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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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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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2016
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2015
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Revenue
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$
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3,336
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$
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3,215
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Expense:
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Compensation and benefits
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1,854
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1,730
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Other operating expenses
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749
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750
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Operating expenses
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2,603
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2,480
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Operating income
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733
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735
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Interest income
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2
|
|
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3
|
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Interest expense
|
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(46
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)
|
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(36
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)
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Investment (loss) income
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(3
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)
|
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2
|
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Income before income taxes
|
|
686
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|
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704
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Income tax expense
|
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196
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|
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206
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Income from continuing operations
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490
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498
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Discontinued operations, net of tax
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—
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(3
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)
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Net income before non-controlling interests
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490
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495
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Less: Net income attributable to non-controlling interests
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9
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13
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Net income attributable to the Company
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$
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481
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$
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482
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Basic net income per share – Continuing operations
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$
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0.92
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$
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0.90
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– Net income attributable to
the Company
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$
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0.92
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$
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0.89
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Diluted net income per share – Continuing operations
|
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$
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0.91
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$
|
0.89
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– Net income attributable to
the Company |
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$
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0.91
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$
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0.88
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Average number of shares outstanding – Basic
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521
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539
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– Diluted
|
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526
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545
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Shares outstanding at March 31,
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521
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538
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Three Months Ended March 31,
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(In millions)
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2016
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2015
|
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Net income before non-controlling interests
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$
|
490
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$
|
495
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Other comprehensive income (loss), before tax:
|
|
|
|
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Foreign currency translation adjustments
|
13
|
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(426
|
)
|
||
Gain (loss) related to pension/post-retirement plans
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138
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|
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236
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Other comprehensive income (loss), before tax
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151
|
|
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(190
|
)
|
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Income tax expense on other comprehensive income
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28
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|
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53
|
|
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Other comprehensive income (loss), net of tax
|
123
|
|
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(243
|
)
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||
Comprehensive income
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613
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252
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Less: comprehensive income attributable to non-controlling interest
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9
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13
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Comprehensive income attributable to the Company
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$
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604
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$
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239
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(In millions, except share and per share figures)
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March 31,
2016 |
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December 31,
2015 |
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ASSETS
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Current assets:
|
|
|
|
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Cash and cash equivalents
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$
|
918
|
|
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$
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1,374
|
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Receivables
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|
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|
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Commissions and fees
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3,357
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3,198
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Advanced premiums and claims
|
60
|
|
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51
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|
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Other
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318
|
|
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309
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|
3,735
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3,558
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Less-allowance for doubtful accounts and cancellations
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(88
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)
|
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(87
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)
|
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Net receivables
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3,647
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3,471
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Other current assets
|
233
|
|
|
199
|
|
||
Total current assets
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4,798
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5,044
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Goodwill
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7,950
|
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7,889
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Other intangible assets
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1,035
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1,036
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Fixed assets
(net of accumulated depreciation and amortization of $1,651 at March 31, 2016 and $1,621 at December 31, 2015)
|
757
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773
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Pension related assets
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1,181
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1,159
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Deferred tax assets
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1,117
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1,138
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Other assets
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1,290
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1,177
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$
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18,128
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$
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18,216
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(In millions, except share and per share figures)
|
March 31,
2016 |
|
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December 31,
2015 |
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||
LIABILITIES AND EQUITY
|
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|
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Current liabilities:
|
|
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|
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Short-term debt
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$
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265
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|
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$
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12
|
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Accounts payable and accrued liabilities
|
1,879
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1,886
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|
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Accrued compensation and employee benefits
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724
