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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;
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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 a number of our competitors;
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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 ability to maintain adequate physical, technical and administrative safeguards to protect the security of confidential information or data, and the potential of a system or network disruption that results in regulatory penalties, remedial costs and/or the improper disclosure of confidential information or data;
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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 in the domestic and international jurisdictions in which we operate, including evolving sanctions against Russia and existing trade sanctions laws relating to countries such as Cuba, Iran, Sudan and Syria, anti-corruption laws such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010, local laws prohibiting corrupt payments to government officials, as well as import and export restrictions;
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•
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our ability to make acquisitions and dispositions and to integrate, and realize expected synergies, savings or 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 on our net income caused by fluctuations in foreign currency exchange rates;
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•
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our ability to successfully recover should we experience a disaster or other business continuity problem, such as an earthquake, hurricane, flood, terrorist attack, pandemic, security breach, cyber attack, power loss, telecommunications failure or other natural or man-made disaster;
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•
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the impact of changes in interest rates and deterioration of counterparty credit quality on our results related to our cash balances and investment portfolios, including corporate and fiduciary funds;
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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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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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FINANCIAL STATEMENTS
(UNAUDITED)
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ITEM 2.
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OF OPERATIONS
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ITEM 3.
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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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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Three Months Ended
March 31, |
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(In millions, except per share figures)
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2014
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2013
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Revenue
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$
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3,264
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$
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3,126
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Expense:
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Compensation and benefits
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1,839
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1,803
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Other operating expenses
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752
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716
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Operating expenses
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2,591
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2,519
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Operating income
|
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673
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607
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Interest income
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5
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4
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Interest expense
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(42
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)
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(44
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)
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Investment income
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13
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21
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Income before income taxes
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649
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588
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Income tax expense
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192
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176
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Income from continuing operations
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457
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412
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Discontinued operations, net of tax
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(1
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)
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12
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Net income before non-controlling interests
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|
456
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424
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Less: Net income attributable to non-controlling interests
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13
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11
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Net income attributable to the Company
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$
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443
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$
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413
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Basic net income per share – Continuing operations
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$
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0.81
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$
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0.73
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– Net income attributable to the Company
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$
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0.81
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$
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0.75
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Diluted net income per share – Continuing operations
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$
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0.80
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$
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0.72
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–
Net income attributable to the Company
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$
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0.80
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$
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0.74
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Average number of shares outstanding – Basic
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548
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548
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– Diluted
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556
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557
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Shares outstanding at March 31
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549
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550
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Three Months Ended
March 31, |
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(In millions)
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2014
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2013
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Net income before non-controlling interests
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$
|
456
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$
|
424
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Other comprehensive income (loss), before tax:
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|
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Foreign currency translation adjustments
|
71
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(260
|
)
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Unrealized investment loss
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—
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|
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—
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Gain (loss) related to pension/post-retirement plans
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(199
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)
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252
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Other comprehensive loss, before tax
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(128
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)
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(8
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)
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Income tax expense (benefit) on other comprehensive income
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(41
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)
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64
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Other comprehensive loss, net of tax
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(87
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)
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(72
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)
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Comprehensive income
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369
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352
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Less: comprehensive income attributable to non-controlling interest
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13
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11
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Comprehensive income attributable to the Company
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$
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356
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$
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341
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(In millions, except per share figures)
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March 31,
2014 |
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December 31,
2013 |
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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1,380
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$
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2,303
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Receivables
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Commissions and fees
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3,209
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3,065
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Advanced premiums and claims
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55
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61
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Other
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300
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|
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282
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3,564
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3,408
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Less-allowance for doubtful accounts and cancellations
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(102
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)
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(98
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)
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Net receivables
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3,462
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3,310
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Current deferred tax assets
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484
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482
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Other current assets
|
237
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|
|
205
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Total current assets
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5,563
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6,300
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Goodwill and intangible assets
|
7,799
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7,365
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Fixed assets
(net of accumulated depreciation and amortization of $1,616 at March 31, 2014 and $1,597 at December 31, 2013)
|
825
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|
828
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Pension related assets
|
889
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|
979
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|
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Deferred tax assets
|
564
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626
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Other assets
|
937
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882
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$
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16,577
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$
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16,980
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(In millions, except per share figures)
|
March 31,
2014 |
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December 31,
2013 |
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LIABILITIES AND EQUITY
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Current liabilities:
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Short-term debt
|
$
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432
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$
|
334
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Accounts payable and accrued liabilities
|
1,895
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1,861
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Accrued compensation and employee benefits
|
701
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1,466
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Accrued income taxes
|
176
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|
|
148
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Dividends payable
|
139
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|
|
—
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Total current liabilities
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3,343
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|
3,809
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Fiduciary liabilities
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4,814
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4,234
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Less – cash and investments held in a fiduciary capacity
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(4,814
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)
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(4,234
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)
