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☒
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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☐
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Large Accelerated Filer
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☒
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Accelerated Filer
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☐
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Non-Accelerated Filer
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☐(Do not check if a smaller reporting company)
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Smaller Reporting Company
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☐
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Emerging Growth Company
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☐
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•
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our ability to successfully integrate or achieve the intended benefits of the acquisition of JLT;
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•
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our organization's ability to maintain adequate safeguards to protect the security of our information systems and confidential, personal or proprietary information, particularly given the large volume of our vendor network and the need to identify and patch software vulnerabilities, including those in the existing JLT information systems;
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•
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our ability to repay our outstanding long-term debt in a timely manner and on favorable terms, including approximately $6.8 billion issued in connection with the acquisition of JLT;
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•
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the impact of any investigations, reviews, or other activity by regulatory or law enforcement authorities, including the ongoing investigation by the European Commission competition authority;
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•
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the impact from lawsuits, other contingent liabilities and loss contingencies arising from errors and omissions, breach of fiduciary duty or other claims against us;
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•
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our ability to compete effectively and adapt to changes in the competitive environment, including to respond to disintermediation, digital disruption and other types of innovation;
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•
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the financial and operational impact of complying with laws and regulations where we operate and the risks of noncompliance with such laws, including cybersecurity and data privacy regulations such as the E.U.’s General Data Protection Regulation, anti-corruption laws such as the U.S. Foreign Corrupt Practices Act and trade sanctions regimes;
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•
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the impact of macroeconomic, political, regulatory or market conditions on us, our clients and the industries in which we operate, including the impact and uncertainty around Brexit or the inability to collect on our receivables;
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•
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the regulatory, contractual and reputational risks that arise based on insurance placement activities and various broker revenue streams;
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•
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our ability to manage risks associated with our investment management and related services business, including potential conflicts of interest between investment consulting and fiduciary management services;
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•
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our ability to successfully recover if we experience a business continuity problem due to cyberattack, natural disaster or otherwise; and
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•
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the impact of changes in tax laws, guidance and interpretations, including certain provisions of the U.S. Tax Cuts and Jobs Act, or disagreements with tax authorities.
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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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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
June 30, |
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Six Months Ended
June 30, |
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(In millions, except per share amounts)
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2019
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2018
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2019
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2018
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Revenue
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$
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4,349
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$
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3,734
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$
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8,420
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$
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7,734
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Expense:
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||||||||
Compensation and benefits
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2,537
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2,135
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4,819
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4,359
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Other operating expenses
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1,132
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908
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1,983
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1,776
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Operating expenses
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3,669
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3,043
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6,802
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6,135
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Operating income
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680
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691
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1,618
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1,599
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||||
Other net benefit credits
|
70
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65
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134
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131
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||||
Interest income
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2
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3
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30
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6
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Interest expense
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(141
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)
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(68
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)
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(261
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)
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(129
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)
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Cost of extinguishment of debt
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(32
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)
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—
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(32
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)
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—
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Investment income
|
8
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28
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13
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28
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||||
Acquisition related derivative contracts
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(37
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)
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—
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(8
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)
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—
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Income before income taxes
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550
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719
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1,494
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1,635
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Income tax expense
|
206
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183
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423
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403
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Net income before non-controlling interests
|
344
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536
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1,071
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1,232
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Less: Net income attributable to non-controlling interests
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12
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5
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23
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11
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Net income attributable to the Company
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$
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332
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$
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531
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$
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1,048
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$
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1,221
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Net income Per Share Attributable to the Company:
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Basic
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$
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0.66
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$
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1.05
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$
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2.07
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$
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2.41
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Diluted
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$
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0.65
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$
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1.04
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$
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2.05
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$
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2.38
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Average number of shares outstanding:
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Basic
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507
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507
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506
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507
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Diluted
|
512
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512
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511
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513
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Shares outstanding at June 30,
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507
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505
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507
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505
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Three Months Ended
June 30, |
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Six Months Ended
June 30, |
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(In millions)
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2019
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2018
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2019
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2018
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Net income before non-controlling interests
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$
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344
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$
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536
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$
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1,071
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$
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1,232
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Other comprehensive income (loss), before tax:
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Foreign currency translation adjustments
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13
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(529
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)
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109
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(301
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)
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Gain related to pension/post-retirement plans
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63
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192
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20
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108
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Other comprehensive income (loss), before tax
|
76
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(337
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)
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129
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(193
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)
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Income tax on other comprehensive income
|
13
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23
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9
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15
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Other comprehensive income (loss), net of tax
|
63
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(360
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)
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|
120
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(208
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)
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||||
Comprehensive income
|
407
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|
176
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1,191
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|
1,024
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Less: comprehensive income attributable to non-controlling interest
|
12
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5
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23
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11
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|
||||
Comprehensive income attributable to the Company
|
$
|
395
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$
|
171
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$
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1,168
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$
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1,013
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(In millions, except share amounts)
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(Unaudited)
June 30, 2019 |
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December 31,
2018 |
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ASSETS
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Current assets:
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Cash and cash equivalents
|
$
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1,294
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$
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1,066
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Receivables
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|
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||||
Commissions and fees
|
5,057
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3,984
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Advanced premiums and claims
|
91
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79
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|
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Other
|
547
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366
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5,695
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4,429
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Less-allowance for doubtful accounts and cancellations
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(142
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)
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(112
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)
|
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Net receivables
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5,553
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4,317
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Other current assets
|
679
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|
551
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Total current assets
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7,526
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5,934
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Goodwill
|
14,479
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9,599
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Other intangible assets
|
3,083
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|
1,437
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|
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Fixed assets
(net of accumulated depreciation and amortization of $2,018 at June 30, 2019 and $1,842 at December 31, 2018) |
799
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|
|
701
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|
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Pension related assets
|
1,821
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1,688
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|
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Right of use assets
|
2,016
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|
|
—
|
|
||
Deferred tax assets
|
628
|
|
|
680
|
|
||
Other assets
|
1,764
|
|
|
1,539
|
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||
|
$
|
32,116
|
|
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$
|
21,578
|
|
(In millions, except share amounts)
|
(Unaudited)
June 30, 2019 |
|
December 31,
2018 |
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term debt
|
$
|
1,663
|
|
|
$
|
314
|
|
Accounts payable and accrued liabilities
|
2,600
|
|
|
2,234
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|
||
Accrued compensation and employee benefits
|
1,375
|
|
|
1,778
|
|
||
Acquisition related derivatives
|
—
|
|
|
441
|
|
||
Current lease liabilities
|
347
|
|
|
—
|
|
||
Accrued income taxes
|
165
|
|
|
157
|
|
||
Dividends payable
|
232
|
|
|
—
|
|
||
Total current liabilities
|
6,382
|
|
|
4,924
|
|
||
Fiduciary liabilities
|
6,807
|
|
|
5,001
|
|
||
Less – cash and investments held in a fiduciary capacity
|
(6,807
|
)
|
|
(5,001
|
)
|
||
|
—
|
|
|
—
|
|
||
Long-term debt
|
11,459
|
|
|
5,510
|
|
||
Pension, post-retirement and post-employment benefits
|
2,044
|
|
|
1,911
|
|
||
Long-term lease liabilities
|
1,981
|
|
|
—
|
|
||
Liabilities for errors and omissions
|
319
|
|
|
287
|
|
||
Other liabilities
|
1,594
|
|
|
1,362
|
|
||
Commitments and contingencies
|
—
|
|
|
—
|
|
||
Equity:
|
|
|
|
||||
Preferred stock, $1 par value, authorized 6,000,000 shares, none issued
|
—
|
|
|
—
|
|
||
Common stock, $1 par value, authorized 1,600,000,000 shares,
issued 560,641,640 shares at June 30, 2019 and December 31, 2018
|
561
|
|
|
561
|
|
||
Additional paid-in capital
|
736
|
|
|
817
|
|
||
Retained earnings
|
14,741
|
|
|
14,347
|
|
||
Accumulated other comprehensive loss
|
(4,527
|
)
|
|
(4,647
|
)
|
||
Non-controlling interests
|
272
|
|
|
73
|
|
||
|
11,783
|
|
|
11,151
|
|
||
Less – treasury shares, at cost, 54,073,164 shares at June 30, 2019
and 56,804,468 shares at December 31, 2018
|
(3,446
|
)
|
|
(3,567
|
)
|
||
Total equity
|
8,337
|
|
|
7,584
|
|
||
|
$
|
32,116
|
|
|
$
|
21,578
|
|
For the Six Months Ended June 30,
|
|
|
|
||||
(In millions)
|
2019
|
|
|
2018
|
|
||
Operating cash flows:
|
|
|
|
||||
Net income before non-controlling interests
|
$
|
1,071
|
|
|
$
|
1,232
|
|
Adjustments to reconcile net income to cash provided by operations:
|
|
|
|
||||
Depreciation and amortization of fixed assets and capitalized software
|
159
|
|
|
159
|
|
||
Amortization of intangible assets
|
151
|
|
|
88
|
|
||
Non cash lease expense
|
151
|
|
|
—
|
|
||
Adjustments and payments related to contingent consideration liability
|
(9
|
)
|
|
2
|
|
||
Charge for early extinguishment of debt
|
32
|
|
|
—
|
|
||
Provision for deferred income taxes
|
82
|
|
|
34
|
|
||
Gain on investments
|
(13
|
)
|
|
(28
|
)
|
||
Loss (gain) on disposition of assets
|
21
|
|
|
(1
|
)
|
||
Share-based compensation expense
|
117
|
|
|
99
|
|
||
Change in fair value of acquisition-related derivative contracts
|
8
|
|
|
—
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Net receivables
|
(437
|
)
|
|
(388
|
)
|
||
Other current assets
|
(4
|
)
|
|
4
|
|
||
Other assets
|
(33
|
)
|
|
(10
|
)
|
||
Accounts payable and accrued liabilities
|
29
|
|
|
30
|
|
||
Accrued compensation and employee benefits
|
(670
|
)
|
|
(614
|
)
|
||
Accrued income taxes
|
6
|
|
|
18
|
|
||
Contributions to pension and other benefit plans in excess of current year expense/credit
|
(172
|
)
|
|
(178
|
)
|
||
Other liabilities
|
36
|
|
|
(10
|
)
|
||
Operating lease liabilities
|
(155
|
)
|
|
—
|
|
||
Effect of exchange rate changes
|
(129
|
)
|
|
(24
|
)
|
||
Net cash provided by operations
|
241
|
|
|
413
|
|
||
Financing cash flows:
|
|
|
|
||||
Purchase of treasury shares
|
(100
|
)
|
|
(500
|
)
|
||
Net increase in commercial paper
|
549
|
|
|
175
|
|
||
Net increase in short term borrowings
|
300
|
|
|
—
|
|
||
Proceeds from issuance of debt
|
6,459
|
|
|
592
|
|
||
Repayments of debt
|
(457
|
)
|
|
(6
|
)
|
||
Payments for early extinguishment of debt
|
(585
|
)
|
|
—
|
|
||
Purchase of non-controlling interests
|
(50
|
)
|
|
—
|
|
||
Acquisition-related derivative payments
|
(337
|
)
|
|
—
|
|
||
Shares withheld for taxes on vested units – treasury shares
|
(87
|
)
|
|
(62
|
)
|
||
Issuance of common stock from treasury shares
|
108
|
|
|
48
|
|
||
Payments of deferred and contingent consideration for acquisitions
|
(39
|
)
|
|
(85
|
)
|
||
Distributions of non-controlling interests
|
(15
|
)
|
|
(11
|
)
|
||
Dividends paid
|
(422
|
)
|
|
(383
|
)
|
||
Net cash provided by (used for) financing activities
|
5,324
|
|
|
(232
|
)
|
||
Investing cash flows:
|
|
|
|
||||
Capital expenditures
|
(161
|
)
|
|
(135
|
)
|
||
Sales (Purchases) of long-term investments
|
202
|
|
|
(3
|
)
|
||
Purchase of equity investment
|
(91
|
)
|
|
—
|
|
||
Proceeds from sales of fixed assets
|
2
|
|
|
1
|
|
||
Dispositions
|
165
|
|
|
4
|
|
||
Acquisitions
|
(5,500
|
)
|
|
(144
|
)
|
||
Other, net
|
(47
|
)
|
|
(2
|
)
|
||
Net cash used for investing activities
|
(5,430
|
)
|
|
(279
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
93
|
|
|
(71
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
228
|
|
|
(169
|
)
|
||
Cash and cash equivalents at beginning of period
|
1,066
|
|
|
1,205
|
|
||
Cash and cash equivalents at end of period
|
$
|
1,294
|
|
|
$
|
1,036
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In millions, except per share amounts)
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
COMMON STOCK
|
|
|
|
|
|
|
|
||||||||
Balance, beginning and end of period
|
$
|
561
|
|
|
$
|
561
|
|
|
$
|
561
|
|
|
$
|
561
|
|
ADDITIONAL PAID-IN CAPITAL
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of period
|
$
|
681
|
|
|
$
|
682
|
|
|
$
|
817
|
|
|
$
|
784
|
|
Change in accrued stock compensation costs
|
59
|
|
|
49
|
|
|
(42
|
)
|
|
(26
|
)
|
||||
Issuance of shares under stock compensation plans and employee stock purchase plans
|
(4
|
)
|
|
1
|
|
|
(39
|
)
|
|
(26
|
)
|
||||
Balance, end of period
|
$
|
736
|
|
|
$
|
732
|
|
|
$
|
736
|
|
|
$
|
732
|
|
RETAINED EARNINGS
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of period
|
$
|
14,642
|
|
|
$
|
13,812
|
|
|
$
|
14,347
|
|
|
$
|
13,140
|
|
Cumulative effect of adoption of the revenue recognition standard
(See Note 19)
|
—
|
|
|
—
|
|
|
—
|
|
|
364
|
|
||||
Net income attributable to the Company
|
332
|
|
|
531
|
|
|
1,048
|
|
|
1,221
|
|
||||
Dividend equivalents declared
|
(2
|
)
|
|
(2
|
)
|
|
(4
|
)
|
|
(3
|
)
|
||||
Dividends declared
|
(231
|
)
|
|
(210
|
)
|
|
(650
|
)
|
|
(591
|
)
|
||||
Balance, end of period
|
$
|
14,741
|
|
|
$
|
14,131
|
|
|
$
|
14,741
|
|
|
$
|
14,131
|
|
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of period
|
$
|
(4,590
|
)
|
|
$
|
(3,905
|
)
|
|
$
|
(4,647
|
)
|
|
$
|
(4,043
|
)
|
Cumulative effect of adoption of the financial instruments standard (See Note 19)
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
||||
Other comprehensive income (loss), net of tax
|
63
|
|
|
(360
|
)
|
|
120
|
|
|
(208
|
)
|
||||
Balance, end of period
|
$
|
(4,527
|
)
|
|
$
|
(4,265
|
)
|
|
$
|
(4,527
|
)
|
|
$
|
(4,265
|
)
|
TREASURY SHARES
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of period
|
$
|
(3,385
|
)
|
|
$
|
(3,210
|
)
|
|
$
|
(3,567
|
)
|
|
$
|
(3,083
|
)
|
Issuance of shares under stock compensation plans and employee stock purchase plans
|
39
|
|
|
17
|
|
|
221
|
|
|
140
|
|
||||
Purchase of treasury shares
|
(100
|
)
|
|
(250
|
)
|
|
(100
|
)
|
|
(500
|
)
|
||||
Balance, end of period
|
$
|
(3,446
|
)
|
|
$
|
(3,443
|
)
|
|
$
|
(3,446
|
)
|
|
$
|
(3,443
|
)
|
NON-CONTROLLING INTERESTS
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of period
|
$
|
77
|
|
|
$
|
81
|
|
|
$
|
73
|
|
|
$
|
83
|
|
Net income attributable to non-controlling interests
|
12
|
|
|
5
|
|
|
23
|
|
|
11
|
|
||||
Net non-controlling interests acquired
|
195
|
|
|
—
|
|
|
195
|
|
|
—
|
|
||||
Distributions and other changes
|
(12
|
)
|
|
(5
|
)
|
|
(19
|
)
|
|
(13
|
)
|
||||
Balance, end of period
|
$
|
272
|
|
|
$
|
81
|
|
|
$
|
272
|
|
|
$
|
81
|
|
TOTAL EQUITY
|
$
|
8,337
|
|
|
$
|
7,797
|
|
|
$
|
8,337
|
|
|
$
|
7,797
|
|
Dividends declared per share
|
$
|
0.455
|
|
|
$
|
0.415
|
|
|
$
|
1.285
|
|
|
$
|
1.165
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||
(In millions)
|
|
2019
|
|
2019
|
||||
Marsh:
|
|
|
|
|
||||
EMEA
|
|
$
|
652
|
|
|
$
|
1,285
|
|
Asia Pacific
|
|
291
|
|
|
456
|
|
||
Latin America
|
|
116
|
|
|
194
|
|
||
Total International
|
|
1,059
|
|
|
1,935
|
|
||
U.S./Canada
|
|
1,097
|
|
|
1,958
|
|
||
Total Marsh
|
|
2,156
|
|
|
3,893
|
|
||
Guy Carpenter
|
|
392
|
|
|
1,055
|
|
||
Subtotal
|
|
2,548
|
|
|
4,948
|
|
||
Fiduciary interest income
|
|
26
|
|
|
49
|
|
||
Total Risk and Insurance Services
|
|
$
|
2,574
|
|
|
$
|
4,997
|
|
Mercer:
|
|
|
|
|
||||
Wealth
|
|
$
|
613
|
|
|
$
|
1,156
|
|
Health
|
|
458
|
|
|
900
|
|
||
Career
|
|
189
|
|
|
359
|
|
||
Total Mercer
|
|
1,260
|
|
|
2,415
|
|
||
Oliver Wyman
|
|
540
|
|
|
1,058
|
|
||
Total Consulting
|
|
$
|
1,800
|
|
|
$
|
3,473
|
|
(In millions)
|
|
June 30, 2019
|
|
January 1, 2019
|
||||
Contract Assets
|
|
$
|
275
|
|
|
$
|
112
|
|
Contract Liabilities
|
|
$
|
641
|
|
|
$
|
545
|
|
|
Basic and Diluted EPS Calculation
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In millions, except per share amounts)
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
Net income before non-controlling interests
|
$
|
344
|
|
|
$
|
536
|
|
|
$
|
1,071
|
|
|
$
|
1,232
|
|
Less: Net income attributable to non-controlling interests
|
12
|
|
|
5
|
|
|
23
|
|
|
11
|
|
||||
Net income attributable to the Company
|
$
|
332
|
|
|
$
|
531
|
|
|
$
|
1,048
|
|
|
$
|
1,221
|
|
Basic weighted average common shares outstanding
|
507
|
|
|
507
|
|
|
506
|
|
|
507
|
|
||||
Dilutive effect of potentially issuable common shares
|
5
|
|
|
5
|
|
|
5
|
|
|
6
|
|
||||
Diluted weighted average common shares outstanding
|
512
|
|
|
512
|
|
|
511
|
|
|
513
|
|
||||
Average stock price used to calculate common stock equivalents
|
$
|
95.74
|
|
|
$
|
81.64
|
|
|
$
|
92.14
|
|
|
$
|
82.24
|
|
(In millions)
|
2019
|
|
|
2018
|
|
||
Assets acquired, excluding cash
|
$
|
8,593
|
|
|
$
|
204
|
|
Liabilities assumed
|
(2,718
|
)
|
|
(28
|
)
|
||
Non-controlling interests assumed
|
(309
|
)
|
|
—
|
|
||
Contingent/deferred purchase consideration
|
(66
|
)
|
|
(32
|
)
|
||
Net cash outflow for current year acquisitions
|
$
|
5,500
|
|
|
$
|
144
|
|
(In millions)
|
2019
|
|
|
2018
|
|
||
Interest paid
|
$
|
141
|
|
|
$
|
107
|
|
Income taxes paid, net of refunds
|
$
|
327
|
|
|
$
|
349
|
|
(In millions)
|
Unrealized Investment Gains (Losses)
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Gains (Losses)
|
|
Total Gains (Losses)
|
||||||||
Balance as of April 1, 2019
|
$
|
—
|
|
|
$
|
(2,990
|
)
|
|
$
|
(1,600
|
)
|
|
$
|
(4,590
|
)
|
Other comprehensive income before reclassifications
|
—
|
|
|
29
|
|
|
15
|
|
|
44
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
||||
Net current period other comprehensive income
|
—
|
|
|
48
|
|
|
15
|
|
|
63
|
|
||||
Balance as of June 30, 2019
|
$
|
—
|
|
|
$
|
(2,942
|
)
|
|
$
|
(1,585
|
)
|
|
$
|
(4,527
|
)
|
(In millions)
|
Unrealized Investment Gains (Losses)
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Gains (Losses)
|
|
Total Gains (Losses)
|
||||||||
Balance as of April 1, 2018
|
$
|
—
|
|
|
$
|
(2,963
|
)
|
|
$
|
(942
|
)
|
|
$
|
(3,905
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
129
|
|
|
(516
|
)
|
|
(387
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
27
|
|
|
—
|
|
|
27
|
|
||||
Net current period other comprehensive income (loss)
|
—
|
|
|
156
|
|
|
(516
|
)
|
|
(360
|
)
|
||||
Balance as of June 30, 2018
|
$
|
—
|
|
|
$
|
(2,807
|
)
|
|
$
|
(1,458
|
)
|
|
$
|
(4,265
|
)
|
(In millions)
|
Unrealized Investment Gains (Losses)
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Gains (Losses)
|
|
Total Gains (Losses)
|
||||||||
Balance as of December 31, 2018
|
$
|
—
|
|
|
$
|
(2,953
|
)
|
|
$
|
(1,694
|
)
|
|
$
|
(4,647
|
)
|
Other comprehensive (loss) income before reclassifications
|
—
|
|
|
(30
|
)
|
|
109
|
|
|
79
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
41
|
|
|
—
|
|
|
41
|
|
||||
Net current period other comprehensive income
|
—
|
|
|
11
|
|
|
109
|
|
|
120
|
|
||||
Balance as of June 30, 2019
|
$
|
—
|
|
|
$
|
(2,942
|
)
|
|
$
|
(1,585
|
)
|
|
$
|
(4,527
|
)
|
(In millions)
|
Unrealized Investment Gains (Losses)
|
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Gains (Losses)
|
|
Total Gains (Losses)
|
||||||||
Balance as of December 31, 2017
|
$
|
14
|
|
|
$
|
(2,892
|
)
|
|
$
|
(1,165
|
)
|
|
$
|
(4,043
|
)
|
Cumulative effect of amended accounting standard
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
||||
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
29
|
|
|
(293
|
)
|
|
(264
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
56
|
|
|
—
|
|
|
56
|
|
||||
Net current period other comprehensive income (loss)
|
—
|
|
|
85
|
|
|
(293
|
)
|
|
(208
|
)
|
||||
Balance as of June 30, 2018
|
$
|
—
|
|
|
$
|
(2,807
|
)
|
|
$
|
(1,458
|
)
|
|
$
|
(4,265
|
)
|
•
|
February – MMA acquired Bouchard Insurance, Inc., a Florida-based full service agency and Employee Benefits Group, Inc., a Maryland-based independent insurance agency.