|
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1,656
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Accrued income taxes
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128
|
|
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154
|
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||
Dividends payable
|
163
|
|
|
—
|
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Total current liabilities
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3,159
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3,708
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Fiduciary liabilities
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4,501
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4,146
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Less – cash and investments held in a fiduciary capacity
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(4,501
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)
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(4,146
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)
|
||
|
—
|
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—
|
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Long-term debt
|
4,748
|
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|
4,402
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Pension, post-retirement and post-employment benefits
|
2,042
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2,058
|
|
||
Liabilities for errors and omissions
|
319
|
|
|
318
|
|
||
Other liabilities
|
1,089
|
|
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1,128
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Commitments and contingencies
|
—
|
|
|
—
|
|
||
Equity:
|
|
|
|
||||
Preferred stock, $1 par value, authorized 6,000,000 shares, none issued
|
—
|
|
|
—
|
|
||
Common stock, $1 par value, authorized
|
|
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|
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1,600,000,000 shares, issued 560,641,640 shares at March 31, 2016
|
|
|
|
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and December 31, 2015
|
561
|
|
|
561
|
|
||
Additional paid-in capital
|
777
|
|
|
861
|
|
||
Retained earnings
|
11,460
|
|
|
11,302
|
|
||
Accumulated other comprehensive loss
|
(4,097
|
)
|
|
(4,220
|
)
|
||
Non-controlling interests
|
92
|
|
|
89
|
|
||
|
8,793
|
|
|
8,593
|
|
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Less – treasury shares, at cost, 39,120,576 shares at March 31, 2016
|
|
|
|
||||
and 38,743,686 shares at December 31, 2015
|
(2,022
|
)
|
|
(1,991
|
)
|
||
Total equity
|
6,771
|
|
|
6,602
|
|
||
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$
|
18,128
|
|
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$
|
18,216
|
|
For the Three Months Ended March 31,
|
|
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|
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(In millions)
|
2016
|
|
|
2015
|
|
||
Operating cash flows:
|
|
|
|
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Net income before non-controlling interests
|
$
|
490
|
|
|
$
|
495
|
|
Adjustments to reconcile net income to cash used for operations:
|
|
|
|
||||
Depreciation and amortization of fixed assets and capitalized software
|
78
|
|
|
77
|
|
||
Amortization of intangible assets
|
33
|
|
|
24
|
|
||
Adjustments and payments related to contingent consideration liability
|
1
|
|
|
(2
|
)
|
||
Provision for deferred income taxes
|
22
|
|
|
87
|
|
||
Loss (gain) on investments
|
3
|
|
|
(2
|
)
|
||
Loss on disposition of assets
|
2
|
|
|
1
|
|
||
Share-based compensation expense
|
31
|
|
|
24
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Net receivables
|
(175
|
)
|
|
(1
|
)
|
||
Other current assets
|
(34
|
)
|
|
(26
|
)
|
||
Other assets
|
2
|
|
|
8
|
|
||
Accounts payable and accrued liabilities
|
36
|
|
|
(128
|
)
|
||
Accrued compensation and employee benefits
|
(931
|
)
|
|
(927
|
)
|
||
Accrued income taxes
|
(26
|
)
|
|
(30
|
)
|
||
Contributions to pension and other benefit plans in excess of current year expense/credit
|
(67
|
)
|
|
(134
|
)
|
||
Other liabilities
|
(71
|
)
|
|
(79
|
)
|
||
Effect of exchange rate changes
|
25
|
|
|
90
|
|
||
Net cash used for operations
|
(581
|
)
|
|
(523
|
)
|
||
Financing cash flows:
|
|
|
|
||||
Purchase of treasury shares
|
(200
|
)
|
|
(300
|
)
|
||
Net increase in commercial paper
|
252
|
|
|
—
|
|
||
Proceeds from debt
|
347
|
|
|
493
|
|
||
Repayments of debt
|
(3
|
)
|
|
(2
|
)
|
||
Shares withheld for taxes on vested units – treasury shares
|
(37
|
)
|
|
(47
|
)
|
||
Issuance of common stock from treasury shares
|
92
|
|
|
104
|
|
||
Payments of deferred and contingent consideration for acquisitions
|
(39
|
)
|
|
(32
|
)
|
||
Distributions of non-controlling interests
|
(6
|
)
|
|
(1
|
)
|
||
Dividends paid
|
(161
|
)
|
|
(151
|
)
|
||
Net cash provided by financing activities
|
245
|
|
|
64
|
|
||
Investing cash flows:
|
|
|
|
||||
Capital expenditures
|
(51
|
)
|
|
(91
|
)
|
||
Net purchases of long-term investments
|
(2
|
)
|
|
(87
|
)
|
||
Proceeds from sales of fixed assets
|
1
|
|
|
1
|
|
||
Acquisitions
|
(75
|
)
|
|
(16
|
)
|
||
Other, net
|
1
|
|
|
(1
|
)
|
||
Net cash used for investing activities
|
(126
|
)
|
|
(194
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
6
|
|
|
(201
|
)
|
||
Decrease in cash and cash equivalents
|
(456
|
)
|
|
(854
|
)
|
||
Cash and cash equivalents at beginning of period
|
1,374
|
|
|
1,958
|
|
||
Cash and cash equivalents at end of period
|
$
|
918
|
|
|
$
|
1,104
|
|
For the Three Months Ended March 31,
|
|
|
|
||||
(In millions, except per share figures)
|
2016
|
|
|
2015
|
|
||
COMMON STOCK
|
|
|
|
||||
Balance, beginning and end of period
|
$
|
561
|
|
|
$
|
561
|
|
ADDITIONAL PAID-IN CAPITAL
|
|
|
|
||||
Balance, beginning of year
|
$
|
861
|
|
|
$
|
930
|
|
Change in accrued stock compensation costs
|
(36
|
)
|
|
(40
|
)
|
||
Issuance of shares under stock compensation plans and employee stock purchase plans and related tax impact
|
(48
|
)
|
|
(53
|
)
|
||
Balance, end of period
|
$
|
777
|
|
|
$
|
837
|
|
RETAINED EARNINGS
|
|
|
|
||||
Balance, beginning of year
|
$
|
11,302
|
|
|
$
|
10,335
|
|
Net income attributable to the Company
|
481
|
|
|
482
|
|
||
Dividend equivalents declared – (per share amounts: $0.62 in 2016 and $0.56 in 2015)
|
(1
|
)
|
|
(1
|
)
|
||
Dividends declared – (per share amounts: $0.62 in 2016 and $0.56 in 2015)
|
(322
|
)
|
|
(301
|
)
|
||
Balance, end of period
|
$
|
11,460
|
|
|
$
|
10,515
|
|
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|
|
|
||||
Balance, beginning of year
|
$
|
(4,220
|
)
|
|
$
|
(3,847
|
)
|
Other comprehensive income (loss), net of tax
|
123
|
|
|
(243
|
)
|
||
Balance, end of period
|
$
|
(4,097
|
)
|
|
$
|
(4,090
|
)
|
TREASURY SHARES
|
|
|
|
||||
Balance, beginning of year
|
$
|
(1,991
|
)
|
|
$
|
(925
|
)
|
Issuance of shares under stock compensation plans and employee stock purchase plans
|
169
|
|
|
174
|
|
||
Purchase of treasury shares
|
(200
|
)
|
|
(300
|
)
|
||
Balance, end of period
|
$
|
(2,022
|
)
|
|
$
|
(1,051
|
)
|
NON-CONTROLLING INTERESTS
|
|
|
|
||||
Balance, beginning of year
|
$
|
89
|
|
|
$
|
79
|
|
Net income attributable to non-controlling interests
|
9
|
|
|
13
|
|
||
Distributions
|
(6
|
)
|
|
(1
|
)
|
||
Balance, end of period
|
$
|
92
|
|
|
$
|
91
|
|
TOTAL EQUITY
|
$
|
6,771
|
|
|
$
|
6,863
|
|
Basic and Diluted EPS Calculation -
Continuing Operations
|
Three Months Ended March 31,
|
||||||
(In millions, except per share figures)
|
2016
|
|
|
2015
|
|
||
Net income from continuing operations
|
$
|
490
|
|
|
$
|
498
|
|
Less: Net income attributable to non-controlling interests
|
9
|
|
|
13
|
|
||
|
$
|
481
|
|
|
$
|
485
|
|
Basic weighted average common shares outstanding
|
521
|
|
|
539
|
|
||
Dilutive effect of potentially issuable common shares
|
5
|
|
|
6
|
|
||
Diluted weighted average common shares outstanding
|
526
|
|
|
545
|
|
||
Average stock price used to calculate common stock equivalents
|
$
|
55.86
|
|
|
$
|
56.37
|
|
(In millions of dollars)
|
|
2016
|
|
|
2015
|
|
||
Assets acquired, excluding cash
|
|
$
|
105
|
|
|
$
|
30
|
|
Liabilities assumed
|
|
(4
|
)
|
|
(2
|
)
|
||
Contingent/deferred purchase consideration
|
|
(26
|
)
|
|
(12
|
)
|
||
Net cash outflow for acquisitions
|
|
$
|
75
|
|
|
$
|
16
|
|
(In millions of dollars)
|
2016
|
|
|
2015
|
|
||
Interest paid
|
$
|
58
|
|
|
$
|
40
|
|
Income taxes paid, net of refunds
|
$
|
187
|
|
|
$
|
118
|
|
(In millions of dollars)
|
Unrealized Investment Gains
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Gains (Losses)
|
|
Total Gains (Losses)
|
||||||||
Balance as of January 1, 2016
|
$
|
6
|
|
|
$
|
(3,124
|
)
|
|
$
|
(1,102
|
)
|
|
$
|
(4,220
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
80
|
|
|
13
|
|
|
93
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
30
|
|
|
—
|
|
|
30
|
|
||||
Net current period other comprehensive income (loss)
|
—
|
|
|
110
|
|
|
13
|
|
|
123
|
|
||||
Balance as of March 31, 2016
|
$
|
6
|
|
|
$
|
(3,014
|
)
|
|
$
|
(1,089
|
)
|
|
$
|
(4,097
|
)
|
(In millions of dollars)
|
Unrealized Investment Gains
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Gains (Losses)
|
|
Total Gains (Losses)
|
||||||||
Balance as of January 1, 2015
|
$
|
5
|
|
|
$
|
(3,393
|
)
|
|
$
|
(459
|
)
|
|
$
|
(3,847
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
128
|
|
|
(423
|
)
|
|
(295
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
52
|
|
|
—
|
|
|
52
|
|
||||
Net current period other comprehensive income (loss)
|
—
|
|
|
180
|
|
|
(423
|
)
|
|
(243
|
)
|
||||
Balance as of March 31, 2015
|
$
|
5
|
|
|
$
|
(3,213
|
)
|
|
$
|
(882
|
)
|
|
$
|
(4,090
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
January – Mercer acquired The Positive Ageing Company Limited, a UK-based firm providing advice on issues surrounding the aging workforce.
|
For the Three Months Ended March 31, 2016
|
|
||
(In millions of dollars)
|
|
||
Cash
|
$
|
77
|
|
Estimated fair value of deferred/contingent consideration
|
26
|
|
|
Total Consideration
|
$
|
103
|
|
Allocation of purchase price:
|
|
||
Cash and cash equivalents
|
$
|
2
|
|
Accounts receivable, net
|
1
|
|
|
Property, plant, and equipment
|
1
|
|
|
Other intangible assets
|
42
|
|
|
Goodwill
|
61
|
|
|
Total assets acquired
|
107
|
|
|
Current liabilities
|
2
|
|
|
Other liabilities
|
2
|
|
|
Total liabilities assumed
|
4
|
|
|
Net assets acquired
|
$
|
103
|
|
|
|
Amount
|
|
Weighted Average Amortization Period
|
||
Client relationships
|
|
$
|
40
|
|
|
10 years
|
Other (a)
|
|
2
|
|
|
3 years
|
|
|
|
$
|
42
|
|
|
|
•
|
January – Marsh acquired INGESEG S.A., an insurance brokerage located in Argentina.
|
•
|
May – Marsh acquired Sylvite Financial Services, Inc., a Canada-based insurance consulting firm and Sumitomo Life Insurance Agency America, Inc., an employee benefits brokerage and consulting firm providing employee benefit and other services to U.S.-based subsidiaries of Japanese companies.
|
•
|
June – Marsh & McLennan Agency ("MMA") acquired MHBT, Inc., a Texas-based insurance broker and Marsh acquired SIS Co. Ltd, a Korea-based insurance broker and advisor.
|
•
|
July – MMA acquired Vezina, a Canada-based independent insurance brokerage firm, Tequesta Insurance Advisors, an employee benefits insurance provider based in Florida, Cline Wood Agency, a Kansas City-based independent specialty insurance agency and J.W. Terrill, a Missouri-based independent insurance agency. Marsh acquired SMEI Group Ltd., a U.K.-based insurance broker providing specialist commercial insurance to small and medium-sized firms.
|
•
|
August – Marsh acquired Dovetail Insurance, a leading provider of insurance technology services to the U.S. small commercial market.
|
•
|
October – MMA acquired Dawson Insurance Agency, a North Dakota-based agency providing commercial and personal insurance, surety bonds, safety and loss control programs, and employee benefits services.
|
•
|
December – Marsh acquired Jelf Group, PLC, a U.K.-based insurance broking and financial consulting firm.
|
•
|
February – Oliver Wyman acquired TeamSAI, a Georgia-based provider of consulting and technical services to the transportation industry, and Mercer acquired Strategic Capital Management AG, a Switzerland-based institutional investment advisor.
|
•
|
June – Mercer acquired Kepler Associates, a U.K.-based executive remuneration specialist.
|
•
|
August – OWG acquired the Hong Kong and Shanghai franchises of OC&C Strategy Consultants.
|
•
|
September – Mercer acquired Comptryx, a global pay and workforce metrics business specializing in the technology sector.
|
•
|
November – Mercer acquired HR Business Solutions (Asia) Limited, a Hong Kong-based compensation and employee benefits consulting firm, and Gama Consultores Associados Ltda, a Brazil-based retirement consulting firm.
