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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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Title of each class
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Trading symbol(s)
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Name of exchange on which registered
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Common Stock, par value $1.00 per share
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MMC
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New York Stock Exchange
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Chicago Stock Exchange
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London Stock Exchange
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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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the financial and operational impact of the coronavirus global pandemic on our revenue and ability to generate new business, our overall level of profitability and cash flow, and our liquidity, particularly the timeliness and ultimate collectability of our receivables;
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•
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the impact of disruption in the credit or financial markets, or changes to our credit ratings, including as a result of COVID-19, on our ability to access capital or repay our significant outstanding indebtedness on favorable terms and our compliance with the covenants contained in the agreements that govern our indebtedness;
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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, including claims related to pandemic coverage;
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•
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our ability to manage risks associated with our investment management and related services business, particularly in the context of volatile equity markets caused by COVID-19, including our ability to execute timely trades in light of increased trading volume and to manage potential conflicts of interest between investment consulting and fiduciary management services;
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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 technological change, disintermediation, digital disruption and other types of innovation;
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•
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our ability to attract and retain industry leading talent;
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•
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our 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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the impact of investigations, reviews, or other activity by regulatory or law enforcement authorities;
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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 anti-corruption laws such as the U.S. Foreign Corrupt Practices Act, U.K. Anti-Bribery Act, trade sanctions regimes and cybersecurity and data privacy regulations such as the E.U.’s General Data Protection Regulation;
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•
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the regulatory, contractual and reputational risks that arise based on insurance placement activities and various insurer revenue streams;
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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
March 31, |
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(In millions, except per share amounts)
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2020
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2019
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Revenue
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$
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4,651
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$
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4,071
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Expense:
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Compensation and benefits
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2,555
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2,282
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Other operating expenses
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1,026
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851
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Operating expenses
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3,581
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3,133
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Operating income
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1,070
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938
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Other net benefit credits
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64
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64
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Interest income
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2
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28
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Interest expense
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(127
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)
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(120
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)
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Investment (loss) income
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(2
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)
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5
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Acquisition related derivative contracts
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—
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29
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Income before income taxes
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1,007
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944
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Income tax expense
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240
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217
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Net income before non-controlling interests
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767
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727
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Less: Net income attributable to non-controlling interests
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13
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11
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Net income attributable to the Company
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$
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754
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$
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716
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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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1.49
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$
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1.42
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Diluted
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$
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1.48
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$
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1.40
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Average number of shares outstanding:
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Basic
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505
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505
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Diluted
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510
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511
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Shares outstanding at March 31,
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506
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507
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Three Months Ended
March 31, |
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(In millions)
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2020
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2019
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Net income before non-controlling interests
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$
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767
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$
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727
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Other comprehensive (loss) income, before tax:
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Foreign currency translation adjustments
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(941
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)
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96
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Gain (loss) related to pension/post-retirement plans
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175
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(43
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)
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Other comprehensive (loss) income, before tax
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(766
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)
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53