|
•
|
April – MMA acquired Lovitt & Touche, Inc., an Arizona-based insurance agency and The Centurion Group, LLC, a Pennsylvania-based retirement consulting, asset management and benefit plan advisory firm.
|
Acquisitions through June 30, 2019
|
|
|
|
||||||
(In millions)
|
JLT
|
Other
|
Total Acquisitions
|
||||||
Cash
|
$
|
5,568
|
|
$
|
291
|
|
$
|
5,859
|
|
Estimated fair value of deferred/contingent consideration
|
—
|
|
66
|
|
66
|
|
|||
Total consideration
|
$
|
5,568
|
|
$
|
357
|
|
$
|
5,925
|
|
Allocation of purchase price:
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
353
|
|
$
|
6
|
|
$
|
359
|
|
Accounts receivable, net
|
714
|
|
6
|
|
720
|
|
|||
Other current assets
|
143
|
|
—
|
|
143
|
|
|||
Fixed assets, net
|
81
|
|
2
|
|
83
|
|
|||
Other intangible assets
|
1,662
|
|
143
|
|
1,805
|
|
|||
Goodwill
|
4,695
|
|
200
|
|
4,895
|
|
|||
Right of use assets
|
379
|
|
—
|
|
379
|
|
|||
Deferred tax assets
|
57
|
|
—
|
|
57
|
|
|||
Other assets
|
503
|
|
8
|
|
511
|
|
|||
Total assets acquired
|
8,587
|
|
365
|
|
8,952
|
|
|||
Current liabilities
|
699
|
|
5
|
|
704
|
|
|||
Fiduciary liabilities
|
1,275
|
|
—
|
|
1,275
|
|
|||
Less- fiduciary assets
|
(1,275
|
)
|
—
|
|
(1,275
|
)
|
|||
Long-term debt
|
1,044
|
|
—
|
|
1,044
|
|
|||
Long-term lease liability
|
386
|
|
—
|
|
386
|
|
|||
Pension, post-retirement and post-employment liabilities
|
234
|
|
—
|
|
234
|
|
|||
Liabilities for errors and omissions
|
31
|
|
—
|
|
31
|
|
|||
Other liabilities
|
316
|
|
3
|
|
319
|
|
|||
Total liabilities assumed
|
2,710
|
|
8
|
|
2,718
|
|
|||
Non controlling interests
|
309
|
|
—
|
|
309
|
|
|||
Net assets acquired
|
$
|
5,568
|
|
$
|
357
|
|
$
|
5,925
|
|
•
|
Amounts of intangible assets, fixed assets, capitalized software assets and right-of use-assets, subject to finalization of valuation efforts;
|
•
|
Amounts for contingencies, pending the finalization of the Company’s assessment of the portfolio of contingencies;
|
•
|
Amounts for income tax assets, receivables and liabilities, pending the filing of the acquired companies' pre-acquisition income tax returns and receipt of information from taxing authorities which may change certain estimates and assumptions used; and
|
•
|
Amounts for deferred tax assets and liabilities pending the finalization of valuations of the assets acquired, liabilities assumed and associated goodwill.
|
Intangible assets through June 30, 2019
(In millions)
|
|
JLT
|
|
Other
|
|
Total
|
|
JLT Weighted Average Amortization Period
|
|
Other Weighted Average Amortization Period
|
||||||
Client relationships
|
|
$
|
1,566
|
|
|
$
|
136
|
|
|
$
|
1,702
|
|
|
13 years
|
|
12 years
|
Other
|
|
96
|
|
|
7
|
|
|
103
|
|
|
5 years
|
|
3 years
|
|||
|
|
$
|
1,662
|
|
|
$
|
143
|
|
|
$
|
1,805
|
|
|
|
|
|
•
|
February – MMA acquired Highsmith Insurance Agency, a North Carolina-based independent insurance brokerage firm.
|
•
|
March – Marsh acquired Hoken Soken, Inc., a Japan-based insurance agency.
|
•
|
May – Marsh acquired Mountlodge Limited, a Scotland-based independent insurance broker and Lorant Martínez Salas y Compañía Agente de Seguros y de Fianzas, S.A. de C.V., a Mexico-based multi-line insurance broker.
|
•
|
June – MMA acquired Bleakley Insurance Services, a California-based provider of employee benefits solutions; Klein Agency, Inc., a Minnesota-based surety and property/casualty agency; and Insurance Associates, Inc., a Maryland-based independent insurance agency.
|
•
|
August – Marsh acquired John L. Wortham & Son, L.P., a Houston-based independent insurance broker.
|
•
|
October – MMA acquired Eustis Insurance, Inc., a Louisiana-based insurance agency.
|
•
|
November – MMA acquired James P. Murphy & Associates, Inc., a Connecticut-based insurance agency.
|
•
|
December – MMA acquired Otis-Magie Insurance Agency, Inc., a Minnesota-based insurance agency, and Marsh acquired Hector Insurance PCC Ltd, a U.K.-based captive management company.
|
•
|
January – Oliver Wyman acquired Draw Ltd., a U.K.-based digital transformation agency.
|
•
|
March – Oliver Wyman acquired 8Works Limited, a U.K.-based design thinking consultancy.
|
•
|
May – Mercer acquired EverBe SAS, a France-based Workday implementer and advisory firm; and Evolve Intelligence Pty Ltd., an Australia-based talent strategy firm.
|
•
|
June – Mercer acquired India Life Capital Private Ltd., an India-based investment advisor.
|
•
|
November – Mercer acquired Induslynk Training Services Private Ltd., an India-based talent assessment company, Pavilion Financial Corp., a Canada-based investment services firm and Summit Strategies Inc., a Missouri-based investment consulting firm.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In millions, except per share figures)
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
Revenue
|
$
|
4,346
|
|
|
$
|
4,339
|
|
|
$
|
8,863
|
|
|
$
|
8,902
|
|
Net income attributable to the Company
|
$
|
463
|
|
|
$
|
513
|
|
|
$
|
1,134
|
|
|
$
|
626
|
|
Basic net income per share attributable to the Company
|
$
|
0.91
|
|
|
$
|
1.01
|
|
|
$
|
2.24
|
|
|
$
|
1.23
|
|
Diluted net income per share attributable to the Company
|
$
|
0.90
|
|
|
$
|
1.00
|
|
|
$
|
2.22
|
|
|
$
|
1.22
|
|
•
|
A reduction of costs of $151 million for the three months ended June 30, 2019
|
•
|
An increase in costs of $658 million for the six month period ended June 30, 2018. Of this amount, $169 million represented a reduction of costs for the six months ended June 30, 2019, and the remainder was incurred in the third and fourth quarter of 2018.
|
June 30,
|
|
|
|
||||
(In millions)
|
2019
|
|
|
2018
|
|
||
Balance as of January 1,
|
$
|
9,599
|
|
|
$
|
9,089
|
|
Goodwill acquired (a)
|
4,895
|
|
|
116
|
|
||
Other adjustments(b)
|
(15
|
)
|
|
(28
|
)
|
||
Balance at June 30,
|
$
|
14,479
|
|
|
$
|
9,177
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
(In millions)
|
Gross
Cost
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
|
Gross
Cost
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
||||||
Client Relationships
|
$
|
3,664
|
|
|
$
|
765
|
|
|
$
|
2,899
|
|
|
$
|
1,970
|
|
|
$
|
639
|
|
|
$
|
1,331
|
|
Other (a)
|
365
|
|
|
181
|
|
|
184
|
|
|
259
|
|
|
153
|
|
|
106
|
|
||||||
Amortized intangibles
|
$
|
4,029
|
|
|
$
|
946
|
|
|
$
|
3,083
|
|
|
$
|
2,229
|
|
|
$
|
792
|
|
|
$
|
1,437
|
|
For the Years Ending December 31,
|
|
||
(In millions)
|
Estimated Expense
|
|
|
2019 (excludes amortization through June 30, 2019)
|
$
|
194
|
|
2020
|
371
|
|
|
2021
|
359
|
|
|
2022
|
345
|
|
|
2023
|
336
|
|
|
Subsequent years
|
1,478
|
|
|
|
$
|
3,083
|
|
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 exchange-traded 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.