|
•
|
December – Mercer acquired CPSG Partners, a Workday Services partner assisting clients worldwide to maximize the value of Workday Financial Management and Human Capital Management.
|
|
|
Three Months Ended
March 31, |
||||||
(In millions, except per share figures)
|
|
2016
|
|
|
2015
|
|
||
Revenue
|
|
$
|
3,343
|
|
|
$
|
3,330
|
|
Income from continuing operations
|
|
$
|
491
|
|
|
$
|
509
|
|
Net income attributable to the Company
|
|
$
|
482
|
|
|
$
|
492
|
|
Basic net income per share:
|
|
|
|
|
||||
– Continuing operations
|
|
$
|
0.92
|
|
|
$
|
0.92
|
|
– Net income attributable to the Company
|
|
$
|
0.92
|
|
|
$
|
0.91
|
|
Diluted net income per share:
|
|
|
|
|
||||
– Continuing operations
|
|
$
|
0.92
|
|
|
$
|
0.91
|
|
– Net income attributable to the Company
|
|
$
|
0.92
|
|
|
$
|
0.90
|
|
March 31,
|
|
|
|
||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
||
Balance as of January 1, as reported
|
$
|
7,889
|
|
|
$
|
7,241
|
|
Goodwill acquired
|
61
|
|
|
12
|
|
||
Other adjustments
(a)
|
—
|
|
|
(93
|
)
|
||
Balance at March 31,
|
$
|
7,950
|
|
|
$
|
7,160
|
|
(a)
|
Primarily reflects the impact of foreign exchange in each period.
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
(In millions of dollars)
|
Gross
Cost
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
|
Gross
Cost
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
||||||
Client Relationships
|
$
|
1,312
|
|
|
$
|
372
|
|
|
$
|
940
|
|
|
$
|
1,281
|
|
|
$
|
347
|
|
|
$
|
934
|
|
Other (a)
|
174
|
|
|
79
|
|
|
95
|
|
|
176
|
|
|
74
|
|
|
102
|
|
||||||
Amortized intangibles
|
$
|
1,486
|
|
|
$
|
451
|
|
|
$
|
1,035
|
|
|
$
|
1,457
|
|
|
$
|
421
|
|
|
$
|
1,036
|
|
For the Years Ending December 31,
|
|
||
(In millions of dollars)
|
Estimated Expense
|
|
|
2016 (excludes amortization through March 31, 2016)
|
$
|
87
|
|
2017
|
123
|
|
|
2018
|
121
|
|
|
2019
|
116
|
|
|
2020
|
120
|
|
|
Subsequent years
|
468
|
|
|
|
$
|
1,035
|
|
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)
|
03/31/16
|
|
|
12/31/15
|
|
|
03/31/16
|
|
|
12/31/15
|
|
|
03/31/16
|
|
|
12/31/15
|
|
|
03/31/16
|
|
|
12/31/15
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial instruments owned:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mutual funds
(a)
|
$
|
132
|
|
|
$
|
142
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
132
|
|
|
$
|
142
|
|
Money market funds
(b)
|
14
|
|
|
140
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
140
|
|
||||||||
Total assets measured at fair value
|
$
|
146
|
|
|
$
|
282
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
146
|
|
|
$
|
282
|
|
Fiduciary Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
|
$
|
92
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
92
|
|
|
$
|
48
|
|
Total fiduciary assets measured
at fair value
|
$
|
92
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
92
|
|
|
$
|
48
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent purchase
consideration liability
(c)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
302
|
|
|
$
|
309
|
|
|
$
|
302
|
|
|
$
|
309
|
|
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
302
|
|
|
$
|
309
|
|
|
$
|
302
|
|
|
$
|
309
|
|
(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 accounts payable and accrued liabilities and other liabilities in the consolidated balance sheets.
|
(In millions of dollars)
|
2016
|
|
|
2015
|
|
||
Balance at January 1,
|
$
|
309
|
|
|
$
|
207
|
|
Additions
|
8
|
|
|
8
|
|
||
Payments
|
(18
|
)
|
|
(19
|
)
|
||
Revaluation Impact
|
5
|
|
|
10
|
|
||
Other
(a)
|
(2
|
)
|
|
—
|
|
||
Balance at March 31,
|
$
|
302
|
|
|
$
|
206
|
|
Combined U.S. and significant non-U.S. Plans
|
Pension
|
|
Post-retirement
|
||||||||||||
For the Three Months Ended March 31,
|
Benefits
|
|
Benefits
|
||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Service cost
|
$
|
44
|
|
|
$
|
52
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
137
|
|
|
146
|
|
|
2
|
|
|
2
|
|
||||
Expected return on plan assets
|
(241
|
)
|
|
(243
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost (credit)
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Recognized actuarial loss (gain)
|
42
|
|
|
76
|
|
|
(1
|
)
|
|
—
|
|
||||
Net periodic benefit (credit) cost
|
$
|
(18
|
)
|
|
$
|
31
|
|
|
$
|
2
|
|
|
$
|
3
|
|
Plan termination
|
—
|
|
|
—
|
|
|
—
|
|
|
(128
|
)
|
||||
Total (credit) cost
|
$
|
(18
|
)
|
|
$
|
31
|
|
|
$
|
2
|
|
|
$
|
(125
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
U.S. Plans only
|
Pension
|
|
Post-retirement
|
||||||||||||
For the Three Months Ended March 31,
|
Benefits
|
|
Benefits
|
||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Service cost
|
$
|
26
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
66
|
|
|
62
|
|
|
1
|
|
|
1
|
|
||||
Expected return on plan assets
|
(95
|
)
|
|
(92
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost (credit)
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Recognized actuarial loss (gain)
|
18
|
|
|
45
|
|
|
(1
|
)
|
|
—
|
|
||||
Net periodic benefit cost
|
$
|
15
|
|
|
$
|
45
|
|
|
$
|
1
|
|
|
$
|
2
|
|
Plan termination
|
—
|
|
|
—
|
|
|
—
|
|
|
(128
|
)
|
||||
Total cost (credit)
|
$
|
15
|
|
|
$
|
45
|
|
|
$
|
1
|
|
|
$
|
(126
|
)
|
|
|
|
|
|
|
|
|
Significant non-U.S. Plans only
|
Pension
|
|
Post-retirement
|
||||||||||||
For the Three Months Ended March 31,
|
Benefits
|
|
Benefits
|
||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
||||
Service cost
|
$
|
18
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
71
|
|
|
84
|
|
|
1
|
|
|
1
|
|
||||
Expected return on plan assets
|
(146
|
)
|
|
(151
|
)
|
|
—
|
|
|
—
|
|
||||
Recognized actuarial loss
|
24
|
|
|
31
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit (credit) cost
|
$
|
(33
|
)
|
|
$
|
(14
|
)
|
|
$
|
1
|
|
|
$
|
1
|
|
Total (credit) cost
|
$
|
(33
|
)
|
|
$
|
(14
|
)
|
|
$
|
1
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
Combined U.S. and significant non-U.S. Plans
|
Pension
Benefits
|
|
Post-retirement
Benefits
|
||||||||
March 31,
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Weighted average assumptions:
|
|
|
|
|
|
|
|
||||
Expected return on plan assets
|
7.07
|
%
|
|
7.25
|
%
|
|
—
|
|
|
—
|
|
Discount rate
|
4.11
|
%
|
|
3.79
|
%
|
|
4.12
|
%
|
|
4.08
|
%
|
Rate of compensation increase
|
2.44
|
%
|
|
2.42
|
%
|
|
—
|
|
|
—
|
|
(In millions of dollars)
|
March 31,
2016 |
|
|
December 31,
2015 |
|
||
Short-term:
|
|
|
|
||||
Commercial paper
|
$
|
252
|
|
|
$
|
—
|
|
Current portion of long-term debt
|
13
|
|
|
12
|
|
||
|
265
|
|
|
12
|
|
||
Long-term:
|
|
|
|
||||
Senior notes – 2.30% due 2017
|
250
|
|
|
249
|
|
||
Senior notes – 2.55% due 2018
|
249
|
|
|
249
|
|
||
Senior notes – 2.35% due 2019
|
298
|
|
|
298
|
|
||
Senior notes – 2.35% due 2020
|
497
|
|
|
496
|
|
||
Senior notes – 4.80% due 2021
|
498
|
|
|
497
|
|
||
Senior notes – 3.30% due 2023
|
347
|
|
|
—
|
|
||
Senior notes – 4.05% due 2023
|
248
|
|
|
248
|
|
||
Senior notes – 3.50% due 2024
|
595
|
|
|
595
|
|
||
Senior notes – 3.50% due 2025
|
495
|
|
|
495
|
|
||
Senior notes – 3.750% due 2026
|
595
|
|
|
595
|
|
||
Senior notes – 5.875% due 2033
|
297
|
|
|
297
|
|
||
Mortgage – 5.70% due 2035
|
390
|
|
|
393
|
|
||
Other
|
2
|
|
|
2
|
|
||
|
4,761
|
|
|
4,414
|
|
||
Less current portion
|
13
|
|
|
12
|
|
||
|
$
|
4,748
|
|
|
$
|
4,402
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||||
(In millions of dollars)
|
Carrying
Amount
|
|
|
Fair
Value
|
|
|
Carrying
Amount
|
|
|
Fair
Value
|
|
||||
Short-term debt
|
$
|
265
|
|
|
$
|
265
|
|
|
$
|
12
|
|
|
$
|
12
|
|
Long-term debt
|
$
|
4,748
|
|
|
$
|
4,931
|
|
|
$
|
4,402
|
|
|
$
|
4,513
|
|
(In millions of dollars)
|
Liability at 1/1/15
|
|
Amounts
Accrued
|
|
|
Cash
Paid
|
|
|
Other
|
|
|
Liability at 12/31/15
|
|
Amounts
Accrued
|
|
|
Cash
Paid
|
|
|
Other
|
|
|
Liability at 3/31/16
|
||||||||||||
Severance
|
$
|
7
|
|
|
$
|
17
|
|
|
$
|
(7
|
)
|
|
$
|
(2
|
)
|
|
$
|
15
|
|
|
$
|
2
|
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
|
$
|
12
|
|
Future rent under non-cancelable leases and other costs
|
85
|
|
|
11
|
|
|
(21
|
)
|
|
3
|
|
|
78
|
|
|
1
|
|
|
(5
|
)
|
|
(1
|
)
|
|
73
|
|
|||||||||
Total
|
$
|
92
|
|
|
$
|
28
|
|
|
$
|
(28
|
)
|
|
$
|
1
|
|
|
$
|
93
|
|
|
$
|
3
|
|
|
$
|
(10
|
)
|
|
$
|
(1
|
)
|
|
$
|
85
|
|
▪
|
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)
|
|
||||
2016–
|
|
|
|
|
||||
Risk and Insurance Services
|
$
|
1,868
|
|
(a)
|
$
|
535
|
|
|
Consulting
|
1,478
|
|
(b)
|
245
|
|
|
||
Total Operating Segments
|
3,346
|
|
|
780
|
|
|
||
Corporate / Eliminations
|
(10
|
)
|
|
(47
|
)
|
|
||
Total Consolidated
|
$
|
3,336
|
|
|
$
|
733
|
|
|
2015–
|
|
|
|
|
||||
Risk and Insurance Services
|
$
|
1,803
|
|
(a)
|
$
|
533
|
|
|
Consulting
|
1,421
|
|
(b)
|
248
|
|
|
||
Total Operating Segments
|
3,224
|
|
|
781
|
|
|
||
Corporate / Eliminations
|
(9
|
)
|
|
(46
|
)
|
|
||
Total Consolidated
|
$
|
3,215
|
|
|
$
|
735
|
|
|
(a)
|
Includes inter-segment revenue of
$1 million
in both
2016
and
2015
, interest income on fiduciary funds of
$6 million
in
2016
and
$5 million
in
2015
, and equity method income of
$1 million
in
2016
and
$2 million
in
2015
.
|
(b)
|
Includes inter-segment revenue of
$9 million
in
2016
and
$8 million
in
2015
, interest income on fiduciary funds of
$1 million
in both
2016
and
2015
, and equity method income of
$4 million
in
2016
and
$3 million
in
2015
.
|
|
Three Months Ended March 31,
|
|
||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
||