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—
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—
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Long-term debt
|
2,619
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|
2,621
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|
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Pension, post-retirement and post-employment benefits
|
1,135
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|
1,150
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Liabilities for errors and omissions
|
354
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|
|
373
|
|
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Other liabilities
|
1,083
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|
|
1,052
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Commitments and contingencies
|
|
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Equity:
|
|
|
|
||||
Preferred stock, $1 par value, authorized 6,000,000 shares, none issued
|
—
|
|
|
—
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|
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Common stock, $1 par value, authorized
|
|
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|
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1,600,000,000 shares, issued 560,641,640 shares at March 31, 2014
|
|
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|
||||
and December 31, 2013
|
561
|
|
|
561
|
|
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Additional paid-in capital
|
909
|
|
|
1,028
|
|
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Retained earnings
|
9,620
|
|
|
9,452
|
|
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Accumulated other comprehensive loss
|
(2,708
|
)
|
|
(2,621
|
)
|
||
Non-controlling interests
|
82
|
|
|
70
|
|
||
|
8,464
|
|
|
8,490
|
|
||
Less – treasury shares, at cost, 11,358,687 shares at March 31, 2014
|
|
|
|
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and 13,882,204 shares at December 31, 2013
|
(421
|
)
|
|
(515
|
)
|
||
Total equity
|
8,043
|
|
|
7,975
|
|
||
|
$
|
16,577
|
|
|
$
|
16,980
|
|
For the Three Months Ended March 31,
|
|
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|
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(In millions)
|
2014
|
|
|
2013
|
|
||
Operating cash flows:
|
|
|
|
||||
Net income before non-controlling interests
|
$
|
456
|
|
|
$
|
424
|
|
Adjustments to reconcile net income to cash provided by operations:
|
|
|
|
||||
Depreciation and amortization of fixed assets and capitalized software
|
75
|
|
|
69
|
|
||
Amortization of intangible assets
|
22
|
|
|
18
|
|
||
Adjustments to acquisition related contingent consideration liability
|
(6
|
)
|
|
1
|
|
||
Provision for deferred income taxes
|
59
|
|
|
51
|
|
||
Gain on investments
|
(13
|
)
|
|
(21
|
)
|
||
Loss on disposition of assets
|
1
|
|
|
2
|
|
||
Share based compensation expense
|
33
|
|
|
42
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Net receivables
|
(150
|
)
|
|
(120
|
)
|
||
Other current assets
|
(35
|
)
|
|
(54
|
)
|
||
Other assets
|
33
|
|
|
(14
|
)
|
||
Accounts payable and accrued liabilities
|
47
|
|
|
53
|
|
||
Accrued compensation and employee benefits
|
(764
|
)
|
|
(727
|
)
|
||
Accrued income taxes
|
28
|
|
|
39
|
|
||
Contributions to pension and other benefit plans in excess of current year expense/credit
|
(93
|
)
|
|
(350
|
)
|
||
Other liabilities
|
(85
|
)
|
|
(42
|
)
|
||
Effect of exchange rate changes
|
12
|
|
|
36
|
|
||
Net cash used for operations
|
(380
|
)
|
|
(593
|
)
|
||
Financing cash flows:
|
|
|
|
||||
Purchase of treasury shares
|
(100
|
)
|
|
(100
|
)
|
||
Net increase in commercial paper
|
100
|
|
|
—
|
|
||
Proceeds from debt
|
—
|
|
|
50
|
|
||
Repayments of debt
|
(3
|
)
|
|
(252
|
)
|
||
Shares withheld for taxes on vested units – treasury shares
|
(49
|
)
|
|
(65
|
)
|
||
Issuance of common stock from treasury shares
|
92
|
|
|
135
|
|
||
Payments of contingent consideration for acquisitions
|
(20
|
)
|
|
(3
|
)
|
||
Distributions of non-controlling interests
|
(1
|
)
|
|
(2
|
)
|
||
Dividends paid
|
(137
|
)
|
|
(127
|
)
|
||
Net cash used for financing activities
|
(118
|
)
|
|
(364
|
)
|
||
Investing cash flows:
|
|
|
|
||||
Capital expenditures
|
(99
|
)
|
|
(88
|
)
|
||
Net sales of long-term investments
|
—
|
|
|
92
|
|
||
Proceeds from sales of fixed assets
|
1
|
|
|
1
|
|
||
Dispositions
|
—
|
|
|
3
|
|
||
Acquisitions
|
(319
|
)
|
|
(1
|
)
|
||
Other, net
|
1
|
|
|
1
|
|
||
Net cash (used for) provided by investing activities
|
(416
|
)
|
|
8
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(9
|
)
|
|
(89
|
)
|
||
Decrease in cash and cash equivalents
|
(923
|
)
|
|
(1,038
|
)
|
||
Cash and cash equivalents at beginning of period
|
2,303
|
|
|
2,301
|
|
||
Cash and cash equivalents at end of period
|
$
|
1,380
|
|
|
$
|
1,263
|
|
For the Three Months Ended March 31,
|
|
|
|
||||
(In millions, except per share figures)
|
2014
|
|
|
2013
|
|
||
COMMON STOCK
|
|
|
|
||||
Balance, beginning and end of period
|
$
|
561
|
|
|
$
|
561
|
|
ADDITIONAL PAID-IN CAPITAL
|
|
|
|
||||
Balance, beginning of year
|
$
|
1,028
|
|
|
$
|
1,107
|
|
Change in accrued stock compensation costs
|
(59
|
)
|
|
(89
|
)
|
||
Issuance of shares under stock compensation plans and employee stock purchase plans and related tax impact
|
(60
|
)
|
|
(25
|
)
|
||
Balance, end of period
|
$
|
909
|
|
|
$
|
993
|
|
RETAINED EARNINGS
|
|
|
|
||||
Balance, beginning of year
|
$
|
9,452
|
|
|
$
|
8,628
|
|
Net income attributable to the Company
|
443
|
|
|
413
|
|
||
Dividend equivalents declared - (per share amounts: $0.50 in 2014 and $0.46 in 2013)
|
(1
|
)
|
|
(3
|
)
|
||
Dividends declared – (per share amounts: $0.50 in 2014 and $0.46 in 2013)
|
(274
|
)
|
|
(252
|
)
|
||
Balance, end of period
|
$
|
9,620
|
|
|
$
|
8,786
|
|
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|
|
|
||||
Balance, beginning of year
|
$
|
(2,621
|
)
|
|
$
|
(3,307
|
)
|
Other comprehensive loss, net of tax
|
(87
|
)
|
|
(72
|
)
|
||
Balance, end of period
|
$
|
(2,708
|
)
|
|
$
|
(3,379
|
)
|
TREASURY SHARES
|
|
|
|
||||
Balance, beginning of year
|
$
|
(515
|
)
|
|
$
|
(447
|
)
|
Issuance of shares under stock compensation plans and employee stock purchase plans
|
194
|
|
|
226
|
|
||
Purchase of treasury shares
|
(100
|
)
|
|
(100
|
)
|
||
Balance, end of period
|
$
|
(421
|
)
|
|
$
|
(321
|
)
|
NON-CONTROLLING INTERESTS
|
|
|
|
||||
Balance, beginning of year
|
$
|
70
|
|
|
$
|
64
|
|
Net income attributable to non-controlling interests
|
13
|
|
|
11
|
|
||
Other changes
|
(1
|
)
|
|
(2
|
)
|
||
Balance, end of period
|
$
|
82
|
|
|
$
|
73
|
|
TOTAL EQUITY
|
$
|
8,043
|
|
|
$
|
6,713
|
|
•
|
Share based compensation expense
|
•
|
Changes in other assets
|
•
|
Contributions to pension and other benefit plans in excess of current year expense/credit
|
•
|
Changes in other liabilities
|
Basic and Diluted EPS Calculation -
Continuing Operations
|
|
Three Months Ended
March 31, |
||||||
(In millions, except per share figures)
|
|
2014
|
|
|
2013
|
|
||
Net income from continuing operations
|
|
$
|
457
|
|
|
$
|
412
|
|
Less: Net income attributable to non-controlling interests
|
|
13
|
|
|
11
|
|
||
|
|
$
|
444
|
|
|
$
|
401
|
|
Basic weighted average common shares outstanding
|
|
548
|
|
|
548
|
|
||
Dilutive effect of potentially issuable common shares
|
|
8
|
|
|
9
|
|
||
Diluted weighted average common shares outstanding
|
|
556
|
|
|
557
|
|
||
Average stock price used to calculate common stock equivalents
|
|
$
|
47.84
|
|
|
$
|
36.21
|
|
(In millions of dollars)
|
2014
|
|
|
2013
|
|
||
Assets acquired, excluding cash
|
$
|
464
|
|
|
$
|
—
|
|
Liabilities assumed
|
(38
|
)
|
|
—
|
|
||
Contingent/deferred purchase consideration
|
(113
|
)
|
|
—
|
|
||
Net cash outflow for current year acquisitions
|
313
|
|
|
—
|
|
||
Deferred purchase consideration from prior years' acquisitions
|
6
|
|
|
1
|
|
||
Net cash outflow for acquisitions
|
$
|
319
|
|
|
$
|
1
|
|
(In millions of dollars)
|
2014
|
|
|
2013
|
|
||
Interest paid
|
$
|
44
|
|
|
$
|
59
|
|
Income taxes paid
|
$
|
120
|
|
|
$
|
85
|
|
(In millions of dollars)
|
Unrealized Investment Gains
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Adjustments
|
|
Total
|
||||||||
Balance as of January 1, 2014
|
$
|
5
|
|
|
$
|
(2,682
|
)
|
|
$
|
56
|
|
|
$
|
(2,621
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
(199
|
)
|
|
78
|
|
|
(121
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
34
|
|
|
—
|
|
|
34
|
|
||||
Net current period other comprehensive income (loss)
|
—
|
|
|
(165
|
)
|
|
78
|
|
|
(87
|
)
|
||||
Balance as of March 31, 2014
|
$
|
5
|
|
|
$
|
(2,847
|
)
|
|
$
|
134
|
|
|
$
|
(2,708
|
)
|
(In millions of dollars)
|
Unrealized Investment Gains
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Adjustments
|
|
Total
|
||||||||
Balance as of January 1, 2013
|
$
|
4
|
|
|
$
|
(3,451
|
)
|
|
$
|
140
|
|
|
$
|
(3,307
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
139
|
|
|
(256
|
)
|
|
(117
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
45
|
|
|
—
|
|
|
45
|
|
||||
Net current period other comprehensive income (loss)
|
—
|
|
|
184
|
|
|
(256
|
)
|
|
(72
|
)
|
||||
Balance as of March 31, 2013
|
$
|
4
|
|
|
$
|
(3,267
|
)
|
|
$
|
(116
|
)
|
|
$
|
(3,379
|
)
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
2014
|
|
2013
|
||||||||||||||||
(In millions of dollars)
|
Pre-Tax
|
|
Tax
|
|
Net of Tax
|
|
|
Pre-Tax
|
|
Tax
|
|
Net of Tax
|
|
||||||
Foreign currency translation adjustments
|
$
|
71
|
|
$
|
(7
|
)
|
$
|
78
|
|
|
$
|
(260
|
)
|
$
|
(4
|
)
|
$
|
(256
|
)
|
Unrealized investment gains (losses)
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Pension/post-retirement plans:
|
|
|
|
|
|
|
|
||||||||||||
Amortization of losses (gains) included in net periodic pension cost:
|
|
|
|
|
|
|
|
|
|||||||||||
Prior service gains (a)
|
(3
|
)
|
(1
|
)
|
(2
|
)
|
|
(6
|
)
|
(2
|
)
|
(4
|
)
|
||||||
Net actuarial losses (a)
|
51
|
|
15
|
|
36
|
|
|
78
|
|
29
|
|
49
|
|
||||||
Subtotal
|
48
|
|
14
|
|
34
|
|
|
72
|
|
27
|
|
45
|
|
||||||
Effect of remeasurement
|
(166
|
)
|
(33
|
)
|
(133
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||
Effect of curtailment
|
(65
|
)
|
(13
|
)
|
(52
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||
Foreign currency translation adjustments
|
(17
|
)
|
(2
|
)
|
(15
|
)
|
|
180
|
|
41
|
|
139
|
|
||||||
Other
|
1
|
|
—
|
|
1
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Pension/post-retirement plans (losses) gains
|
(199
|
)
|
(34
|
)
|
(165
|
)
|
|
252
|
|
68
|
|
184
|
|
||||||
Other comprehensive (loss) income
|
$
|
(128
|
)
|
$
|
(41
|
)
|
$
|
(87
|
)
|
|
$
|
(8
|
)
|
$
|
64
|
|
$
|
(72
|
)
|
For the Three Months Ended March 31, 2014
|
|
||
(Amounts in millions)
|
|
||
Cash
|
$
|
331
|
|
Estimated fair value of deferred/contingent consideration
|
113
|
|
|
Total Consideration
|
$
|
444
|
|
Allocation of purchase price:
|
|
||
Cash and cash equivalents
|
$
|
18
|
|
Accounts receivable, net
|
3
|
|
|
Other current assets
|
—
|
|
|
Property, plant, and equipment
|
3
|
|
|
Intangible assets
|
189
|
|
|
Goodwill
|
267
|
|
|
Other assets
|
2
|
|
|
Total assets acquired
|
482
|
|
|
Current liabilities
|
33
|
|
|
Other liabilities
|
5
|
|
|
Total liabilities assumed
|
38
|
|
|
Net assets acquired
|
$
|
444
|
|
•
|
June - Marsh acquired Rehder y Asociados Group, an insurance adviser in Peru. The business includes the insurance broker Rehder y Asociados and employee health and benefits specialist, Humanasalud. Marsh also completed the acquisition of Franco & Acra Tecniseguros, an insurance advisor in the Dominican Republic.
|
•
|
July - Guy Carpenter acquired Smith Group, a specialist disability reinsurance risk manager and consultant based in Maine.
|
•
|
September - Marsh purchased an additional stake in Insia a.s., an insurance broker operating in the Czech Republic and Slovakia which, when combined with its prior holdings, gave MMC a controlling interest. Insia a.s. was previously accounted for under the equity method.
|
•
|
November - Marsh & McLennan Agency ("MMA") acquired Elsey & Associates, a Texas-based provider of surety bonds and insurance coverage to the construction industry.
|
•
|
December - MMA acquired Cambridge Property and Casualty, a Michigan-based company providing insurance and risk management services to high net worth individuals and mid-sized businesses.
|
•
|
July - Oliver Wyman acquired Corven, a U.K.-based management consultancy firm.
|
•
|
August - Mercer acquired Global Remuneration Solutions, a market leading compensation consulting firm based in South Africa.
|
|
|
Three Months Ended
March 31, |
||||||
(In millions, except per share figures)
|
|
2014
|
|
|
2013
|
|
||
Revenue
|
|
$
|
3,277
|
|
|
$
|
3,187
|
|
Income from continuing operations
|
|
$
|
460
|
|
|
$
|
416
|
|
Net income attributable to the Company
|
|
$
|
446
|
|
|
$
|
417
|
|
Basic net income per share:
|
|
|
|
|
||||
– Continuing operations
|
|
$
|
0.82
|
|
|
$
|
0.74
|
|
– Net income attributable to the Company
|
|
$
|
0.81
|
|
|
$
|
0.76
|
|
Diluted net income per share:
|
|
|
|
|
||||
– Continuing operations
|
|
$
|
0.80
|
|
|
$
|
0.73
|
|
– Net income attributable to the Company
|
|
$
|
0.80
|
|
|
$
|
0.75
|
|
|
|
Three Months Ended
March 31, |
||||||
(In millions of dollars, except per share figures)
|
|
2014
|
|
|
2013
|
|
||
Disposals of discontinued operations
|
|
$
|
—
|
|
|
$
|
1
|
|
Income tax expense (credit)
|
|
1
|
|
|
(11
|
)
|
||
Disposals of discontinued operations, net of tax
|
|
(1
|
)
|
|
12
|
|
||
Discontinued operations, net of tax
|
|
$
|
(1
|
)
|
|
$
|
12
|
|
Discontinued operations, net of tax per share
|
|
|
|
|
||||
– Basic
|
|
$
|
—
|
|
|
$
|
0.02
|
|
– Diluted
|
|
$
|
—
|
|
|
$
|
0.02
|
|
March 31,
|
|
|
|
||||
(In millions of dollars)
|
2014
|
|
|
2013
|
|
||
Balance as of January 1, as reported
|
$
|
6,893
|
|
|
$
|
6,792
|
|
Goodwill acquired
|
267
|
|
|
—
|
|
||
Other adjustments
(a)
|
(1
|
)
|
|
(40
|
)
|
||
Balance at March 31,
|
$
|
7,159
|
|
|
$
|
6,752
|
|
(a)
|
Primarily reflects the impact of foreign exchange in each period.
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||||||||||||
(In millions of dollars)
|
Gross
Cost
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
|
Gross
Cost
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
||||||
Amortized intangibles
|
$
|
1,079
|
|
|
$
|
439
|
|
|
$
|
640
|
|
|
$
|
888
|
|
|
$
|
416
|
|
|
$
|
472
|
|
For the Years Ending December 31,
|
|
||
(In millions of dollars)
|
Estimated Expense
|
|
|
2014 (excludes amortization through March 31, 2014)
|
$
|
82
|
|
2015
|
102
|
|
|
2016
|
97
|
|
|
2017
|
90
|
|
|
2018
|
89
|
|
|
Subsequent years
|
180
|
|
|
|
$
|
640
|
|
Level 1.
|
Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market (examples include active exchange-traded equity securities and money market mutual funds).
|
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)
|
03/31/14
|
|
|
12/31/13
|
|
|
03/31/14
|
|
|
12/31/13
|
|
|
03/31/14
|
|
|
12/31/13
|
|
|
03/31/14
|
|
|
12/31/13
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial instruments owned:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mutual funds
(a)
|
$
|
144
|
|
|
$
|
154
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
144
|
|
|
$
|
154
|
|
Money market funds
(b)
|
66
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
66
|
|
|
45
|
|
||||||||
Interest rate swap derivatives
(c)
|
—
|
|
|
—
|
|
|
2
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
3
|
|
||||||||
Total assets measured at fair value
|
$
|
210
|
|
|
$
|
199
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
212
|
|
|
$
|
202
|
|
Fiduciary Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
—
|
|
Total fiduciary assets measured
at fair value
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent purchase
consideration liability
(d)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
133
|
|
|
$
|
104
|
|
|
$
|
133
|
|
|
$
|
104
|
|
Senior Notes due 2014
(e)
|
—
|
|
|
—
|
|
|
252
|
|
|
253
|
|
|
—
|
|
|
—
|
|
|
252
|
|
|
253
|
|
||||||||
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
252
|
|
|
$
|
253
|
|
|
$
|
133
|
|
|
$
|
104
|
|
|
$
|
385
|
|
|
$
|
357
|
|
(a)
|
Included in other assets in the consolidated balance sheets.
|
(b)
|
Included in cash and cash equivalents in the consolidated balance sheets.
|
(c)
|
Included in other receivables in the consolidated balance sheets.
|
(d)
|
Included in accounts payable and accrued liabilities and other liabilities in the consolidated balance sheets.
|
(e)
|
Included in long-term debt in the consolidated balance sheets.