|
|
Identical Assets
(Level 1)
|
|
Observable Inputs
(Level 2)
|
|
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||||||||||||||||||
(In millions)
|
06/30/19
|
|
|
12/31/18
|
|
|
06/30/19
|
|
|
12/31/18
|
|
|
06/30/19
|
|
|
12/31/18
|
|
|
06/30/19
|
|
|
12/31/18
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial instruments owned:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Exchange traded equity securities(a)
|
$
|
4
|
|
|
$
|
133
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
133
|
|
Mutual funds(a)
|
153
|
|
|
151
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
153
|
|
|
151
|
|
||||||||
Money market funds(b)
|
71
|
|
|
118
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71
|
|
|
118
|
|
||||||||
Other equity investment(a)
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
||||||||
Contingent purchase consideration asset(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
65
|
|
|
—
|
|
|
65
|
|
|
—
|
|
||||||||
Total assets measured at fair value
|
$
|
228
|
|
|
$
|
402
|
|
|
$
|
8
|
|
|
$
|
8
|
|
|
$
|
65
|
|
|
$
|
—
|
|
|
$
|
301
|
|
|
$
|
410
|
|
Fiduciary Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury Bills
|
$
|
—
|
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20
|
|
Money market funds
|
347
|
|
|
80
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
347
|
|
|
80
|
|
||||||||
Total fiduciary assets measured
at fair value
|
$
|
347
|
|
|
$
|
100
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
347
|
|
|
$
|
100
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent purchase
consideration liability(c)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
196
|
|
|
$
|
183
|
|
|
$
|
196
|
|
|
$
|
183
|
|
Acquisition related derivative contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
116
|
|
|
—
|
|
|
325
|
|
|
—
|
|
|
441
|
|
||||||||
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
116
|
|
|
$
|
196
|
|
|
$
|
508
|
|
|
$
|
196
|
|
|
$
|
624
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|||||||||||
(In millions)
|
2019
|
|
|
2018
|
|
|
2019
|
|
2018
|
|
||||
Balance at beginning of period,
|
$
|
454
|
|
|
$
|
161
|
|
|
$
|
508
|
|
$
|
189
|
|
Additions
|
29
|
|
|
20
|
|
|
40
|
|
26
|
|
||||
Payments
|
(10
|
)
|
|
(1
|
)
|
|
(45
|
)
|
(41
|
)
|
||||
Revaluation Impact
|
9
|
|
|
6
|
|
|
20
|
|
11
|
|
||||
Change in fair value of the FX contract
|
(283
|
)
|
|
—
|
|
|
(325
|
)
|
—
|
|
||||
Other (a)
|
(3
|
)
|
|
(1
|
)
|
|
(2
|
)
|
—
|
|
||||
Balance at June 30,
|
$
|
196
|
|
|
$
|
185
|
|
|
$
|
196
|
|
$
|
185
|
|
For the Three and Six Months Ended June 30, 2019
(In millions)
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||
Lease Cost:
|
|
|
||||
Operating lease cost
|
$
|
100
|
|
$
|
182
|
|
Short-term lease cost
|
2
|
|
3
|
|
||
Variable lease cost
|
39
|
|
76
|
|
||
Sublease income
|
(4
|
)
|
(8
|
)
|
||
Net lease cost
|
$
|
137
|
|
$
|
253
|
|
Other information:
|
|
|
||||
Operating cash outflows from operating leases
|
|
$
|
187
|
|
||
Right of use assets obtained in exchange for new operating lease liabilities
|
|
67
|
|
|||
Weighted-average remaining lease term – real estate
|
|
8.99 years
|
|
|||
Weighted-average discount rate – real estate leases
|
|
3.08
|
%
|
Payment Dates (In millions)
|
Real Estate Leases
|
||
Remainder of 2019
|
$
|
203
|
|
2020
|
387
|
|
|
2021
|
330
|
|
|
2022
|
308
|
|
|
2023
|
267
|
|
|
2024
|
222
|
|
|
Subsequent years
|
974
|
|
|
Total future lease payments
|
2,691
|
|
|
Less: Imputed interest
|
(363
|
)
|
|
Total
|
$
|
2,328
|
|
Current lease liabilities
|
$
|
347
|
|
Long-term lease liabilities
|
1,981
|
|
|
Total lease liabilities
|
$
|
2,328
|
|
For the Year Ended December 31,
|
Gross
Rental
Commitments
|
|
Rentals
from
Subleases
|
|
Net
Rental
Commitments
|
||||||
(In millions of dollars)
|
|
|
|||||||||
2019
|
$
|
361
|
|
|
$
|
32
|
|
|
$
|
329
|
|
2020
|
$
|
340
|
|
|
$
|
31
|
|
|
$
|
309
|
|
2021
|
$
|
277
|
|
|
$
|
12
|
|
|
$
|
265
|
|
2022
|
$
|
252
|
|
|
$
|
10
|
|
|
$
|
242
|
|
2023
|
$
|
214
|
|
|
$
|
9
|
|
|
$
|
205
|
|
Subsequent years
|
$
|
753
|
|
|
$
|
32
|
|
|
$
|
721
|
|
Combined U.S. and significant non-U.S. Plans
|
Pension
Benefits
|
|
Post-retirement
Benefits
|
||||||||||||
For the Three Months Ended June 30,
|
|
||||||||||||||
(In millions)
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
Service cost
|
$
|
10
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
121
|
|
|
117
|
|
|
—
|
|
|
1
|
|
||||
Expected return on plan assets
|
(217
|
)
|
|
(218
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service (credit) cost
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Recognized actuarial loss
|
26
|
|
|
37
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit credit
|
$
|
(60
|
)
|
|
$
|
(58
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Combined U.S. and significant non-U.S. Plans
|
Pension
Benefits
|
|
Post-retirement
Benefits
|
||||||||||||
For the Six Months Ended June 30,
|
|
||||||||||||||
(In millions)
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
Service cost
|
$
|
18
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
240
|
|
|
235
|
|
|
1
|
|
|
2
|
|
||||
Expected return on plan assets
|
(430
|
)
|
|
(439
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
||||
Recognized actuarial loss
|
52
|
|
|
74
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit credit
|
$
|
(120
|
)
|
|
$
|
(114
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Settlement loss
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total credit
|
$
|
(116
|
)
|
|
$
|
(114
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. Plans only
|
Pension
Benefits |
|
Post-retirement
Benefits |
||||||||||||
For the Three Months Ended June 30,
|
|
||||||||||||||
(In millions)
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
Interest cost
|
60
|
|
|
59
|
|
|
—
|
|
|
1
|
|
||||
Expected return on plan assets
|
(85
|
)
|
|
(90
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Recognized actuarial loss
|
11
|
|
|
14
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit credit
|
$
|
(14
|
)
|
|
$
|
(17
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. Plans only
|
Pension
Benefits |
|
Post-retirement
Benefits |
||||||||||||
For the Six Months Ended June 30,
|
|
||||||||||||||
(In millions)
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
Interest cost
|
120
|
|
|
118
|
|
|
—
|
|
|
1
|
|
||||
Expected return on plan assets
|
(171
|
)
|
|
(179
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Recognized actuarial loss
|
22
|
|
|
27
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit (credit) cost
|
$
|
(29
|
)
|
|
$
|
(34
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Significant non-U.S. Plans only
|
Pension
Benefits |
|
Post-retirement
Benefits |
||||||||||||
For the Three Months Ended June 30,
|
|
||||||||||||||
(In millions)
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
Service cost
|
$
|
10
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
61
|
|
|
58
|
|
|
—
|
|
|
—
|
|
||||
Expected return on plan assets
|
(132
|
)
|
|
(128
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Recognized actuarial loss
|
15
|
|
|
23
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit credit
|
$
|
(46
|
)
|
|
$
|
(41
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Significant non-U.S. Plans only
|
Pension
Benefits |
|
Post-retirement
Benefits |
||||||||||||
For the Six Months Ended June 30,
|
|
||||||||||||||
(In millions)
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
Service cost
|
$
|
18
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
120
|
|
|
117
|
|
|
1
|
|
|
1
|
|
||||
Expected return on plan assets
|
(259
|
)
|
|
(260
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Recognized actuarial loss
|
30
|
|
|
47
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit credit
|
$
|
(91
|
)
|
|
$
|
(80
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Settlement loss
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total credit
|
$
|
(87
|
)
|
|
$
|
(80
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Combined U.S. and significant non-U.S. Plans
|
Pension
Benefits |
|
Post-retirement
Benefits |
||||||||
|
|||||||||||
June 30,
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Weighted average assumptions:
|
|
|
|
|
|
|
|
||||
Expected return on plan assets
|
5.74
|
%
|
|
5.83
|
%
|
|
—
|
|
|
—
|
|
Discount Rate
|
3.48
|
%
|
|
3.07
|
%
|
|
3.65
|
%
|
|
3.21
|
%
|
Rate of compensation increase
|
1.74
|
%
|
|
1.73
|
%
|
|
—
|
|
|
—
|
|
(In millions)
|
June 30,
2019 |
|
|
December 31,
2018 |
|
||
Short-term:
|
|
|
|
||||
Commercial paper
|
$
|
549
|
|
|
$
|
—
|
|
Term loan facility
|
300
|
|
|
—
|
|
||
Current portion of long-term debt
|
814
|
|
|
314
|
|
||
|
1,663
|
|
|
314
|
|
||
Long-term:
|
|
|
|
||||
Senior notes – 2.35% due 2019
|
300
|
|
|
300
|
|
||
Senior notes – 2.35% due 2020
|
499
|
|
|
499
|
|
||
Senior notes – 3.50% due 2020
|
697
|
|
|
—
|
|
||
Senior notes – 4.80% due 2021
|
499
|
|
|
499
|
|
||
Senior notes - Floating rate due 2021
|
298
|
|
|
—
|
|
||
Senior notes – 2.75% due 2022
|
498
|
|
|
497
|
|
||
Senior notes – 3.30% due 2023
|
348
|
|
|
348
|
|
||
Senior notes – 4.05% due 2023
|
249
|
|
|
249
|
|
||
Senior notes – 3.50% due 2024
|
597
|
|
|
597
|
|
||
Senior notes – 3.875% due 2024
|
993
|
|
|
—
|
|
||
Senior notes – 3.50% due 2025
|
497
|
|
|
496
|
|
||
Senior notes – 1.349% due 2026
|
618
|
|
|
—
|
|
||
Senior notes – 3.75% due 2026
|
597
|
|
|
596
|
|
||
Senior notes – 4.375% due 2029
|
1,499
|
|
|
—
|
|
||
Senior notes – 1.979% due 2030
|
617
|
|
|
—
|
|
||
Senior notes – 5.875% due 2033
|
298
|
|
|
297
|
|
||
Senior notes – 4.75% due 2039
|
494
|
|
|
—
|
|
||
Senior notes – 4.35% due 2047
|
492
|
|
|
492
|
|
||
Senior notes – 4.20% due 2048
|
592
|
|
|
592
|
|
||
Senior notes – 4.90% due 2049
|
1,236
|
|
|
—
|
|
||
Mortgage – 5.70% due 2035
|
351
|
|
|
358
|
|
||
Other
|
4
|
|
|
4
|
|
||
|
12,273
|
|
|
5,824
|
|
||
Less current portion
|
814
|
|
|
314
|
|
||
|
$
|
11,459
|
|
|
$
|
5,510
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
(In millions)
|
Carrying
Amount
|
|
|
Fair
Value
|
|
|
Carrying
Amount
|
|
|
Fair
Value
|
|
||||
Short-term debt
|
$
|
1,633
|
|
|
$
|
1,665
|
|
|
$
|
314
|
|
|
$
|
313
|
|
Long-term debt
|
$
|
11,459
|
|
|
$
|
12,231
|
|
|
$
|
5,510
|
|
|
$
|
5,437
|
|
(In millions)
|
Liability at
1/1/18
|
|
Amounts
Accrued
|
|
Cash
Paid
|
|
Other
|
|
Liability at 12/31/18
|
|
Amounts
Accrued
|
|
Cash
Paid
|
|
Other
|
|
Liability at 6/30/19
|
||||||||||||||||||
Severance
|
$
|
15
|
|
|
$
|
137
|
|
|
$
|
(77
|
)
|
|
$
|
(2
|
)
|
|
$
|
73
|
|
|
$
|
38
|
|
|
$
|
(73
|
)
|
|
$
|
(1
|
)
|
|
$
|
37
|
|
Future rent under non-cancelable leases and other costs
|
50
|
|
|
24
|
|
|
(37
|
)
|
|
2
|
|
|
39
|
|
|
6
|
|
|
(9
|
)
|
|
(1
|
)
|
|
35
|
|
|||||||||
Total
|
$
|
65
|
|
|
$
|
161
|
|
|
$
|
(114
|
)
|
|
$
|
—
|
|
|
$
|
112
|
|
|
$
|
44
|
|
|
$
|
(82
|
)
|
|
$
|
(2
|
)
|
|
$
|
72
|
|
(In millions)
|
Liability at
1/1/19
|
|
Amounts
Accrued
|
|
Cash
Paid
|
|
Other
|
|
Liability at 6/30/19
|
||||||||||
Severance
|
$
|
—
|
|
|
$
|
73
|
|
|
$
|
(27
|
)
|
|
$
|
—
|
|
|
$
|
46
|
|
Real estate related costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Consulting and other outside services
|
—
|
|
|
61
|
|
|
(33
|
)
|
|
—
|
|
|
28
|
|
|||||
Total
|
$
|
—
|
|
|
$
|
134
|
|
|
$
|
(60
|
)
|
|
$
|
—
|
|
|
$
|
74
|
|
▪
|
Risk and Insurance Services, comprising insurance services (Marsh) and reinsurance services (Guy Carpenter); and
|
▪
|
Consulting, comprising Mercer and Oliver Wyman Group.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In millions)
|
Revenue
|
|
Operating Income
(Loss)
|
|
Revenue
|
|
Operating Income
(Loss)
|
||||||||
2019–
|
|
|
|
|
|
|
|
||||||||
Risk and Insurance Services
|
$
|
2,574
|
|
(a)
|
$
|
517
|
|
|
$
|
4,997
|
|
(c)
|
$
|
1,250
|
|
Consulting
|
1,800
|
|
(b)
|
278
|
|
|
3,473
|
|
(d)
|
557
|
|
||||
Total Operating Segments
|
4,374
|
|
|
795
|
|
|
8,470
|
|
|
1,807
|
|
||||
Corporate/Eliminations
|
(25
|
)
|
|
(115
|
)
|
|
(50
|
)
|
|
(189
|
)
|
||||
Total Consolidated
|
$
|
4,349
|
|
|
$
|
680
|
|
|
$
|
8,420
|
|
|
$
|
1,618
|
|
2018–
|
|
|
|
|
|
|
|
||||||||
Risk and Insurance Services
|
$
|
2,096
|
|
(a)
|
$
|
472
|
|
|
$
|
4,440
|
|
(c)
|
$
|
1,188
|
|
Consulting
|
1,650
|
|
(b)
|
267
|
|
|
3,318
|
|
(d)
|
514
|
|
||||
Total Operating Segments
|
3,746
|
|
|
739
|
|
|
7,758
|
|
|
1,702
|
|
||||
Corporate/Eliminations
|
(12
|
)
|
|
(48
|
)
|
|
(24
|
)
|
|
(103
|
)
|
||||
Total Consolidated
|
$
|
3,734
|
|
|
$
|
691
|
|
|
$
|
7,734
|
|
|
$
|
1,599
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In millions)
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
Risk and Insurance Services
|
|
|
|
|
|
|
|
||||||||
Marsh
|
$
|
2,174
|
|
|
$
|
1,760
|
|
|
$
|
3,927
|
|
|
$
|
3,463
|
|
Guy Carpenter
|
400
|
|
|
336
|
|
|
1,070
|
|
|
977
|
|
||||
Total Risk and Insurance Services
|
2,574
|
|
|
2,096
|
|
|
4,997
|
|
|
4,440
|
|
||||
Consulting
|
|
|
|
|
|
|
|
||||||||
Mercer
|
1,260
|
|
|
1,158
|
|
|
2,415
|
|
|
2,329
|
|
||||
Oliver Wyman Group
|
540
|
|
|
492
|
|
|
1,058
|
|
|
989
|
|
||||
Total Consulting
|
1,800
|
|
|
1,650
|
|
|
3,473
|
|
|
3,318
|
|
||||
Total Operating Segments
|
4,374
|
|
|
3,746
|
|
|
8,470
|
|
|
7,758
|
|
||||
Corporate/Eliminations
|
(25
|
)
|
|
(12
|
)
|
|
(50
|
)
|
|
(24
|
)
|
||||
Total
|
$
|
4,349
|
|
|
$
|
3,734
|
|
|
$
|
8,420
|
|
|
$
|
7,734
|
|
•
|
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. The Company conducts business in this segment through Marsh and Guy Carpenter.
|
•
|
Consulting includes wealth, health and career consulting services and products, and specialized management, economic and brand consulting services. The Company conducts business in this segment through Mercer and Oliver Wyman.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In millions, except per share figures)
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
Revenue
|
$
|
4,349
|
|
|
$
|
3,734
|
|
|
$
|
8,420
|
|
|
$
|
7,734
|
|
Expense:
|
|
|
|
|
|
|
|
||||||||
Compensation and Benefits
|
2,537
|
|
|
2,135
|
|
|
4,819
|
|
|
4,359
|
|
||||
Other Operating Expenses
|
1,132
|
|
|
908
|
|
|
1,983
|
|
|
1,776
|
|
||||
Operating Expenses
|
3,669
|
|
|
3,043
|
|
|
6,802
|
|
|
6,135
|
|
||||
Operating Income
|
680
|
|
|
691
|
|
|
1,618
|
|
|
1,599
|
|
||||
Net Income Before Non-Controlling Interests
|
344
|
|
|
536
|
|
|
1,071
|
|
|
1,232
|
|
||||
Income Before Income Taxes
|
550
|
|
|
719
|
|
|
1,494
|
|
|
1,635
|
|
||||
Net Income Attributable to the Company
|
$
|
332
|
|
|
$
|
531
|
|
|
$
|
1,048
|
|
|
$
|
1,221
|
|
Net Income Per Share Attributable to the Company:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.66
|
|
|
$
|
1.05
|
|
|
$
|
2.07
|
|
|
$
|
2.41
|
|
Diluted
|
$
|
0.65
|
|
|
$
|
1.04
|
|
|
$
|
2.05
|
|
|
$
|
2.38
|
|
Average Number of Shares Outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
507
|
|
|
507
|
|
|
506
|
|
|
507
|
|
||||
Diluted
|
512
|
|
|
512
|
|
|
511
|
|
|
513
|
|
||||
Shares Outstanding at June 30,
|
507
|
|
|
505
|
|
|
507
|
|
|
505
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In millions)
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
Restructuring costs (non-JLT)
|
$
|
26
|
|
|
$
|
58
|
|
|
$
|
44
|
|
|
$
|
64
|
|
JLT integration and restructuring costs
|
98
|
|
|
—
|
|
|
134
|
|
|
—
|
|
||||
JLT acquisition related costs
|
82
|
|
|
—
|
|
|
93
|
|
|
—
|
|
||||
Impact on operating income
|
206
|
|
|
58
|
|
|
271
|
|
|
64
|
|
||||
JLT related derivatives
|
37
|
|
|
—
|
|
|
8
|
|
|
—
|
|
||||
Early extinguishment of debt
|
32
|
|
|
—
|
|
|
32
|
|
|
—
|
|
||||
Impact on income before taxes
|
$
|
275
|
|
|
$
|
58
|
|
|
$
|
311
|
|
|
$
|
64
|
|
|
Three Months Ended
June 30, |
|
% Change GAAP Revenue
|
|
2018 Including JLT
|
|
% Change Including JLT in 2018
|
|
Components of Revenue Change Including JLT*
|
|||||||||||||||||
Currency
Impact |
|
Acquisitions/
Dispositions/ Other Impact |
|
Underlying
Revenue |
||||||||||||||||||||||
(In millions)
|
2019
|
|
|
2018
|
|
|
||||||||||||||||||||
Risk and Insurance Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Marsh
|
$
|
2,156
|
|
|
$
|
1,749
|
|
|
23
|
%
|
|
$
|
2,102
|
|
|
3
|
%
|
|
(3
|
)%
|
|
2
|
%
|
|
4
|
%
|
Guy Carpenter
|
392
|
|
|
332
|
|
|
18
|
%
|
|
406
|
|
|
(4
|
)%
|
|
(1
|
)%
|
|
—
|
|
|
(3
|
)%
|
|||
Subtotal
|
2,548
|
|
|
2,081
|
|
|
22
|
%
|
|
2,508
|
|
|
2
|
%
|
|
(2
|
)%
|
|
2
|
%
|
|
2
|
%
|
|||
Fiduciary Interest Income
|
26
|
|
|
15
|
|
|
|
|
18
|
|
|
|
|
|
|
|
|
|
||||||||
Total Risk and Insurance Services
|
2,574
|
|
|
2,096
|
|
|
23
|
%
|
|
2,526
|
|
|
2
|
%
|
|
(3
|
)%
|
|
2
|
%
|
|
3
|
%
|
|||
Consulting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Mercer
|
1,260
|
|
|
1,158
|
|
|
9
|
%
|
|
1,245
|
|
|
1
|
%
|
|
(3
|
)%
|
|
2
|
%
|
|
2
|
%
|
|||
Oliver Wyman
|
540
|
|
|
492
|
|
|
10
|
%
|
|
492
|
|
|
10
|
%
|
|
(3
|
)%
|
|
—
|
|
|
13
|
%
|
|||
Total Consulting
|
1,800
|
|
|
1,650
|
|
|
9
|
%
|
|
1,737
|
|
|
4
|
%
|
|
(3
|
)%
|
|
1
|
%
|
|
5
|
%
|
|||
Corporate/Eliminations
|
(25
|
)
|
|
(12
|
)
|
|
|
|
(12
|
)
|
|
|
|
|
|
|
|
|
||||||||
Total Revenue
|
$
|
4,349
|
|
|
$
|
3,734
|
|
|
16
|
%
|
|
$
|
4,251
|
|
|
2
|
%
|
|
(3
|
)%
|
|
2
|
%
|
|
4
|
%
|
|
Three Months Ended
June 30, |
|
% Change GAAP Revenue
|
|
2018 Including JLT
|
|
% Change Including JLT in 2018
|
|
Components of Revenue Change Including JLT*
|
|||||||||||||||||
Currency
Impact
|
|
Acquisitions/
Dispositions/ Other Impact |
|
Underlying
Revenue |
||||||||||||||||||||||
(In millions)
|
2019
|
|
|
2018
|
|
|
||||||||||||||||||||
Marsh:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
EMEA
|
$
|
652
|
|
|
$
|
526
|
|
|
24
|
%
|
|
$
|
678
|
|
|
(4
|
)%
|
|
(4
|
)%
|
|
—
|
|
|
—
|
|
Asia Pacific
|
291
|
|
|
183
|
|
|
59
|
%
|
|
293
|
|
|
(1
|
)%
|
|
(5
|
)%
|
|
(3
|
)%
|
|
7
|
%
|
|||
Latin America
|
116
|
|
|
99
|
|
|
17
|
%
|
|
135
|
|
|
(14
|
)%
|
|
(10
|
)%
|
|
(8
|
)%
|
|
4
|
%
|
|||
Total International
|
1,059
|
|
|
808
|
|
|
31
|
%
|
|
1,106
|
|
|
(4
|
)%
|
|
(5
|
)%
|
|
(1
|
)%
|
|
2
|
%
|
|||
U.S./Canada
|
1,097
|
|
|
941
|
|
|
16
|
%
|
|
996
|
|
|
10
|
%
|
|
—
|
|
|
5
|
%
|
|
5
|
%
|
|||
Total Marsh
|
$
|
2,156
|
|
|
$
|
1,749
|
|
|
23
|
%
|
|
$
|
2,102
|
|
|
3
|
%
|
|
(3
|
)%
|
|
2
|
%
|
|
4
|
%
|
Mercer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Wealth
|
613
|
|
|
552
|
|
|
11
|
%
|
|
619
|
|
|
(1
|
)%
|
|
(4
|
)%
|
|
3
|
%
|
|
—
|
|
|||
Health
|
458
|
|
|
429
|
|
|
6
|
%
|
|
448
|
|
|
2
|
%
|
|
(1
|
)%
|
|
—
|
|
|
4
|
%
|
|||
Career
|
189
|
|
|
177
|
|
|
7
|
%
|
|
178
|
|
|
7
|
%
|
|
(3
|
)%
|
|
4
|
%
|
|
6
|
%
|
|||
Total Mercer
|
$
|
1,260
|
|
|
$
|
1,158
|
|
|
9
|
%
|
|
$
|
1,245
|
|
|
1
|
%
|
|
(3
|
)%
|
|
2
|
%
|
|
2
|
%
|
* Components of revenue change may not add due to rounding.