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Income tax expense (benefit) on other comprehensive income (loss)
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26
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(4
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)
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Other comprehensive (loss) income, net of tax
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(792
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)
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57
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Comprehensive (loss) income
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(25
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)
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784
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Less: comprehensive income attributable to non-controlling interest
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13
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11
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Comprehensive (loss) income attributable to the Company
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$
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(38
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)
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$
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773
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(In millions, except share amounts)
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(Unaudited)
March 31, 2020 |
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December 31,
2019 |
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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1,480
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$
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1,155
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Receivables
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Commissions and fees
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5,028
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4,608
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Advanced premiums and claims
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113
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123
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Other
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561
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645
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5,702
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5,376
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Less-allowance for credit losses
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(144
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)
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(140
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)
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Net receivables
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5,558
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5,236
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Other current assets
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711
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677
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Total current assets
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7,749
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7,068
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Goodwill
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14,412
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14,671
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Other intangible assets
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2,663
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2,774
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Fixed assets
(net of accumulated depreciation and amortization of $2,012 at March 31, 2020 and $2,001 at December 31, 2019) |
850
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858
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Pension related assets
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1,619
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1,632
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Right of use assets
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1,885
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1,921
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Deferred tax assets
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694
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676
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Other assets
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1,519
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1,757
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$
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31,391
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$
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31,357
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(In millions, except share amounts)
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(Unaudited)
March 31, 2020 |
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December 31,
2019 |
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LIABILITIES AND EQUITY
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Current liabilities:
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Short-term debt
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$
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2,409
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$
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1,215
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Accounts payable and accrued liabilities
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2,611
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2,746
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Accrued compensation and employee benefits
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1,018
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2,197
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Current lease liabilities
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334
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342
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Accrued income taxes
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256
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179
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Dividends payable
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231
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—
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Total current liabilities
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6,859
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6,679
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Fiduciary liabilities
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7,661
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7,344
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Less – cash and investments held in a fiduciary capacity
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(7,661
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)
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(7,344
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)
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—
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—
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Long-term debt
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11,231
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10,741
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Pension, post-retirement and post-employment benefits
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2,248
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2,336
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Long-term lease liabilities
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1,898
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1,926
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Liabilities for errors and omissions
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343
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335
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Other liabilities
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1,361
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1,397
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Commitments and contingencies
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—
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—
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Equity:
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Preferred stock, $1 par value, authorized 6,000,000 shares, none issued
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—
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—
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Common stock, $1 par value, authorized 1,600,000,000 shares, issued 560,641,640 shares at March 31, 2020 and December 31, 2019
|
561
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|
|
561
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|
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Additional paid-in capital
|
746
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|
|
862
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Retained earnings
|
15,490
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15,199
|
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Accumulated other comprehensive loss
|
(5,847
|
)
|
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(5,055
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)
