omission that results in a conviction, plea of no contest, plea of
nolo contendere
, or imposition of unadjudicated probation for any felony or
|
4.
|
unlawful use (including being under the influence) or possession of illegal drugs;
|
5.
|
any gross negligence or willful misconduct resulting in a material loss to the Company, or material damage to the reputation of the Company; or
|
6.
|
any violation of any statutory or common law duty of loyalty to the Company, including the commission at any time of any act of fraud, embezzlement, or material breach of fiduciary duty against the Company.
|
D.
|
“Company”
shall mean Marsh & McLennan Companies or any of its subsidiaries or affiliates.
|
E.
|
“Good Reason”
shall mean any one of the following events without your written consent:
|
1.
|
a material reduction in your base salary;
|
2.
|
material reduction in your annual incentive opportunity (including a material adverse change in the method of calculating your annual incentive);
|
3.
|
material diminution of your duties, responsibilities or authority; or
|
4.
|
a relocation of more than 50 miles from your principal place of employment immediately prior to the Change in Control;
provided that you provide Marsh & McLennan Companies with written notice of your intent to terminate your employment for Good Reason within 60 days of your becoming aware of any circumstances set forth above (with such notice indicating the specific termination provision above on which you are relying and describing in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the indicated provision) and that you provide Marsh & McLennan Companies with at least 30 days following receipt of such notice to remedy such circumstances. |
F.
|
“Performance Period”
shall mean the period that begins on [DATE] and ends on [DATE], provided that in the event of a termination of your employment described in Section III.A.2. or III.F.2. or the occurrence of your Permanent Disability described in Section III.B.2. prior to a Change in Control, such period will end on December 31 of the year prior to such termination of employment or occurrence of your Permanent Disability for the PSUs covered by the Award, and provided further that in the event of a Change in Control, such period will end on December 31 of the year prior to the occurrence of such Change in Control.
|
G.
|
“Permanent Disability”
will be deemed to occur when it is determined (by Marsh & McLennan Companies’ disability carrier for the primary long-term disability plan or program applicable to you because of your employment with the Company) that you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.
|
H.
|
“Retirement Treatment Committee”
is comprised of employees of the Company appointed by the Committee.
|
I.
|
Additional Definitions.
|
VI.
|
ADDITIONAL PROVISIONS
|
A.
|
Additional Provisions—General
|
1.
|
Administrative Rules.
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 the Award Documentation and Grant Documentation 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.
|
2.
|
Amendment.
The Committee may, in its sole discretion, amend the terms of the Award, provided, however, that if the Committee concludes, in its sole discretion, that such amendment is likely to materially impair your rights with respect to the Award, such amendment shall not be implemented with respect to the Award without your consent, except to the extent that any such action is made to cause the Award to comply with applicable law, stock market or exchange rules and regulations, or accounting or tax rules and regulations, or is otherwise made in accordance with Section VI.A.4.
|
3.
|
Limitations.
Payment of the Award is not secured by trust, insurance contract or other funding medium, and you do not have any interest in any fund or specific asset of Marsh & McLennan Companies by reason of the Award. Your right to payment of the Award is the same as the right of an unsecured general creditor of Marsh & McLennan Companies.
|
4.
|
Cancellation or Clawback of Awards.
|
a.
|
Marsh & McLennan Companies may, to the extent permitted or required by any applicable law, stock exchange rules, or any applicable Company policy or arrangement in effect prior to the vesting of any unvested portion of the Award, or as specified in the Award Documentation or Grant Documentation, cancel, reduce or require reimbursement of the Award.
|
b.
|
If (i) Section III.H.2. is applicable to you, (ii) you terminate your employment with the Company under Section III.G. and such termination of employment occurs within 60 days following a Scheduled Vesting Date, (iii) you receive delivery of the portion of the Award that was thought to have vested on such Scheduled Vesting Date pursuant to Section II.B.4. or II.C.4. and (iv) the date of your termination of employment as determined pursuant to Section III.H.2. is before the Scheduled Vesting Date, then you will be required to reimburse the Company for the portion of the Award you received following such Scheduled Vesting Date.
|
c.
|
If you fail to repay any amount due pursuant to this Section VI.A.4., the Company may bring an action in court to recover the amount due. You acknowledge that, by accepting the Award, you agree to pay all costs, expenses and attorney’s fees incurred by the Company in any proceeding for the collection of amounts due pursuant to this Section VI.A.4., provided that the Company prevails in whole or in part in any such proceeding. The Company may also, to the extent permitted by applicable law, reduce any amounts owed to you by the Company in an amount up to the full amount of the repayment due.
|
5.
|
Choice of Forum.