|
(In millions of dollars)
|
2014
|
|
|
2013
|
|
|
||
Balance at January 1,
|
$
|
104
|
|
|
$
|
63
|
|
|
Additions
|
55
|
|
|
—
|
|
|
||
Payments
|
(30
|
)
|
|
(3
|
)
|
|
||
Revaluation Impact
|
4
|
|
|
1
|
|
|
||
Balance at March 31,
|
$
|
133
|
|
|
$
|
61
|
|
|
Combined U.S. and significant non-U.S. Plans
|
Pension
|
|
Postretirement
|
||||||||||||
For the Three Months Ended March 31,
|
Benefits
|
|
Benefits
|
||||||||||||
(In millions of dollars)
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
||||
Service cost
|
$
|
61
|
|
|
$
|
64
|
|
|
$
|
1
|
|
|
$
|
2
|
|
Interest cost
|
161
|
|
|
145
|
|
|
3
|
|
|
3
|
|
||||
Expected return on plan assets
|
(248
|
)
|
|
(228
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(3
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
||||
Recognized actuarial loss
|
51
|
|
|
78
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost
|
$
|
22
|
|
|
$
|
54
|
|
|
$
|
4
|
|
|
$
|
5
|
|
Curtailment (credit)
|
(65
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total cost (credit)
|
$
|
(43
|
)
|
|
$
|
54
|
|
|
$
|
4
|
|
|
$
|
5
|
|
U.S. Plans only
|
Pension
|
|
Postretirement
|
||||||||||||
For the Three Months Ended March 31,
|
Benefits
|
|
Benefits
|
||||||||||||
(In millions of dollars)
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
||||
Service cost
|
$
|
22
|
|
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
63
|
|
|
57
|
|
|
2
|
|
|
2
|
|
||||
Expected return on plan assets
|
(86
|
)
|
|
(81
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(2
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
||||
Recognized actuarial loss (gain)
|
26
|
|
|
51
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost (credit)
|
$
|
23
|
|
|
$
|
50
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant non-U.S. Plans only
|
Pension
|
|
Postretirement
|
||||||||||||
For the Three Months Ended March 31,
|
Benefits
|
|
Benefits
|
||||||||||||
(In millions of dollars)
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
||||
Service cost
|
$
|
39
|
|
|
$
|
37
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
98
|
|
|
88
|
|
|
1
|
|
|
1
|
|
||||
Expected return on plan assets
|
(162
|
)
|
|
(147
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Recognized actuarial loss
|
25
|
|
|
27
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost
|
$
|
(1
|
)
|
|
$
|
4
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Curtailment (credit)
|
(65
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total cost (credit)
|
$
|
(66
|
)
|
|
$
|
4
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
|
|
|
|
|
|
|
Combined U.S. and significant non-U.S. Plans
|
Pension
Benefits
|
|
Postretirement
Benefits
|
||||||||
March 31,
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
Weighted average assumptions:
|
|
|
|
|
|
|
|
||||
Expected return on plan assets
|
7.53
|
%
|
|
7.66
|
%
|
|
—
|
%
|
|
—
|
%
|
Discount rate
|
4.74
|
%
|
|
4.38
|
%
|
|
5.03
|
%
|
|
4.32
|
%
|
Rate of compensation increase
|
2.64
|
%
|
|
2.43
|
%
|
|
—
|
%
|
|
—
|
%
|
(In millions of dollars)
|
March 31,
2014 |
|
|
December 31,
2013 |
|
||
Short-term:
|
|
|
|
||||
Commercial paper
|
$
|
100
|
|
|
$
|
—
|
|
Current portion of long-term debt
|
332
|
|
|
334
|
|
||
|
432
|
|
|
334
|
|
||
Long-term:
|
|
|
|
||||
Senior notes – 5.875% due 2033
|
297
|
|
|
297
|
|
||
Senior notes – 5.375% due 2014
|
322
|
|
|
323
|
|
||
Senior notes – 5.75% due 2015
|
230
|
|
|
230
|
|
||
Senior notes – 2.30% due 2017
|
249
|
|
|
249
|
|
||
Senior notes – 9.25% due 2019
|
399
|
|
|
399
|
|
||
Senior notes – 4.80% due 2021
|
497
|
|
|
497
|
|
||
Senior notes – 2.55% due 2018
|
248
|
|
|
248
|
|
||
Senior notes – 4.05% due 2023
|
247
|
|
|
247
|
|
||
Mortgage – 5.70% due 2035
|
410
|
|
|
413
|
|
||
Term Loan Facility - due 2016
|
50
|
|
|
50
|
|
||
Other
|
2
|
|
|
2
|
|
||
|
2,951
|
|
|
2,955
|
|
||
Less current portion
|
332
|
|
|
334
|
|
||
|
$
|
2,619
|
|
|
$
|
2,621
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||||
(In millions of dollars)
|
Carrying
Amount
|
|
|
Fair
Value
|
|
|
Carrying
Amount
|
|
|
Fair
Value
|
|
||||
Short-term debt
|
$
|
432
|
|
|
$
|
439
|
|
|
$
|
334
|
|
|
$
|
334
|
|
Long-term debt
|
$
|
2,619
|
|
|
$
|
2,844
|
|
|
$
|
2,621
|
|
|
$
|
2,819
|
|
(In millions of dollars)
|
Liability at 1/1/13
|
|
Amounts
Accrued
|
|
|
Cash
Paid
|
|
|
Other
|
|
|
Liability at 12/31/13
|
|
Amounts
Accrued
|
|
|
Cash
Paid
|
|
|
Liability at 3/31/14
|
|||||||||||
Severance
|
$
|
36
|
|
|
$
|
9
|
|
|
$
|
(33
|
)
|
|
$
|
(1
|
)
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
8
|
|
Future rent under non-cancelable leases and other costs
|
134
|
|
|
13
|
|
|
(32
|
)
|
|
(2
|
)
|
|
113
|
|
|
2
|
|
|
(12
|
)
|
|
103
|
|
||||||||
Total
|
$
|
170
|
|
|
$
|
22
|
|
|
$
|
(65
|
)
|
|
$
|
(3
|
)
|
|
$
|
124
|
|
|
$
|
2
|
|
|
$
|
(15
|
)
|
|
$
|
111
|
|
▪
|
Risk and Insurance Services
, comprising insurance services (Marsh) and reinsurance services (Guy Carpenter); and
|
▪
|
Consulting
, comprising Mercer and Oliver Wyman Group
|
|
|
Three Months Ended
March 31, |
||||||
(In millions of dollars)
|
|
Revenue
|
|
Operating
Income
(Loss)
|
||||
2014 –
|
|
|
|
|
||||
Risk and Insurance Services
|
|
$
|
1,839
|
|
(a)
|
$
|
493
|
|
Consulting
|
|
1,432
|
|
(b)
|
225
|
|
||
Total Operating Segments
|
|
3,271
|
|
|
718
|
|
||
Corporate / Eliminations
|
|
(7
|
)
|
|
(45
|
)
|
||
Total Consolidated
|
|
$
|
3,264
|
|
|
$
|
673
|
|
2013–
|
|
|
|
|
||||
Risk and Insurance Services
|
|
$
|
1,771
|
|
(a)
|
$
|
468
|
|
Consulting
|
|
1,362
|
|
(b)
|
187
|
|
||
Total Operating Segments
|
|
3,133
|
|
|
655
|
|
||
Corporate / Eliminations
|
|
(7
|
)
|
|
(48
|
)
|
||
Total Consolidated
|
|
$
|
3,126
|
|
|
$
|
607
|
|
(a)
|
Includes interest income on fiduciary funds of
$6 million
and
$8 million
in
2014
and
2013
, respectively, and equity method income of
$1 million
in
2013
, respectively.
|
(b)
|
Includes inter-segment revenue of
$7 million
in both
2014
and
2013
and interest income on fiduciary funds of $
1 million
in both
2014
and
2013
.
|
|
|
Three Months Ended
March 31, |
||||||
(In millions of dollars)
|
|
2014
|
|
|
2013
|
|
||
Risk and Insurance Services
|
|
|
|
|
||||
Marsh
|
|
$
|
1,457
|
|
|
$
|
1,395
|
|
Guy Carpenter
|
|
382
|
|
|
376
|
|
||
Total Risk and Insurance Services
|
|
1,839
|
|
|
1,771
|
|
||
Consulting
|
|
|
|
|
||||
Mercer
|
|
1,061
|
|
|
1,041
|
|
||
Oliver Wyman Group
|
|
371
|
|
|
321
|
|
||
Total Consulting
|
|
1,432
|
|
|
1,362
|
|
||
Total Operating Segments
|
|
3,271
|
|
|
3,133
|
|
||
Corporate
/
Eliminations
|
|
(7
|
)
|
|
(7
|
)
|
||
Total
|
|
$
|
3,264
|
|
|
$
|
3,126
|
|
•
|
Risk and Insurance Services
includes risk management activities (risk advice, risk transfer and risk control and mitigation solutions) as well as insurance and reinsurance broking and services. We conduct business in this segment through Marsh and Guy Carpenter.
|
•
|
Consulting
includes Health, Retirement, Talent and Investments consulting and services and products, and specialized management and economic consulting services. We conduct business in this segment through Mercer and Oliver Wyman Group.