|
||
Non-controlling interests
|
156
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|
|
150
|
|
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|
11,106
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11,717
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|
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Less – treasury shares, at cost, 54,694,523 shares at March 31, 2020
and 57,013,097 shares at December 31, 2019
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(3,655
|
)
|
|
(3,774
|
)
|
||
Total equity
|
7,451
|
|
|
7,943
|
|
||
|
$
|
31,391
|
|
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$
|
31,357
|
|
For the Three Months Ended March 31,
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||||
(In millions)
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2020
|
|
|
2019
|
|
||
Operating cash flows:
|
|
|
|
||||
Net income before non-controlling interests
|
$
|
767
|
|
|
$
|
727
|
|
Adjustments to reconcile net income to cash provided by operations:
|
|
|
|
||||
Depreciation and amortization of fixed assets and capitalized software
|
97
|
|
|
74
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|
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Amortization of intangible assets
|
86
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|
|
51
|
|
||
Non cash lease expense
|
80
|
|
|
68
|
|
||
Adjustments and payments related to contingent consideration liability
|
(10
|
)
|
|
(18
|
)
|
||
Provision for deferred income taxes
|
9
|
|
|
(9
|
)
|
||
Loss (gain) on investments
|
2
|
|
|
(5
|
)
|
||
Gain on disposition of assets
|
(3
|
)
|
|
—
|
|
||
Share-based compensation expense
|
72
|
|
|
57
|
|
||
Change in fair value of acquisition-related derivative contracts
|
—
|
|
|
(29
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Net receivables
|
(313
|
)
|
|
(309
|
)
|
||
Other current assets
|
(34
|
)
|
|
(37
|
)
|
||
Other assets
|
57
|
|
|
(1
|
)
|
||
Accounts payable and accrued liabilities
|
(140
|
)
|
|
79
|
|
||
Accrued compensation and employee benefits
|
(1,178
|
)
|
|
(886
|
)
|
||
Accrued income taxes
|
91
|
|
|
96
|
|
||
Contributions to pension and other benefit plans in excess of current year credit
|
(85
|
)
|
|
(80
|
)
|
||
Other liabilities
|
(38
|
)
|
|
42
|
|
||
Operating lease liabilities
|
(86
|
)
|
|
(73
|
)
|
||
Effect of exchange rate changes
|
(12
|
)
|
|
(23
|
)
|
||
Net cash used for operations
|
(638
|
)
|
|
(276
|
)
|
||
Financing cash flows:
|
|
|
|
||||
Net increase in commercial paper
|
193
|
|
|
748
|
|
||
Borrowings from term-loan and credit facilities
|
2,000
|
|
|
—
|
|
||
Proceeds from issuance of debt
|
—
|
|
|
6,462
|
|
||
Repayments of debt
|
(503
|
)
|
|
(3
|
)
|
||
Purchase of non-controlling interests
|
(3
|
)
|
|
—
|
|
||
Acquisition-related derivative payments
|
—
|
|
|
(129
|
)
|
||
Shares withheld for taxes on vested units – treasury shares
|
(112
|
)
|
|
(86
|
)
|
||
Issuance of common stock from treasury shares
|
44
|
|
|
77
|
|
||
Payments of deferred and contingent consideration for acquisitions
|
(29
|
)
|
|
(29
|
)
|
||
Distributions of non-controlling interests
|
(18
|
)
|
|
(4
|
)
|
||
Dividends paid
|
(232
|
)
|
|
(210
|
)
|
||
Net cash provided by financing activities
|
1,340
|
|
|
6,826
|
|
||
Investing cash flows:
|
|
|
|
||||
Capital expenditures
|
(118
|
)
|
|
(73
|
)
|
||
Net sales of long-term investments
|
57
|
|
|
115
|
|
||
Purchase of equity investment
|
—
|
|
|
(88
|
)
|
||
Proceeds from sales of fixed assets
|
—
|
|
|
1
|
|
||
Dispositions
|
7
|
|
|
—
|
|
||
Acquisitions
|
(200
|
)
|
|
(140
|
)
|
||
Other, net
|
9
|
|
|
(2
|
)
|
||
Net cash used for investing activities
|
(245
|
)
|
|
(187
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(132
|
)
|
|
47
|
|
||
Increase in cash and cash equivalents and cash held in escrow
|
325
|
|
|
6,410
|
|
||
Cash and cash equivalents at beginning of period
|
1,155
|
|
|
1,066
|
|
||
|
|
|
|
||||
Cash balances, end of period
|
|
|
|
||||
Cash and cash equivalents at end of period
|
$
|
1,480
|
|
|
$
|
1,117
|
|
Funds held in escrow for acquisition
|
—
|
|
|
6,359
|
|
||
Total
|
$
|
1,480
|
|
|
$
|
7,476
|
|
|
Three Months Ended
March 31, |
||||||
(In millions, except per share amounts)
|
2020
|
|
|
2019
|
|
||
COMMON STOCK
|
|
|
|
||||
Balance, beginning and end of period
|
$
|
561
|
|
|
$
|
561
|
|
ADDITIONAL PAID-IN CAPITAL
|
|
|
|
||||
Balance, beginning of period
|
$
|
862
|
|
|
$
|
817
|
|
Change in accrued stock compensation costs
|
(129
|
)
|
|
(101
|
)
|
||
Issuance of shares under stock compensation plans and employee stock purchase plans
|
14
|
|
|
(35
|
)
|
||
Other
|
(1
|
)
|
|
—
|
|
||
Balance, end of period
|
$
|
746
|
|
|
$
|
681
|
|
RETAINED EARNINGS
|
|
|
|
||||
Balance, beginning of period
|
$
|
15,199
|
|
|
$
|
14,347
|
|
Net income attributable to the Company
|
754
|
|
|
716
|
|
||
Dividend equivalents declared
|
(4
|
)
|
|
(2
|
)
|
||
Dividends declared
|
(459
|
)
|
|
(419
|
)
|
||
Balance, end of period
|
$
|
15,490
|
|
|
$
|
14,642
|
|
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|
|
|
||||
Balance, beginning of period
|
$
|
(5,055
|
)
|
|
$
|
(4,647
|
)
|
Other comprehensive loss, net of tax
|
(792
|
)
|
|
57
|
|
||
Balance, end of period
|
$
|
(5,847
|
)
|
|
$
|
(4,590
|
)
|
TREASURY SHARES
|
|
|
|
||||
Balance, beginning of period
|
$
|
(3,774
|
)
|
|
$
|
(3,567
|
)
|
Issuance of shares under stock compensation plans and employee stock purchase plans
|
119
|
|
|
182
|
|
||
Balance, end of period
|
$
|
(3,655
|
)
|
|
$
|
(3,385
|
)
|
NON-CONTROLLING INTERESTS
|
|
|
|
||||
Balance, beginning of period
|
$
|
150
|
|
|
$
|
73
|
|
Net income attributable to non-controlling interests
|
13
|
|
|
11
|
|
||
Net non-controlling interests disposed
|
(3
|
)
|
|
—
|
|
||
Distributions and other changes
|
(4
|
)
|
|
(7
|
)
|
||
Balance, end of period
|
$
|
156
|
|
|
$
|
77
|
|
TOTAL EQUITY
|
$
|
7,451
|
|
|
$
|
7,986
|
|
Dividends declared per share
|
$
|
0.91
|
|
|
$
|
0.83
|
|
•
|
the allowance for current expected credit losses on receivables,
|
•
|
estimates of revenue,
|
•
|
impairment assessments and charges,
|
•
|
recoverability of long-lived assets,
|
•
|
liabilities for errors and omissions,
|
•
|
deferred tax assets, uncertain tax positions and income tax expense,
|
•
|
share-based and incentive compensation expense,
|
•
|
useful lives assigned to long-lived assets, and depreciation and amortization,
|
•
|
fair value estimates of contingent consideration receivable or payable related to acquisitions or dispositions
|
|
|
Three Months Ended
March 31, |
||
(In millions)
|
|
2020
|
||
Marsh:
|
|
|
||
EMEA
|
|
$
|
754
|
|
Asia Pacific
|
|
238
|
|
|
Latin America
|
|
91
|
|
|
Total International
|
|
1,083
|
|
|
U.S./Canada
|
|
978
|
|
|
Total Marsh
|
|
2,061
|
|
|
Guy Carpenter
|
|
827
|
|
|
Subtotal
|
|
2,888
|
|
|
Fiduciary interest income
|
|
23
|
|
|
Total Risk and Insurance Services
|
|
$
|
2,911
|
|
Mercer:
|
|
|
||
Wealth
|
|
$
|
592
|
|
Health
|
|
486
|
|
|
Career
|
|
173
|
|
|
Total Mercer
|
|
1,251
|
|
|
Oliver Wyman
|
|
511
|
|
|
Total Consulting
|
|
$
|
1,762
|
|
(In millions)
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Contract Assets
|
|
$
|
270
|
|
|
$
|
207
|
|
Contract Liabilities
|
|
$
|
659
|
|
|
$
|
593
|
|
Basic and Diluted EPS Calculation
|
Three Months Ended
March 31, |
||||||
(In millions, except per share amounts)
|
2020
|
|
|
2019
|
|
||
Net income before non-controlling interests
|
$
|
767
|
|
|
$
|
727
|
|
Less: Net income attributable to non-controlling interests
|
13
|
|
|
11
|
|
||
Net income attributable to the Company
|
$
|
754
|
|
|
$
|
716
|
|
Basic weighted average common shares outstanding
|
505
|
|
|
505
|
|
||
Dilutive effect of potentially issuable common shares
|
5
|
|
|
6
|
|
||
Diluted weighted average common shares outstanding
|
510
|
|
|
511
|
|
||
Average stock price used to calculate common stock equivalents
|
$
|
107.10
|
|
|
$
|
88.54
|
|
(In millions)
|
2020
|
|
|
2019
|
|
||
Assets acquired, excluding cash
|
$
|
249
|
|
|
$
|
180
|
|
Liabilities assumed
|
(5
|
)
|
|
(5
|
)
|
||
Contingent/deferred purchase consideration
|
(44
|
)
|
|
(35
|
)
|
||
Net cash outflow for current year acquisitions
|
$
|
200
|
|
|
$
|
140
|
|
(In millions)
|
2020
|
|
|
2019
|
|
||
Interest paid
|
$
|
199
|
|
|
$
|
98
|
|
Income taxes paid, net of refunds
|
$
|
136
|
|
|
$
|
131
|
|
(In millions)
|
Pension/Post-Retirement Plans Gains (Losses)
|
|
Foreign Currency Translation Gains (Losses)
|
|
Total Gains (Losses)
|
||||||
Balance as of December 31, 2019
|
$
|
(3,512
|
)
|
|
$
|
(1,543
|
)
|
|
$
|
(5,055
|
)
|
Other comprehensive income before reclassifications
|
109
|
|
|
(930
|
)
|
|
(821
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
29
|
|
|
—
|
|
|
29
|
|
|||
Net current period other comprehensive income (loss)
|
138
|
|
|
(930
|
)
|
|
(792
|
)
|
|||
Balance as of March 31, 2020
|
$
|
(3,374
|
)
|
|
$
|
(2,473
|
)
|
|
$
|
(5,847
|
)
|
(In millions)
|
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 income (loss) before reclassifications
|
(59
|
)
|
|
94
|
|
|
35
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
22
|
|
|
—
|
|
|
22
|
|
|||
Net current period other comprehensive income (loss)
|
(37
|
)
|
|
94
|
|
|
57
|
|
|||
Balance as of March 31, 2019
|
$
|
(2,990
|
)
|
|
$
|
(1,600
|
)
|
|
$
|
(4,590
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
January – Marsh & McLennan Agency ("MMA") acquired Momentous Insurance Brokerage Inc, a California-based full-service risk management and employee benefits firm specializing in high net worth private client services and insurance solutions for the entertainment industry, and Ironwood Insurance Services, LLC, an Atlanta-based broker that provides commercial property/casualty insurance, employee benefits, and private client solutions to mid-size businesses and individuals throughout the U.S.