Risk and Insurance Services
|
|
|
|
|
||||
Marsh
|
$
|
1,493
|
|
|
$
|
1,434
|
|
|
Guy Carpenter
|
375
|
|
|
369
|
|
|
||
Total Risk and Insurance Services
|
1,868
|
|
|
1,803
|
|
|
||
Consulting
|
|
|
|
|
||||
Mercer
|
1,039
|
|
|
1,037
|
|
|
||
Oliver Wyman Group
|
439
|
|
|
384
|
|
|
||
Total Consulting
|
1,478
|
|
|
1,421
|
|
|
||
Total Operating Segments
|
3,346
|
|
|
3,224
|
|
|
||
Corporate
/
Eliminations
|
(10
|
)
|
|
(9
|
)
|
|
||
Total
|
$
|
3,336
|
|
|
$
|
3,215
|
|
|
|
Period Ended March 31, 2015
|
||||||||||||||
|
As Previously Reported
|
|
Change in Deferred Tax Presentation
|
|
Change in Prepaid Debt Fees Presentation
|
|
As Amended
|
||||||||
Consolidated Statement of Cash Flows
|
|
|
|
|
|
|
|
||||||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
||||||||
Other current assets
|
$
|
28
|
|
|
$
|
(55
|
)
|
|
$
|
1
|
|
|
$
|
(26
|
)
|
Other assets
|
(43
|
)
|
|
45
|
|
|
6
|
|
|
8
|
|
||||
Accrued income taxes
|
(37
|
)
|
|
7
|
|
|
—
|
|
|
(30
|
)
|
||||
Other liabilities
|
(82
|
)
|
|
3
|
|
|
—
|
|
|
(79
|
)
|
||||
Net cash used for operations
|
(530
|
)
|
|
—
|
|
|
7
|
|
|
(523
|
)
|
||||
Proceeds from debt
|
500
|
|
|
—
|
|
|
(7
|
)
|
|
493
|
|
||||
Net cash provided by financing activities
|
$
|
71
|
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
$
|
64
|
|
•
|
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 services and products, and specialized management, economic and brand consulting services. We conduct business in this segment through Mercer and Oliver Wyman Group.
|
|
Three Months Ended March 31,
|
|
|||||
(In millions, except per share figures)
|
2016
|
|
2015
|
|
|
||
Revenue
|
$
|
3,336
|
|
$
|
3,215
|
|
|
Expense:
|
|
|
|
||||
Compensation and Benefits
|
1,854
|
|
1,730
|
|
|
||
Other Operating Expenses
|
749
|
|
750
|
|
|
||
Operating Expenses
|
2,603
|
|
2,480
|
|
|
||
Operating Income
|
733
|
|
735
|
|
|
||
Income from Continuing Operations
|
490
|
|
498
|
|
|
||
Discontinued Operations, net of tax
|
—
|
|
(3
|
)
|
|
||
Net Income Before Non-Controlling Interests
|
490
|
|
495
|
|
|
||
Net Income Attributable to the Company
|
$
|
481
|
|
$
|
482
|
|
|
Income From Continuing Operations Per Share:
|
|
|
|
||||
Basic
|
$
|
0.92
|
|
$
|
0.90
|
|
|
Diluted
|
$
|
0.91
|
|
$
|
0.89
|
|
|
Net Income Per Share Attributable to the Company:
|
|
|
|
||||
Basic
|
$
|
0.92
|
|
$
|
0.89
|
|
|
Diluted
|
$
|
0.91
|
|
$
|
0.88
|
|
|
Average Number of Shares Outstanding:
|
|
|
|
||||
Basic
|
521
|
|
539
|
|
|
||
Diluted
|
526
|
|
545
|
|
|
||
Shares Outstanding at March 31
|
521
|
|
538
|
|
|
|
Three Months Ended March 31,
|
|
%
Change
GAAP
Revenue
|
|
Components of Revenue Change*
|
||||||||||||||
Currency
Impact
|
|
Acquisitions/
Dispositions
Impact
|
|
Underlying
Revenue
|
|||||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
|||||||||||||
Risk and Insurance Services
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Marsh
|
$
|
1,488
|
|
|
$
|
1,430
|
|
|
4
|
%
|
|
(4
|
)%
|
|
6
|
%
|
|
2
|
%
|
Guy Carpenter
|
374
|
|
|
368
|
|
|
2
|
%
|
|
(1
|
)%
|
|
-
|
|
|
3
|
%
|
||
Subtotal
|
1,862
|
|
|
1,798
|
|
|
4
|
%
|
|
(4
|
)%
|
|
5
|
%
|
|
2
|
%
|
||
Fiduciary Interest Income
|
6
|
|
|
5
|
|
|
|
|
|
|
|
|
|
||||||
Total Risk and Insurance Services
|
1,868
|
|
|
1,803
|
|
|
4
|
%
|
|
(4
|
)%
|
|
5
|
%
|
|
2
|
%
|
||
Consulting
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Mercer
|
1,039
|
|
|
1,037
|
|
|
-
|
|
|
(3
|
)%
|
|
1
|
%
|
|
3
|
%
|
||
Oliver Wyman Group
|
439
|
|
|
384
|
|
|
14
|
%
|
|
(2
|
)%
|
|
1
|
%
|
|
15
|
%
|
||
Total Consulting
|
1,478
|
|
|
1,421
|
|
|
4
|
%
|
|
(3
|
)%
|
|
1
|
%
|
|
6
|
%
|
||
Corporate/Eliminations
|
(10
|
)
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
||||||
Total Revenue
|
$
|
3,336
|
|
|
$
|
3,215
|
|
|
4
|
%
|
|
(3
|
)%
|
|
3
|
%
|
|
4
|
%
|
|
Three Months Ended March 31,
|
|
%
Change
GAAP
Revenue
|
|
Components of Revenue Change*
|
||||||||||||||
Currency
Impact
|
|
Acquisitions/
Dispositions
Impact
|
|
Underlying
Revenue
|
|||||||||||||||
(In millions of dollars)
|
2016
|
|
|
2015
|
|
|
|||||||||||||
Marsh:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
EMEA
|
$
|
570
|
|
|
$
|
563
|
|
|
1
|
%
|
|
(6
|
)%
|
|
6
|
%
|
|
1
|
%
|
Asia Pacific
|
146
|
|
|
148
|
|
|
(2
|
)%
|
|
(5
|
)%
|
|
1
|
%
|
|
3
|
%
|
||
Latin America
|
71
|
|
|
81
|
|
|
(13
|
)%
|
|
(19
|
)%
|
|
-
|
|
|
6
|
%
|
||
Total International
|
787
|
|
|
792
|
|
|
(1
|
)%
|
|
(7
|
)%
|
|
4
|
%
|
|
2
|
%
|
||
U.S. / Canada
|
701
|
|
|
638
|
|
|
10
|
%
|
|
(1
|
)%
|
|
9
|
%
|
|
2
|
%
|
||
Total Marsh
|
$
|
1,488
|
|
|
$
|
1,430
|
|
|
4
|
%
|
|
(4
|
)%
|
|
6
|
%
|
|
2
|
%
|
Mercer:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Health
|
$
|
400
|
|
|
$
|
384
|
|
|
4
|
%
|
|
(2
|
)%
|
|
-
|
|
|
6
|
%
|
Retirement
|
312
|
|
|
331
|
|
|
(5
|
)%
|
|
(3
|
)%
|
|
(2
|
)%
|
|
-
|
|
||
Investments
|
196
|
|
|
205
|
|
|
(4
|
)%
|
|
(6
|
)%
|
|
1
|
%
|
|
1
|
%
|
||
Talent
|
131
|
|
|
117
|
|
|
11
|
%
|
|
(3
|
)%
|
|
13
|
%
|
|
1
|
%
|
||
Total Mercer
|
$
|
1,039
|
|
|
$
|
1,037
|
|
|
-
|
|
|
(3
|
)%
|
|
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)
|
2016
|
|
2015
|
|
||
Revenue
|
$
|
1,478
|
|
$
|
1,421
|
|
Compensation and Benefits
|
847
|
|
783
|
|
||
Other Expenses
|
386
|
|
390
|
|
||
Expense
|
1,233
|
|
1,173
|
|
||
Operating Income
|
$
|
245
|
|
$
|
248
|
|
Operating Income Margin
|
16.6
|
%
|
17.4
|
%
|
|
|
|
|
|
|
(
In millions of dollars
)
|
Payment due by Period
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
|
Within
1 Year
|
|
|
1-3 Years
|
|
|
4-5 Years
|
|
|
After
5 Years
|
|
|||||
Short-term debt
|
$
|
265
|
|
|
$
|
265
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Long-term debt
|
4,780
|
|
|
—
|
|
|
526
|
|
|
827
|
|
|
3,427
|
|
|||||
Interest on long-term debt
|
1,521
|
|
|
177
|
|
|
344
|
|
|
303
|
|
|
697
|
|
|||||
Net operating leases
|
2,067
|
|
|
318
|
|
|
547
|
|
|
408
|
|
|
794
|
|
|||||
Service agreements
|
241
|
|
|
145
|
|
|
87
|
|
|
8
|
|
|
1
|
|
|||||
Other long-term obligations
|
494
|
|
|
132
|
|
|
320
|
|
|
37
|
|
|
5
|
|
|||||
Total
|
$
|
9,368
|
|
|
$
|
1,037
|
|
|
$
|
1,824
|
|
|
$
|
1,583
|
|
|
$
|
4,924
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
(In millions of dollars)
|
March 31, 2016
|
||
Cash and cash equivalents invested in money market funds, certificates of deposit and time deposits
|
$
|
918
|
|
Fiduciary cash and investments
|
$
|
4,501
|
|
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, 2016
|
935,453
|
|
|
$
|
53.4500
|
|
|
935,453
|
|
|
$
|
1,105,471,706
|
|
February 1-29, 2016
|
1,325,845
|
|
|
$
|
56.5796
|
|
|
1,325,845
|
|
|
$
|
1,030,455,909
|
|
March 1-31, 2016
|
1,280,501
|
|
|
$
|
58.5584
|
|
|
1,280,501
|
|
|
$
|
955,471,796
|
|
Total
|
3,541,799
|
|
|
$
|
56.4684
|
|
|
3,541,799
|
|
|
$
|
955,471,796
|
|
Date:
|
May 2, 2016
|
/s/ Mark C. McGivney
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Mark C. McGivney
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Chief Financial Officer
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Date:
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May 2, 2016
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/s/ Robert J. Rapport
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Robert J. Rapport
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Senior Vice President & Controller
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(Chief Accounting Officer)
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Exhibit No.
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Exhibit Name
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4.1
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Eighth Supplemental Indenture, dated as of March 14, 2016, between Marsh & McLennan Companies, Inc. and The Bank of New York Mellon, as trustee
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10.1
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Form of 2016 Long-term Incentive Award under the Marsh & McLennan Companies, Inc. 2011
Incentive and Stock Award Plan
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10.2
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Form of Deferred Stock Unit Award, dated as of March 1, 2016, under the Marsh & McLennan
Companies, Inc. 2011 Incentive and Stock Award Plan
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12.1
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Statement Re: Computation of Ratio of Earnings to Fixed Charges
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31.1
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Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
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31.2
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Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
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32.1
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Section 1350 Certifications
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase
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101.LAB
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XBRL Taxonomy Extension Label Linkbase
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase
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MARSH & McLENNAN COMPANIES, INC.
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By:
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/s/ Ferdinand Jahnel
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Name:
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Ferdinand Jahnel