|
|
Six Months Ended
June 30, |
|
% Change GAAP Revenue
|
|
2018 Including JLT
|
|
% Change Including JLT in 2018
|
|
Components of Revenue Change Including JLT*
|
|||||||||||||||||
Currency
Impact
|
|
Acquisitions/
Dispositions/
Other Impact
|
|
Underlying
Revenue
|
||||||||||||||||||||||
(In millions)
|
2019
|
|
|
2018
|
|
|
||||||||||||||||||||
Risk and Insurance Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Marsh
|
$
|
3,893
|
|
|
$
|
3,443
|
|
|
13
|
%
|
|
$
|
3,795
|
|
|
3
|
%
|
|
(3
|
)%
|
|
2
|
%
|
|
4
|
%
|
Guy Carpenter
|
1,055
|
|
|
969
|
|
|
9
|
%
|
|
1,044
|
|
|
1
|
%
|
|
(1
|
)%
|
|
—
|
|
|
2
|
%
|
|||
Subtotal
|
4,948
|
|
|
4,412
|
|
|
12
|
%
|
|
4,839
|
|
|
2
|
%
|
|
(3
|
)%
|
|
1
|
%
|
|
4
|
%
|
|||
Fiduciary Interest Income
|
49
|
|
|
28
|
|
|
|
|
31
|
|
|
|
|
|
|
|
|
|
||||||||
Total Risk and Insurance Services
|
4,997
|
|
|
4,440
|
|
|
13
|
%
|
|
4,870
|
|
|
3
|
%
|
|
(3
|
)%
|
|
1
|
%
|
|
4
|
%
|
|||
Consulting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Mercer
|
2,415
|
|
|
2,329
|
|
|
4
|
%
|
|
2,416
|
|
|
—
|
|
|
(3
|
)%
|
|
2
|
%
|
|
1
|
%
|
|||
Oliver Wyman
|
1,058
|
|
|
989
|
|
|
7
|
%
|
|
989
|
|
|
7
|
%
|
|
(3
|
)%
|
|
—
|
|
|
10
|
%
|
|||
Total Consulting
|
3,473
|
|
|
3,318
|
|
|
5
|
%
|
|
3,405
|
|
|
2
|
%
|
|
(3
|
)%
|
|
2
|
%
|
|
4
|
%
|
|||
Corporate/Eliminations
|
(50
|
)
|
|
(24
|
)
|
|
|
|
(24
|
)
|
|
|
|
|
|
|
|
|
||||||||
Total Revenue
|
$
|
8,420
|
|
|
$
|
7,734
|
|
|
9
|
%
|
|
$
|
8,251
|
|
|
2
|
%
|
|
(3
|
)%
|
|
1
|
%
|
|
4
|
%
|
|
Six Months Ended
June 30, |
|
% Change GAAP Revenue
|
|
2018 Including JLT
|
|
% Change Including JLT in 2018
|
|
Components of Revenue Change Including JLT*
|
|||||||||||||||||
Currency
Impact
|
|
Acquisitions/
Dispositions/
Other Impact
|
|
Underlying
Revenue
|
||||||||||||||||||||||
(In millions)
|
2019
|
|
|
2018
|
|
|
||||||||||||||||||||
Marsh:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
EMEA
|
$
|
1,285
|
|
|
$
|
1,169
|
|
|
10
|
%
|
|
$
|
1,321
|
|
|
(3
|
)%
|
|
(5
|
)%
|
|
1
|
%
|
|
2
|
%
|
Asia Pacific
|
456
|
|
|
347
|
|
|
31
|
%
|
|
457
|
|
|
—
|
|
|
(4
|
)%
|
|
(3
|
)%
|
|
7
|
%
|
|||
Latin America
|
194
|
|
|
183
|
|
|
6
|
%
|
|
218
|
|
|
(11
|
)%
|
|
(11
|
)%
|
|
(6
|
)%
|
|
6
|
%
|
|||
Total International
|
1,935
|
|
|
1,699
|
|
|
14
|
%
|
|
1,996
|
|
|
(3
|
)%
|
|
(6
|
)%
|
|
(1
|
)%
|
|
3
|
%
|
|||
U.S./Canada
|
1,958
|
|
|
1,744
|
|
|
12
|
%
|
|
1,799
|
|
|
9
|
%
|
|
—
|
|
|
4
|
%
|
|
5
|
%
|
|||
Total Marsh
|
$
|
3,893
|
|
|
$
|
3,443
|
|
|
13
|
%
|
|
$
|
3,795
|
|
|
3
|
%
|
|
(3
|
)%
|
|
2
|
%
|
|
4
|
%
|
Mercer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Wealth
|
1,156
|
|
|
1,117
|
|
|
4
|
%
|
|
1,184
|
|
|
(2
|
)%
|
|
(5
|
)%
|
|
3
|
%
|
|
(1
|
)%
|
|||
Health
|
900
|
|
|
871
|
|
|
3
|
%
|
|
890
|
|
|
1
|
%
|
|
(2
|
)%
|
|
—
|
|
|
3
|
%
|
|||
Career
|
359
|
|
|
341
|
|
|
5
|
%
|
|
342
|
|
|
5
|
%
|
|
(3
|
)%
|
|
4
|
%
|
|
4
|
%
|
|||
Total Mercer
|
$
|
2,415
|
|
|
$
|
2,329
|
|
|
4
|
%
|
|
$
|
2,416
|
|
|
—
|
|
|
(3
|
)%
|
|
2
|
%
|
|
1
|
%
|
* Components of revenue change may not add due to rounding.
|
For the Three and Six Months Ended June 30,
|
Three Months
|
|
Six Months
|
|||||||||||
(In millions)
|
2019
|
|
|
2018
|
|
|
2019
|
|
2018
|
|
||||
Revenue
|
$
|
2,574
|
|
|
$
|
2,096
|
|
|
$
|
4,997
|
|
$
|
4,440
|
|
Compensation and Benefits
|
1,418
|
|
|
1,145
|
|
|
2,639
|
|
2,313
|
|
||||
Other Operating Expenses
|
639
|
|
|
479
|
|
|
1,108
|
|
939
|
|
||||
Expense
|
2,057
|
|
|
1,624
|
|
|
3,747
|
|
3,252
|
|
||||
Operating Income
|
$
|
517
|
|
|
$
|
472
|
|
|
$
|
1,250
|
|
$
|
1,188
|
|
Operating Income Margin
|
20.1
|
%
|
|
22.5
|
%
|
|
25.0
|
%
|
26.8
|
%
|
For the Three and Six Months Ended June 30,
|
Three Months
|
|
Six Months
|
|||||||||||
(In millions)
|
2019
|
|
|
2018
|
|
|
2019
|
|
2018
|
|
||||
Revenue
|
$
|
1,800
|
|
|
$
|
1,650
|
|
|
$
|
3,473
|
|
$
|
3,318
|
|
Compensation and Benefits
|
1,009
|
|
|
902
|
|
|
1,965
|
|
1,858
|
|
||||
Other Operating Expenses
|
513
|
|
|
481
|
|
|
951
|
|
946
|
|
||||
Expense
|
1,522
|
|
|
1,383
|
|
|
2,916
|
|
2,804
|
|
||||
Operating Income
|
$
|
278
|
|
|
$
|
267
|
|
|
$
|
557
|
|
$
|
514
|
|
Operating Income Margin
|
15.5
|
%
|
|
16.2
|
%
|
|
16.1
|
%
|
15.5
|
%
|
|
(In millions)
|
Payment due by Period
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
|
Within
1 Year
|
|
|
1-3 Years
|
|
|
4-5 Years
|
|
|
After
5 Years
|
|
|||||
Commercial paper
|
$
|
550
|
|
|
$
|
550
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Term loan facility
|
300
|
|
|
300
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Short-term debt
|
814
|
|
|
814
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Long-term debt
|
11,532
|
|
|
—
|
|
|
2,031
|
|
|
2,233
|
|
|
7,268
|
|
|||||
Interest on long-term debt
|
5,819
|
|
|
494
|
|
|
845
|
|
|
731
|
|
|
3,749
|
|
|||||
Net operating leases
|
2,691
|
|
|
398
|
|
|
679
|
|
|
533
|
|
|
1,081
|
|
|||||
Service agreements
|
165
|
|
|
113
|
|
|
37
|
|
|
14
|
|
|
1
|
|
|||||
Other long-term obligations
|
436
|
|
|
83
|
|
|
270
|
|
|
78
|
|
|
5
|
|
|||||
Total
|
$
|
22,307
|
|
|
$
|
2,752
|
|
|
$
|
3,862
|
|
|
$
|
3,589
|
|
|
$
|
12,104
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
(In millions)
|
June 30, 2019
|
||
Cash and cash equivalents invested in money market funds, certificates of deposit and time deposits
|
$
|
1,294
|
|
Fiduciary cash and investments
|
$
|
6,807
|
|
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
|
|
||
April 1-30, 2019
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
May 1-31, 2019
|
318,455
|
|
|
$
|
95.8109
|
|
|
318,455
|
|
|
$
|
835,241,533
|
|
June 1-30, 2019
|
711,925
|
|
|
$
|
97.6065
|
|
|
711,925
|
|
|
$
|
765,752,993
|
|
Total
|
1,030,380
|
|
|
$
|
97.0516
|
|
|
1,030,380
|
|
|
$
|
765,752,993
|
|
Date:
|
August 2, 2019
|
/s/ Mark C. McGivney
|
|
|
|
Mark C. McGivney
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
Date:
|
August 2, 2019
|
/s/ Stacy M. Mills
|
|
|
|
Stacy M. Mills
|
|
|
|
Vice President & Controller
|
|
|
|
(Chief Accounting Officer)
|
|
Exhibit No.
|
|
Exhibit Name
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase
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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. Award Acceptance
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1
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2. Rights of Award Holders
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1
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3. 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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2
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C. Satisfaction of Tax Obligations
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3
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1. Personal Tax Advisor
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3
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2. U.S. Employees
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3
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3. Non-U.S. Employees
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3
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a. Stock Units and Dividend Equivalents
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3
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b. Withholding
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3
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III. EMPLOYMENT EVENTS
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4
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A. Death
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4
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B. Permanent Disability
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4
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C. Termination by the Company Other Than for Cause
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4
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1. General
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4
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2. Important Notes
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4
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a. Sale of Business Unit
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4
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b. Constructive Discharge
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4
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D. All Other Terminations
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4
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E. Date of Termination of Employment
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4
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F. Conditions to Vesting of Award Prior to the Scheduled Vesting Date
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5
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1. Restrictive Covenants Agreement
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5
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2. Waiver and Release and Restrictive Covenants Agreement
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5
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G. Determination of Pro-Rata Vesting upon Termination of
Employment
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6
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H. Section 409A of the Code for Award Recipients Subject to U.S.
Federal Income Tax
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6
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IV. CHANGE IN CONTROL PROVISIONS
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7
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V. DEFINITIONS
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8
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VI. ADDITIONAL PROVISIONS
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9
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A. Additional Provisions - General
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9
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1. Administrative Rules
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9
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2. Amendment
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9
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3. Limitations
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9
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4. Cancellation or Clawback of Awards
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10
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5. Governing Law; Choice of Forum
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10
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6. Severability; Captions
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10
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7. Electronic Delivery and Acceptance
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10
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8. Waiver
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10
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9. Eligibility for Award
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10
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B. Additional Provisions - Outside of the United States
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11
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1. Changes to Delivery
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11
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2. Amendment and Modification
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11
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VII. QUESTIONS AND ADDITIONAL INFORMATION
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11
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I.
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BACKGROUND
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II.
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AWARDS
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A.
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General.
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1.
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Award Acceptance. The grant of this Award is contingent upon your acceptance, by the date and in the manner specified by Global & Executive Compensation and/or the Company’s stock plan service provider, of these Terms and Conditions, the Country-Specific Notices 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 deadline date and in the manner specified, then the Award will be cancelled as of the grant date of the Award.
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2.
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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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3.
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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 timely execute the Restrictive Covenants Agreement by the date specified in the Grant Documentation or failure to timely execute or reaffirm and comply with the Restrictive Covenants Agreement as described in Section III.F.1. or 2., as applicable, will result in cancellation or forfeiture of any rights, title and interest in and to the Award, without any liability to the Company.
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B.
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Stock Units.
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1.
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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.
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2.
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Vesting. Subject to your continued employment, 100% of the Stock Units will vest on the 15th of the month in which the third anniversary of the grant date of the Award occurs. The date on which a Stock Unit is scheduled to vest pursuant to this Section II.B.2. is the “Scheduled Vesting Date.” In the event of your termination of employment or the occurrence of your Permanent Disability (as defined in Section V.D.) prior to the Scheduled Vesting Date, your right to any Stock Units that are unvested immediately prior to your termination of employment or occurrence of your Permanent Disability, as applicable, will be determined in accordance with Section III. below. For the avoidance of doubt, the date of your termination of employment for purposes of determining vesting under this Section II.B.2. will be determined in accordance with Section III.E.
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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. No further Dividend Equivalents will accrue on Stock Units that do not vest or are cancelled or forfeited. If a pro-rata amount of the outstanding unvested Stock Unit award is eligible to vest upon a termination of employment as described in Section III.C., the pro-rata calculation (as described in Section III.G.) will be applied to the Dividend Equivalents that have accrued on the Award as of the date of termination. 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 as per a termination of employment event described in Section III.D.
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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 after vesting, and in no event later than 60 days after vesting.
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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 vesting and in no event later than 60 days after vesting.
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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.C.
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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 affiliates’ 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.H.
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C.
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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. 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.
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3.
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Non-U.S. Employees.
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a.
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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.
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b.
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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 will, to the extent permissible under applicable law or otherwise agreed between you and Marsh & McLennan Companies and/or your employer, 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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III.
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EMPLOYMENT EVENTS
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A.
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Death. In the event your employment is terminated because of your death, all of the unvested Stock Units that are outstanding as of the date of your death will fully vest and will be distributed as described in Section II.B.4.
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B.
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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.
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C.
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Termination by the Company Other Than for Cause.
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1.
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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.
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2.
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Important Notes.
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a.
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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.
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b.
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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.
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D.
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All Other Terminations. For all other terminations of employment not described in Sections III.A. through C. or Section IV. (including, but not limited to, a termination by the Company for Cause or a resignation by you of your employment with the Company), any rights, title and interest in and to any remaining unvested portion of the Award shall be cancelled as of the date your employment is treated as having terminated as described in Section III.E.
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E.
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Date of Termination of Employment.
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1.
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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.
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2.
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If you are obligated (whether by law or contract) to provide the Company advance notice of your intention to terminate your employment then, in the event you terminate your employment or service relationship pursuant to Section III.D (regardless of the reason for such termination and whether or not later found to be
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F.
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Conditions to Vesting of Award Prior to the Scheduled Vesting Date.
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1.
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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.
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2.
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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.
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G.
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Determination of Pro-Rata Vesting upon Termination of Employment.
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A
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= the number of Stock Units/accrued Dividend Equivalents covered by the Award;
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B
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= 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.;
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C
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= the number of days in the period beginning on the grant date of the Award and ending on the Scheduled Vesting Date; and
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D
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= the number of Stock Units/accrued Dividend Equivalents that have previously vested, as determined in accordance with Section III.E.
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H.
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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.).
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1.
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For Award recipients subject to U.S. federal income tax, notwithstanding any other provision herein, the Award may be subject to additional restrictions to ensure compliance with (or continued exemption from) the requirements of Section 409A of the Code (as defined in Section V.E.). The Compensation Committee of the Board of Directors of Marsh & McLennan Companies (the “Committee”) intends to administer the Award in accordance with Section 409A of the Code and reserves the right to make changes in the terms or operations of the Award (including changes that may have retroactive effect) deemed necessary or desirable to comply with Section 409A of the Code. This means, for example, that the timing of distributions may be different from those described in the Award Documentation that do not reflect Section 409A of the Code. If the Award is not in compliance with Section 409A of the Code, you may be subject to immediate taxation of all unpaid awards under the Plan that are subject to Section 409A of the Code at your regular federal income tax rate, plus a 20% additional tax, plus interest at the underpayment rate plus 1%, as well as any state and local taxes, penalties, additional taxes and interest, if applicable, imposed under any state tax law similar to Section 409A of the Code.