|
|
|
Three Months
|
||||||
(In millions, except per share figures)
|
|
2014
|
|
|
2013
|
|
||
Revenue
|
|
$
|
3,264
|
|
|
$
|
3,126
|
|
Expense:
|
|
|
|
|
||||
Compensation and Benefits
|
|
1,839
|
|
|
1,803
|
|
||
Other Operating Expenses
|
|
752
|
|
|
716
|
|
||
Operating Expenses
|
|
2,591
|
|
|
2,519
|
|
||
Operating Income
|
|
673
|
|
|
607
|
|
||
Income from Continuing Operations
|
|
457
|
|
|
412
|
|
||
Discontinued Operations, net of tax
|
|
(1
|
)
|
|
12
|
|
||
Net Income Before Non-Controlling Interests
|
|
456
|
|
|
424
|
|
||
Net Income Attributable to the Company
|
|
$
|
443
|
|
|
$
|
413
|
|
Income From Continuing Operations Per Share:
|
|
|
|
|
||||
Basic
|
|
$
|
0.81
|
|
|
$
|
0.73
|
|
Diluted
|
|
$
|
0.80
|
|
|
$
|
0.72
|
|
Net Income Per Share Attributable to the Company:
|
|
|
|
|
||||
Basic
|
|
$
|
0.81
|
|
|
$
|
0.75
|
|
Diluted
|
|
$
|
0.80
|
|
|
$
|
0.74
|
|
Average Number of Shares Outstanding:
|
|
|
|
|
||||
Basic
|
|
548
|
|
|
548
|
|
||
Diluted
|
|
556
|
|
|
557
|
|
||
Shares Outstanding at March 31
|
|
549
|
|
|
550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, |
|
%
Change
GAAP
Revenue
|
|
Components of Revenue Change*
|
||||||||||||||
Currency
Impact
|
|
Acquisitions/
Dispositions
Impact
|
|
Underlying
Revenue
|
|||||||||||||||
(In millions of dollars)
|
2014
|
|
|
2013
|
|
|
|||||||||||||
Risk and Insurance Services
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Marsh
|
$
|
1,452
|
|
|
$
|
1,388
|
|
|
5
|
%
|
|
(1
|
)%
|
|
2
|
%
|
|
4
|
%
|
Guy Carpenter
|
381
|
|
|
375
|
|
|
2
|
%
|
|
—
|
|
|
2
|
%
|
|
—
|
|
||
Subtotal
|
1,833
|
|
|
1,763
|
|
|
4
|
%
|
|
(1
|
)%
|
|
2
|
%
|
|
3
|
%
|
||
Fiduciary Interest Income
|
6
|
|
|
8
|
|
|
|
|
|
|
|
|
|
||||||
Total Risk and Insurance Services
|
1,839
|
|
|
1,771
|
|
|
4
|
%
|
|
(1
|
)%
|
|
2
|
%
|
|
3
|
%
|
||
Consulting
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Mercer
|
1,061
|
|
|
1,041
|
|
|
2
|
%
|
|
(1
|
)%
|
|
—
|
|
|
3
|
%
|
||
Oliver Wyman Group
|
371
|
|
|
321
|
|
|
16
|
%
|
|
1
|
%
|
|
3
|
%
|
|
11
|
%
|
||
Total Consulting
|
1,432
|
|
|
1,362
|
|
|
5
|
%
|
|
(1
|
)%
|
|
1
|
%
|
|
5
|
%
|
||
Corporate/Eliminations
|
(7
|
)
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
||||||
Total Revenue
|
$
|
3,264
|
|
|
$
|
3,126
|
|
|
4
|
%
|
|
(1
|
)%
|
|
2
|
%
|
|
4
|
%
|
|
Three Months Ended
March 31, |
|
%
Change
GAAP
Revenue
|
|
Components of Revenue Change*
|
||||||||||||||
Currency
Impact
|
|
Acquisitions/
Dispositions
Impact
|
|
Underlying
Revenue
|
|||||||||||||||
(In millions of dollars)
|
2014
|
|
|
2013
|
|
|
|||||||||||||
Marsh:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
EMEA
|
$
|
617
|
|
|
$
|
594
|
|
|
4
|
%
|
|
1
|
%
|
|
1
|
%
|
|
2
|
%
|
Asia Pacific
|
151
|
|
|
147
|
|
|
2
|
%
|
|
(7
|
)%
|
|
—
|
|
|
9
|
%
|
||
Latin America
|
84
|
|
|
78
|
|
|
7
|
%
|
|
(14
|
)%
|
|
10
|
%
|
|
11
|
%
|
||
Total International
|
852
|
|
|
819
|
|
|
4
|
%
|
|
(2
|
)%
|
|
1
|
%
|
|
4
|
%
|
||
U.S. / Canada
|
600
|
|
|
569
|
|
|
6
|
%
|
|
(1
|
)%
|
|
4
|
%
|
|
2
|
%
|
||
Total Marsh
|
$
|
1,452
|
|
|
$
|
1,388
|
|
|
5
|
%
|
|
(1
|
)%
|
|
2
|
%
|
|
4
|
%
|
Mercer:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Health
|
$
|
388
|
|
|
$
|
381
|
|
|
2
|
%
|
|
—
|
|
|
—
|
|
|
2
|
%
|
Retirement
|
357
|
|
|
343
|
|
|
4
|
%
|
|
—
|
|
|
—
|
|
|
4
|
%
|
||
Talent
|
117
|
|
|
123
|
|
|
(5
|
)%
|
|
(2
|
)%
|
|
(1
|
)%
|
|
(1
|
)%
|
||
Investments
|
199
|
|
|
194
|
|
|
2
|
%
|
|
(6
|
)%
|
|
1
|
%
|
|
8
|
%
|
||
Total Mercer
|
$
|
1,061
|
|
|
$
|
1,041
|
|
|
2
|
%
|
|
(1
|
)%
|
|
—
|
|
|
3
|
%
|
Underlying revenue measures the change in revenue using consistent currency exchange rates, excluding the impact of certain items that affect comparability, 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)
|
|
2014
|
|
2013
|
|
||
Revenue
|
|
$
|
1,432
|
|
$
|
1,362
|
|
Compensation and Benefits
|
|
813
|
|
796
|
|
||
Other Expenses
|
|
394
|
|
379
|
|
||
Expense
|
|
1,207
|
|
1,175
|
|
||
Operating Income
|
|
$
|
225
|
|
$
|
187
|
|
Operating Income Margin
|
|
15.8
|
%
|
13.7
|
%
|
|
|
|
|
|
|
Three Months
|
|||||
(In millions of dollars, except per share figures)
|
|
2014
|
|
2013
|
|
||
Disposals of discontinued operations
|
|
$
|
—
|
|
$
|
1
|
|
Income tax expense (credit)
|
|
1
|
|
(11
|
)
|
||
Disposals of discontinued operations, net of tax
|
|
(1
|
)
|
12
|
|
||
Discontinued operations, net of tax
|
|
$
|
(1
|
)
|
$
|
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
|
|
|||||
Commercial paper
|
$
|
100
|
|
|
$
|
100
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current portion of long-term debt
|
331
|
|
|
331
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Long-term debt
|
2,631
|
|
|
—
|
|
|
303
|
|
|
524
|
|
|
1,804
|
|
|||||
Interest on long-term debt
|
1,215
|
|
|
147
|
|
|
254
|
|
|
235
|
|
|
579
|
|
|||||
Net operating leases
|
2,292
|
|
|
337
|
|
|
563
|
|
|
428
|
|
|
964
|
|
|||||
Service agreements
|
606
|
|
|
244
|
|
|
211
|
|
|
136
|
|
|
15
|
|
|||||
Other long-term obligations
|
321
|
|
|
80
|
|
|
118
|
|
|
121
|
|
|
2
|
|
|||||
Purchases commitments
|
15
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
7,511
|
|
|
$
|
1,254
|
|
|
$
|
1,449
|
|
|
$
|
1,444
|
|
|
$
|
3,364
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
(In millions of dollars)
|
March 31, 2014
|
||
Cash and cash equivalents invested in money market funds, certificates of deposit and time deposits
|
$
|
1,380
|
|
Fiduciary cash and investments
|
$
|
4,814
|
|
Item 4.
|
Controls & Procedures.
|
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
|
|
||
January 1-31, 2014
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
562,500,042
|
|
|
February 1-28, 2014
|
804,868
|
|
|
$
|
47.8648
|
|
|
804,868
|
|
|
$
|
523,975,202
|
|
March 1-31, 2014
|
1,243,638
|
|
|
$
|
49.4137
|
|
|
1,243,638
|
|
|
$
|
462,522,386
|
|
Total Q1 2014
|
2,048,506
|
|
|
$
|
48.8052
|
|
|
2,048,506
|
|
|
$
|
462,522,386
|
|
Date:
|
May 8, 2014
|
/s/ J. Michael Bischoff
|
|
|
J. Michael Bischoff
|
|
|
Chief Financial Officer
|
|
|
|
Date:
|
May 8, 2014
|
/s/ Robert J. Rapport
|
|
|
Robert J. Rapport
|
|
|
Senior Vice President & Controller
|
|
|
(Chief Accounting Officer)
|
Exhibit No.
|
|
Exhibit Name
|
|
|
|
10.1
|
|
Form of 2014 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 March 1, 2014, under the Marsh & McLennan Companies, Inc. 2011 Incentive and Stock Award Plan
|
|
|
|
10.3
|
|
Marsh & McLennan Companies International Retirement Plan As Amended and Restated Effective January 1, 2009
|
|
|
|
10.4
|
|
Letter Agreement, effective as of March 20, 2013, between Marsh & McLennan Companies, Inc. and Alexander S. Moczarski
|
|
|
|
10.5
|
|
Non-Competition and Non-Solicitation Agreement, effective as of November 21, 2013, between Marsh & McLennan Companies, Inc. and Alexander S. 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
|
|
3
|
|
II. AWARDS
|
|
3
|
|
A. General
|
|
3
|
|
1. Grant of Award and Award Types
|
|
3
|
|
2. Award Acceptance
|
|
3
|
|
3. Rights of Award Holders
|
|
3
|
|
4. Restrictive Covenants Agreement
|
|
3
|
|
B. Stock Units
|
|
4
|
|
1. General
|
|
4
|
|
2. Vesting
|
|
4
|
|
3. Dividend Equivalents
|
|
4
|
|
4. Delivery
|
|
4
|
|
C. Performance Stock Units
|
|
5
|
|
1. General
|
|
5
|
|
2. Vesting
|
|
5
|
|
3. Dividend Equivalents
|
|
5
|
|
4. Delivery
|
|
6
|
|
D. Options
|
|
6
|
|
1. General
|
|
6
|
|
2. Vesting
|
|
6
|
|
3. Term
|
|
7
|
|
4. Exercisability
|
|
7
|
|
5. Method of Exercise of an Option
|
|
7
|
|
E. Satisfaction of Tax Obligations
|
|
7
|
|
1. Personal Tax Advisor
|
|
7
|
|
2. U.S. Employees
|
|
7
|
|
3. Non-U.S. Employees
|
|
8
|
|
III. EMPLOYMENT EVENTS
|
|
9
|
|
A. Death
|
|
9
|
|
1. Stock Units
|
|
9
|
|
2. Performance Stock Units
|
|
9
|
|
3. Options
|
|
9
|
|
B. Permanent Disability
|
|
9
|
|
1. Stock Units
|
|
9
|
|
2. Performance Stock Units
|
|
9
|
|
3. Options
|
|
9
|
|
C. Termination by You Outside of the European
Union – Age and Service Pro-Rata Vesting
|
|
9
|
|
1. Stock Units
|
|
10
|
|
2. Performance Stock Units
|
|
10
|
|
3. Options
|
|
10
|
|
D. Termination by You Outside of the European
Union – Age and Service Full Vesting
|
|
10
|
|
1. Stock Units
|
|
10
|
|
2. Performance Stock Units
|
|
10
|
|
3. Options
|
|
10
|
|
E. Termination by You Within the European Union – Retirement Treatment
|
|
11
|
|
1. Stock Units
|
|
11
|
|
2. Performance Stock Units
|
|
11
|
|
3. Options
|
|
11
|
|
F. Termination by the Company Other Than for Cause
|
|
11
|
|
1. Stock Units
|
|
11
|
|
2. Performance Stock Units
|
|
12
|
|
3. Options
|
|
12
|
|
4. Important Notes
|
|
13
|
|
G. All Other Terminations
|
|
13
|
|
H. Date of Termination of Employment
|
|
14
|
|
I. Conditions to Vesting of Award Prior to a Scheduled Vesting Date or the PSU Scheduled Vesting Date and Exercisability of Options Following Termination
|
|
14
|
|
1. Restrictive Covenants Agreement
|
|
14
|
|
2. Waiver and Release and Restrictive Covenants Agreement
|
|
14
|
|
J. Determination of Pro-Rata Vesting upon Termination of Employment
|
|
15
|
|
K. Distribution in Respect of Performance Stock Units
|
|
15
|
|
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 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
|
|
15
|
|
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
|
|
16
|
|
L. Section 409A of the Code for U.S. Taxpayers
|
|
16
|
|
IV. CHANGE IN CONTROL PROVISIONS
|
|
23
|
|
A. Treatment of Awards
|
|
23
|
|
1. Stock Units
|
|
23
|
|
2. Performance Stock Units
|
|
23
|
|
3. Options
|
|
23
|
|
V. DEFINITIONS
|
|
24
|
|
VI. ADDITIONAL PROVISIONS
|
|
27
|
|
A. Additional Provisions—General
|
|
27
|
|
1. Administrative Rules
|
|
27
|
|
2. Amendment
|
|
27
|
|
3. Limitations
|
|
27
|
|
4. Cancellation or Clawback of Awards
|
|
27
|
|
5. Governing Law; Choice of Forum
|
|
28
|
|
6. Severability; Captions
|
|
28
|
|
7. Electronic Delivery and Acceptance
|
|
28
|
|
8. Waiver
|
|
28
|
|
B. Additional Provisions—Outside of the United States
|
|
29
|
|
1. Changes to Delivery
|
|
29
|
|
2. Amendment and Modification
|
|
29
|
|
VII. QUESTIONS AND ADDITIONAL INFORMATION
|
|
29
|
|
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
|
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, with no interest paid on such amounts. 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 74 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 74 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 Marsh & McLennan Companies and any of its subsidiaries or affiliate’s obligations under the Award.
|
e.
|
Additional delivery rules for certain Award recipients subject to U.S. federal income tax (whether or not the recipient is a U.S. citizen or employed in the U.S.) are reflected in Section III.L.
|
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 with no interest paid on such amounts. 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, if any, 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 74 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 74 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 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.
|
e.
|
Additional delivery rules for certain Award recipients subject to U.S. federal income tax (whether or not the recipient is a U.S. citizen or employed in the U.S.) are reflected in Section III.L.
|
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
|
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 Common Stock acquired from a stock option exercise or a stock unit award vesting).
|
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
|
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 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 employer, an amount sufficient to satisfy any taxes that Marsh & McLennan Companies expects to be payable under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, payroll taxes, fringe benefits, payment on account, capital gain taxes, transfer taxes, social security contributions and National Insurance Contributions with respect to the Award, and any and all associated tax events derived therefrom. If applicable, Marsh & McLennan Companies and/or your 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 the date 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 Marsh & McLennan Companies, 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 to vesting 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 to vesting 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 Marsh & McLennan Companies, 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 to vesting 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 to vesting 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.
|
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 to vesting 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 to vesting 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 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.C.), 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 to vesting described in Section III.I.2. For the avoidance of doubt, this Section III.F.1.a.