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Title:
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Vice President & Treasurer
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Attest:
By:
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/s/ Carey Roberts
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Name: Carey Roberts
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Title:
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Deputy General Counsel, Chief Compliance Officer & Corporate Secretary
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THE BANK OF NEW YORK MELLON, as Trustee
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By:
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/s/ Francine Kincaid
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Name:
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Francine Kincaid
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Title:
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Vice President
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MARSH & McLENNAN COMPANIES, INC.
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By:
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Name:
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Mark C. McGivney
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Title:
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Chief Financial Officer
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By:
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Name:
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Ferdinand Jahnel
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Title:
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Vice President & Treasurer
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Attest:
By:
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Name:
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Carey Roberts
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Title:
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Deputy General Counsel , Chief Compliance Officer & Corporate Secretary
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Date
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Principal Amount of this Global Security
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Notation Explaining Principal Amount Recorded
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Signature of authorized officer of Trustee or Depositary
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I. BACKGROUND
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1
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II. AWARDS
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1
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A. General.
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1
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1. Grant of Award and Award Types
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1
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2. Award Acceptance
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1
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3. Rights of Award Holders
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1
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4. Restrictive Covenants Agreement
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1
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B. Stock Units.
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2
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1. General
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2
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2. Vesting
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2
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3. Dividend Equivalents
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2
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4. Delivery
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3
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C. Performance Stock Units.
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3
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1. General
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3
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2. Vesting
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3
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3. Dividend Equivalents
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4
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4. Delivery.
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4
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D. Options.
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4
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1. General
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4
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2. Vesting
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5
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3. Term
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5
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4. Exercisability
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5
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5. Method of Exercise of an Option
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5
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E. Satisfaction of Tax Obligations
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6
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1. Personal Tax Advisor
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6
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2. U.S. Employees
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6
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3. Non-U.S. Employees
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6
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III. EMPLOYMENT EVENTS
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7
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A. Death.
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7
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1. Stock Units
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7
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2. Performance Stock Units
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7
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3. Options
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7
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B. Permanent Disability
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7
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1. Stock Units
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7
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2. Performance Stock Units
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8
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3. Options
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8
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C. Termination by You Outside of the European Union - Age and Service Pro-Rata
Vesting
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8
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1. Stock Units
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8
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2. Performance Stock Units
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9
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3. Options
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9
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D. Termination by You Outside of the European Union - Age and Service Full Vesting
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9
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1. Stock Units
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9
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2. Performance Stock Units
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9
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3. Options
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10
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E. Termination by You Within the European Union - Retirement Treatment
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10
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1. Stock Units
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10
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2. Performance Stock Units
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10
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3. Options
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11
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F. Termination by the Company Other Than for Cause
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11
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1. Stock Units
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11
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2. Performance Stock Units
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12
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3. Options
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13
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4. Important Notes
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14
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G. All Other Terminations.