|
Acquisitions through March 31, 2020
|
|
||
(In millions)
|
|
||
Cash
|
201
|
|
|
Estimated fair value of deferred/contingent consideration
|
44
|
|
|
Total consideration
|
$
|
245
|
|
Allocation of purchase price:
|
|
||
Cash and cash equivalents
|
1
|
|
|
Accounts receivable, net
|
9
|
|
|
Fixed assets, net
|
3
|
|
|
Other intangible assets
|
91
|
|
|
Goodwill
|
142
|
|
|
Other assets
|
4
|
|
|
Total assets acquired
|
250
|
|
|
Current liabilities
|
5
|
|
|
Total liabilities assumed
|
5
|
|
|
Net assets acquired
|
$
|
245
|
|
Intangible assets through March 31, 2020
(In millions)
|
|
Amount
|
|
Weighted Average Amortization Period
|
||
Client relationships
|
|
$
|
86
|
|
|
13 years
|
Other
|
|
5
|
|
|
4 years
|
|
|
|
$
|
91
|
|
|
|
•
|
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.
|
•
|
October – MMA acquired Benefits Reports Insurance Services, Inc., a Massachusetts-based independent insurance agency.
|
|
Three Months Ended
March 31, |
||||||
(In millions, except per share figures)
|
2020
|
|
|
2019
|
|
||
Revenue
|
$
|
4,657
|
|
|
$
|
4,536
|
|
Net income attributable to the Company
|
$
|
754
|
|
|
$
|
684
|
|
Basic net income per share attributable to the Company
|
$
|
1.49
|
|
|
$
|
1.35
|
|
Diluted net income per share attributable to the Company
|
$
|
1.48
|
|
|
$
|
1.34
|
|
March 31,
|
|
|
|
||||
(In millions)
|
2020
|
|
|
2019
|
|
||
Balance as of January 1,
|
$
|
14,671
|
|
|
$
|
9,599
|
|
Goodwill acquired
|
142
|
|
|
97
|
|
||
Other adjustments(a)
|
(401
|
)
|
|
43
|
|
||
Balance at March 31,
|
$
|
14,412
|
|
|
$
|
9,739
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
(In millions)
|
Gross
Cost
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
|
Gross
Cost
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
||||||
Client Relationships
|
$
|
3,450
|
|
|
$
|
951
|
|
|
$
|
2,499
|
|
|
$
|
3,494
|
|
|
$
|
897
|
|
|
$
|
2,597
|
|
Other (a)
|
373
|
|
|
209
|
|
|
164
|
|
|
380
|
|
|
203
|
|
|
177
|
|
||||||
Amortized intangibles
|
$
|
3,823
|
|
|
$
|
1,160
|
|
|
$
|
2,663
|
|
|
$
|
3,874
|
|
|
$
|
1,100
|
|
|
$
|
2,774
|
|
For the Years Ending December 31,
|
|
||
(In millions)
|
Estimated Expense
|
|
|
2020 (excludes amortization through March 31, 2020)
|
$
|
249
|
|
2021
|
325
|
|
|
2022
|
298
|
|
|
2023
|
277
|
|
|
2024
|
266
|
|
|
Subsequent years
|
1,248
|
|
|
|
$
|
2,663
|
|
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)
|
03/31/20
|
|
|
12/31/19
|
|
|
03/31/20
|
|
|
12/31/19
|
|
|
03/31/20
|
|
|
12/31/19
|
|
|
03/31/20
|
|
|
12/31/19
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial instruments owned:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Exchange traded equity securities(a)
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
4
|
|
Mutual funds(a)
|
138
|
|
|
166
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
138
|
|
|
166
|
|
||||||||
Money market funds(b)
|
408
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
408
|
|
|
55
|
|
||||||||
Other equity investment(a)
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
||||||||
Contingent purchase consideration asset(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
82
|
|
|
84
|
|
|
82
|
|
|
84
|
|
||||||||
Total assets measured at fair value
|
$
|
549
|
|
|
$
|
225
|
|
|
$
|
8
|
|
|
$
|
8
|
|
|
$
|
82
|
|
|
$
|
84
|
|
|
$
|
639
|
|
|
$
|
317
|
|
Fiduciary Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury Bills
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40
|
|
Money market funds
|
134
|
|
|
360
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
134
|
|
|
360
|
|
||||||||
Total fiduciary assets measured
at fair value
|
$
|
134
|
|
|
$
|
400
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
134
|
|
|
$
|
400
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent purchase
consideration liability(c)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
239
|
|
|
$
|
225
|
|
|
$
|
239
|
|
|
$
|
225
|
|
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
239
|
|
|
$
|
225
|
|
|
$
|
239
|
|
|
$
|
225
|
|
|
Three Months Ended
March 31, |
||||||
(In millions)
|
2020
|
|
|
2019
|
|
||