|
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 to vesting 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 to vesting 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 to vesting 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 to vesting 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 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 to vesting described in Section III.I.2. Provided that you satisfy the conditions described in Section III.I.2(i)., 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 your employment is terminated by the Company 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.
|
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 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 Sections II.B.2., II.C.2. and II.D.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.
|
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 as described in Section III.B. or your termination of employment as described in Sections III.C. and D., and no later than 60 days following vesting if your termination of employment is pursuant to III.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 without any liability to the Company.
|
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 (i) execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, and return to
|
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 74 days following such termination of employment, occurrence of Permanent Disability or Change in Control, the
|
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 prior to December 31 of the year in which the PSUs are granted and your termination of employment occurs following such Change in Control, you will receive one (1) share of Common Stock in respect of each PSU covered by the Award that vests upon your termination of employment.
|
L.
|
Section 409A of the Code for Award Recipients Subject to U.S. Federal Income Tax (whether or not the recipient is a U.S. citizen or employed in the U.S.)
|
1.
|
For U.S. Award recipients subject to U.S. federal income tax, notwithstanding any other provision herein, the Award may be subject to additional restrictions to ensure compliance with (or continued exemption from) the requirements of Section 409A of the Code (as defined in V.I.). 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 federal income tax rate, plus a 20% additional tax, plus interest at the underpayment rate plus 1%, as well as any state and local taxes,
|
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.
|
Notwithstanding any provision herein (other than Section III.L.8.a.), 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 (other than Section III.L.7.a.) 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.
|
Notwithstanding any other provision herein, if (a) the Award is subject to Section 409A of the Code and the Award Documentation conditions payment or commencement of payment on one or more employment-related actions, such as the execution and effectiveness of a release of claims or a restrictive covenant (each an “
Employment-Related Action
”), and (b) the period for the completion of an Employment-Related Action includes the January 1 next following the event otherwise triggering the right to payment, then the payment shall be made or commence following the completion of the Employment-Related Action, but in no event earlier than that January 1.
|
7.
|
Special 409A Distribution Provisions for Stock Units and payments attributable to Stock Units.
|
a.
|
Notwithstanding any provision herein, for distributions of Stock Units or cash attributable to such Stock Units that are subject to one or more Employment-Related Actions where, you have not satisfied and would not satisfy the Age and Service Criteria for Full Vesting prior to [DATE]:
|
i.
|
With respect to Stock Units, no later than March 15
th
of the year following the year in which the substantial risk of forfeiture (as determined under Section 409A of the Code) (the “
Substantial Risk of Forfeiture
”) lapses with respect to such Stock Units, shares of Common Stock underlying such Stock Units shall be delivered to you (to the extent not previously delivered), subject to a stop transfer order and subject to withholding of any applicable tax obligations, as described in Section II.E. at the time of such delivery. Upon your timely satisfaction of all applicable Employment-Related Actions, Marsh & McLennan Companies will remove or cause to be removed such stop transfer order; and
|
ii.
|
With respect to a cash payment attributable to Stock Units, to the extent that such payment will not be made by March 15
th
of the year following the year in which the Substantial Risk of Forfeiture lapses with respect to such payment, such payment shall be placed in escrow or contributed to a secular trust (in the sole discretion of the Marsh & McLennan Companies) for your benefit on or before such March 15
th
and subject to withholding of any applicable tax
|
b.
|
Notwithstanding any provision herein, with respect to distributions of Stock Units or cash attributable to such Stock Units (i) where you have satisfied or would satisfy the Age and Service Criteria for Full Vesting prior to [DATE], (ii) where such distributions are subject to one or more Employment-Related Actions, and (iii) where such distributions are being made other than with respect to a Scheduled Vesting Date (the date of such event or occurrence giving rise to such distributions, a
“Triggering Date”
):
|
i.
|
With respect to Stock Units, no later than 74 days after the Triggering Date occurs, shares of Common Stock underlying such Stock Units shall be delivered to you (to the extent not previously delivered), subject to a stop transfer order and subject to withholding of any applicable tax obligations, as described in Section II.E. at the time of such delivery. Upon your timely satisfaction of all applicable Employment-Related Actions, Marsh & McLennan Companies will remove or cause to be removed such stop transfer order; and
|
ii.
|
With respect to a cash payment attributable to Stock Units, no later than 74 days after the Triggering Date occurs, such payment (to the extent not previously delivered to you) shall be placed in escrow or contributed to a secular trust (in the sole discretion of the Marsh & McLennan Companies) for your benefit and subject to withholding of any applicable tax obligations, as described in Section II.E. at the time of such placement or contribution. Upon your timely satisfaction of all applicable Employment-Related Actions, Marsh & McLennan Companies shall cause such amounts to be released from escrow or paid to you out of such trust.
|
c.
|
Notwithstanding any provision herein, with respect to distributions of Stock Units or cash attributable to such Stock Units (i) where you have satisfied or would satisfy the Age and Service Criteria for Full Vesting prior to [DATE], (ii) where such distributions are subject to one or more Employment-Related Actions, and (iii) where such distributions are being made with respect to a Scheduled Vesting Date:
|
i.
|
With respect to Stock Units, no later than December 31
st
of the year in which the Scheduled Vesting Date occurs, shares of Common Stock underlying the Stock Units that relate to such Scheduled Vesting Date, shall be delivered to you (to the extent not previously delivered), subject to a stop transfer order and subject to withholding of any applicable tax obligations, as described in Section II.E. at the time of such delivery. Upon your timely satisfaction of all applicable Employment-Related Actions, Marsh & McLennan Companies will remove or cause to be removed such stop transfer order; and
|
ii.
|
With respect to a cash payment attributable to Stock Units, to the extent any such payment will not be made by December 31
st
of the year in which the Scheduled Vesting Date occurs, any payment that relates to such Scheduled Vesting Date shall be placed in escrow or contributed to a secular trust (in the sole discretion of the Marsh & McLennan Companies) for your benefit on or before such December 31
st
and subject to withholding of any applicable tax obligations, as described in Section II.E. at the time of such placement or contribution. Upon your timely satisfaction of all applicable Employment-Related Actions, Marsh & McLennan Companies shall cause such amounts to be released from escrow or paid to you out of such trust.
|
8.
|
Special 409A Distribution Provisions for Performance Stock Units and payments attributable to Performance Stock Units.
|
a.
|
Notwithstanding any provision herein, for distributions of PSUs or cash attributable to such PSUs that are subject to one or more Employment-Related Actions where, prior to [DATE], you have not satisfied and would not satisfy either (X) the Age and Service Criteria for Full Vesting or (Y) the Age and Service Criteria for Pro-Rata Vesting:
|
i.
|
With respect to PSUs, no later than March 15
th
of the year following the year in which the Substantial Risk of Forfeiture lapses with respect to such PSUs, shares of Common Stock underlying such PSUs shall be delivered to you (to the extent not previously delivered), subject to a stop transfer order and subject to withholding of any applicable tax obligations, as described in Section II.E. at the time of such delivery. Upon your timely satisfaction of all applicable Employment-Related Actions, Marsh & McLennan Companies will remove or cause to be removed such stop transfer order; and
|
ii.
|
With respect to a cash payment attributable to PSUs, to the extent any such payment will not be made by March 15
th
of the year
|
b.
|
Notwithstanding any provision herein, with respect to distributions of PSUs or cash attributable to such PSUs (i) where, prior to [DATE], you have satisfied or would satisfy the Age and Service Criteria either for Full Vesting or Pro-Rata Vesting (ii) where such distributions are subject to one or more Employment-Related Actions, and (iii) where such distributions are being made other than with respect to the PSU Scheduled Vesting Date (the date of such event or occurrence giving rise to such distributions, a
“PSU Triggering Date”
):
|
i.
|
With respect to PSUs, no later than 74 days after the PSU Triggering Date occurs, shares of Common Stock underlying such PSUs shall be delivered to you (to the extent not previously delivered), subject to a stop transfer order and subject to withholding of any applicable tax obligations, as described in Section II.E. at the time of such delivery. Upon your timely satisfaction of all applicable Employment-Related Actions, Marsh & McLennan Companies will remove or cause to be removed such stop transfer order; and
|
ii.
|
With respect to a cash payment attributable to PSUs, no later than 74 days after the PSU Triggering Date occurs, such payment (to the extent not previously delivered to you) shall be placed in escrow or contributed to a secular trust (in the sole discretion of the Marsh & McLennan Companies) for your benefit and subject to withholding of any applicable tax obligations, as described in Section II.E. at the time of such placement or contribution. Upon your timely satisfaction of all applicable Employment-Related Actions, Marsh & McLennan Companies shall cause such amounts to be released from escrow or paid to you out of such trust.
|
c.
|
Notwithstanding any provision herein, with respect to distributions of PSUs or cash attributable to such PSUs (i) where, prior to [DATE], you have satisfied
|
i.
|
With respect to PSUs, no later than December 31
st
of the year in which the PSU Scheduled Vesting Date occurs, shares of Common Stock underlying such PSUs that relate to the PSU Scheduled Vesting Date, shall be delivered to you (to the extent not previously delivered), subject to a stop transfer order and subject to withholding of any applicable tax obligations, as described in Section II.E. at the time of such delivery. Upon your timely satisfaction of all applicable Employment-Related Actions, Marsh & McLennan Companies will remove or cause to be removed such stop transfer order; and
|
ii.
|
With respect to a cash payment attributable to PSUs, to the extent any such payment will not be made by December 31
st
of the year in which the PSU Scheduled Vesting Date occurs, any payment that relates to the PSU Scheduled Vesting Date shall be placed in escrow or contributed to a secular trust (in the sole discretion of the Marsh & McLennan Companies) for your benefit on or before such December 31
st
and subject to withholding of any applicable tax obligations, as described in Section II.E. at the time of such placement or contribution. Upon your timely satisfaction of all applicable Employment-Related Actions, Marsh & McLennan Companies shall cause such amounts to be released from escrow or paid to you out of such trust.
|
9.
|
Nothing in this 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 or any similar state tax law.
|
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 (a) 90 days following your termination of employment or the occurrence of the Change in Control, as applicable, and (b) 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 crime involving moral turpitude;
|
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.
|
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.
|
relocation of more than 50 miles from your principal place of employment immediately prior to the Change in Control;
|
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.
|
“Section 409A of the Code”
shall mean Section 409A of the U.S. Internal Revenue Code of 1986, as amended, and the regulations and guidance thereunder (regarding nonqualified deferred compensation).
|
J.
|
Additional Definitions.
|
Award
|
|
3
|
|
Award Documentation
|
|
3
|
|
Change in Control
|
|
23
|
|
Committee
|
|
5
|
|
Common Stock
|
|
3
|
|
Country-Specific Notices
|
|
3
|
|
Dividend Equivalent
|
|
4
|
|
Employing Company
|
|
13
|
|
Employment-Related Action
|
|
18
|
|
Exercise Notice
|
|
7
|
|
Grant Documentation
|
|
3
|
|
Marsh & McLennan Companies
|
|
3
|
|
Option
|
|
6
|
|
Option Expiration Date
|
|
7
|
|
Option Shares
|
|
6
|
|
Plan
|
|
3
|
|
PSU
|
|
5
|
|
PSU Triggering Date
|
|
21
|
|
PSU Scheduled Vesting Date
|
|
5
|
|
Restrictive Covenants Agreement
|
|
3
|
|
Scheduled Vesting Date
|
|
4, 6
|
|
Stock Unit
|
|
4
|
|
Substantial Risk of Forfeiture
|
|
18
|
|
Terms and Conditions
|
|
3
|
|
Triggering Date
|
|
19
|
|
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, including, without limitation, to impose additional requirements on the Award and on any shares of Common Stock acquired with respect to 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, currency controls, 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, currency controls, 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,
|
5.
|
Governing Law; Choice of Forum.
The Award and the Award Documentation applicable to the Award are governed by and subject to the laws of the state of Delaware, without regard to the conflict of law provisions, as set forth in Section 10.J of the Plan. For purposes of any action, lawsuit, or other proceedings brought to enforce the Award Documentation, 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.
|
7.
|
Electronic Delivery and Acceptance.