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14
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H. Date of Termination of Employment
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14
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I. Conditions for All or a Portion of an Award to Remain Outstanding Following a
Termination of Employment and Exercisability of Options Following a Termination of
Employment
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15
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1. Restrictive Covenants Agreement
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15
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2. Waiver and Release and Restrictive Covenants Agreement
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15
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J. Determination of Pro-Rata Calculation upon Termination of Employment.
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16
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K. Section 409A of the Code for Award Recipients Subject to U.S. Federal Income Tax
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16
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IV. CHANGE IN CONTROL PROVISIONS
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20
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A. Treatment of Awards - Stock Units and Performance Stock Units
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20
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1. General
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20
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2. Awards Not Assumed
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21
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3. Calculation of Shares Distributable with Respect to PSUs
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21
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B. Treatment of Awards - Stock Options
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21
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C. Waiver and Release
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21
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D. Other Matters
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22
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V. DEFINITIONS
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22
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VI. ADDITIONAL PROVISIONS
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25
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A. Additional Provisions-General
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25
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1. Administrative Rules
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25
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2. Amendment
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25
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3. Limitations
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25
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4. Cancellation or Clawback of Awards
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25
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5. Governing Law; Choice of Forum
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26
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6. Severability; Captions
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26
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7. Electronic Delivery and Acceptance
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26
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8. Waiver
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26
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B. Additional Provisions-Outside of the United States
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27
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1. Changes to Delivery
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27
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2. Amendment and Modification
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27
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VII. QUESTIONS AND ADDITIONAL INFORMATION
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27
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A.
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General.
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1.
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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.
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2.
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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.
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3.
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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).
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4.
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Restrictive Covenants Agreement.
As described in Section II.A.2., a Restrictive Covenants Agreement (“
Restrictive Covenants Agreement
”) in a form determined by Marsh & McLennan Companies must be in place in order to accept the Award, you
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B.
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Stock Units.
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1.
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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.
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2.
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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 “
Stock Unit Scheduled Vesting Date
.” In the event of your termination of employment, the occurrence of your Permanent Disability (as defined in Section V.H.) or the occurrence of a “
Change in Control
” (as defined in the Plan) prior to a Stock Unit 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. or Section IV., as applicable. 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.
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3.
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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.
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4.
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Delivery.
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a.
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Shares of Common Stock deliverable in respect of the Stock Units covered by the Award shall be delivered to you as soon as practicable following the Stock Unit Scheduled Vesting Date, and in no event later than 60 days following the Stock Unit Scheduled Vesting Date, except as otherwise provided in Sections III., IV., and VI.B.
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b.
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The value of vested Dividend Equivalents will be delivered to you in cash as soon as practicable after delivery of the shares of Common Stock described in II.B.4.a above, and in no event later than 60 days following the Stock Unit Scheduled Vesting Date, except as otherwise provided in Sections III., IV., and VI.B.
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c.
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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.
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d.
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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.
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e.
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Notwithstanding the foregoing, 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.K.
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C.
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Performance Stock Units.
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1.
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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.G.). 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 Sections III. and IV.A.3.
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2.
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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, the occurrence of your Permanent Disability or a Change in Control prior to the PSU Scheduled Vesting Date, your right to the PSUs will be determined
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3.
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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.
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4.
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Delivery.
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a.
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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 following the PSU Scheduled Vesting Date, and in no event later than 60 days following the PSU Scheduled Vesting Date, except as otherwise provided in Sections III., IV., and VI.B.
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b.
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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 delivery of the shares of Common Stock described in II.C.4.a. above, and in no event later than 60 days following the PSU Scheduled Vesting Date, except as otherwise provided in Sections III., IV., and VI.B.
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c.
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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.
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d.
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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.
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e.
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Notwithstanding the foregoing, 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.K.
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D.
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Options.
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1.
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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
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2.
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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 an “
Option Scheduled Vesting Date
.”
In the event of your termination of employment or occurrence of your Permanent Disability prior to an Option 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. For the avoidance of doubt, the date of your termination of employment for purposes of this Section II.D.2. will be determined in accordance with Section III.H.
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3.
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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.
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4.
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Exercisability.
The Option Shares covered by the Option will become exercisable when they vest. You are responsible for keeping track of exercise periods while actively employed and, if applicable, any post-termination exercise periods.
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5.
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Method of Exercise of an Option.
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a.
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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. or (B) as otherwise determined by Marsh & McLennan Companies.
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b.
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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).
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c.
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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.
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E.
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Satisfaction of Tax Obligations.
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1.
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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.
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2.
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U.S. Employees.
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a.
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Stock Units, Performance Stock Units and Dividend Equivalents.
Applicable employment taxes are required by law to be withheld when a Stock Unit, PSU or Dividend Equivalent vests, or, if later, when the number of shares of Common Stock deliverable in respect of a PSU (or the amount of cash payable in respect of a Dividend Equivalent corresponding to a PSU) is determined. Applicable income taxes are required by law to be withheld when shares of Common Stock in respect of Stock Units, PSUs or cash in respect of Dividend Equivalents are delivered to you. A sufficient number of whole shares of Common Stock, cash or other property, as applicable, will be retained by Marsh & McLennan Companies to satisfy the tax-withholding obligation.
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b.
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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.
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3.
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Non-U.S. Employees.
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a.
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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.
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b.
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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.
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c.
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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.
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A.
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Death.
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1.
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Stock Units.
In the event your employment is terminated because of your death, all of the unvested Stock Units that are outstanding as of such termination of employment will fully vest and will be distributed within 60 days following such termination of employment.
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2.
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Performance Stock Units.
In the event your employment is terminated because of your death, all of the unvested PSUs that are outstanding as of such termination of employment will fully vest and will be distributed within 60 days following such termination of employment. The Performance Period will be deemed to have ended on December 31 of the year immediately preceding such termination, and the number of shares of Common Stock distributable in respect of the PSUs will be determined in accordance with Section II.C.1.; provided that, in the event that your death 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.
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3.
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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.
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B.
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Permanent Disability.
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1.
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Stock Units
. Upon the occurrence of your Permanent Disability, all of the unvested Stock Units that are outstanding as of the occurrence of your Permanent Disability will remain outstanding and will be distributed as soon as practicable following the
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2.
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Performance Stock Units.
Upon the occurrence of your Permanent Disability, all of the unvested PSUs that are outstanding as of the occurrence of your Permanent Disability will remain outstanding until the PSU Scheduled Vesting Date and will be distributed as soon as practicable following the PSU Scheduled Vesting Date as described in Section II.C.4; provided that you have satisfied the conditions described in Section III.I.1., and provided further that the number of shares of Common Stock distributable in respect of such PSUs will be determined in accordance with Section II.C.1.
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3.
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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.
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C.
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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.).
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1.
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Stock Units.
Upon such termination of employment, a pro-rata portion of the unvested Stock Units that are outstanding as of such termination of employment will remain outstanding (as described in Section III.J.) and will be distributed as soon as practicable following the next Stock Unit Scheduled Vesting Date as described in Section II.B.4.; provided that you have satisfied the conditions described in Section III.I.1. The portion of the unvested Stock Units that does not remain outstanding pursuant to this paragraph will be forfeited and cancelled. For the avoidance of doubt, if your termination of employment occurs on a Stock Unit Scheduled Vesting Date, distribution will occur as soon as practicable following such Stock Unit Scheduled Vesting Date as described in Section II.B.4.
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2.
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Performance Stock Units.
Upon such termination of employment, a pro-rata portion of the unvested PSUs that are outstanding as of such termination of employment will remain outstanding (as described in Section III.J.) until the PSU Scheduled Vesting Date and will be distributed as soon as practicable following the PSU Scheduled Vesting Date as described in Section II.C.4; provided that you have satisfied the conditions described in Section III.I.1., and provided further that the number of shares of Common Stock distributable in respect of such PSUs will be determined in accordance with Section II.C.1. The portion of the unvested PSUs that does not remain outstanding pursuant to this paragraph will be forfeited and cancelled.
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3.
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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.
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D.
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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.
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1.
|
Stock Units.
Upon such termination of employment, all of the unvested Stock Units that are outstanding as of such termination of employment will remain outstanding and be distributed as soon as practicable following the next Stock Unit Scheduled Vesting Date as described in Section II.B.4.; provided that you have satisfied the conditions described in Section III.I.1. For the avoidance of doubt, if your termination of employment occurs on a Stock Unit Scheduled Vesting Date, distribution will occur as soon as practicable following such Stock Unit Scheduled Vesting Date as described in Section II.B.4.
|
2.
|
Performance Stock Units.