The Company and you each hereby irrevocably and unconditionally submits to the exclusive jurisdiction of any New York state court or federal court of the United States of America sitting in the State of New York, and any appellate court thereof, in any action or proceeding arising out of or relating to this Award or for recognition or enforcement of any judgment relating thereto, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York state court or, to the extent permitted by law, in such federal court. The Company and you agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
|
6.
|
Severability; Captions.
In the event that any provision of this Award is determined to be invalid or unenforceable, in whole or in part, the remaining provisions of this Award will be unaffected thereby and will remain in full force and effect to the fullest extent permitted by law. The captions of this Award are not part of the provisions of this Award and will have no force or effect.
|
B.
|
Additional Provisions—Outside of the United States
|
1.
|
Changes to Delivery.
In the event that Marsh & McLennan Companies considers that due to legal, regulatory or tax issues the normal delivery of an Award to a participant outside the United States would not be appropriate, then Marsh & McLennan Companies may, in its sole discretion, determine how the value of the Award will be delivered. Without
|
2.
|
Amendment and Modification.
The Committee may modify the terms of any Award under the Plan granted to you in any manner deemed by the Committee to be necessary or appropriate in order for such Award to conform to laws, regulations and customs of the country (other than the United States) in which you are then resident or primarily employed or were resident or primarily employed at the time of grant or during the term of the Award, or so that the value and other benefits of the Award to you, as affected by non-U.S. tax laws and other restrictions applicable as a result of your residence or employment outside of the United States, shall be comparable to the value of such an Award to an individual who is resident or primarily employed in the United States.
|
a.
|
Annual Base Salary
: You will receive an annual base salary of the amount set forth on Exhibit A, payable in installments in accordance with the Company’s payroll procedures in effect from time to time. Your base salary includes compensation for all time worked, as well as appropriate consideration for sick days, personal days, and other time off. Your compensation will be considered for adjustment in succeeding years as part of the Company’s normal performance management process.
|
b.
|
Vacation
: You are entitled to 5 weeks of vacation annually, in accordance with our Company policy.
|
c.
|
Annual Bonus
: You are eligible for an annual bonus on the terms set forth on Exhibit A. Bonus awards are discretionary and may be paid in the form of cash, deferred cash or Marsh & McLennan Companies stock units, or a combination thereof. Except as provided in this paragraph and in Section 3(a), to qualify for an annual bonus, you must remain continuously and actively employed by the Company through the date of the bonus payment. The annual bonus shall be paid no later than March 15 of the year following the year for which such bonus is earned. In the event of your Permanent Disability (as defined below) or death, the Company shall pay you (or your estate in the case of death) a prorated target annual bonus for the year in which your termination occurs based on the portion of the year elapsed as of the date of your termination. Any such bonus amount shall be paid within 30 days of your death. In the event of your Permanent Disability, your prorated annual bonus payment is conditioned upon, and subject to, your execution and delivery to the Company within 30 days of the date of such event a valid confidential waiver and release of claims agreement (including restrictive covenants) in a form satisfactory to the Company (the “Release”) and such Release has become irrevocable as provided therein (the “Release Date”). Payment of any such annual bonus amount shall then be paid within 30 days following the Release Effective Date.
|
d.
|
Annual Long-Term Incentive Compensation
: You are eligible to participate in Marsh & McLennan Companies’ long-term incentive program with a target long-term incentive compensation award as set forth on Exhibit A. Long-term incentive awards are discretionary and are governed by terms and conditions approved by the Compensation Committee of the Marsh & McLennan Companies Board of Directors as set forth in the award agreement and in Marsh & McLennan Companies’ 2011 Incentive and Stock Award Plan (or other plan under which the long-term incentive award is granted). In accordance with Company practice, you will be required to enter into a “Restrictive Covenants Agreement” in connection with the grant.
|
e.
|
Benefit Programs
: You and your eligible family members will have the opportunity to participate in the employee benefit plans, policies and programs provided by the Company on such terms and conditions as are generally provided to similarly situated employees of the Company. These plans may include retirement, savings, medical, life, disability, and other insurance programs as well as an array of work/life effectiveness policies and
|
a.
|
You have been designated as a “Key Employee” under the Marsh & McLennan Companies, Inc. Senior Executive Severance Pay Plan (the “Senior Executive Severance Plan”). In the event that your employment with the Company terminates for any reason, the Senior Executive Severance Plan in effect at the time of your termination will exclusively govern the terms under which you may be eligible to receive severance and/or other transition benefits from the Company. In the event that the reason for your termination of employment entitles you to receive severance benefits under Article 5 of the Senior Executive Severance Plan, the Company shall also pay you the earned annual bonus, if any, for the calendar year that preceded your termination to the extent not theretofore paid.
|
b.