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2.
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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:
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3.
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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.
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4.
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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.
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IV.
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CHANGE IN CONTROL PROVISIONS
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A.
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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.
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B.
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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.
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V.
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DEFINITIONS
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A.
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“Cause” shall mean:
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1.
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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;
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2.
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willful violation of any written Company policies including, but not limited to, The Marsh & McLennan Companies Code of Conduct, The Greater Good;
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3.
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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;
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4.
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unlawful use (including being under the influence) or possession of illegal drugs;
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5.
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any gross negligence or willful misconduct resulting in a material loss to the Company, or material damage to the reputation of the Company; or
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6.
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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.
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B.
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“Company” shall mean Marsh & McLennan Companies or any of its subsidiaries or affiliates.
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C.
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“Good Reason” shall mean any one of the following events without your written consent:
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1.
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material reduction in your base salary;
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2.
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material reduction in your annual incentive opportunity (including a material adverse change in the method of calculating your annual incentive);
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3.
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material diminution of your duties, responsibilities or authority; or
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4.
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relocation of more than 50 miles from your principal place of employment immediately prior to the Change in Control;
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D.
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“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
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E.
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“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).
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F.
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Additional Definitions.
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VI.
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ADDITIONAL PROVISIONS
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A.
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Additional Provisions—General
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1.
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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.
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2.
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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.
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3.
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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.
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4.
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Cancellation or Clawback of Awards.
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a.
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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.
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b.
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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.
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5.
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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.
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6.
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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.
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7.
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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.
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8.
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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.
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9.
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Eligibility for Award. In order to be granted an Award, you must satisfy the eligibility criteria for grantees set forth in the Plan as of the grant date.
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B.
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Additional Provisions—Outside of the United States
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1.
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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.
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2.
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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.
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VII.
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QUESTIONS AND ADDITIONAL INFORMATION
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PAGE
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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. Award Acceptance
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1
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2. Rights of Award Holders
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1
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3. 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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2
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C. Satisfaction of Tax Obligations
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3
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1. Personal Tax Advisor
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3
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2. U.S. Employees
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3
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3. Non-U.S. Employees
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3
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a. Stock Units and Dividend Equivalents
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3
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b. Withholding
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3
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III. EMPLOYMENT EVENTS
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4
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A. Death
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4
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B. Permanent Disability
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4
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C. Termination by the Company Other Than for Cause
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4
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1. General
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4
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2. Important Notes
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4
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a. Sale of Business Unit
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4
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b. Constructive Discharge
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4
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D. All Other Terminations
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4
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E. Date of Termination of Employment
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4
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F. Conditions to Vesting of Award Prior to a Scheduled Vesting Date
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5
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1. Restrictive Covenants Agreement
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5
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2. Waiver and Release and Restrictive Covenants Agreement
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5
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G. Determination of Pro-Rata Vesting upon Termination of
Employment
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6
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H. Section 409A of the Code for Award Recipients Subject to U.S.
Federal Income Tax
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6
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IV. CHANGE IN CONTROL PROVISIONS
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7
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V. DEFINITIONS
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8
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VI. ADDITIONAL PROVISIONS
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9
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A. Additional Provisions - General
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9
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1. Administrative Rules
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9
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2. Amendment
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9
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3. Limitations
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9
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4. Cancellation or Clawback of Awards
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10
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5. Governing Law; Choice of Forum
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10
|
6. Severability; Captions
|
10
|
7. Electronic Delivery and Acceptance
|
10
|
8. Waiver
|
10
|
9. Eligibility for Award
|
11
|
B. Additional Provisions - Outside of the United States
|
11
|
1. Changes to Delivery
|
11
|
2. Amendment and Modification
|
11
|
VII. QUESTIONS AND ADDITIONAL INFORMATION
|
11
|
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 by Global & Executive Compensation and/or the Company’s stock plan service provider, of these Terms and Conditions, the Country-Specific Notices 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 deadline date and in the manner specified, 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 timely execute the Restrictive Covenants Agreement by the date specified in the Grant Documentation or failure to timely execute or reaffirm and comply with the Restrictive Covenants Agreement as described in Section III.F.1. or 2., as applicable, will result in cancellation or forfeiture of any rights, title and interest in and to the Award, without any liability to the Company.
|
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, 33-1/3% of the Stock Units will vest on the 15th of the month in which each of the first, second and third anniversaries 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. No further Dividend Equivalents will accrue on Stock Units that do not vest or are cancelled or forfeited. If a pro-rata amount of the outstanding unvested Stock Unit award is eligible to vest upon a termination of employment as described in Section III.C., the pro-rata calculation (as described in Section III.G.) will be applied to the Dividend Equivalents that have accrued on the Award as of the date of termination. 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 as per a termination of employment event described in Section III.D.
|
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
|
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, 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 will, to the extent permissible under applicable law or otherwise agreed between you and Marsh & McLennan Companies and/or your employer, retain and sell a sufficient number of whole shares of Common Stock distributable in respect of the Award for this purpose.
|
III.
|
EMPLOYMENT EVENTS
|
A.
|
Death. In the event your employment is terminated because of your death, all of the unvested Stock Units that are outstanding as of the date of your death will fully vest and will be distributed as described in Section II.B.4.
|
B.
|
Permanent Disability. Upon the occurrence of your Permanent Disability, the unvested Stock Units will fully vest and will be distributed as described in Section II.B.4., provided that you satisfy the conditions to vesting described in Section III.F.1.
|
C.
|
Termination by the Company Other Than for Cause.
|
1.
|
General. Except as otherwise provided in Section IV., in the event the Company, in its sole discretion, determines that your employment is terminated by the Company other than for Cause (as defined in Section V.A.), the unvested Stock Units will vest at such termination of employment on a pro-rata basis as described in Section III.G. and will be distributed as described in Section II.B.4., provided that you satisfy the conditions to vesting described in Section III.F.2.
|
2.
|
Important Notes.
|
a.
|
Sale of Business Unit. For purposes of this Award, in the event of a sale or similar transaction involving the business unit for which you work (“Employing Company”) as a result of which the Employing Company ceases to be a subsidiary or affiliate of Marsh & McLennan Companies, your employment will be deemed terminated by the Company other than for Cause, even if your employment with the Employing Company continues after the sale or similar transaction.
|
b.
|
Constructive Discharge. The Award will not vest, whether on a pro-rata or full basis, upon a constructive discharge, including if any court or regulatory agency retroactively concludes or interprets events to have constituted a constructive discharge.
|
D.
|
All Other Terminations. For all other terminations of employment not described in Sections III.A. through C. or Section IV. (including, but not limited to, a termination by the Company for Cause or a resignation by you of your employment with the Company), any rights, title and interest in and to any remaining unvested portion of the Award shall be cancelled as of the date your employment is treated as having terminated as described in Section III.E.
|
E.
|
Date of Termination of Employment.
|
1.
|
If Section III.E.2 does not apply to you, then for purposes of determining vesting under Section II.B.2. and the number of unvested Stock Units that vest on a pro-rata basis as described in Section III.G., your employment will be treated as having terminated on your last day of employment with the Company.
|
2.
|
If you are obligated (whether by law or contract) to provide the Company advance notice of your intention to terminate your employment then, in the event you terminate your employment or service relationship pursuant to Section III.D (regardless of the reason for such termination and whether or not later found to be
|
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/accrued Dividend Equivalents 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.;
|
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/accrued Dividend Equivalents that have previously vested, as determined in accordance with Section III.E.
|
H.
|
Section 409A of the Code for Award Recipients Subject to U.S. Federal Income Tax (whether or not the recipient is a U.S. citizen or employed in the U.S.).
|
1.
|
For Award recipients subject to U.S. federal income tax, notwithstanding any other provision herein, the Award may be subject to additional restrictions to ensure compliance with (or continued exemption from) the requirements of Section 409A of the Code (as defined in Section V.E.). The Compensation Committee of the Board of Directors of Marsh & McLennan Companies (the “Committee”) intends to administer the Award in accordance with Section 409A of the Code and reserves the right to make changes in the terms or operations of the Award (including changes that may have retroactive effect) deemed necessary or desirable to comply with Section 409A of the Code. This means, for example, that the timing of distributions may be different from those described in the Award Documentation that do not reflect Section 409A of the Code. If the Award is not in compliance with Section 409A of the Code, you may be subject to immediate taxation of all unpaid awards under the Plan that are subject to Section 409A of the Code at your regular federal income tax rate, plus a 20% additional tax, plus interest at the underpayment rate plus 1%, as well as any state and local taxes, penalties, additional taxes and interest, if applicable, imposed under any state tax law similar to Section 409A of the Code.
|
2.
|
Notwithstanding any other provision herein, if any portion of the Award is determined to be nonqualified deferred compensation subject to Section 409A of the Code, any references to “termination of employment,” or “when you are no longer employed” in these Terms and Conditions shall have the following meaning:
|
3.
|
Notwithstanding any other provision herein, if at the time of your termination of employment you are a “specified employee” (as defined in Section 409A of the Code) no portion of the Award that is determined to be nonqualified deferred compensation subject to Section 409A of the Code 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.
|
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
|
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.
|
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 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.
|
9.
|
Eligibility for Award. In order to be granted an Award, you must satisfy the eligibility criteria for grantees set forth in the Plan as of the grant date.
|
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
|
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 You Outside of the European Union - Age and Service
Treatment
|
4
|
D. Termination by You Within the European Union - Retirement Treatment
|
5
|
E. Termination by the Company Other Than for Cause
|
6
|
1. General
|
6
|
2. Prior Satisfaction of Age and Service Criteria for Full Vesting
|
6
|
3. Important Notes
|
6
|
a. Sale of Business Unit
|
6
|
b. Constructive Discharge
|
6
|
F. All Other Terminations
|
7
|
G. Date of Termination of Employment
|
7
|
H. Conditions for All or a Portion of the Award to Remain Outstanding
Following a Termination of Employment
|
7
|
1. Restrictive Covenants Agreement
|
7
|
2. Waiver and Release and Restrictive Covenants Agreement
|
8
|
I. Determination of Pro-Rata Calculation upon Termination of
Employment
|
9
|
J. Section 409A of the Code for Award Recipients Subject to U.S.
Federal Income Tax
|
9
|
IV. CHANGE IN CONTROL PROVISIONS
|
11
|
V. DEFINITIONS
|
12
|
VI. ADDITIONAL PROVISIONS
|
14
|
A. Additional Provisions - General
|
14
|
1. Administrative Rules
|
14
|
2. Amendment
|
14
|
3. Limitations
|
14
|
4. Cancellation or Clawback of Awards
|
14
|
5. Governing Law; Choice of Forum
|
15
|
6. Severability; Captions
|
15
|
7. Electronic Delivery and Acceptance
|
15
|
8. Waiver
|
15
|
9. Eligibility for Award
|
|
B. Additional Provisions - Outside of the United States
|
15
|
1. Changes to Delivery
|
15
|
2. Amendment and Modification
|
16
|
VII. QUESTIONS AND ADDITIONAL INFORMATION
|
16
|
1.
|
Award Acceptance. The grant of this Award is contingent upon your acceptance, by the date and in the manner specified by Global & Executive Compensation and/or the Company’s stock plan service provider, of these Terms and Conditions, the Country-Specific Notices 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 deadline date and in the manner specified, 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, you must execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, the Restrictive Covenants Agreement in order for the Award to vest pursuant to certain employment events as described in Section III., and you must further execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, and be in compliance with the Restrictive Covenants Agreement in order for the Award to become distributable to you whether or not you are employed by the Company at that time. Failure to timely execute the Restrictive Covenants
|
1.
|
General. A restricted stock unit (“Stock Unit”) represents an unfunded and unsecured promise to deliver (or cause to be delivered) to you, subject to the terms of the Award Documentation, one share of Common Stock after vesting.
|
2.
|
Vesting. Subject to your continued employment, 33-1/3% of the Stock Units will vest on [DATE] of [YEAR], [YEAR] and [YEAR]. Each date on which a Stock Unit is scheduled to vest pursuant to this Section II.B.2. is a “Scheduled Vesting Date.” In the event of your termination of employment, 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 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.G.
|
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. No further Dividend Equivalents will accrue on Stock Units that do not vest or are cancelled or forfeited. If a pro-rata amount of the outstanding unvested Stock Unit award is eligible to vest upon a termination of employment event as described in Section III.C.1, III.D and III.E.1, the pro-rata calculation (as described in Section III.I) will be applied to the Dividend Equivalents that have accrued on the Award as of the date of termination. 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 as per a termination of employment event described in Section III.F.
|
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 following the Scheduled Vesting Date, and in no event later than 60 days following the Scheduled Vesting Date, except as otherwise provided in Sections III., IV., and VI.B.
|
b.
|
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 Scheduled Vesting Date, except as otherwise provided in Sections III., IV., and VI.B.
|
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.J.
|
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
|
A.
|
Death. In the event your employment is terminated because of your death, all of the unvested Stock Units that are outstanding as of the date of your death will fully vest and will be distributed within 60 days following such date.
|
B.
|
Permanent Disability. 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 next Scheduled Vesting Date as described in Section II.B.4.; provided that you have satisfied the conditions described in Section III.H.1.
|
C.
|
Termination by You Outside of the European Union – Age and Service Treatment. If you have satisfied the Age and Service Criteria for Pro-Rata Vesting (as defined in Section V.B.) or 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 (as defined in V.F.), then:
|
1.
|
If you have satisfied the Age and Service Criteria for Pro-Rata Vesting but not the Age and Service Criteria for Full Vesting, 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.I) and will be distributed as soon as practicable following the next Scheduled Vesting Date as described in Section II.B.4.; provided that you have satisfied the conditions described in Section III.H.1. The portion of the unvested Stock Units that does not remain outstanding pursuant to this paragraph will be forfeited and cancelled.
|
2.
|
If you have satisfied the Age and Service Criteria for Full Vesting, upon such termination of employment, all of the unvested Stock Units that are outstanding as of such termination of employment will remain outstanding
|
D.
|
Termination by You Within the European Union - Retirement Treatment. Provided you have a minimum of five years of service with the Company on or before you terminate employment, you will be eligible to apply for 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 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.I) until the later to occur of the next 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.H.1. 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. 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, Section III.E.1. will govern the treatment of the Award in the event your employment is terminated by the Company other than for Cause. For the further avoidance of doubt, if your termination of employment occurs on a Scheduled Vesting Date, distribution will occur within 60 days following such Scheduled Vesting Date (or, if later, within 60 days following the determination by the Retirement Treatment Committee that you are eligible for retirement treatment).
|
1.
|
General. Except as otherwise provided in Sections III.E.2. 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.I) and will be distributed as soon as practicable following the next Scheduled Vesting Date as described in Section II.B.4., provided that you have satisfied the conditions described in Section III.H.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.E.1. 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.
|
2.
|
Prior 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 Scheduled Vesting Date as described in Section II.B.4.; provided that you have satisfied the conditions described in Section III.H.2. For the avoidance of doubt, this section III.E.2. shall not apply (and rather Section III.E.1. shall apply) if you are determined by the Company, in its sole discretion, to be employed within the European Union.
|
3.
|
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.
|
F.
|
All Other Terminations. For all other terminations of employment not described in Sections III.A. through E. 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 or the Age and Service Criteria for Full Vesting as described in Section III.C., or your resignation without meeting the minimum service requirement or 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.D.), 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.G.
|
G.
|
Date of Termination of Employment.
|
1.
|
If Section III.G.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.I., your employment will be treated as having terminated on your last day of employment with the Company.
|
2.
|
If you are obligated (whether by law or contract) to provide the Company advance notice of your intention to terminate your employment or service relationship then, in the event you terminate your employment pursuant to Section III.C., III.D. or III.F. (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), for purposes of determining vesting under Section II.B.2. and the pro rata calculation described in Section III.I., your employment will be treated as having terminated on your last day of active service with the Company, as determined by the Company in its sole discretion.
|
H.
|
Conditions for All or a Portion of the Award to Remain Outstanding 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 Section III.C. or (iii) a determination by the Retirement Treatment Committee that you are eligible for retirement treatment as described in Section III.D., you will be required to execute or reaffirm, as determined by Marsh &
|
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.E., 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 (as described in Section II.B.4.) 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.
|
I.
|
Determination of Pro-Rata Calculation upon Termination of Employment.
|
A
|
= the number of Stock Units/accrued Dividend Equivalents 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.G;
|
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/accrued Dividend Equivalents that have previously vested, as determined in accordance with Section III.G.
|
J.
|
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.J.). The Compensation Committee of the Board of Directors of Marsh & McLennan Companies (the “Committee”) intends to administer the Award in accordance with Section 409A of the Code and reserves the right to make changes in the terms or operations of the Award (including changes that may have retroactive effect) deemed necessary or desirable to comply with Section 409A of the Code. This means, for example, that the timing of distributions may be different from those described in the Award Documentation that do not reflect Section 409A of the Code. If the Award is not in compliance with Section 409A of the Code, you may be subject to immediate taxation of all unpaid awards under the Plan that are subject to Section 409A of the Code at your regular federal income tax rate, plus a 20% additional tax, plus interest at the underpayment rate plus 1%, as well as any state and local taxes, penalties, additional taxes and interest, if applicable, imposed under any state tax law similar to Section 409A of the Code.
|
2.
|
Notwithstanding any other provision herein, if any portion of the Award is determined to be nonqualified deferred compensation subject to Section 409A of the Code, any references to “termination of employment,” or “when you are no longer employed” in these Terms and Conditions shall have the following meaning:
|
3.
|
Notwithstanding any other provision herein, if at the time of your termination of employment you are a “specified employee” (as defined in Section 409A of the Code), no portion of the Award that is determined to be nonqualified deferred compensation subject to Section 409A of the Code 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, with respect to distributions of Stock Units or cash attributable to such Stock Units where such distributions are subject to one or more Employment-Related Actions:
|
a.