Balance at beginning of period
|
$
|
225
|
|
|
$
|
508
|
|
Net Additions
|
30
|
|
|
11
|
|
||
Payments
|
(13
|
)
|
|
(35
|
)
|
||
Revaluation Impact
|
1
|
|
|
11
|
|
||
Change in fair value of the FX contract
|
—
|
|
|
(42
|
)
|
||
Other (a)
|
(4
|
)
|
|
1
|
|
||
Balance at March 31,
|
$
|
239
|
|
|
$
|
454
|
|
For the Three Months Ended March 31,
(In millions)
|
2020
|
2019
|
||||
Lease Cost:
|
|
|
||||
Operating lease cost
|
$
|
92
|
|
$
|
82
|
|
Short-term lease cost
|
1
|
|
1
|
|
||
Variable lease cost
|
37
|
|
37
|
|
||
Sublease income
|
(5
|
)
|
(4
|
)
|
||
Net lease cost
|
$
|
125
|
|
$
|
116
|
|
Other information:
|
|
|
||||
Operating cash outflows from operating leases
|
$
|
103
|
|
$
|
87
|
|
Right of use assets obtained in exchange for new operating lease liabilities
|
$
|
79
|
|
$
|
—
|
|
Weighted-average remaining lease term – real estate
|
8.66 years
|
|
7.70 years
|
|
||
Weighted-average discount rate – real estate leases
|
3.06
|
%
|
3.12
|
%
|
Payment Dates (In millions)
|
Real Estate Leases
|
||
Remainder of 2020
|
$
|
308
|
|
2021
|
361
|
|
|
2022
|
336
|
|
|
2023
|
293
|
|
|
2024
|
248
|
|
|
2025
|
222
|
|
|
Subsequent years
|
800
|
|
|
Total future lease payments
|
2,568
|
|
|
Less: Imputed interest
|
(336
|
)
|
|
Total
|
$
|
2,232
|
|
Current lease liabilities
|
$
|
334
|
|
Long-term lease liabilities
|
1,898
|
|
|
Total lease liabilities
|
$
|
2,232
|
|
Combined U.S. and significant non-U.S. Plans
|
Pension
Benefits
|
|
Post-retirement
Benefits
|
||||||||||||
For the Three Months Ended March 31,
|
|
||||||||||||||
(In millions)
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
||||
Service cost
|
$
|
8
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
106
|
|
|
119
|
|
|
1
|
|
|
1
|
|
||||
Expected return on plan assets
|
(210
|
)
|
|
(213
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service (credit) cost
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Recognized actuarial loss
|
40
|
|
|
26
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit (credit) cost
|
$
|
(56
|
)
|
|
$
|
(60
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Settlement loss
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
||||
Total (credit) cost
|
$
|
(56
|
)
|
|
$
|
(56
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
U.S. Plans only
|
Pension
Benefits |
|
Post-retirement
Benefits |
||||||||||||
For the Three Months Ended March 31,
|
|
||||||||||||||
(In millions)
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
||||
Interest cost
|
$
|
53
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Expected return on plan assets
|
(86
|
)
|
|
(86
|
)
|
|
—
|
|
|
—
|
|
||||
Recognized actuarial loss
|
18
|
|
|
11
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit credit
|
$
|
(15
|
)
|
|
$
|
(15
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
Significant non-U.S. Plans only
|
Pension
Benefits |
|
Post-retirement
Benefits |
||||||||||||
For the Three Months Ended March 31,
|
|
||||||||||||||
(In millions)
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
||||
Service cost
|
$
|
8
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
53
|
|
|
59
|
|
|
1
|
|
|
1
|
|
||||
Expected return on plan assets
|
(124
|
)
|
|
(127
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Recognized actuarial loss
|
22
|
|
|
15
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit (credit) cost
|
$
|
(41
|
)
|
|
$
|
(45
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Settlement loss
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
||||
Total (credit) cost
|
$
|
(41
|
)
|
|
$
|
(41
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
Combined U.S. and significant non-U.S. Plans
|
Pension
Benefits |
|
Post-retirement
Benefits |
||||||||
|
|||||||||||
March 31,
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
Weighted average assumptions:
|
|
|
|
|
|
|
|
||||
Expected return on plan assets
|
5.31
|
%
|
|
5.74
|
%
|
|
—
|
|
|
—
|
|
Discount rate
|
2.57
|
%
|
|
3.48
|
%
|
|
2.72
|
%
|
|
3.65
|
%
|
Rate of compensation increase
|
1.76
|
%
|
|
1.74
|
%
|
|
—
|
|
|
—
|
|
(In millions)
|