|
Upon the termination of your employment for any reason, you shall immediately resign, as of your date of termination, from all positions that you then hold with any member of the Affiliated Group. You hereby agree to execute any and all documentation to effectuate such resignations upon request by the Company, but you shall be treated for all purposes as having so resigned upon your date of termination, regardless of when or whether you execute any such documentation.
|
c.
|
During the term of this letter agreement, and, subject to any other business obligations that you may have, following your date of termination, you agree to assist the Affiliated Group in the investigation and/or defense of any claims or potential claims that may be made or threatened to be made against any member of the Affiliated Group, including any of their officers or directors (a “
Proceeding
”), and will assist the Affiliated Group in connection with any claims that may be made by any member of the Affiliated Group in any Proceeding. You agree, unless precluded by law, to promptly inform Marsh & McLennan Companies if you are asked to participate in any Proceeding or to assist in any investigation of any member of the Affiliated Group. In addition, you agree to provide such services as are reasonably requested by the Company to assist any successor to you in the transition of duties and responsibilities to such successor. Following the receipt of reasonable documentation, the Company agrees to reimburse you for all of your reasonable out-of-pocket expenses associated with such assistance. Your request for any reimbursement, including reasonable documentation, must be submitted as soon as practicable and otherwise consistent with Company policy. In any event, your request for a taxable reimbursement, including reasonable documentation, must be submitted by the October 31st of the year following the year in which the expense is incurred. The Company will generally reimburse such expenses within 60 days of the date they are submitted, but in no event will they be reimbursed later than the December 31st of the year following the year in which the expense is incurred.
|
Annual Base Salary
|
$900,000
|
Annual Target Bonus Opportunity
|
Bonus awards are discretionary. Anticipated target bonus of $1,800,000. Actual bonus may range from 0% - 200% of target, based on achievement of performance objectives related to your performance, Marsh’s performance and/or Marsh & McLennan Companies’ performance as Marsh & McLennan Companies may establish from time to time.
|
Annual Target Long-Term Incentive Opportunity
|
Long-term incentive awards are discretionary. Anticipated target grant-date value of 250% of base salary.
|
1.
|
Duties and Responsibilities
|
2.
|
Compensation and Benefits
|
a.
|
Annual Base Salary
: You will receive an annual base salary of the amount set forth on Exhibit A, payable in installments in accordance with the Company’s payroll procedures in effect from time to time. Your base salary includes compensation for all time worked, as well as appropriate consideration for sick days, personal days, and other time off.
|
b.
|
Vacation
: You are entitled to 5 weeks of vacation annually, in accordance with our Company policy.
|
c.
|
Annual Bonus
: You are eligible for an annual bonus on the terms set forth on Exhibit A. Bonus awards are discretionary and may be paid in the form of cash, deferred cash or Marsh & McLennan Companies stock units, or a combination thereof. Except as provided in this paragraph and in Section 3(a), to qualify for an annual bonus, you must remain continuously and actively employed by the Company through the date of the bonus payment. The annual bonus shall be paid no later than March 15 of the year following the year for which such bonus is earned. In the event of your Permanent Disability (as defined below) or death, the Company shall pay you (or your estate in the case of death) a prorated target annual bonus for the year in which your termination occurs based on the portion of the year elapsed as of the date of your termination. Any such bonus amount shall be paid within 30 days of your death. In the event of your Permanent Disability, your prorated annual bonus payment is conditioned upon, and subject to, your execution and delivery to the Company within 30 days of the date of such event a valid confidential waiver and release of claims agreement (including restrictive covenants) in a form satisfactory to the Company (the “Release”) and such Release has become irrevocable as provided therein (the “Release Date”). Payment of any such annual bonus amount shall then be paid within 30 days following the Release Effective Date.
|
d.
|
Annual Long-Term Incentive Compensation
: You are eligible to participate in Marsh & McLennan Companies’ long-term incentive program with a target long-term incentive compensation award as set forth on Exhibit A. Long-term incentive awards are discretionary and are governed by terms and conditions approved by the Compensation Committee of the Marsh & McLennan Companies Board of Directors as set forth in the award agreement and in Marsh & McLennan Companies’ 2011 Incentive and Stock Award Plan (or other plan under which the long-term incentive award is granted). In accordance with Company practice, you will be required to enter into a “Restrictive Covenants Agreement” in connection with the grant.
|
e.
|
Benefit Programs
: You and your eligible family members will have the opportunity to participate in the employee benefit plans, policies and programs provided by the Company on such terms and conditions as are generally provided to similarly situated employees of the Company. These plans may include retirement, savings, medical, life, disability, and other insurance programs as well as an array of work/life effectiveness policies and programs. Please be aware that nothing in this letter agreement shall limit Marsh & McLennan Companies’ ability to change, modify, cancel or amend any such policies or plans. In addition, you will be eligible to participate in the Marsh & McLennan Companies Executive Financial Services Program, as in effect from time to time.