|
With respect to Stock Units, no later than December 31st of the year in which 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.C. 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
|
b.
|
With respect to a cash payment attributable to Stock Units, to the extent any such payment will not be made by December 31st of the year in which the Scheduled Vesting Date occurs, any payment that relates to such Scheduled Vesting Date shall be placed in escrow or contributed to
|
5.
|
Nothing in this Section III.J. is intended to nor does it guarantee that the Award will not be subject to “additional tax” or other adverse tax consequences under Section 409A of the Code or any similar state tax law.
|
A.
|
Upon the occurrence of a Change in Control, the Award will continue to vest in accordance with the vesting schedule specified in Section II.B.2., subject to earlier vesting or forfeiture pursuant to Section III.; provided that upon your termination of employment by the Company other than for Cause, or by you for Good Reason (as defined in V.G.), during the 24-month period following such Change in Control, all unvested Stock Units that are outstanding as of your termination of employment will remain outstanding and will be distributed as soon as practicable following the next Scheduled Vesting Date as described in Section II.B.4.; provided that you have satisfied the conditions described in Section IV.B. Notwithstanding the foregoing, if the Stock Units are not assumed, converted or replaced in connection with a Change in Control on an equivalent basis, the Stock Units (to the extent permitted in accordance with the requirements of Treas. Reg. § 1.409A-3(j)(4)(ix)(B)) 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.
|
B.
|
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 and be in compliance with the agreement, if applicable, as of the delivery date as described in II.B.4., will result in the cancellation or forfeiture of any rights, title and interest in and to the Award.
|
C.
|
For the avoidance of doubt, in the event of your termination of employment by the Company other than for Cause or by you for Good Reason during the 24-month period following such Change in Control and, on or before the date of your termination of employment you satisfy the Age and Service Criteria for Pro-Rata Vesting or the Age and Service Criteria for Full Vesting as described in Section III.C., or you are determined by the Retirement Treatment Committee to be eligible
|
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.
|
“European Union” shall include all member states and the United Kingdom, if the United Kingdom leaves the European Union.
|
G.
|
“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.
|
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.
|
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 shall be conclusive and binding. The Committee may delegate to any other individual or entity the authority to perform any or all of the functions of the Committee under the Award, and references to the Committee shall be deemed to include any such delegate.
|
2.
|
Amendment. The Committee may, in its sole discretion, amend the terms of the Award, including, without limitation, to impose additional requirements on the Award and on any shares of Common Stock with respect to the Award; provided, however, that if the Committee concludes, in its sole discretion, that such amendment is likely to materially impair your rights with respect to the Award, such amendment shall not be implemented with respect to the Award without your consent, except to the extent that any such action is made to cause the Award to comply with applicable law, currency controls, stock market or exchange rules and regulations, or accounting or tax rules and regulations, or is otherwise made in accordance with Section VI.A.4.
|
3.
|
Limitations. Payment of the Award is not secured by trust, insurance contract or other funding medium, and you do not have any interest in any fund or specific asset of Marsh & McLennan Companies by reason of the Award. Your right to payment of the Award is the same as the right of an unsecured general creditor of Marsh & McLennan Companies.
|
4.
|
Cancellation or Clawback of Awards.
|
a.
|
Marsh & McLennan Companies may, to the extent permitted or required by any applicable law, stock exchange rules, currency controls, or any applicable Company policy or arrangement in effect prior to the vesting of any unvested portion of the Award, or as specified in the Award Documentation, cancel, reduce or require reimbursement of the Award.
|
b.
|
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.
|
9.
|
Eligibility for Award. In order to be granted an Award, you must satisfy the eligibility criteria for grantees set forth in the Plan as of the grant date.
|
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, 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
|
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
|
4
|
III. EMPLOYMENT EVENTS
|
4
|
A. Death
|
4
|
B. Permanent Disability
|
4
|
C. Termination by You Outside of the European Union - Age and Service
Treatment
|
4
|
D. Termination by You Within the European Union - Retirement Treatment
|
5
|
E. Termination by the Company Other Than for Cause
|
5
|
1. General
|
5
|
2. Important Notes
|
6
|
a. Sale of Business Unit
|
6
|
b. Constructive Discharge
|
6
|
F. All Other Terminations
|
6
|
G. Date of Termination of Employment
|
6
|
H. Conditions for All or a Portion of the Award to Vest
Following a Termination of Employment
|
7
|
1. Restrictive Covenants Agreement
|
7
|
2. Waiver and Release and Restrictive Covenants Agreement
|
7
|
I. Determination of Pro-Rata Calculation upon Termination of
Employment
|
8
|
J. Section 409A of the Code for Award Recipients Subject to U.S.
Federal Income Tax
|
8
|
IV. CHANGE IN CONTROL PROVISIONS
|
11
|
V. DEFINITIONS
|
12
|
|
|
VI. ADDITIONAL PROVISIONS
|
14
|
A. Additional Provisions - General
|
14
|
1. Administrative Rules
|
14
|
2. Amendment
|
14
|
3. Limitations
|
14
|
4. Cancellation or Clawback of Awards
|
14
|
5. Governing Law; Choice of Forum
|
14
|
6. Severability; Captions
|
15
|
7. Electronic Delivery and Acceptance
|
15
|
8. Waiver
|
15
|
9. Eligibility for Award
|
15
|
B. Additional Provisions - Outside of the United States
|
15
|
1. Changes to Delivery
|
15
|
2. Amendment and Modification
|
15
|
VII. QUESTIONS AND ADDITIONAL INFORMATION
|
16
|
1.
|
Award Acceptance. The grant of this Award is contingent upon your acceptance, by the date and in the manner specified by Global & Executive Compensation and/or the Company’s stock plan service provider, of these Terms and Conditions, the Country-Specific Notices 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 deadline date and in the manner specified, 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, you must execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, the Restrictive Covenants Agreement in order for the Award to vest pursuant to certain employment events as described in Section III., and you must further execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, and
|
1.
|
General. A restricted stock unit (“Stock Unit”) represents an unfunded and unsecured promise to deliver (or cause to be delivered) to you, subject to the terms of the Award Documentation, one share of Common Stock after vesting.
|
2.
|
Vesting. Subject to your continued employment, 33-1/3% of the Stock Units will vest on [DATE] of [YEAR], [YEAR] and [YEAR]. Each date on which a Stock Unit is scheduled to vest pursuant to this Section II.B.2. is a “Scheduled Vesting Date.” In the event of your termination of employment, 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 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.G.
|
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. No further Dividend Equivalents will accrue on Stock Units that do not vest or are cancelled or forfeited. If a pro-rata amount of the outstanding unvested Stock Unit award is eligible to vest upon a termination of employment event as described in Section III.C.1, and III.D, the pro-rata calculation (as described in Section III.I) will be applied to the Dividend Equivalents that have accrued on the Award as of the date of termination. 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 as per a termination of employment event described in Section III.F.
|
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 following the Scheduled Vesting Date, and in no event later than 60 days
|
b.
|
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 Scheduled Vesting Date, except as otherwise provided in Sections III., IV., and VI.B.
|
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.J.
|
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, 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 will, to the extent permissible under applicable law or otherwise agreed between you and Marsh & McLennan Companies and/or your employer, retain and sell a sufficient number of whole shares of Common Stock distributable in respect of the Award for this purpose.
|
A.
|
Death. In the event your employment is terminated because of your death, all of the unvested Stock Units that are outstanding as of the date of your death will fully vest and will be distributed within 60 days following such date.
|
B.
|
Permanent Disability. 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 fully vest and will be distributed within 60 days following such date; provided that you have satisfied the conditions described in Section III.H.1.
|
C.
|
Termination by You Outside of the European Union - Age and Service Treatment. If you have satisfied the Age and Service Criteria for Pro-Rata Vesting (as defined in Section V.B.) or 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 (as defined in V.F.), then:
|
1.
|
If you have satisfied the Age and Service Criteria for Pro-Rata Vesting but not the Age and Service Criteria for Full Vesting, upon such termination of employment, a pro-rata portion of the unvested Stock Units that are outstanding as of such termination of employment will vest and will be distributed within 60 days following such date; provided that you have satisfied the conditions described in Section III.H.1. The portion of the unvested Stock Units that does not vest pursuant to this paragraph will be forfeited and cancelled.
|
2.
|
If you have satisfied the Age and Service Criteria for Full Vesting, upon such termination of employment, all of the unvested Stock Units that are outstanding as of such termination of employment will vest and will be distributed within 60 days following such date; provided that you have satisfied the conditions described in Section III.H.1.
|
D.
|
Termination by You Within the European Union - Retirement Treatment. Provided you have a minimum of five years of service with the Company on or before you terminate employment, you will be eligible to apply for 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 upon your termination of employment a pro-rata portion of the unvested Stock Units that are outstanding as of such termination of employment will vest upon 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.H.1. 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. 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, Section III.E.1. will govern the treatment of the Award in the event your employment is terminated 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, all of the unvested Stock Units that are outstanding as of such termination of employment will vest and will be distributed within 60 days following such date, provided that you have satisfied the conditions described in Section III.H.2. For the avoidance of doubt, this Section III.E.1. shall apply regardless of whether you are determined by the Retirement Treatment Committee to be eligible for
|
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.
|
F.
|
All Other Terminations. For all other terminations of employment not described in Sections III.A. through E. 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 or the Age and Service Criteria for Full Vesting as described in Section III.C., or your resignation without meeting the minimum service requirement or 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.D.), 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.G.
|
G.
|
Date of Termination of Employment.
|
1.
|
If Section III.G.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.I., your employment will be treated as having terminated on your last day of employment with the Company.
|
2.
|
If you are obligated (whether by law or contract) to provide the Company advance notice of your intention to terminate your employment or service relationship then, in the event you terminate your employment pursuant to Section III.C., III.D. or III.F. (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), for purposes of determining vesting under Section II.B.2. and the pro rata calculation described in Section III.I., your employment will be treated as having terminated on your last day of active service with the Company, as determined by the Company in its sole discretion.
|
H.
|
Conditions for All or a Portion of the Award to Vest 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 Section III.C. or (iii) a determination by the Retirement Treatment Committee that you are eligible for retirement treatment as described in Section III.D., 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 Section III.C. and no later than 60 days following vesting if your termination of employment is pursuant to Section III.D., 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 (as described in Section II.B.4.) 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.E., 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 (as described in Section II.B.4.) 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.
|
I.
|
Determination of Pro-Rata Calculation upon Termination of Employment.
|
A
|
= the number of Stock Units/accrued Dividend Equivalents 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.G;
|
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/accrued Dividend Equivalents that have previously vested, as determined in accordance with Section III.G.
|
J.
|
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.J.). The Compensation Committee of the Board of Directors of Marsh & McLennan Companies (the “Committee”) intends to administer the Award in accordance with Section 409A of the Code and reserves the right to make changes in the terms or operations of the Award (including changes that may have retroactive effect) deemed necessary or desirable to comply with Section 409A of the Code. This means, for example, that the timing of distributions may be different from those described in the Award Documentation that do not reflect Section 409A of the Code. If the Award is not in compliance with Section 409A of the Code, you may be subject to immediate taxation of all unpaid awards under the Plan that are subject to Section 409A of the Code at your regular federal income tax rate, plus a 20% additional tax, plus interest at the underpayment rate plus 1%, as well as any state and local taxes, penalties, additional taxes and interest, if applicable, imposed under any state tax law similar to Section 409A of the Code.
|
2.
|
Notwithstanding any other provision herein, if any portion of the Award is determined to be nonqualified deferred compensation subject to Section 409A of the Code, any references to “termination of employment,” or “when you are no longer employed” in these Terms and Conditions shall have the following meaning:
|
3.
|
Notwithstanding any other provision herein, if at the time of your termination of employment you are a “specified employee” (as defined in Section 409A of the Code), no portion of the Award that is determined to be nonqualified deferred compensation subject to Section 409A of the Code 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 other provision herein, if (a) the Award is subject to Section 409A of the Code (or could, absent this provision, be subject to Section 409A of the Code, including a distribution that would otherwise be made pursuant to Section III. J.5) and the Award Documentation conditions payment or commencement of payment on one or more Employment-Related Actions and (b) the period for the completion of an Employment-Related Action includes the January 1 next following the event otherwise triggering the right to payment, then the payment shall be made or commence following the completion of the Employment-Related Action, but in no event earlier than that January 1.
|
5.
|
Notwithstanding any provision herein other than Section III.J.4, 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 January 1, [YEAR]:
|
a.
|
With respect to Stock Units, no later than March 15th 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.C. 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
|
b.
|
With respect to a cash payment attributable to Stock Units, to the extent that such payment will not be made by March 15th of the year following the year in which the Substantial Risk of Forfeiture lapses with respect to such payment, such payment shall be placed in escrow or contributed to a secular trust (in the sole discretion of Marsh & McLennan Companies) for your benefit on or before such March 15th and subject to withholding of any applicable tax obligations, as described in Section II.C. 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.
|
6.
|
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 January 1, [YEAR] and (ii) where such distributions are subject to one or more Employment-Related Actions:
|
a.
|
With respect to Stock Units, no later than December 31st of the year in which the Scheduled Vesting Date occurs (or December 31st of the year in which your termination of employment occurs, if sooner), shares of Common Stock underlying such Stock Units shall be delivered to you (to the extent not previously delivered) on or before such December 31st, subject to a stop transfer order and subject to withholding of any applicable tax obligations, as described in Section II.C. 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
|
b.
|
With respect to a cash payment attributable to Stock Units, to the extent any such payment will not be made by December 31st of the year in which the Scheduled Vesting Date occurs (or December 31st of the year in which your termination of employment occurs, if sooner), any payment that relates to such payment event shall be placed in escrow or contributed to a secular trust (in the sole discretion of Marsh & McLennan Companies) for your benefit on or before such December 31st and subject to withholding of any applicable tax obligations, as described in Section II.C. 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.
|
Nothing in this Section III.J. is intended to nor does it guarantee that the Award will not be subject to “additional tax” or other adverse tax consequences under Section 409A of the Code or any similar state tax law.
|
A.
|
Upon the occurrence of a Change in Control, the Award will continue to vest in accordance with the vesting schedule specified in Section II.B.2., subject to earlier vesting or forfeiture pursuant to Section III.; provided that upon your termination of employment by the Company other than for Cause, or by you for Good Reason (as defined in V.G.), during the 24-month period following such Change in Control, all unvested Stock Units that are outstanding as of your termination of employment will fully vest and will be distributed within 60 days following such date; provided that you have satisfied the conditions described in Section IV.B. Notwithstanding the foregoing, if the Stock Units are not assumed, converted or replaced in connection with a Change in Control on an equivalent basis, the Stock Units (to the extent permitted in accordance with the requirements of Treas. Reg. § 1.409A-3(j)(4)(ix)(B)) 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.
|
B.
|
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 and be in compliance with the agreement, if applicable, as of the delivery date as described in II.B.4., will result in the cancellation or forfeiture of any rights, title and interest in and to the Award.
|
C.
|
For the avoidance of doubt, in the event of your termination of employment by the Company other than for Cause or by you for Good Reason during the 24-month period following such Change in Control and, on or before the date of your termination of employment you satisfy the Age and Service Criteria for Pro-Rata Vesting or the Age and Service Criteria for Full Vesting as described in Section III.C., or you are determined by the Retirement Treatment Committee to be eligible for retirement treatment on or following your termination of employment as described in Section III.D., any unvested Stock Units covered by the Award will be treated as described in Section IV.A; provided that you have satisfied the conditions described in Section IV.B.
|
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.
|
“European Union” shall include all member states and the United Kingdom, if the United Kingdom leaves the European Union.
|
G.
|
“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.
|
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.
|
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 shall be conclusive and binding. The Committee may delegate to any other individual or entity the authority to perform any or all of the functions of the Committee under the Award, and references to the Committee shall be deemed to include any such delegate.
|
2.
|
Amendment. The Committee may, in its sole discretion, amend the terms of the Award, including, without limitation, to impose additional requirements on the Award and on any shares of Common Stock with respect to the Award; provided, however, that if the Committee concludes, in its sole discretion, that such amendment is likely to materially impair your rights with respect to the Award, such amendment shall not be implemented with respect to the Award without your consent, except to the extent that any such action is made to cause the Award to comply with applicable law, currency controls, stock market or exchange rules and regulations, or accounting or tax rules and regulations, or is otherwise made in accordance with Section VI.A.4.
|
3.
|
Limitations. Payment of the Award is not secured by trust, insurance contract or other funding medium, and you do not have any interest in any fund or specific asset of Marsh & McLennan Companies by reason of the Award. Your right to payment of the Award is the same as the right of an unsecured general creditor of Marsh & McLennan Companies.
|
4.
|
Cancellation or Clawback of Awards.
|
a.
|
Marsh & McLennan Companies may, to the extent permitted or required by any applicable law, stock exchange rules, currency controls, or any applicable Company policy or arrangement in effect prior to the vesting of any unvested portion of the Award, or as specified in the Award Documentation, cancel, reduce or require reimbursement of the Award.
|
b.
|
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
|
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.
|
9.
|
Eligibility for Award. In order to be granted an Award, you must satisfy the eligibility criteria for grantees set forth in the Plan as of the grant date.