Marsh & McLennan Companies may, in its sole discretion, decide to deliver any documents related to the Award and/or your current or future participation in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by Marsh & McLennan Companies or an agent appointed by Marsh & McLennan Companies.
|
8.
|
Waiver.
You acknowledge that neither a waiver by Marsh & McLennan Companies of your breach of any provision of the Award Documentation nor a prior waiver by Marsh & McLennan Companies of a breach of any provision of the Award Documentation by any other participant of the Plan shall operate or be construed as a waiver of any other provision of the Award Documentation, or of any subsequent breach by you.
|
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 exercise (for Options) or vesting after payment of applicable taxes and fees and any exercise price. 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, fees and any exercise price) 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.
|
|
Global & Executive Compensation
Marsh & McLennan Companies, Inc. 1166 Avenue of the Americas New York, NY 10036-2774 United States of America Telephone Number: +1 212 345-9722 Facsimile Number: +1 212 948-8481 Email: mmc.compensation@mmc.com |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Laurie Ledford
|
|
Laurie Ledford
SVP, Chief Human Resources Officer |
|
|
|
I. BACKGROUND
|
|
2
|
|
II. AWARDS
|
|
2
|
|
A. General
|
|
2
|
|
1. Award Acceptance
|
|
2
|
|
2. Rights of Award Holders
|
|
2
|
|
3. Restrictive Covenants Agreement
|
|
2
|
|
B. Stock Units
|
|
3
|
|
1. General
|
|
3
|
|
2. Vesting
|
|
3
|
|
3. Dividend Equivalents—Accrual and Vesting
|
|
3
|
|
4. Delivery
|
|
3
|
|
C. Satisfaction of Tax Obligations
|
|
4
|
|
1. Personal Tax Advisor
|
|
4
|
|
2. U.S. Employees
|
|
4
|
|
3. Non-U.S. Employees
|
|
4
|
|
a. Stock Units
|
|
4
|
|
b. Withholding
|
|
4
|
|
III. EMPLOYMENT EVENTS
|
|
4
|
|
A. Death
|
|
4
|
|
B. Permanent Disability
|
|
4
|
|
C. Termination by the Company Other Than for Cause
|
|
5
|
|
1. General
|
|
5
|
|
2. Important Notes
|
|
5
|
|
a. Sale of Business Unit
|
|
5
|
|
b. Constructive Discharge
|
|
5
|
|
D. All Other Terminations
|
|
5
|
|
E. Date of Termination of Employment
|
|
5
|
|
F. Conditions to Vesting of Award Prior to a Scheduled Vesting Date
|
|
6
|
|
1. Restrictive Covenants Agreement
|
|
6
|
|
2. Waiver and Release and Restrictive Covenants Agreement
|
|
6
|
|
G. Determination of Pro-Rata Vesting upon Termination of Employment
|
|
6
|
|
H. Section 409A of the Code for U.S. Taxpayers
|
|
7
|
|
IV. CHANGE IN CONTROL PROVISIONS
|
|
8
|
|
V. DEFINITIONS
|
|
8
|
|
VI. ADDITIONAL PROVISIONS
|
|
10
|
|
A. Additional Provisions—General
|
|
10
|
|
1. Administrative Rules
|
|
10
|
|
2. Amendment
|
|
10
|
|
3. Limitations
|
|
10
|
|
4. Cancellation or Clawback of Awards
|
|
11
|
|
5. Governing Law; Choice of Forum
|
|
11
|
|
6. Severability; Captions
|
|
11
|
|
7. Electronic Delivery and Acceptance
|
|
12
|
|
8. Waiver
|
|
12
|
|
B. Additional Provisions—Outside of the United States
|
|
12
|
|
1. Changes to Delivery
|
|
12
|
|
2. Amendment and Modification
|
|
12
|
|
VII. QUESTIONS AND ADDITIONAL INFORMATION
|
|
13
|
|
I.
|
BACKGROUND
|
II.
|
AWARDS
|
A.
|
General.
|
B.
|
Stock Units.
|
1.
|
General.
A deferred 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,
[PERCENTAGE] of the Stock Units will vest on the 15th of the month in which the [VESTING DATE(S)] of the grant date of the Award occurs. 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.D.) 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.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, with no interest paid on such amounts. 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 74 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 74 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 Marsh & McLennan Companies and any of its subsidiaries or affiliate’s obligations under the Award.
|
e.
|
Additional delivery rules for certain Award recipients subject to U.S. federal income tax (whether or not the recipient is a U.S. citizen or employed in the U.S.) are reflected in Section III.H.
|
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 shares of Common Stock, cash or other property, as applicable, will be retained by Marsh & McLennan Companies to satisfy the tax-withholding obligation.
|
3.
|
Non-U.S. Employees.
|
a.
|
Stock Units and Dividend Equivalents.
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 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 employer, an amount sufficient to satisfy any taxes that Marsh & McLennan Companies expects to be payable under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, payroll taxes, fringe benefits, payment on account, capital gain taxes, transfer taxes, social security contributions, and National Insurance Contributions with respect to the Award, and any and all associated tax events derived therefrom. If applicable, Marsh & McLennan Companies and/or your 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 basis, upon a constructive discharge, including if any court or regulatory agency retroactively concludes or interprets events to have constituted a constructive discharge.
|
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 a 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 without any liability to the Company.
|
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 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 without any liability to the Company.
|
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 last Scheduled Vesting Date; and
|
D
|
= the number of Stock Units that have previously vested.
|
H.
|
Section 409A of the Code for Award Recipients Subject to U.S. Federal Income Tax (whether or not the recipient is a U.S. citizen or employed in the U.S.).
|
1.
|
For Award recipients subject to U.S. federal income tax, notwithstanding any other provision herein, the Award may be subject to additional restrictions to ensure compliance with (or continued exemption from) the requirements of Section 409A of the Code (as defined in Section V.E.). 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 federal income tax rate, plus a 20% additional tax, plus interest at the underpayment rate plus 1%, as well as any state and local taxes, penalties, additional taxes and interest, if applicable, imposed under any state tax law similar to Section 409A of the Code.
|
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 or any similar state tax law.
|
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 or crime involving moral turpitude;
|
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.
|
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.
|
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.
|
“Section 409A of the Code”
shall mean Section 409A of the U.S. Internal Revenue Code of 1986, as amended, and the regulations and guidance thereunder (regarding nonqualified deferred compensation).
|
F.
|
Additional Definitions.
|
Award
|
|
2
|
|
Award Documentation
|
|
2
|
|
Change in Control
|
|
8
|
|
Committee
|
|
7
|
|
Common Stock
|
|
2
|
|
Country-Specific Notices
|
|
2
|
|
Dividend Equivalent
|
|
3
|
|
Employing Company
|
|
5
|
|
Grant Documentation
|
|
2
|
|
Marsh & McLennan Companies
|
|
2
|
|
Plan
|
|
2
|
|
Restrictive Covenants Agreement
|
|
2
|
|
Scheduled Vesting Date
|
|
3
|
|
Stock Unit
|
|
3
|
|
Terms and Conditions
|
|
2
|
|
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, including, without limitation, to impose additional requirements on the Award and on any shares of Common Stock with respect to 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, currency controls, 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, currency controls, 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 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. 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 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.
|
Governing Law; Choice of Forum
.
The Award and the Award Documentation applicable to the Award are governed by, and subject to the laws of the state of Delaware, without regard to the conflict of law provisions, as set forth in Section 10.J of the Plan. For purposes of any action, lawsuit, or other proceedings brought to enforce the Award Documentation, 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.
|
7.
|
Electronic Delivery and Acceptance
. Marsh & McLennan Companies may, in its sole discretion, decide to deliver any documents related to the Award and/or your current or future participation in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by Marsh & McLennan Companies or an agent appointed by Marsh & McLennan Companies.
|
8.
|
Waiver.
You acknowledge that neither a waiver by Marsh & McLennan Companies of your breach of any provision of the Award Documentation nor a prior waiver by Marsh & McLennan Companies of a breach of any provision of the Award Documentation by any other participant of the Plan shall operate or be construed as a waiver of any other provision of the Award Documentation, or of any subsequent breach by you.
|
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
|
|
Global & Executive Compensation
Marsh & McLennan Companies, Inc. 1166 Avenue of the Americas New York, NY 10036-2774 United States of America Telephone Number: +1 212 345-9722 Facsimile Number: +1 212 948-8481 Email: mmc.compensation@mmc.com |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Laurie Ledford
|
|
Laurie Ledford
SVP, Chief Human Resources Officer |
|
|
|
PREFACE
|
2
|
ELIGIBILITY & PARTICIPATION
|
3
|
COST OF THE PLAN
|
3
|
VESTING
|
3
|
BENEFIT FORMULA
|
3
|
Transition Benefits
|
4
|
TIME OF PAYMENT
|
4
|
General Rules
|
4
|
Commencing on Normal Commencement Date
|
5
|
Commencing on Early Commencement Date
|
5
|
Commencing on Deferred Commencement Date
|
6
|
FORM OF PAYMENT
|
6
|
Normal Form of Payment
|
7
|
Optional Forms of Payment
|
7
|
DEATH
|
8
|
Survivor Benefit if Participant Dies While Actively Employed
|
8
|
Survivor Benefit if the Participant Dies after Termination but Before the Participant’s Benefit Commencement Date
|
9
|
Survivor Benefit if the Participant Dies After Benefit Commencement Date
|
9
|
BREAKS IN SERVICE AND REHIRE
|
9
|
PLAN ADMINISTRATOR
|
9
|
Plan Administrator Discretion
|
10
|
PLAN AMENDMENT AND TERMINATION
|
10
|
SPECIAL RULES FOR SECTION 409A PARTICIPANTS
|
10
|
Time of Payment - Special Rules for 409A Participants
|
11
|
Form of Payment – Special Rules for 409A Participants
|
12
|
Lump Sum Payments - Special Rules for 409A Participants
|
12
|
Death - Special Rules for 409A Participants
|
13
|
Disability - Special Rules for 409A Participants
|
16
|
Breaks In Service and Rehire
|
16
|
DEFINITIONS
|
17
|
•
|
because of career assignments outside their home country, might not be continuously covered under another Company retirement plan,
|
•
|
might not be entitled to receive benefits from any other Company retirement plan, and
|
•
|
are not U.S. nationals or green-card holders or U.S. resident aliens.
|
•
|
For each month of the first 300 months (25 years) of Benefit Service, 2.0% multiplied by Eligible Monthly Pay
|
•
|
For each month of the next 60 months (5 years) of Benefit Service, 1.6% multiplied by Eligible Monthly Pay
|
•
|
For each month of Benefit Service in excess of 360 months (30 years), 1.0% multiplied by Eligible Monthly Pay
|
•
|
Benefit Offsets (as defined herein).
|
•
|
2.0% of Final Average Monthly Salary as of December 31, 2005 multiplied by months of Benefit Service as of December 31, 2005
|
•
|
1.6% of Final Average Monthly Salary as of December 31, 2005 multiplied by months of Benefit Service as of December 31, 2005 in excess of 300 months (25 years) but less than 360 months (30 years)
|
•
|
1% of Final Average Monthly Salary as of December 31, 2005 multiplied by months of Benefit Service as of December 31, 2005 in excess of 360 months (30 years)
|
•
|
Benefit Offsets (as defined herein).
|
•
|
If a Participant commences on or after attaining age 55, but before attaining age 65, the Participant is commencing on an Early Commencement Date.
|
•
|
If a Participant commences upon attaining age 65, the Participant is commencing on a Normal Commencement Date.
|
•
|
If a Participant delays the commencement of the Participant’s benefit past age 65, the Participant is commencing on a Deferred Commencement Date.
|
•
|
Early Commencement for a Retired Participant
-
If a Participant is a Retired Participant, he or she may elect to commence monthly payments as of the first day of any month after the Participant terminates employment. When determining the amount of such Participant’s monthly payments, the Participant’s Accrued Benefit will be actuarially adjusted (reduced) to reflect a longer expected payout period. The actuarial adjustment factors for this purpose are as follows:
|
◦
|
In the case of a Participant who terminates employment on or after January 1, 2006, (i) with respect to his or her benefit accrued as of December 31, 2005 (and with respect to any Transition Benefit), zero percent (0%) for each of the first thirty-six (36) months by which benefit commencement precedes his or her Normal Retirement Date, and one-third of one percent (1/3%) for each additional month by which benefit commencement precedes his or her Normal Retirement Date, and (ii) with respect to his or her benefit accrued after December 31, 2005,
|
◦
|
In the case of a Participant who terminates employment before January 1, 2006, zero percent (0%) for each of the first thirty-six (36) months by which benefit commencement precedes his or her Normal Retirement Date and one-third of one percent (1/3%) for each additional month by which benefit commencement precedes his or her Normal Retirement Date.