March 31,
2020 |
|
|
December 31,
2019 |
|
||
Short-term:
|
|
|
|
||||
Commercial paper
|
$
|
193
|
|
|
$
|
—
|
|
Term loan facility - one year
|
500
|
|
|
—
|
|
||
Revolving credit facility
|
1,000
|
|
|
—
|
|
||
Current portion of long-term debt
|
716
|
|
|
1,215
|
|
||
|
2,409
|
|
|
1,215
|
|
||
Long-term:
|
|
|
|
||||
Senior notes – 2.35% due 2020
|
—
|
|
|
500
|
|
||
Senior notes – 3.50% due 2020
|
699
|
|
|
698
|
|
||
Senior notes – 4.80% due 2021
|
499
|
|
|
499
|
|
||
Senior notes - Floating rate due 2021
|
299
|
|
|
298
|
|
||
Senior notes – 2.75% due 2022
|
498
|
|
|
498
|
|
||
Senior notes – 3.30% due 2023
|
349
|
|
|
349
|
|
||
Senior notes – 4.05% due 2023
|
249
|
|
|
249
|
|
||
Senior notes – 3.50% due 2024
|
597
|
|
|
597
|
|
||
Senior notes – 3.875% due 2024
|
994
|
|
|
994
|
|
||
Senior notes – 3.50% due 2025
|
497
|
|
|
497
|
|
||
Senior notes – 1.349% due 2026
|
605
|
|
|
609
|
|
||
Senior notes – 3.75% due 2026
|
597
|
|
|
597
|
|
||
Senior notes – 4.375% due 2029
|
1,499
|
|
|
1,499
|
|
||
Senior notes – 1.979% due 2030
|
604
|
|
|
607
|
|
||
Senior notes – 5.875% due 2033
|
298
|
|
|
298
|
|
||
Senior notes – 4.75% due 2039
|
494
|
|
|
494
|
|
||
Senior notes – 4.35% due 2047
|
493
|
|
|
492
|
|
||
Senior notes – 4.20% due 2048
|
592
|
|
|
592
|
|
||
Senior notes – 4.90% due 2049
|
1,237
|
|
|
1,237
|
|
||
Mortgage – 5.70% due 2035
|
341
|
|
|
345
|
|
||
Term loan facility - two year
|
500
|
|
|
—
|
|
||
Other
|
6
|
|
|
7
|
|
||
|
11,947
|
|
|
11,956
|
|
||
Less current portion
|
716
|
|
|
1,215
|
|
||
|
$
|
11,231
|
|
|
$
|
10,741
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||
(In millions)
|
Carrying
Amount
|
|
|
Fair
Value
|
|
|
Carrying
Amount
|
|
|
Fair
Value
|
|
||||
Short-term debt
|
$
|
2,409
|
|
|
$
|
2,416
|
|
|
$
|
1,215
|
|
|
$
|
1,229
|
|
Long-term debt
|
$
|
11,231
|
|
|
$
|
12,033
|
|
|
$
|
10,741
|
|
|
$
|
11,953
|
|
|
(In millions)
|
Severance
|
|
Real Estate Related Costs (a)
|
|
Information Technology (a)
|
|
Consulting and Other Outside Services (b)
|
|
Total
|
||||||||||
Liability at 1/1/19
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2019 Charges
|
154
|
|
|
38
|
|
|
45
|
|
|
98
|
|
|
335
|
|
|||||
Cash payments
|
(112
|
)
|
|
(14
|
)
|
|
(45
|
)
|
|
(94
|
)
|
|
(265
|
)
|
|||||
Non-cash charges
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
(4
|
)
|
|
(23
|
)
|
|||||
Liability at 12/31/19
|
$
|
42
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
47
|
|
2020 Charges
|
23
|
|
|
16
|
|
|
21
|
|
|
20
|
|
|
80
|
|
|||||
Cash payments
|
(24
|
)
|
|
(4
|
)
|
|
(17
|
)
|
|
(16
|
)
|
|
(61
|
)
|
|||||
Non-cash charges
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(1
|
)
|
|
(13
|
)
|
|||||
Liability at 3/31/2020
|
$
|
41
|
|
|
$
|
5
|
|
|
$
|
4
|
|
|
$
|
3
|
|
|
$
|
53
|
|
(In millions)
|
Liability at
1/1/19
|
|
Amounts
Accrued
|
|
Cash
Paid
|
|
Other
|
|
Liability at 12/31/19
|
|
Amounts
Accrued
|
|
Cash
Paid
|
|
Other
|
|
Liability at 3/31/2020
|
||||||||||||||||||
Severance
|
$
|
73
|
|
|
$
|
73
|
|
|
$
|
(91
|
)
|
|
$
|
(4
|
)
|
|
$
|
51
|
|
|
$
|
5
|
|
|
$
|
(31
|
)
|
|
$
|
(1
|
)
|
|
$
|
24
|
|
Future rent under non-cancelable leases and other costs
|
39
|
|
|
39
|
|
|
(21
|
)
|
|
(6
|
)
|
|
51
|
|
|
4
|
|
|
(7
|
)
|
|
(4
|
)
|
|
$
|
44
|
|
||||||||
Total
|
$
|
112
|
|
|
$
|
112
|
|
|
$
|
(112
|
)
|
|
$
|
(10
|
)
|
|
$
|
102
|
|
|
$
|
9
|
|
|
$
|
(38
|
)
|
|
$
|
(5
|
)
|
|
$
|
68
|
|
•
|
In April 2017, the Financial Conduct Authority in the United Kingdom (the "FCA") commenced a civil competition investigation into the aviation insurance and reinsurance sector. In connection with that investigation, the FCA carried out an on-site inspection at the London offices of Marsh Limited, our Marsh and Guy Carpenter operating subsidiary in the United Kingdom, and JLT Specialty Ltd., JLT's U.K. operating subsidiary. The FCA indicated that it had reasonable grounds for suspecting that Marsh Limited, JLT Specialty Ltd. and other participants in the market had been sharing competitively sensitive information within the aviation insurance and reinsurance broking sector.