|
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, 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 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
|
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
|
3
|
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
|
4
|
III. EMPLOYMENT EVENTS
|
4
|
A. Death
|
4
|
B. Permanent Disability
|
4
|
C. Termination by You Outside of the European Union - Age and Service
Treatment
|
4
|
D. Termination by You Within the European Union - Retirement Treatment
|
5
|
E. Termination by the Company Other Than for Cause
|
5
|
1. General
|
5
|
2. Important Notes
|
6
|
a. Sale of Business Unit
|
6
|
b. Constructive Discharge
|
6
|
F. All Other Terminations
|
6
|
G. Date of Termination of Employment
|
6
|
H. Conditions for All or a Portion of the Award to Vest
Following a Termination of Employment
|
7
|
1. Restrictive Covenants Agreement
|
7
|
2. Waiver and Release and Restrictive Covenants Agreement
|
7
|
I. Determination of Pro-Rata Calculation upon Termination of
Employment
|
8
|
J. Section 409A of the Code for Award Recipients Subject to U.S.
Federal Income Tax
|
8
|
IV. CHANGE IN CONTROL PROVISIONS
|
11
|
V. DEFINITIONS
|
12
|
|
|
VI. ADDITIONAL PROVISIONS
|
14
|
A. Additional Provisions - General
|
14
|
1. Administrative Rules
|
14
|
2. Amendment
|
14
|
3. Limitations
|
14
|
4. Cancellation or Clawback of Awards
|
14
|
5. Governing Law; Choice of Forum
|
14
|
6. Severability; Captions
|
15
|
7. Electronic Delivery and Acceptance
|
15
|
8. Waiver
|
15
|
9. Eligibility for Award
|
15
|
B. Additional Provisions - Outside of the United States
|
15
|
1. Changes to Delivery
|
15
|
2. Amendment and Modification
|
16
|
VII. QUESTIONS AND ADDITIONAL INFORMATION
|
16
|
1.
|
Award Acceptance. The grant of this Award is contingent upon your acceptance, by the date and in the manner specified by Global & Executive Compensation and/or the Company’s stock plan service provider, of these Terms and Conditions, the Country-Specific Notices 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 deadline date and in the manner specified, 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, you must execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, the Restrictive Covenants Agreement in order for the Award to vest pursuant to certain employment events as described in Section III., and you must further execute or reaffirm,
|
1.
|
General. A restricted stock unit (“Stock Unit”) represents an unfunded and unsecured promise to deliver (or cause to be delivered) to you, subject to the terms of the Award Documentation, one share of Common Stock after vesting.
|
2.
|
Vesting. Subject to your continued employment, 33-1/3% of the Stock Units will vest on [DATE] of [YEAR], [YEAR] and [YEAR]. Each date on which a Stock Unit is scheduled to vest pursuant to this Section II.B.2. is a “Scheduled Vesting Date.” In the event of your termination of employment, 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 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.G.
|
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. No further Dividend Equivalents will accrue on Stock Units that do not vest or are cancelled or forfeited. If a pro-rata amount of the outstanding unvested Stock Unit award is eligible to vest upon a termination of employment event as described in Section III.C.1, and III.D, the pro-rata calculation (as described in Section III.I) will be applied to the Dividend Equivalents that have accrued on the Award as of the date of termination. 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 as per a termination of employment event described in Section III.F.
|
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 following the Scheduled Vesting Date, and in no event later than 60 days following the Scheduled Vesting Date, except as otherwise provided in Sections III., IV., and VI.B.
|
b.
|
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 Scheduled Vesting Date, except as otherwise provided in Sections III., IV., and VI.B.
|
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.J.
|
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
|
b.
|
Withholding. Marsh & McLennan Companies and/or your employer shall have the power and the right to deduct and withhold from the Award and other compensation or to require you to remit to Marsh & McLennan Companies and/or to your employer, an amount sufficient to satisfy any taxes that Marsh & McLennan Companies expects to be payable under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, payroll taxes, fringe benefits, payment on account, capital gain taxes, transfer taxes, social security contributions and National Insurance Contributions with respect to the Award, and any and all associated tax events derived therefrom. If applicable, Marsh & McLennan Companies and/or your employer will, to the extent permissible under applicable law or otherwise agreed between you and Marsh & McLennan Companies and/or your employer, retain and sell a sufficient number of whole shares of Common Stock distributable in respect of the Award for this purpose.
|
A.
|
Death. In the event your employment is terminated because of your death, all of the unvested Stock Units that are outstanding as of the date of your death will fully vest and will be distributed within 60 days following such date.
|
B.
|
Permanent Disability. 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 fully vest and will be distributed within 60 days following such date; provided that you have satisfied the conditions described in Section III.H.1.
|
C.
|
Termination by You Outside of the European Union - Age and Service Treatment. If you have satisfied the Age and Service Criteria for Pro-Rata Vesting (as defined in Section V.B.) or 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 (as defined in V.F.), then:
|
1.
|
If you have satisfied the Age and Service Criteria for Pro-Rata Vesting but not the Age and Service Criteria for Full Vesting, upon such termination of employment, a pro-rata portion of the unvested Stock Units that are outstanding as of such termination of employment will vest and will be distributed within 60 days following such date; provided that you have satisfied the conditions described in Section III.H.1. The portion of the unvested Stock Units that does not vest pursuant to this paragraph will be forfeited and cancelled.
|
2.
|
If you have satisfied the Age and Service Criteria for Full Vesting, upon such termination of employment, all of the unvested Stock Units that are outstanding as of such termination of employment will vest and will be distributed within 60 days following such date; provided that you have satisfied the conditions described in Section III.H.1.
|
D.
|
Termination by You Within the European Union - Retirement Treatment. Provided you have a minimum of five years of service with the Company on or before you terminate employment, you will be eligible to apply for 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 upon your termination of employment a pro-rata portion of the unvested Stock Units that are outstanding as of such termination of employment will vest upon 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.H.1. 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. 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, Section III.E.1. will govern the treatment of the Award in the event your employment is terminated 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, all of the unvested Stock Units that are outstanding as of such termination of employment will vest and will be distributed within 60 days following such date, provided that you have satisfied the conditions described in Section III.H.2. For the avoidance of doubt, this Section III.E.1. shall apply regardless of whether you are determined by the Retirement Treatment Committee to be eligible for
|
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.
|
F.
|
All Other Terminations. For all other terminations of employment not described in Sections III.A. through E. 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 or the Age and Service Criteria for Full Vesting as described in Section III.C., or your resignation without meeting the minimum service requirement or 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.D.), 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.G.
|
G.
|
Date of Termination of Employment.
|
1.
|
If Section III.G.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.I., your employment will be treated as having terminated on your last day of employment with the Company.
|
2.
|
If you are obligated (whether by law or contract) to provide the Company advance notice of your intention to terminate your employment or service relationship then, in the event you terminate your employment pursuant to Section III.C., III.D. or III.F. (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), for purposes of determining vesting under Section II.B.2. and the pro rata calculation described in Section III.I., your employment will be treated as having terminated on your last day of active service with the Company, as determined by the Company in its sole discretion.
|
H.
|
Conditions for All or a Portion of the Award to Vest 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 Section III.C. or (iii) a determination by the Retirement Treatment Committee that you are eligible for retirement treatment as described in Section III.D., 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 Section III.C. and no later than 60 days following vesting if your termination of employment is pursuant to Section III.D., 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 (as described in Section II.B.4.) 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.E., 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 (as described in Section II.B.4.) 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.
|
I.
|
Determination of Pro-Rata Calculation upon Termination of Employment.
|
A
|
= the number of Stock Units/accrued Dividend Equivalents 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.G;
|
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/accrued Dividend Equivalents that have previously vested, as determined in accordance with Section III.G.
|
J.
|
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.J.). The Compensation Committee of the Board of Directors of Marsh & McLennan Companies (the “Committee”) intends to administer the Award in accordance with Section 409A of the Code and reserves the right to make changes in the terms or operations of the Award (including changes that may have retroactive effect) deemed necessary or desirable to comply with Section 409A of the Code. This means, for example, that the timing of distributions may be different from those described in the Award Documentation that do not reflect Section 409A of the Code. If the Award is not in compliance with Section 409A of the Code, you may be subject to immediate taxation of all unpaid awards under the Plan that are subject to Section 409A of the Code at your regular federal income tax rate, plus a 20% additional tax, plus interest at the underpayment rate plus 1%, as well as any state and local taxes, penalties, additional taxes and interest, if applicable, imposed under any state tax law similar to Section 409A of the Code.
|
2.
|
Notwithstanding any other provision herein, if any portion of the Award is determined to be nonqualified deferred compensation subject to Section 409A of the Code, any references to “termination of employment,” or “when you are no longer employed” in these Terms and Conditions shall have the following
|
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 other provision herein, if (a) the Award is subject to Section 409A of the Code (or could, absent this provision, be subject to Section 409A of the Code, including a distribution that would otherwise be made pursuant to Section III. J.5) and the Award Documentation conditions payment or commencement of payment on one or more Employment-Related Actions and (b) the period for the completion of an Employment-Related Action includes the January 1 next following the event otherwise triggering the right to payment, then the payment shall be made or commence following the completion of the Employment-Related Action, but in no event earlier than that January 1.
|
5.
|
Notwithstanding any provision herein other than Section III.J.4, 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 January 1, [YEAR]:
|
a.
|
With respect to Stock Units, no later than March 15th 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
|
b.
|
With respect to a cash payment attributable to Stock Units, to the extent that such payment will not be made by March 15th of the year following the year in which the Substantial Risk of Forfeiture lapses with respect to such payment, such payment shall be placed in escrow or contributed to a secular trust (in the sole discretion of Marsh & McLennan Companies) for your benefit on or before such March 15th and subject to withholding of any applicable tax obligations, as described in Section II.C. 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.
|
6.
|
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 January 1, [YEAR] and (ii) where such distributions are subject to one or more Employment-Related Actions:
|
a.
|
With respect to Stock Units, no later than December 31st of the year in which the Scheduled Vesting Date occurs (or December 31st of the year in which your termination of employment occurs, if sooner), shares of Common Stock underlying such Stock Units shall be delivered to you (to the extent not previously delivered) on or before such December 31st, subject to a stop transfer order and subject to withholding of any applicable tax obligations, as described in Section II.C. 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
|
b.
|
With respect to a cash payment attributable to Stock Units, to the extent any such payment will not be made by December 31st of the year in which the Scheduled Vesting Date occurs (or December 31st of the year in which your termination of employment occurs, if sooner), any payment that relates to such payment event shall be placed in escrow or contributed to a secular trust (in the sole discretion of Marsh & McLennan Companies) for your benefit on or before such December 31st and subject to withholding of any applicable tax obligations, as described in Section II.C. at the time of such placement or contribution. Upon your
|
7.
|
Nothing in this Section III.J. is intended to nor does it guarantee that the Award will not be subject to “additional tax” or other adverse tax consequences under Section 409A of the Code or any similar state tax law.
|
A.
|
Upon the occurrence of a Change in Control, the Award will continue to vest in accordance with the vesting schedule specified in Section II.B.2., subject to earlier vesting or forfeiture pursuant to Section III.; provided that upon your termination of employment by the Company other than for Cause, or by you for Good Reason (as defined in V.G.), during the 24-month period following such Change in Control, all unvested Stock Units that are outstanding as of your termination of employment will fully vest and will be distributed within 60 days following such date; provided that you have satisfied the conditions described in Section IV.B. Notwithstanding the foregoing, if the Stock Units are not assumed, converted or replaced in connection with a Change in Control on an equivalent basis, the Stock Units (to the extent permitted in accordance with the requirements of Treas. Reg. § 1.409A-3(j)(4)(ix)(B)) 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.
|
B.
|
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 and be in compliance with the agreement, if applicable, as of the delivery date as described in II.B.4., will result in the cancellation or forfeiture of any rights, title and interest in and to the Award.
|
C.
|
For the avoidance of doubt, in the event of your termination of employment by the Company other than for Cause or by you for Good Reason during the 24-month period following such Change in Control and, on or before the date of your termination of employment you satisfy the Age and Service Criteria for Pro-Rata Vesting or the Age and Service Criteria for Full Vesting as described in Section III.C., or you are determined by the Retirement Treatment Committee to be eligible for retirement treatment on or following your termination of employment as described in Section III.D., any unvested Stock Units covered by the Award will be treated as described in Section IV.A; provided that you have satisfied the conditions described in Section IV.B.
|
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.
|
“European Union” shall include all member states and the United Kingdom, if the United Kingdom leaves the European Union.
|
G.
|
“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.
|
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.
|
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 shall be conclusive and binding. The Committee may delegate to any other individual or entity the authority to perform any or all of the functions of the Committee under the Award, and references to the Committee shall be deemed to include any such delegate.
|
2.
|
Amendment. The Committee may, in its sole discretion, amend the terms of the Award, including, without limitation, to impose additional requirements on the Award and on any shares of Common Stock with respect to the Award; provided, however, that if the Committee concludes, in its sole discretion, that such amendment is likely to materially impair your rights with respect to the Award, such amendment shall not be implemented with respect to the Award without your consent, except to the extent that any such action is made to cause the Award to comply with applicable law, currency controls, stock market or exchange rules and regulations, or accounting or tax rules and regulations, or is otherwise made in accordance with Section VI.A.4.
|
3.
|
Limitations. Payment of the Award is not secured by trust, insurance contract or other funding medium, and you do not have any interest in any fund or specific asset of Marsh & McLennan Companies by reason of the Award. Your right to payment of the Award is the same as the right of an unsecured general creditor of Marsh & McLennan Companies.
|
4.
|
Cancellation or Clawback of Awards.
|
a.
|
Marsh & McLennan Companies may, to the extent permitted or required by any applicable law, stock exchange rules, currency controls, or any applicable Company policy or arrangement in effect prior to the vesting of any unvested portion of the Award, or as specified in the Award Documentation, cancel, reduce or require reimbursement of the Award.
|
b.
|
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,
|
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.
|
9.
|
Eligibility for Award. In order to be granted an Award, you must satisfy the eligibility criteria for grantees set forth in the Plan as of the grant date.
|
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, 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 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.
|
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. Performance Stock Units
|
2
|
1. General
|
2
|
2. Vesting
|
2
|
3. Dividend Equivalents
|
2
|
4. Delivery
|
3
|
C. Satisfaction of Tax Obligations
|
3
|
1. Personal Tax Advisor
|
3
|
2. U.S. Employees - Performance Stock Units and Dividend
Equivalents
|
3
|
3. Non-U.S. Employees
|
4
|
III. EMPLOYMENT EVENTS
|
4
|
A. Death
|
4
|
B. Permanent Disability
|
4
|
C. Termination by You Outside of the European Union - Age and Service
Pro-Rata Vesting
|
5
|
D. Termination by You Outside of the European Union - Age and Service
Full Vesting
|
5
|
E. Termination by You Within the European Union - Retirement Treatment
|
6
|
F. Termination by the Company Other Than for Cause
|
6
|
1. Treatment of Performance Stock Units
|
6
|
2. Important Notes
|
7
|
G. All Other Terminations
|
7
|
H. Date of Termination of Employment
|
7
|
I. Conditions for All or a Portion of an Award to Remain Outstanding
Following a Termination of Employment
|
8
|
1. Restrictive Covenants Agreement
|
8
|
2. Waiver and Release and Restrictive Covenants Agreement
|
8
|
J. Determination of Pro-Rata Calculation upon Termination of Employment
|
9
|
K. Section 409A of the Code for Award Recipients Subject to U.S.
Federal Income Tax
|
9
|
IV. CHANGE IN CONTROL PROVISIONS
|
11
|
A. Treatment of Performance Stock Units
|
11
|
1. General
|
11
|
2. Awards Not Assumed
|
11
|
3. Calculation of Shares Distributable with Respect to PSUs
|
12
|
B. Waiver and Release
|
12
|
C. Other Matters
|
12
|
V. DEFINITIONS
|
12
|
VI. ADDITIONAL PROVISIONS
|
14
|
A. Additional Provisions - General
|
14
|
1. Administrative Rules
|
14
|
2. Amendment
|
15
|
3. Limitations
|
15
|
4. Cancellation or Clawback of Awards
|
15
|
5. Governing Law; Choice of Forum
|
15
|
6. Severability; Captions
|
16
|
7. Electronic Delivery and Acceptance
|
16
|
8. Waiver
|
16
|
9. Eligibility for Award
|
16
|
B. Additional Provisions - Outside of the United States
|
16
|
1. Changes to Delivery
|
16
|
2. Amendment and Modification
|
16
|
VII. QUESTIONS AND ADDITIONAL INFORMATION
|
17
|
A.
|
General.
|
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, etc.).
|
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, you must execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, the Restrictive Covenants Agreement in order for the Award to vest pursuant to certain employment events as described in Section III., and you must further execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, and be in compliance with the Restrictive Covenants Agreement in order for the Award to become distributable to you whether or not you are employed by the Company at that time. Failure to timely execute the Restrictive Covenants Agreement by the date specified by the Company or failure to timely execute or reaffirm and comply with the Restrictive Covenants Agreement
|
B.
|
Performance Stock Units.
|
1.
|
General. A performance stock unit (“PSU”) represents an unfunded and unsecured promise to deliver (or cause to be delivered) to you, subject to the terms of the Award Documentation, a minimum of zero (0) and up to a maximum of two (2) shares of Common Stock after vesting, depending on the achievement, as determined by the Compensation Committee of the Board of Directors of Marsh & McLennan Companies (the “Committee”), of the financial performance objectives established by the Committee for the Performance Period (as defined in Section V.I.). In the event of your termination of employment or occurrence of your Permanent Disability (as defined in Section V.J.) 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.
|
2.
|
Vesting. Subject to your continued employment, the PSUs are scheduled to vest on [DATE] (the “PSU Scheduled Vesting Date”). In the event of your termination of employment, the occurrence of your Permanent Disability or a Change in Control (as defined in Section V.D.) prior to the PSU Scheduled Vesting Date, your right to the PSUs 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 this Section II.B.2. will be determined in accordance with Section III.H.
|
3.
|
Dividend Equivalents. A payment will be made that is equal to the dividend payment (if any) that would have been made, on each dividend record date that occurs on or after the date of grant while the PSUs are outstanding, in respect of the number of shares of Common Stock that is determined under Section II.B.1 to be delivered in respect of vested PSUs (a “Dividend Equivalent”). Dividend Equivalents will vest when the PSUs, in respect of which such Dividend Equivalents were calculated, vest. Prior to the determination described in Section II.B.1, for each outstanding PSU, an amount equal to the dividend payment (if any) made in respect of one share of Common Stock 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. No further dividend equivalents will accrue on PSUs that do not vest or are cancelled or forfeited. If a pro-rata amount of the outstanding unvested PSUs is eligible to vest upon a termination of employment as described in Section III.C, III.E and III.F, the pro-rata calculation applied to the outstanding PSUs described in Section III.J will be applied to the dividend equivalents that have accrued on the Award as of the date of termination. Accrued dividend equivalents will not be paid, and no further dividend equivalents will accrue, on PSUs that do not vest or are cancelled or forfeited as described in Section III.G.