|
•
|
Early Commencement for a Terminated Vested Participant
-
If a Participant is a Terminated Vested Participant, he or she may elect to commence monthly payments on the first of any month coincident with or next following the date the Participant attains age 55. If the Participant elects to commence monthly benefit payments before he or she attains age 65, the Participant has an Early Commencement and his or her Accrued Benefit will be actuarially adjusted (reduced) to take into account the longer expected payout period. The actuarial adjustment factors for this purpose are as follows:
|
◦
|
In the case of a Participant without any Benefit Service after 1990, one-quarter of one percent (0.25%) for each month by which benefit commencement precedes his or her Normal Retirement Date.
|
◦
|
In the case of a Participant with Benefit Service after 1990, (i) with respect to his or her benefit accrued before January 1, 2003, zero percent (0%) for each of the first thirty-six (36) months by which benefit commencement precedes his or her Normal Retirement Date, and one-third of one percent (1/3%) for each additional month by which benefit commencement precedes his or her Normal Retirement Date, and (ii) with respect to his or her benefit accrued after December 31, 2002, if any, one-half of one percent (1/2%) for each month by which benefit commencement precedes his or her Normal Retirement Date.
|
•
|
If the Participant does not have a Spouse or Domestic Partner on the Benefit Commencement Date, the normal form of payment is a single life annuity. A single life annuity provides equal monthly payments for as long as the Participant lives. No further payments are made to the Participant or his or her beneficiaries after death of the Participant.
|
•
|
If the Participant has a Spouse or Domestic Partner on the Benefit Commencement Date, the normal form of payment is a 50% contingent annuity with the Participant’s Spouse or Domestic Partner as Designated Survivor. A 50% contingent annuity provides a monthly benefit payment for the Participant’s life and when the Participant dies, it will provide a monthly benefit payment for the life of the Participant’s Spouse or Domestic Partner, if the Spouse or Domestic Partner is still living at the time of the Participant’s death. The contingent annuity form of payment is described more fully below under “Optional Forms of Payment.”
|
•
|
Single Life Annuity:
The single life annuity form of payment provides equal monthly payments for as long as the Participant lives. No further payments are made to the Participant or his or her beneficiaries after death of the Participant.
|
•
|
Contingent Annuity:
The contingent annuity form of payment provides a monthly benefit payment for the Participant’s life and when the Participant dies, it will provide a monthly benefit payment for the life of a Designated Survivor, if that person is still living at the Participant’s death. When a Participant elects to commence his or her monthly benefit payment, the Participant selects both the Designated Survivor and the specific percentage of his or her monthly benefit amount (50%, 66 2/3%, 75% or 100%) to be paid to the Participant’s Designated Survivor. When the Participant dies, the Participant’s Designated Survivor, if then living, will receive the percentage of the Participant’s monthly benefit that the Participant selected, for the remainder of his or her life.
|
•
|
Period certain:
The period certain form of payment is a single life annuity combined with a guaranteed payment period. This form of payment provides the Participant with equal monthly payments for the Participant’s life and guarantees that benefits will be paid for a minimum of 5, 10, 15 or 20 years as the Participant elects (but no longer than the Participant’s life expectancy), in the event that the Participant dies before all guaranteed payments are made. If the Participant dies before all guaranteed payments are made, the Participant’s Designated Survivor will receive the remaining payments. If the Participant survives the period of guaranteed payments, the Participant’s monthly benefit will be continued for as long as the Participant lives, but no payments will be made to the Participant’s Designated Survivor after the Participant’s death. If both the Participant and the Participant’s Designated Survivor die before all guaranteed payments are made, the commuted value of the balance of the guaranteed payments will be made in one lump sum to the executor or administrator as the case may be, of the last to die. The Participant can elect to change his or her Designated Survivor at any time prior to the Participant’s death.
|
•
|
If the Participant dies before age 50 -
If a Participant is actively employed, has a vested Accrued Benefit and dies before age 50, the Participant’s Eligible Survivor will be eligible for a survivor benefit. The survivor benefit will be equal to the Designated Survivor’s portion of the Accrued Benefit, calculated as if the Participant had terminated employment on the Participant’s date of death and had elected a 50% contingent annuity. The Participant’s Eligible Survivor’s monthly benefit payments will commence on the first of the month following the month in which the Participant would have attained age 65, unless the Eligible Survivor elects to commence the benefit earlier. The Participant’s Eligible Survivor can elect to commence monthly benefit payments as early as the first of the month following the month when the Participant would have attained age 55, however, the monthly benefit payment will be reduced by applying the Plan’s early commencement reduction factors.
|
•
|
If the Participant
dies on or after age 50 -
If the Participant is an Active Participant, has a vested Accrued Benefit and dies on or after age 50, the Participant’s Eligible Survivor will be eligible for a survivor benefit equal to 50% of the Participant’s vested Accrued Benefit calculated as if the Participant had terminated employment on his or her date of death. Monthly benefit payments will commence as of the first of the month following the Participant’s death. The monthly benefit payment will not be reduced by the Plan’s early commencement reduction factors.
|
•
|
Should the Plan Administrator determine, after consulting with the plan administrator of another Company plan, that the other Company plan may provide benefits with respect to the same period of Benefit Service recognized under the Plan, then the Plan Administrator may cancel the Participant’s benefit under this Plan, provided that; the other Company plan does actually provide such benefits and, in the case of a 409A Participant and with respect to any 409A Benefits, such cancellation is consistent with Internal Revenue Code Section 409A.
|
•
|
Should the Plan Administrator determine that a provision of this Plan will result in a violation of local law, the Plan Administrator may take action as needed to prevent such violation, provided that, in the case of a 409A Participant and with respect to any 409A Benefits, such action is consistent with Internal Revenue Code Section 409A.
|
•
|
The Plan is intended to make payment of benefits as a monthly annuity. The Plan Administrator may, in certain circumstances and at its sole discretion, with respect to any Plan benefits (including death benefits), pay benefits in one payment or change the frequency of annuity payments, provided that the resulting payment or payments in the aggregate are equal to the actuarial equivalent, as determined by the Plan Administrator, of the Participant’s Accrued Benefit, in lieu of the monthly annuity described above, and provided further that, in the case of a 409A Participant and with respect to any 409A Benefits, such action is consistent with Internal Revenue Code Section 409A. Such circumstances may include, but are not limited to, lump sum payment of Accrued Benefits determined to be of small value or lump sum payments deemed necessary to avoid adverse local income tax treatment.
|
•
|
“409A Benefit” - The portion of a 409A Participant’s Plan benefit that is subject to Section 409A is generally that portion either (i) earned after December 31, 2004, or (ii) earned before January 1, 2005 and first vested after such date. Notwithstanding any other provision in the Plan, with respect to a 409A Benefit, the terms of the Plan shall in all instances be interpreted in a manner so as to comply with the requirements of Section 409A of the Internal Revenue Code.
|
•
|
“Grandfathered Benefit” – The portion of a 409A Participant’s Plan benefit that is exempt from Section 409A is generally that portion earned and vested before January 1, 2005.
|
•
|
“409A Survivor Benefit” – The survivor benefit payable in the event that the 409A Participant dies before commencing a benefit. The 409A Survivor Benefit is based on the 409A Participant’s 409A Benefit if the Participant’s Eligible Survivor is a Spouse as defined under U.S. federal law on October 3, 2004, or, alternatively, is based on the 409A Participant’s 409A Benefit and Grandfathered Benefit if the 409A Participant’s Eligible Survivor is not a Spouse as defined under U.S. federal law on October 3, 2004.
|
•
|
“Grandfathered Survivor Benefit” – A Grandfathered Survivor Benefit is payable only if the 409A Participant dies before commencing a benefit and has a Grandfathered Benefit and an Eligible Survivor who is a Spouse as defined under U.S. federal law on October 3, 2004.
|
•
|
Rules for a 409A Benefit –
409A Participants may not select the commencement date for a 409A Benefit. A 409A Benefit must commence effective with the month following the later of Separation from Service or the attainment of age 55. Payment of a 409A Benefit will be delayed until the fourth month following Separation from Service, unless the 409A Participant is deemed a Specified Employee at the time of commencement. If the 409A Participant is a Specified Employee at the time of commencement, payment will be delayed until the seventh month following Separation from Service. Separation from Service occurs in the following circumstances:
|
◦
|
The number of hours a 409A Participant performs service for the Company in a week is 20% or less of the average weekly hours the 409A Participant worked during the previous 36 month (3 year) period and is reasonably expected to remain at or below that 20% threshold.
|
◦
|
A 409A Participant incurs a disability, which meets one of the following requirements (i) the 409A Participant is 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, or (ii) the 409A Participant is, 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,
|
◦
|
A 409A Participant is on an unpaid bona fide leave of absence for more than 6 months.
|
◦
|
If a 409A Benefit becomes payable on account of a Separation from Service occurring upon the death of a 409A Participant, the timing of the survivor benefit will depend on the age and employment status of the 409A Participant on the date of death.
|
◦
|
If a 409A Benefit becomes payable on account of Separation from Service due to disability, benefit payments will commence in the calendar month following the month in which the 409A Participant attains age 65.
|
◦
|
If a 409A Benefit is determined by the Plan Administrator to be a small benefit, it will be paid in the fourth month (seventh month if the 409A Participant is a Specified Employee) following the calendar month in which the 409A Participant separates from service. (See, “
Small Benefit Lump Sum Rule for 409A Benefits,”
below, in the subsection titled “Lump Sum Payments - Special Rules for 409A Benefits”.)
|
•
|
Rules for a Grandfathered Benefit –
A Grandfathered Benefit is generally paid under the same timing rules as described in “Time of Payment - General Rules.”
|
•
|
Lump Sums for 409A Participants -
409A Participants may not elect a lump sum distribution with respect to 409A Benefits or Grandfathered Benefits. The Plan Administrator may not discretionarily pay 409A Benefits in the form of a lump sum, but may
pay in its discretion, a lump sum equal to the actuarial equivalent, as determined by the Plan Administrator, of the 409A Participant’s accrued Grandfathered Benefit.
|
•
|
Small Benefit Lump Sum Rule for 409A Benefits -
If a 409A Participant has a 409A Benefit determined by the Plan Administrator to be a small benefit, the 409A Participant will receive a single lump sum payment representing his or her entire vested 409A Benefit under the Plan. The amount of the single lump sum payment will be determined as of the first of the month following the calendar month in which the 409A Participant incurs a Separation from Service and payment will be made in the fourth month (seventh month if the 409A Participant is a Specified Employee) following the calendar month in which the Participant incurs a Separation from Service. Such Participant’s
|
•
|
409A Survivor Benefits - Death Before 409A Benefit Commences
– A 409A Survivor Benefit shall be payable in the following events: (i) A 409A Participant who has a vested 409A Benefit dies before the 409A Benefit commences and has an Eligible Survivor, or (ii) A 409A Participant who has a Grandfathered Benefit dies before the Grandfathered Benefit commences and has an Eligible Survivor who is not a Spouse as defined under U.S. federal law as of October 3, 2004. The Plan does not pay a 409A Survivor Benefit upon the 409A Participant’s death if the 409A Participant does not have a vested 409A Benefit or does not have any Eligible Survivor at the time of death.
|
◦
|
If a 409A Participant dies before age 50 and before termination of employment:
If a 409A Participant dies while actively employed, before attaining age 50 and is vested in his or her Applicable Benefit at the time of death, the 409A Participant’s Eligible Survivor will receive a 409A Survivor Benefit equal to the Designated Survivor’s portion of the 409A Participant’s Applicable Benefit as if the 409A Participant had terminated employment and incurred a Separation from Service on the 409A Participant’s date of death and elected a 50% contingent annuity. The 409A Survivor Benefit will commence on the first of the month following the month the 409A Participant would have attained age 55 and will be reduced by the Plan’s early commencement reduction factors.