Upon such termination of employment, all of the unvested PSUs that are outstanding as of such termination of employment will remain outstanding until the PSU Scheduled Vesting Date and will be distributed as soon as practicable following the PSU Scheduled Vesting Date as described in Section II.C.4; provided that you have satisfied the conditions described in Section III.I.1., and provided further that the number of shares of Common Stock distributable in respect of such PSUs will be determined in accordance with Section II.C.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.I.) 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. Prior to distribution, Marsh & McLennan Companies in its sole discretion may ask you to reaffirm the existence of the facts and factors upon which the determination to provide retirement treatment was made. 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 your termination of employment, a pro-rata portion of the unvested Stock Units
that are outstanding as of such termination of employment will remain outstanding (as described in Section III.J.) until the later to occur of the next Stock Unit Scheduled Vesting Date or the determination by the Retirement Treatment Committee that you are eligible for retirement treatment, and will be distributed as soon as practicable, and in no event later than 60 days thereafter; provided that you have satisfied the conditions described in Section III.I.1.
The portion of the unvested Stock Units that does not remain outstanding pursuant to this paragraph will be forfeited and cancelled. For the avoidance of doubt, if your termination of employment occurs on a Stock Unit Scheduled Vesting Date, distribution will occur within 60 days following such Stock Unit Scheduled Vesting Date (or, if later, within 60 days following the determination by the Retirement Treatment Committee that you are eligible for retirement treatment).
|
2.
|
Performance Stock Units.
Upon your termination of employment, a pro-rata portion of the unvested PSUs that are outstanding as of such termination of employment will remain outstanding (as described in Section III.J.) until the later to occur of the PSU Scheduled Vesting Date or the determination by the Retirement Treatment Committee that you are eligible for retirement treatment, and will be distributed as soon as practicable, and in no event later than 60 days, thereafter; provided that you have satisfied the conditions described in Section III.I.1., and provided further that
|
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 an Option 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 Option 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, a pro-rata portion of the unvested Stock Units that are outstanding as of such termination of employment will remain outstanding (as described in Section III.J.) and will be distributed as soon as practicable following the next Stock Unit Scheduled Vesting Date as described in Section II.B.4.; provided that you have satisfied the conditions described in Section III.I.2. The portion of the unvested Stock Units that does not remain outstanding pursuant to this paragraph will be forfeited and cancelled. For the avoidance of doubt, this Section III.F.1.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. For the further avoidance of doubt, if your termination of employment occurs on a Stock Unit Scheduled Vesting Date, distribution will occur as soon as practicable following such Stock Unit Scheduled Vesting Date as described in Section II.B.4.
|
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, all of the unvested Stock Units that are outstanding as of such termination of employment will remain outstanding and will be distributed as soon as practicable following the next Stock Unit Scheduled Vesting Date as described in Section II.B.4.; provided that you have satisfied the conditions described in Section III.I.2. For the avoidance of doubt, this section III.F.1.b. shall not apply (and rather Section III.F.1.a. shall apply) if you are determined by the Company, in its sole discretion, to be employed within the European Union. For the further avoidance of doubt, if your termination of employment occurs on a Stock Unit Scheduled Vesting Date, distribution will occur as soon as practicable following such Stock Unit Scheduled Vesting Date as described in Section II.B.4.
|
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, a pro-rata portion of the unvested PSUs that are outstanding as of such termination of employment will remain outstanding (as described in Section III.J.) until the PSU Scheduled Vesting Date and will be distributed as soon as practicable following the PSU Scheduled Vesting Date as described in Section II.C.4; provided that you have satisfied the conditions described in Section III.I.2., and provided further that the number of shares of Common Stock distributable in respect of such PSUs will be determined in accordance with Section II.C.1. The portion of the unvested PSUs that does not remain outstanding pursuant to this paragraph will be forfeited and cancelled. 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, all unvested PSUs that are outstanding as of such termination of employment will remain outstanding until the PSU Scheduled Vesting Date and will be distributed as soon as practicable following the PSU Scheduled Vesting Date as described in Section II.C.4; provided that you have satisfied the
|
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., 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 an Option 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 Option 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 Section 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
|
I.
|
Conditions for All or a Portion of an Award to Remain Outstanding Following a Termination of Employment and Exercisability of Options Following a Termination of Employment.
|
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 or to continue to be in compliance with the Restrictive Covenants Agreement as of the delivery date for Stock Units and Performance Stock Units (as described in Section II.B.4. or II.C.4., as applicable) or, at the Company’s discretion, to reaffirm compliance prior to the delivery date, 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 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, or continue to be in compliance with the applicable agreement as of the delivery date for Stock Units and Performance Stock Units (as described in Section II.B.4. or II.C.4., as applicable) and, at the Company’s discretion, to reaffirm compliance prior to the delivery date, will result in the cancellation or forfeiture of any rights, title and interest in and to the Award without any liability to the Company.
|
J.
|
Determination of Pro-Rata Calculation 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 Stock Unit 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.
|
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 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, 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 can be distributed prior to the first day of the seventh month after your termination of employment and any such distributions to which you would otherwise be entitled during the first six months following your termination of employment will be accumulated and paid without interest on the first day of the seventh month after your termination of employment. The provisions of this subparagraph will only apply if and to the extent required to avoid any “additional tax” under Section 409A of the Code.
|
4.
|
Notwithstanding any provision herein, if (i) a Change in Control occurs on or prior to December 31 of the second year of the three-year Performance Period and (ii) no earlier than in the third year of the three-year Performance Period, (A) you satisfy the Age and Service Criteria for Pro-Rata Vesting, (B) you satisfy the Age and Service Criteria for Full Vesting, (C) you are determined by the Retirement Treatment Committee to be eligible for retirement treatment on or following your termination of employment, (D) you are terminated by the Company other than for Cause, or (E) the occurrence of your Permanent Disability, 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 following the PSU Scheduled Vesting Date, and in no event later than March 15 of the year in which the PSU Scheduled Vesting Date occurs.
|
5.
|
Notwithstanding any other provision herein (other than Section III.K.6.a.) with respect to Stock Units (and any dividend equivalents payable 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 Stock Unit 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 Stock Unit 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] Stock Unit Scheduled Vesting Date will be delivered by March 15, [YEAR].
|
c.
|
If your employment is terminated on or after March 1 but on or before December 31 in any year pursuant to Section III.B.1. (Permanent Disability), C.1. (Age and Service Pro-Rata Vesting), or E.1. (Termination Other Than for Cause), then shares of Common Stock and/or cash pursuant to Section II.B.4. will be delivered by March 15 of the year following the year of such termination.
|
6.
|
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 (as defined in Section V.E.) 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
|
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] and (ii) where such distributions are subject to one or more Employment-Related Actions:
|
i.
|
With respect to Stock Units, no later than December 31
st
of the year in which the Stock Unit Scheduled Vesting 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, 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 Stock Unit 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.
|
7.
|
Special 409A Distribution Provisions for Performance Stock Units and payments attributable to Performance Stock Units.
|
a.
|
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 and (ii) where such distributions are subject to one or more Employment-Related Actions:
|
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.
|
8.
|
Nothing in this Section III.K. 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.
|
Treatment of Awards - Stock Units and Performance Stock Units.
|
1.
|
General
. Upon the occurrence of a Change in Control, the Stock Units and PSUs will continue to vest in accordance with the vesting schedule specified in Sections II.B.2. and II.C.2., subject to earlier vesting or forfeiture pursuant to Section III.;
|
2.
|
Awards Not Assumed.
Notwithstanding the foregoing, if the Stock Units or PSUs are not assumed, converted or replaced in connection with a Change in Control on an equivalent basis, such Stock Units or PSUs will fully vest immediately prior to the Change in Control and will be distributed as soon as practicable following vesting and in no event later than 60 days following vesting.
|
3.
|
Calculation of Shares Distributable with Respect to PSUs.
Upon the occurrence of a
“
Change in Control
”
, the Performance Period shall be deemed to have ended on December 31 of the year preceding the year in which the Change in Control occurs, and the number of shares of Common Stock distributable in respect of the PSUs (subject to the vesting conditions applicable thereto) will be determined in accordance with Section II.C.1.; provided that, in the event that the 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 that vests.
|
B.
|
Treatment of Awards - Stock Options
|
C.
|
Waiver and Release
|
D.
|
Other Matters
|
A.
|
“Age and Service Criteria for Full Vesting”
shall mean you are at least age 65 and have a minimum of one year of service with the Company.