|
4.
|
Delivery.
|
a.
|
Shares of Common Stock deliverable, if any, in respect of the PSUs covered by the Award that vest on the PSU Scheduled Vesting Date shall be delivered to you as soon as practicable 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.
|
b.
|
The value of vested Dividend Equivalents that vest on the PSU Scheduled Vesting Date will be delivered to you in cash as soon as practicable after delivery of the shares of Common Stock described in II.B.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.
|
c.
|
The delivery of shares of Common Stock and/or cash or other property that may be deliverable under these Terms and Conditions, is conditioned on the satisfaction or withholding of any applicable tax obligations, as described in Section II.C.
|
d.
|
Any shares of Common Stock and/or cash or other property that may be deliverable following your death shall be delivered to the person or persons to whom your rights pass by will or the law of descent and distribution, and such delivery shall completely discharge the Company’s 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.K.
|
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 - Performance Stock Units and Dividend Equivalents. Applicable employment taxes are required by law to be withheld when a 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 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.
|
3.
|
Non-U.S. Employees.
|
a.
|
Performance Stock Units and Dividend Equivalents. In most countries, the value of a PSU or Dividend Equivalent is generally not taxable on the grant date. If the value of the 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 PSU that vests, and/or the subsequent sale of the share of Common Stock received in connection with the vesting of the PSU, or upon delivery of cash in respect of a Dividend Equivalent.
|
b.
|
Withholding. Marsh & McLennan Companies and/or your employer shall have the power and the right to deduct and withhold from the Award and other compensation or to require you to remit to Marsh & McLennan Companies and/or to your employer, an amount sufficient to satisfy any taxes that Marsh & McLennan Companies expects to be payable under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, payroll taxes, fringe benefits, payment on account, capital gain taxes, transfer taxes, social security contributions and National Insurance Contributions with respect to the Award, and any and all associated tax events derived therefrom. If applicable, Marsh & McLennan Companies and/or your employer will, to the extent permissible under applicable law or otherwise agreed between you and Marsh & McLennan Companies and/or your employer, retain and sell a sufficient number of whole shares of Common Stock distributable in respect of the Award for this purpose.
|
A.
|
Death.
|
B.
|
Permanent Disability.
|
|
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.B.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.B.1.
|
C.
|
Termination by You Outside of the European Union - Age and Service Pro-Rata Vesting. If you have satisfied the Age and Service Criteria for Pro-Rata Vesting (as defined in Section V.B.) but do not satisfy the Age and Service Criteria for Full Vesting (as defined in Section V.A.) on or before the date you terminate your employment with the Company for any reason other than death or the occurrence of your Permanent Disability and you are determined by Marsh & McLennan Companies, in its sole discretion, to be employed outside the European Union (as defined in V.G.), 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.).
|
D.
|
Termination by You Outside of the European Union - Age and Service Full Vesting. If you have satisfied the Age and Service Criteria for Full Vesting on or before 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.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.
|
E.
|
Termination by You Within the European Union - Retirement Treatment. Provided you have a minimum of five years of service with the Company on or before you terminate employment, you will be eligible to apply for retirement treatment. If you are determined by the Retirement Treatment Committee (as defined in Section V.K.) 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.
|
F.
|
Termination by the Company Other Than for Cause.
|
1.
|
Treatment of Performance 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 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.B.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.B.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.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.
|
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.B.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.B.1. 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.
|
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.
|
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 meeting the minimum service requirement or 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 Section II.B.2. and the number of unvested PSUs 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 obligated (whether by law or contract) to provide the Company advance notice of your intention to terminate your employment then, in the event you terminate your employment or service relationship pursuant to Section III.C, III.D., III.E., or III.G. (and regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), for purposes of determining vesting under Section II.B.2. and the pro rata calculation described in Section III.J., your employment will be treated as having terminated on your last day of active service with the Company, as determined by the Company in its sole discretion.
|
I.
|
Conditions for All or a Portion of an Award to Remain Outstanding 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., respectively, 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 Section III.C.or III.D., and no later than 60 days following the determination that you are eligible for retirement treatment 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 Performance Stock Units (as described in Section II.B.4.) 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
|
J.
|
Determination of Pro-Rata Calculation upon Termination of Employment.
|
A
|
= the number of PSUs/accrued dividend equivalents 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.H;
|
C
|
= the number of days in the period beginning on the grant date of the Award and ending on the PSU Scheduled Vesting Date, as applicable; and
|
D
|
= the number of PSUs/accrued dividend equivalents that have previously vested, as determined in accordance with Section III.H.
|
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 Section V.L.). 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
|
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.
|
[Intentionally omitted]
|
5.
|
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 31st 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.C. at the time of such delivery. Upon your timely satisfaction of all applicable
|
ii.
|
With respect to a cash payment attributable to PSUs, to the extent any such payment will not be made by December 31st 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 Marsh & McLennan Companies) for your benefit on or before such December 31st and subject to withholding of any applicable tax obligations, as described in Section II.C. 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.
|
6.
|
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.
|
A.
|
Treatment of Performance Stock Units.
|
1.
|
General. Upon the occurrence of a Change in Control (as defined in Section V.D.), the PSUs will continue to vest in accordance with the vesting schedule specified in Sections II.B.2., subject to earlier vesting or forfeiture pursuant to Section III.; provided that upon your termination of employment by the Company other than for Cause, or by you for Good Reason (as defined in Section V.H.), during the 24-month period following such Change in Control, all unvested PSUs that are outstanding as of your termination of employment will remain outstanding and will be distributed as soon as practicable following the PSU Scheduled Vesting Date, as described in Section II.B.4., as applicable; provided that you have satisfied the conditions described in Section IV.C. and provided further that the number of shares distributable with respect to PSUs is as described in Section IV.A.3.
|
2.
|
Awards Not Assumed. Notwithstanding the foregoing, if the PSUs are not assumed, converted or replaced in connection with a Change in Control on an equivalent basis, such PSUs as described in Section IV.A.3 (to the extent permitted in accordance with the requirements of Treas. Reg. § 1.409A-3(j)(4)(ix)(B)) 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.B.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.
|
Waiver and Release
|
C.
|
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.
|
“Change in Control” shall have the meaning set forth in the Plan.
|
E.
|
“Company” shall mean Marsh & McLennan Companies or any of its subsidiaries or affiliates.
|
F.
|
“Employment-Related Action” shall mean the execution and effectiveness of a release of claims and/or a restrictive covenant.
|
G.
|
“European Union” shall include all member states and the United Kingdom, if the United Kingdom leaves the European Union.
|
H.
|
“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.
|
I.
|
“Performance Period” shall mean the period that begins on [DATE] and ends on [DATE]; provided that in the event of a termination of your employment 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.
|
J.
|
“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.
|
K.
|
“Retirement Treatment Committee” is comprised of employees of the Company appointed by the Committee.
|
L.
|
“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).
|
M.
|
Additional Definitions.
|
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 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, cancel, reduce or require reimbursement of the Award.
|
b.
|
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.
|
9.
|
Eligibility for Award. In order to be granted an Award, you must satisfy the eligibility criteria for grantees set forth in the Plan as of the grant date.
|
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 or vesting after payment of applicable taxes and fees 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 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.
|
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 Options
|
2
|
1. General
|
2
|
2. Vesting
|
2
|
3. Term
|
2
|
4. Exercisability
|
2
|
5. Method of Exercise of an Option
|
2
|
C. Satisfaction of Tax Obligations
|
3
|
1. Personal Tax Advisor
|
3
|
2. U.S. Employees
|
3
|
3. Non-U.S. Employees
|
3
|
III. EMPLOYMENT EVENTS
|
3
|
A. Death
|
3
|
B. Permanent Disability
|
4
|
C. Termination by You Outside of the European Union - Age and Service
Vesting
|
4
|
D. Termination by You Within the European Union - Retirement Treatment
|
4
|
E. Termination by the Company Other Than for Cause
|
5
|
1. Treatment of Stock Options
|
5
|
2. Important Notes
|
6
|
F. All Other Terminations
|
6
|
G. Date of Termination of Employment
|
6
|
H. 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
|
7
|
1. Restrictive Covenants Agreement
|
7
|
2. Waiver and Release and Restrictive Covenants Agreement
|
7
|
IV. CHANGE IN CONTROL PROVISIONS
|
8
|
A. Treatment of Stock Options
|
8
|
B. Waiver and Release
|
8
|
C. Other Matters
|
8
|
V. DEFINITIONS
|
9
|
VI. ADDITIONAL PROVISIONS
|
10
|
A. Additional Provisions - General
|
10
|
1. Administrative Rules
|
10
|
2. Amendment
|
10
|
3. Limitations
|
11
|
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
|
9. Eligibility for Award
|
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
|
A.
|
General.
|
1.
|
Award Acceptance. The grant of this Award is contingent upon your acceptance, by the date and in the manner specified by Global & Executive Compensation and/or the Company’s stock plan service provider, of these Terms and Conditions, the Country-Specific Notices 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 deadline date and in the manner specified, 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 shares of Common Stock, as applicable, have been delivered to you upon your exercise of the Award in accordance with the Award Documentation, you have none of the rights of ownership to such shares (e.g., Options cannot be transferred or assigned; Options have no voting rights, etc.).
|
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, you must execute or reaffirm, as determined by Marsh & McLennan Companies, in its sole discretion, the Restrictive Covenants Agreement in order for the Award to vest pursuant to certain employment events as described in Section III., and you must further execute or reaffirm, as determined by Marsh & McLennan Companies, in its sole discretion, and be in compliance with the Restrictive Covenants Agreement in order to exercise an Option whether or not you are employed by the Company at that time. Failure to timely execute the Restrictive Covenants Agreement by the date specified by the Company or failure to timely execute or reaffirm and comply with the Restrictive Covenants Agreement as described in Section III.H.1. or 2., as applicable, will result in cancellation or forfeiture of any rights, title and interest in and to the Award, without any liability to the Company.
|
1.
|
General. A stock option (“Option”) represents the right to purchase a number of shares of Common Stock (the “Option Shares”) at a specified exercise price for a specified period.
|
2.
|
Vesting. Subject to your continued employment, 25% of the Option Shares covered by the Option will vest on each of the first four anniversaries of the grant date of the Award. Each date on which an Option Share covered by the Option is scheduled to vest is an “Option Scheduled Vesting Date.” In the event of your termination of employment or occurrence of your Permanent Disability (as defined in Section V.H.) 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.B.2. will be determined in accordance with Section III.G.
|
3.
|
Term. Subject to your continued employment, the Option will expire on the day immediately preceding the tenth anniversary of the grant date of the Award (“Option Expiration Date”). If your employment terminates before the Option Expiration Date, your right to exercise any vested Option Shares covered by the Option will be determined in accordance with Section III.
|
4.
|
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.
|
5.
|
Method of Exercise of an Option.
|
a.
|
General Procedures. An Option may be exercised by written notice (or other notice as required by the Company and/or its stock plan service provider) 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) any required 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.
|
b.
|
Payment of Exercise Price. Payment of the aggregate exercise price may be made with U.S. dollars or by tendering shares of Common Stock (including shares of Common Stock acquired from a stock option exercise or a stock unit award vesting) at your election.
|
c.
|
Distribution of Option Shares. The shares of Common Stock from the Option exercise will be distributed as specified in the Exercise Notice, after you have satisfied applicable tax obligations, as described in Section II.C., and fees.
|
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 taxes (including employment taxes) are required by law to be withheld when a nonqualified Option is exercised. A sufficient number of whole shares of Common Stock resulting from the Option exercise will be retained by Marsh & McLennan Companies to satisfy the tax-withholding obligation unless you elect in the Exercise Notice to satisfy all applicable tax withholding in another manner.
|
3.
|
Non-U.S. Employees.
|
a.
|
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.
|
b.
|
Withholding. Marsh & McLennan Companies and/or your employer shall have the power and the right to deduct and withhold from the Award and other compensation or to require you to remit to Marsh & McLennan Companies and/or to your employer, an amount sufficient to satisfy any taxes that Marsh & McLennan Companies expects to be payable under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, payroll taxes, fringe benefits, payment on account, capital gain taxes, transfer taxes, social security contributions and National Insurance Contributions with respect to the Award, and any and all associated tax events derived therefrom. If applicable, Marsh & McLennan Companies and/or your employer will, to the extent permissible under applicable law or otherwise agreed between you and Marsh & McLennan Companies and/or your employer, retain and sell a sufficient number of whole shares of Common Stock distributable in respect of the Award for this purpose.
|
A.
|
Death.
|
B.
|
Permanent Disability.
|
C.
|
Termination by You Outside of the European Union - Age and Service Vesting. If you have satisfied the Age and Service Criteria for 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 (as defined in Section V.F.), then this Section III.C. shall apply. For the avoidance of doubt, Section III.E. 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.B.).
|
D.
|
Termination by You Within the European Union - Retirement Treatment. Provided you have a minimum of five years of service with the Company on or before you terminate employment, you will be eligible to apply for 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.D. shall apply. For the avoidance of doubt, Section III.E. 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.B.).
|
E.
|
Termination by the Company Other Than for Cause.
|
a.
|
General. Except as otherwise provided in Sections III.E.1.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.H.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 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 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.B.2. as if your employment had not terminated and the Option Shares will become exercisable as provided in Section II.B.4.; provided that you satisfy the conditions to vesting described in Section III.H.2. Provided that you satisfy the conditions described in Section III.H.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.
|
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 upon a constructive discharge, including if any court or regulatory agency retroactively concludes or interprets events to have constituted a constructive discharge.
|
F.
|
All Other Terminations. For all other terminations of employment not described in Sections III.A. through E. 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 Vesting as described in Section III.C., or your resignation without meeting the minimum service requirement or 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.D.), 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.G. Provided that you satisfy the conditions to vesting described in Section III.H.1., any Option Shares that were vested at the time of your termination of employment (except if you are terminated by the Company for Cause) shall be exercisable until the earlier of 90 days following your termination of employment and the Option Expiration Date. If you are terminated by the Company for Cause, any rights, title and interest in and to any remaining vested or unvested portion of the Award shall be cancelled as of the date your employment is treated as having terminated as described in Section III.G.
|
G.
|
Date of Termination of Employment.
|
1.
|
If Section III.G.2 does not apply to you, then or purposes of determining vesting under Section II.B.2., your employment will be treated as having terminated on your last day of employment with the Company.
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2.
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If you are obligated (whether by law or contract) to provide the Company advance notice of your intention to terminate your employment or service relationship then, in the event you terminate your employment pursuant to Section III.C., III.D. or III.F. (and regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), for purposes of determining vesting under Section II.B.2., your employment will be treated as having terminated on your last day of active service with the Company, as determined by the Company in its sole discretion.
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H.
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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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1.
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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 Vesting as described in Sections III.C., (iii) a determination by the Retirement Treatment Committee that you are eligible for retirement treatment as described in Section III.D., or (iv) your termination of employment (other than a termination by the Company for Cause) as described in Section III.F., 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 Section III.C. or III.F., and no later than 60 days following the determination that you are eligible for retirement treatment if your termination of employment is pursuant to III.D., 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.
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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.E., 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 failure to continue to be in compliance with the applicable 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.
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A.
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Treatment of Stock Options
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B.
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Waiver and Release
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C.
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Other Matters
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A.
|
“Age and Service Criteria for Vesting” shall mean: (a) you are at least age 65 and have a minimum of one year of service with the Company or (b) 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 Vesting is not applicable to you if you are determined by the Company, in its sole discretion, to be employed within the European Union.
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B.
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“Cause” shall mean:
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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;
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2.
|
willful violation of any written Company policies, including but not limited to, The Marsh & McLennan Companies Code of Conduct, The Greater Good;
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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;
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4.
|
unlawful use (including being under the influence) or possession of illegal drugs;
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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
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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.
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E.
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“Company” shall mean Marsh & McLennan Companies or any of its subsidiaries or affiliates.
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F.
|
“European Union” shall include all member states and the United Kingdom, if the United Kingdom leaves the European Union.
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G.
|
“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
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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.
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I.
|
“Retirement Treatment Committee” is comprised of employees of the Company appointed by the Committee.
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J.
|
Additional Definitions.
|
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 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;
|
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, cancel, reduce or require reimbursement of the Award.
|
b.
|
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.
|
9.
|
Eligibility for Award. In order to be granted an Award, you must satisfy the eligibility criteria for grantees set forth in the Plan as of the grant date.
|
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 exercise of an Award (as described in these Terms and Conditions) by 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 an amount equivalent to the value of the Award on the date of exercise after payment of applicable taxes and fees and any exercise price If the value of an Award is to be delivered in cash instead of shares of Common Stock, Marsh & McLennan Companies may sell any shares of Common Stock distributable in respect of the Award on your behalf and use the proceeds (after payment of applicable taxes, fees and any exercise price) to satisfy the Award.
|
2.
|
Amendment and Modification. The Committee may modify the terms of any Award under the Plan granted to you in any manner deemed by the Committee to be necessary or appropriate in order for such Award to conform to laws, regulations and customs of the country (other than the United States) in which you are then resident or primarily employed or were resident or primarily employed at the time of grant or during the term of the Award, or so that the value and other benefits of the Award to you, as affected by non-U.S. tax laws and other restrictions applicable as a result of your residence or employment outside of the United States, shall be comparable to the value of such an Award to an individual who is resident or primarily employed in the United States.
|
Date:
|
August 2, 2019
|
|
/s/ Daniel S. Glaser
|
|
|
|
Daniel S. Glaser
|
|
|
|
President and Chief Executive Officer
|
Date:
|
August 2, 2019
|
|
/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:
|
August 2, 2019
|
|
/s/ Daniel S. Glaser
|
|
|
|
Daniel S. Glaser
|
|
|
|
President and Chief Executive Officer
|
Date:
|
August 2, 2019
|
|
/s/ Mark C. McGivney
|
|
|
|
Mark C. McGivney
|
|
|
|
Chief Financial Officer
|