|
◦
|
If a 409A Participant dies on or after age 50 and before termination of employment:
If a 409A Participant dies while actively employed after attaining at least age 50 and is vested in his or her Applicable Benefit at the time of death, the 409A Participant’s Eligible Survivor will receive a 409A Survivor Benefit equal to 50% of the 409A Participant’s Applicable Benefit, calculated as if the 409A Participant had terminated employment and incurred a Separation from Service on his or her date of death. The 409A Survivor Benefit will commence as soon as administratively practicable after the 409A Participant’s death, provided that payments commence no later than ninety (90) days following the notification of the 409A Participant’s death. The 409A Survivor Benefit will not be reduced by the Plan’s early commencement reduction factors.
|
◦
|
If a 409A Participant dies after termination of employment and before commencing an Applicable Benefit:
If a 409A Participant dies after terminating employment and before commencing a portion of the 409A Participant’s Applicable Benefit, the 409A Participant’s Eligible Survivor will receive a 409A Survivor Benefit equal to the Designated Survivor’s portion of the portion of the 409A Participant’s Applicable Benefit that has not yet commenced calculated as if the 409A Participant had terminated employment and incurred a Separation from Service on his or her date of death and elected the 50% contingent annuity option. The 409A Survivor Benefit will be reduced using the Plan’s early commencement reduction factors. The 409A Survivor Benefit will commence at the later of: (i) the calendar month following the month the 409A Participant would have attained age 55, or (ii) the calendar month following the month of the 409A Participant’s death.
|
•
|
409A Benefits - Death After 409A Benefit Commences -
If a 409A Participant dies after any portion of the 409A Participant’s Applicable Benefit commences, monthly benefit payments will be made to the Designated Survivor if any, that the 409A Participant named when the 409A Participant commenced his or her Applicable Benefit. The benefit, if any, payable after the 409A Participant’s death, will be based on the form of payment elected by the 409A Participant when the Applicable Benefit commenced.
|
•
|
Grandfathered Survivor Benefit – Death Before Grandfathered Benefit Commences –
A Grandfathered Survivor Benefit shall be payable only if a 409A Participant (i) has a Grandfathered Benefit, (ii) dies before the Grandfathered Benefit has commenced, and (iii) has an Eligible Survivor who is a Spouse as defined under U.S. federal law on October 3, 2004. If the 409A Participant does not have a Grandfathered benefit or there is no Eligible Survivor as defined in the preceding sentence, no Grandfathered Survivor Benefit is payable.
|
◦
|
If a 409A Participant dies before attaining age 50 and before termination of employment
–
If a Participant dies while actively employed before attaining age 50 the Eligible Survivor will receive a Grandfathered Survivor Benefit equal to the Designated Survivor’s portion of the 409A Participant’s Grandfathered Benefit as if the 409A Participant had terminated employment on his or her date of death and elected a 50% contingent annuity. This Grandfathered Survivor Benefit will commence as of the first of the month following the month in which the 409A Participant would have attained age 65. The 409A Participant’s Eligible Survivor can elect to commence the Grandfathered Survivor Benefit as early as the first of the month following the month when the 409A Participant would have attained age 55. The Grandfathered Survivor Benefit will be reduced by applying the Plan’s early commencement reduction factors.
|
◦
|
If a 409A Participant
dies on or after age 50 and before termination of employment -
If a 409A Participant dies while actively employed after attaining at least age 50, the 409A Participant’s Eligible Survivor will receive a Grandfathered Survivor Benefit equal to 50% of the 409A Participant’s Grandfathered Benefit, calculated as if the 409A Participant had terminated employment on his or her date of death. The Grandfathered Survivor Benefit will commence as of the first of the month following the 409A Participant’s death. The Grandfathered Survivor Benefit will not be reduced by the Plan’s early commencement reduction factors.
|
◦
|
Grandfathered Survivor Benefit if a 409A Participant dies after termination of employment but before a Grandfathered Benefit commences -
If a 409A Participant dies after terminating employment and before commencing a Grandfathered Benefit, the 409A Participant’s Eligible Survivor will receive a Grandfathered Survivor Benefit equal to the Designated Survivor’s portion of the 409A Participant’s Grandfathered Benefit calculated as if the 409A Participant had terminated employment on his or her date of death and elected the 50% Contingent Annuity option. This benefit will commence as of the first of the month following the month in which the 409A Participant would have attained age 65. The 409A Participant’s Eligible Survivor can elect to commence a Grandfathered Survivor Benefit as early as the first of the month following the month when the 409A Participant would have attained age 55. The Grandfathered Survivor Benefit will be reduced by applying the Plan’s early commencement reduction factors.
|
•
|
Grandfathered Benefits - Death After Grandfathered Benefit Commences -
If a 409A Participant dies after a Grandfathered Benefit has commenced, monthly benefit payments will be made to the Designated Survivor if any, that the 409A Participant named when the 409A Participant commenced his or her Grandfathered Benefit. The benefit, if any, payable after the 409A Participant’s death, will be based on the form of payment elected by the 409A Participant when the Grandfathered Benefit commenced.
|
Accrued Benefit
|
This is the amount of benefit that a Participant has earned to date, as determined by the Plan’s benefit formula, assuming it is payable as a single life annuity commencing at age 65.
|
Actuarial Equivalence
|
Actuarial equivalence will be determined under assumptions and administrative procedures established by the Plan Administrator.
|
Benefit Commencement Date
|
This is the first day of the month for which a Participant’s benefit is deemed to be paid.
|
Benefit Offsets
|
As determined by the Plan Administrator, the actuarial equivalent of:
(i) any government paid monthly social security or similar retirement benefits from any country
(ii) termination indemnities, and
(iii) any other defined benefit or defined contribution benefits earned at any World-wide Controlled Group company,
which, in all cases, are attributable to the period of Benefit Service recognized for purposes of the Plan.
A benefit offset denominated in a currency other than U.S. dollars, will be converted to U.S. dollars in accordance with administrative procedures established by the Plan Administrator.
|
Benefit Service
|
Benefit Service is the period of time elapsed from Participant’s date of initial eligibility for the Plan (or such earlier or later date specified by the Plan Administrator in conjunction with the Participant’s admission to the Plan) through the cessation date of participation in the Plan (due to cessation of eligibility as determined by MMC or the Plan Administrator, termination of employment, death, cessation of service due to disability or retirement).
|
Domestic Partner
|
At the time of reference, a partner with whom a Participant is registered as Domestic Partner (or a term of similar meaning, for example, civil union) in accordance with the requirements of a country, city, state, or municipality that recognizes domestic partnerships. If a Participant and his or her partner are not registered as Domestic Partners, a partner will qualify as a Domestic Partner for the purposes of the Plan if the Participant and his or her partner satisfy all of the following criteria:
•
The Participant and his or her partner are both at least age 18.
•
Neither the Participant nor his or her partner are currently nor have ever been married or the Domestic Partner of any other person for at least the previous 12 months.
•
The Participant and his or her partner are not related by blood to a degree of closeness that would prohibit marriage under applicable law.
•
The Participant and his or her partner are in an exclusive, committed relationship that has existed for at least 12 months and is intended to be permanent.
•
The Participant and his or her partner have mutually agreed to be responsible for each other’s common welfare.
•
The Participant and his or her partner have resided together for at least the previous 12 months and intend to do so permanently.
|
Vested Termination Benefit
|
This is the benefit a Participant receives if he or she leaves the Company after becoming vested but before he or she is eligible to receive a retirement benefit (i.e., before age 55). (See, “Time of Payment; General Rules for Participants; Vested Termination - Termination before age 55”)
|
Vesting Service
|
Vesting Service is the elapsed time period of a participant’s total employment as an employee of the Company, whether or not a Participant in the Plan during that time.
|
World-wide Controlled Group
|
The term World-wide Controlled Group refers to a group of corporations related by a common ownership interest, most often when one business (or a chain of businesses) owns 80% or more of one or more subsidiaries. MMC’s World-wide Controlled Group generally includes MMC, its subsidiaries and affiliated companies. The determination of which companies are included in the World-wide Controlled Group will be made by the Plan Administrator.
|
|
MARSH & McLENNAN COMPANIES, INC.
|
|
|
|
|
|
By:
/s/ Laurie Ledford
|
|
Laurie Ledford
Senior Vice President and Chief
Human Resources Officer
|
|
|
|
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. Your
|
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, without having tendered a notice of resignation, through the date of the bonus payment, in accordance with the terms and conditions of the award. 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 Effective Date”). Payment of any such annual bonus amount shall then be paid within 30 days following the Release Effective Date, but in no event later than March 15 of the year following the year for which such bonus is earned.
|
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 (“Compensation Committee”) 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 may be required to enter into a “Restrictive Covenants Agreement” in connection with long-term incentive awards.
|
e.
|
Benefit Programs
: You and your eligible family members will continue to have the opportunity to participate in the employee benefit plans, policies and programs provided
|
3.
|
Termination of Employment
|
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 you are entitled 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
|
(1)
|
if the Relevant Plan does not specify a period or provides for a period of more than 90 days for the completion of an Employment-Related Action, then the period for completion of the Employment-Related Action will be the period specified by the Company, which shall be no longer than 90 days following the event otherwise triggering the right to payment; and
|
(2)
|
if the period for the completion of an Employment-Related Action includes the January 1 next following the event otherwise triggering the right to payment, then the payment shall be made or commence following the completion of the Employment-Related Action, but in no event earlier than that January 1.
|
Board or Committee Memberships
|
•
British-American Business Association (BABA)
•
International Insurance Society (IIS)
•
Bayard
|
Annual Base Salary
|
$800,000
|
Annual Target Bonus Opportunity
|
Bonus awards are discretionary. Anticipated target bonus of $1,500,000 commencing with the 2013 performance year (awarded in 2014). Actual bonus may range from 0% - 200% of target, based on achievement of individual performance objectives, 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 fair value of $1,250,000, commencing with the award made in 2014.
|
/s/ Daniel S. Glaser
|
/s/ Alexander S. Moczarski
|
Daniel S. Glaser
|
Alexander S. Moczarski
|
President and Chief Executive Officer
|
|
Marsh & McLennan Companies, Inc.
|
|
|
Three Months Ended
March 31, 2014 |
Years Ended December 31,
|
|||||||||||||||||||||
|
(Unaudited)
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||||
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income before income taxes
|
$
|
649
|
|
|
$
|
1,973
|
|
|
$
|
1,696
|
|
|
$
|
1,404
|
|
|
$
|
769
|
|
|
$
|
552
|
|
Interest expense
|
42
|
|
|
167
|
|
|
181
|
|
|
199
|
|
|
233
|
|
|
241
|
|
||||||
Portion of rents representative of the interest factor
|
36
|
|
|
134
|
|
|
139
|
|
|
143
|
|
|
140
|
|
|
132
|
|
||||||
|
$
|
727
|
|
|
$
|
2,274
|
|
|
$
|
2,016
|
|
|
$
|
1,746
|
|
|
$
|
1,142
|
|
|
$
|
925
|
|
Fixed Charges
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
$
|
42
|
|
|
$
|
167
|
|
|
$
|
181
|
|
|
$
|
199
|
|
|
$
|
233
|
|
|
$
|
241
|
|
Portion of rents representative of the interest factor
|
36
|
|
|
134
|
|
|
139
|
|
|
143
|
|
|
140
|
|
|
132
|
|
||||||
|
$
|
78
|
|
|
$
|
301
|
|
|
$
|
320
|
|
|
$
|
342
|
|
|
$
|
373
|
|
|
$
|
373
|
|
Ratio of Earnings to Fixed Charges
|
9.3
|
|
|
7.6
|
|
|
6.3
|
|
|
5.1
|
|
|
3.1
|
|
|
2.5
|
|
Date:
|
May 8, 2014
|
|
/s/ Daniel S. Glaser
|
|
|
|
Daniel S. Glaser
|
|
|
|
President and Chief Executive Officer
|
Date:
|
May 8, 2014
|
|
/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, 2014
|
|
/s/ Daniel S. Glaser
|
|
|
|
Daniel S. Glaser
|
|
|
|
President and Chief Executive Officer
|
Date:
|
May 8, 2014
|
|
/s/ J. Michael Bischoff
|
|
|
|
J. Michael Bischoff
|
|
|
|
Chief Financial Officer
|