|
•
|
In 2017, JLT identified payments to a third-party introducer that had been directed to unapproved bank accounts. These payments related to reinsurance placements made on behalf of an Ecuadorian state-owned insurer. In early 2018, JLT voluntarily reported this matter to law enforcement authorities. In February and March 2020, money laundering charges were filed in the United States against a former employee of JLT, the principals of the third-party introducer and a former official of the state-owned insurer. We are cooperating with the ongoing investigations.
|
▪
|
Risk and Insurance Services, comprising insurance services (Marsh) and reinsurance services (Guy Carpenter); and
|
▪
|
Consulting, comprising Mercer and Oliver Wyman Group.
|
|
Three Months Ended
March 31, |
||||||
(In millions)
|
Revenue
|
|
Operating Income
(Loss)
|
||||
2020–
|
|
|
|
||||
Risk and Insurance Services
|
$
|
2,911
|
|
(a)
|
$
|
854
|
|
Consulting
|
1,762
|
|
(b)
|
282
|
|
||
Total Operating Segments
|
4,673
|
|
|
1,136
|
|
||
Corporate/Eliminations
|
(22
|
)
|
|
(66
|
)
|
||
Total Consolidated
|
$
|
4,651
|
|
|
$
|
1,070
|
|
2019–
|
|
|
|
||||
Risk and Insurance Services
|
$
|
2,423
|
|
(a)
|
$
|
733
|
|
Consulting
|
1,673
|
|
(b)
|
279
|
|
||
Total Operating Segments
|
4,096
|
|
|
1,012
|
|
||
Corporate/Eliminations
|
(25
|
)
|
|
(74
|
)
|
||
Total Consolidated
|
$
|
4,071
|
|
|
$
|
938
|
|
|
Three Months Ended
March 31, |
||||||
(In millions)
|
2020
|
|
|
2019
|
|
||
Risk and Insurance Services
|
|
|
|
||||
Marsh
|
$
|
2,076
|
|
|
$
|
1,753
|
|
Guy Carpenter
|
835
|
|
|
670
|
|
||
Total Risk and Insurance Services
|
2,911
|
|
|
2,423
|
|
||
Consulting
|
|
|
|
||||
Mercer
|
1,251
|
|
|
1,155
|
|
||
Oliver Wyman Group
|
511
|
|
|
518
|
|
||
Total Consulting
|
1,762
|
|
|
1,673
|
|
||
Total Operating Segments
|
4,673
|
|
|
4,096
|
|
||
Corporate/Eliminations
|
(22
|
)
|
|
(25
|
)
|
||
Total
|
$
|
4,651
|
|
|
$
|
4,071
|
|
•
|
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
March 31, |
||||||
(In millions, except per share figures)
|
2020
|
|
|
2019
|
|
||
Revenue
|
$
|
4,651
|
|
|
$
|
4,071
|
|
Expense:
|
|
|
|
||||
Compensation and Benefits
|
2,555
|
|
|
2,282
|
|
||
Other Operating Expenses
|
1,026
|
|
|
851
|
|
||
Operating Expenses
|
3,581
|
|
|
3,133
|
|
||
Operating Income
|
1,070
|
|
|
938
|
|
||
Income Before Income Taxes
|
1,007
|
|
|
944
|
|
||
Net Income Before Non-Controlling Interests
|
767
|
|
|
727
|
|
||
Net Income Attributable to the Company
|
$
|
754
|
|
|
$
|
716
|
|
Net Income Per Share Attributable to the Company:
|
|
|
|
||||
Basic
|
$
|
1.49
|
|
|
$
|
1.42
|
|
Diluted
|
$
|
1.48
|
|
|
$
|
1.40
|
|
Average Number of Shares Outstanding:
|
|
|
|
||||
Basic
|
505
|
|
|
505
|
|
||
Diluted
|
510
|
|
|
511
|
|
||
Shares outstanding at March 31,
|
506
|
|
|
507
|
|
|
Three Months Ended
March 31, |
||||||
(In millions)
|
2020
|
|
|
2019
|
|
||
Restructuring costs, excluding JLT
|
$
|
9
|
|
|
$
|
18
|
|
JLT integration and restructuring costs
|
80
|
|
|
36
|
|
||
JLT acquisition related costs
|
13
|
|
|
11
|
|
||
Impact on operating income
|
102
|
|
|
65
|
|
||
Change in fair value of acquisition related derivative contracts
|
—
|
|
|
(29
|
)
|
||
JLT related interest income - pre-acquisition
|
—
|
|
|
(25
|
)
|
||
JLT related interest expense - pre-acquisition
|
—
|
|
|
54
|
|
||
Impact on income before taxes
|
$
|
102
|
|
|
$
|
65
|
|
|
Three Months Ended