|
3.
|
Termination of Employment
|
a.
|
You will be designated as a “Key Employee” under the Marsh & McLennan Companies, Inc. Senior Executive Severance Pay Plan (the “Senior Executive Severance Plan”). In the event that your employment with the Company terminates for any reason, the Senior Executive Severance Plan in effect at the time of your termination will exclusively govern the terms under which you may be eligible to receive severance and/or other transition benefits from the Company. In the event that the reason for your termination of employment entitles you to receive severance benefits under Article 5 of the Senior Executive Severance Plan, the Company shall also pay you the earned annual bonus, if any, for the calendar year that preceded your termination to the extent not theretofore paid.
|
b.
|
Upon the termination of your employment for any reason, you shall immediately resign, as of your date of termination, from all positions that you then hold with any member of the Affiliated Group. You hereby agree to execute any and all documentation to effectuate such resignations upon request by the Company, but you shall be treated for all purposes as having so resigned upon your date of termination, regardless of when or whether you execute any such documentation.
|
c.
|
During the term of this letter agreement, and, subject to any other business obligations that you may have, following your date of termination, you agree to assist the Affiliated Group in the investigation and/or defense of any claims or potential claims that may be made or threatened to be made against any member of the Affiliated Group, including any of their officers or directors (a “
Proceeding
”), and will assist the Affiliated Group in connection with any claims that may be made by any member of the Affiliated Group in any Proceeding. You agree, unless precluded by law, to promptly inform Marsh & McLennan Companies if you are asked to participate in any Proceeding or to assist in any investigation of any member of the Affiliated Group. In addition, you agree to provide such services as are reasonably requested by the Company to assist any successor to you in the transition of duties and responsibilities to such successor. Following the receipt of reasonable documentation, the Company agrees to reimburse
|
Annual Base Salary
|
$800,000
|
Annual Target Bonus Opportunity
|
Bonus awards are discretionary. Anticipated target bonus of $1,300,000. Actual bonus may range from 0% - 200% of target, based on achievement of performance objectives related to your performance, Guy Carpenter’s performance and/or Marsh & McLennan Companies’ performance as Marsh & McLennan Companies may establish from time to time.
|
Annual Target Long-Term Incentive Opportunity
|
Long-term incentive awards are discretionary. Anticipated target grant-date value of 150% of base salary.
|
|
Three Months Ended
March 31, 2012 |
Years Ended December 31,
|
|||||||||||||||||||||
|
(Unaudited)
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
||||||||||||
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income before income taxes
|
$
|
507
|
|
|
$
|
1,404
|
|
|
$
|
769
|
|
|
$
|
552
|
|
|
$
|
494
|
|
|
$
|
759
|
|
Interest expense
|
46
|
|
|
199
|
|
|
233
|
|
|
241
|
|
|
220
|
|
|
266
|
|
||||||
Portion of rents representative of the interest factor
|
35
|
|
|
143
|
|
|
140
|
|
|
132
|
|
|
145
|
|
|
162
|
|
||||||
|
$
|
588
|
|
|
$
|
1,746
|
|
|
$
|
1,142
|
|
|
$
|
925
|
|
|
$
|
859
|
|
|
$
|
1,187
|
|
Fixed Charges
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
$
|
46
|
|
|
$
|
199
|
|
|
$
|
233
|
|
|
$
|
241
|
|
|
$
|
220
|
|
|
$
|
266
|
|
Portion of rents representative of the interest factor
|
35
|
|
|
143
|
|
|
140
|
|
|
132
|
|
|
145
|
|
|
162
|
|
||||||
|
$
|
81
|
|
|
$
|
342
|
|
|
$
|
373
|
|
|
$
|
373
|
|
|
$
|
365
|
|
|
$
|
428
|
|
Ratio of Earnings to Fixed Charges
|
7.3
|
|
|
5.1
|
|
|
3.1
|
|
|
2.5
|
|
|
2.4
|
|
|
2.8
|
|
Date:
|
May 8, 2012
|
|
/s/ Brian Duperreault
|
|
|
|
Brian Duperreault
|
|
|
|
President and Chief Executive Officer
|
Date:
|
May 8, 2012
|
|
/s/ J. Michael Bischoff
|
|
|
|
J. Michael Bischoff
|
|
|
|
Chief Financial Officer
|
1.
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
|
2.
|
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 8, 2012
|
|
/s/ Brian Duperreault
|
|
|
|
Brian Duperreault
|
|
|
|
President and Chief Executive Officer
|
Date:
|
May 8, 2012
|
|
/s/ J. Michael Bischoff
|
|
|
|
J. Michael Bischoff
|
|
|
|
Chief Financial Officer
|