For the avoidance of doubt, Age and Service Criteria for Full Vesting is not applicable to you if you are determined by the Company, in its sole discretion, to be employed within the European Union.
|
B.
|
“Age and Service Criteria for Pro-Rata Vesting”
shall mean you are at least age 55 but are not yet age 65 and have a minimum of five years of service with the Company. For the avoidance of doubt, Age and Service Criteria for Pro-Rata Vesting is not applicable to you if you are determined by the Company, in its sole discretion, to be employed within the European Union.
|
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 Conduct,
The Greater Good
;
|
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.
|
“Employment-Related Action”
shall mean the execution and effectiveness of a release of claims and/or a restrictive covenant.
|
F.
|
“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; provided that you provide Marsh & McLennan Companies with written notice of your intent to terminate your employment for Good Reason within 60 days of your becoming aware of any circumstances set forth above (with such notice indicating the specific termination provision above on which you are relying and describing in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the indicated provision) and that you provide Marsh & McLennan Companies with at least 30 days following receipt of such notice to remedy such circumstances.
|
G.
|
“Performance Period”
shall mean the period that begins on January 1, [YEAR] and ends on December 31, [YEAR]; provided that in the event of a termination of your employment due to death prior to a Change in Control, such period will end on December 31 of the year prior to such termination of employment 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.
|
H.
|
“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.
|
I.
|
“Retirement Treatment Committee”
is comprised of employees of the Company appointed by the Committee.
|
J.
|
“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).
|
K.
|
Additional Definitions.
|
Award
|
1
|
|
Award Documentation
|
1
|
|
Change in Control
|
2
|
|
Committee
|
3
|
|
Common Stock
|
1
|
|
Country-Specific Notices
|
1
|
|
Dividend Equivalent
|
2
|
|
Employing Company
|
14
|
|
Exercise Notice
|
5
|
|
Grant Documentation
|
1
|
|
Marsh & McLennan Companies
|
1
|
|
Option
|
4
|
|
Option Expiration Date
|
5
|
|
Option Scheduled Vesting Date
|
5
|
|
Option Shares
|
5
|
|
Plan
|
1
|
|
PSU
|
3
|
|
PSU Scheduled Vesting Date
|
3
|
|
Restrictive Covenants Agreement
|
1
|
|
Stock Unit
|
2
|
|
Stock Unit Scheduled Vesting Date
|
2
|
|
Substantial Risk of Forfeiture
|
18
|
|
Terms and Conditions
|
1
|
|
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 Stock Unit Scheduled Vesting Date or the PSU Scheduled Vesting Date, (iii) you receive delivery of the portion of the Award that was thought to have vested on such Stock Unit Scheduled Vesting Date or the PSU 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 Stock Unit Scheduled Vesting Date or the PSU Scheduled
|
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 arising out of or relating to this Award, including without limitation, 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. 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 (as described in these Terms and Conditions) to a participant outside the United States would not be appropriate, then Marsh & McLennan Companies may, in its sole discretion, determine how and when 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 or, delivering or paying out the Award as soon as practicable following a termination of employment. 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.
|
I. BACKGROUND
|
1
|
II. AWARDS
|
1
|
A. General
|
1
|
1. Award Acceptance
|
1
|
2. Rights of Award Holders
|
1
|
3. Restrictive Covenants Agreement
|
1
|
B. Stock Units
|
2
|
1. General
|
2
|
2. Vesting
|
2
|
3. Dividend Equivalents
|
2
|
4. Delivery
|
2
|
C. Satisfaction of Tax Obligations
|
3
|
1. Personal Tax Advisor
|
3
|
2. U.S. Employees
|
3
|
3. Non-U.S. Employees
|
3
|
a. Stock Units and Dividend Equivalents
|
3
|
b. Withholding
|
3
|
III. EMPLOYMENT EVENTS
|
4
|
A. Death
|
4
|
B. Permanent Disability
|
4
|
C. Termination by the Company Other Than for Cause
|
4
|
1. General
|
4
|
2. Important Notes
|
4
|
a. Sale of Business Unit
|
4
|
b. Constructive Discharge
|
4
|
D. All Other Terminations
|
4
|
E. Date of Termination of Employment
|
5
|
F. Conditions to Vesting of Award Prior to [a] Scheduled Vesting Date
|
5
|
1. Restrictive Covenants Agreement
|
5
|
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 Award Recipients Subject to U.S.
Federal Income Tax
|
6
|
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.
|
1.
|
Award Acceptance.
The grant of this Award is contingent upon your acceptance, by the date and in the manner specified in the Grant Documentation, of these Terms and Conditions, the Country-Specific Notices (if applicable) and Restrictive Covenants Agreement as described in Section II.A.3. If you decline the Award or if you do not accept the Award and any applicable documents described in the preceding sentence by the date and in the manner specified in the Grant Documentation, then the Award will be cancelled as of the grant date of the Award.
|
2.
|
Rights of Award Holders.
Unless and until the vesting conditions of the Award have been satisfied and cash or shares of Common Stock, as applicable, have been delivered to you in accordance with the Award Documentation, you have only the rights of a general unsecured creditor of Marsh & McLennan Companies. Unless and until shares of Common Stock have been delivered to you, you have none of the rights of ownership to such shares (e.g., units cannot be used as payment for stock option exercises; units may not be transferred or assigned; units have no voting rights).
|
3.
|
Restrictive Covenants Agreement.
As described in Section II.A.1., a Restrictive Covenants Agreement (
“Restrictive Covenants Agreement”
) in a form determined by Marsh & McLennan Companies must be in place in order to accept the Award and you must execute or reaffirm, as determined by Marsh & McLennan Companies, in its sole discretion, the Restrictive Covenants Agreement in order for the Award to vest pursuant to certain employment events as described in Section III. Failure to
|
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.
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 60 days after vesting.
|
b.
|
The value of vested Dividend Equivalents will be delivered to you in cash as soon as practicable after vesting and in no event later than 60 days after vesting.
|
c.
|
The delivery of shares of Common Stock and/or cash or other property that may be deliverable under these Terms and Conditions, is conditioned on the satisfaction or withholding of any applicable tax obligations, as described in Section II.C.
|
d.
|
Any shares of Common Stock and/or cash or other property that may be deliverable following your death shall be delivered to the person or persons to whom your rights pass by will or the law of descent and distribution, and such delivery shall completely discharge Marsh & McLennan Companies and any of its subsidiaries’ or affiliates’ obligations under the Award.
|
e.
|
Notwithstanding the foregoing,
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 or Dividend Equivalent is generally not taxable on the grant date. If the value of the Stock Unit 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 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,
|
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
|
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
|
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 Conduct,
The Greater Good
;
|
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
|
1
|
|
Award Documentation
|
1
|
|
Change in Control
|
8
|
|
Committee
|
6
|
|
Common Stock
|
1
|
|
Country-Specific Notices
|
1
|
|
Dividend Equivalent
|
2
|
|
Employing Company
|
4
|
|
Grant Documentation
|
1
|
|
Marsh & McLennan Companies
|
1
|
|
Plan
|
1
|
|
Restrictive Covenants Agreement
|
1
|
|
Scheduled Vesting Date
|
2
|
|
Stock Unit
|
2
|
|
Terms and Conditions
|
1
|
|
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
|
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 arising out of or relating to this Award, including without limitation, 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. 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 (as described in these Terms and Conditions) to a participant outside the United States would not be appropriate, then Marsh & McLennan Companies may, in its sole discretion, determine how and when 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
|
|
Three Months Ended
March 31, 2016 |
Years Ended December 31,
|
|||||||||||||||||||||
|
(Unaudited)
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||||
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income before income taxes
|
$
|
686
|
|
|
$
|
2,307
|
|
|
$
|
2,057
|
|
|
$
|
1,973
|
|
|
$
|
1,696
|
|
|
$
|
1,404
|
|
Interest expense
|
46
|
|
|
163
|
|
|
165
|
|
|
167
|
|
|
181
|
|
|
199
|
|
||||||
Portion of rents representative of the interest factor
|
36
|
|
|
127
|
|
|
131
|
|
|
134
|
|
|
139
|
|
|
143
|
|
||||||
|
$
|
768
|
|
|
$
|
2,597
|
|
|
$
|
2,353
|
|
|
$
|
2,274
|
|
|
$
|
2,016
|
|
|
$
|
1,746
|
|
Fixed Charges
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
$
|
46
|
|
|
$
|
163
|
|
|
$
|
165
|
|
|
$
|
167
|
|
|
$
|
181
|
|
|
$
|
199
|
|
Portion of rents representative of the interest factor
|
36
|
|
|
127
|
|
|
131
|
|
|
134
|
|
|
139
|
|
|
143
|
|
||||||
|
$
|
82
|
|
|
$
|
290
|
|
|
$
|
296
|
|
|
$
|
301
|
|
|
$
|
320
|
|
|
$
|
342
|
|
Ratio of Earnings to Fixed Charges
|
9.4
|
|
|
9.0
|
|
|
7.9
|
|
|
7.6
|
|
|
6.3
|
|
|
5.1
|
|
Date:
|
May 2, 2016
|
|
/s/ Daniel S. Glaser
|
|
|
|
Daniel S. Glaser
|
|
|
|
President and Chief Executive Officer
|
Date:
|
May 2, 2016
|
|
/s/ Mark C. McGivney
|
|
|
|
Mark C. McGivney
|
|
|
|
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 2, 2016
|
|
/s/ Daniel S. Glaser
|
|
|
|
Daniel S. Glaser
|
|
|
|
President and Chief Executive Officer
|
Date:
|
May 2, 2016
|
|
/s/ Mark C. McGivney
|
|
|
|
Mark C. McGivney
|
|
|
|
Chief Financial Officer
|