March 31, |
|
% Change GAAP Revenue
|
|
2019 Including JLT
|
|
% Change Including JLT in 2019
|
|
Components of Revenue Change Including JLT*
|
|||||||||||||||||
Currency
Impact |
|
Acquisitions/
Dispositions/ Other Impact |
|
Underlying
Revenue |
||||||||||||||||||||||
(In millions)
|
2020
|
|
|
2019
|
|
|
||||||||||||||||||||
Risk and Insurance Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Marsh
|
$
|
2,061
|
|
|
$
|
1,737
|
|
|
19
|
%
|
|
$
|
1,969
|
|
|
5
|
%
|
|
(2
|
)%
|
|
1
|
%
|
|
5
|
%
|
Guy Carpenter
|
827
|
|
|
663
|
|
|
25
|
%
|
|
781
|
|
|
6
|
%
|
|
—
|
|
|
(1
|
)%
|
|
7
|
%
|
|||
Subtotal
|
2,888
|
|
|
2,400
|
|
|
20
|
%
|
|
2,750
|
|
|
5
|
%
|
|
(1
|
)%
|
|
1
|
%
|
|
6
|
%
|
|||
Fiduciary Interest Income
|
23
|
|
|
23
|
|
|
|
|
27
|
|
|
|
|
|
|
|
|
|
||||||||
Total Risk and Insurance Services
|
2,911
|
|
|
2,423
|
|
|
20
|
%
|
|
2,777
|
|
|
5
|
%
|
|
(1
|
)%
|
|
1
|
%
|
|
5
|
%
|
|||
Consulting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Mercer
|
1,251
|
|
|
1,155
|
|
|
8
|
%
|
|
1,229
|
|
|
2
|
%
|
|
(2
|
)%
|
|
(2
|
)%
|
|
5
|
%
|
|||
Oliver Wyman
|
511
|
|
|
518
|
|
|
(1
|
)%
|
|
518
|
|
|
(1
|
)%
|
|
(1
|
)%
|
|
—
|
|
|
—
|
|
|||
Total Consulting
|
1,762
|
|
|
1,673
|
|
|
5
|
%
|
|
1,747
|
|
|
1
|
%
|
|
(1
|
)%
|
|
(1
|
)%
|
|
3
|
%
|
|||
Corporate/Eliminations
|
(22
|
)
|
|
(25
|
)
|
|
|
|
(25
|
)
|
|
|
|
|
|
|
|
|
||||||||
Total Revenue
|
$
|
4,651
|
|
|
$
|
4,071
|
|
|
14
|
%
|
|
$
|
4,499
|
|
|
3
|
%
|
|
(1
|
)%
|
|
—
|
|
|
5
|
%
|
|
Three Months Ended
March 31, |
|
% Change GAAP Revenue
|
|
2019 Including JLT
|
|
% Change Including JLT in 2019
|
|
Components of Revenue Change Including JLT*
|
|||||||||||||||||
Currency
Impact
|
|
Acquisitions/
Dispositions/ Other Impact |
|
Underlying
Revenue |
||||||||||||||||||||||
(In millions)
|
2020
|
|
|
2019
|
|
|
||||||||||||||||||||
Marsh:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
EMEA
|
$
|
754
|
|
|
$
|
633
|
|
|
19
|
%
|
|
$
|
740
|
|
|
2
|
%
|
|
(2
|
)%
|
|
—
|
|
|
4
|
%
|
Asia Pacific
|
238
|
|
|
165
|
|
|
44
|
%
|
|
232
|
|
|
3
|
%
|
|
(2
|
)%
|
|
(1
|
)%
|
|
6
|
%
|
|||
Latin America
|
91
|
|
|
78
|
|
|
16
|
%
|
|
100
|
|
|
(10
|
)%
|
|
(10
|
)%
|
|
(3
|
)%
|
|
3
|
%
|
|||
Total International
|
1,083
|
|
|
876
|
|
|
24
|
%
|
|
1,072
|
|
|
1
|
%
|
|
(3
|
)%
|
|
—
|
|
|
4
|
%
|
|||
U.S./Canada
|
978
|
|
|
861
|
|
|
14
|
%
|
|
897
|
|
|
9
|
%
|
|
—
|
|
|
4
|
%
|
|
5
|
%
|
|||
Total Marsh
|
$
|
2,061
|
|
|
$
|
1,737
|
|
|
19
|
%
|
|
$
|
1,969
|
|
|
5
|
%
|
|
(2
|
)%
|
|
1
|
%
|
|
5
|
%
|
Mercer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Wealth
|
592
|
|
|
543
|
|
|
9
|
%
|
|
598
|
|
|
(1
|
)%
|
|
(2
|
)%
|
|
(2
|
)%
|
|
3
|
%
|
|||
Health
|
486
|
|
|
442
|
|
|
10
|
%
|
|
461
|
|
|
5
|
%
|
|
(1
|
)%
|
|
(2
|
)%
|
|
8
|
%
|
|||
Career
|
173
|
|
|
170
|
|
|
2
|
%
|
|
170
|
|
|
2
|
%
|
|
(2
|
)%
|
|
1
|
%
|
|
2
|
%
|
|||
Total Mercer
|
$
|
1,251
|
|
|
$
|
1,155
|
|
|
8
|
%
|
|
$
|
1,229
|
|
|
2
|
%
|
|
(2
|
)%
|
|
(2
|
)%
|
|
5
|
%
|
* Components of revenue change may not add due to rounding.
|
For the Three Months Ended March 31,
|
Three Months
|
||||||
(In millions)
|
2020
|
|
|
2019
|
|
||
Revenue
|
$
|
2,911
|
|
|
$
|
2,423
|
|
Compensation and Benefits
|
1,452
|
|
|
1,221
|
|
||
Other Operating Expenses
|
605
|
|
|
469
|
|
||
Expense
|
2,057
|
|
|
1,690
|
|
||
Operating Income
|
$
|
854
|
|
|
$
|
733
|
|
Operating Income Margin
|
29.4
|
%
|
|
30.2
|
%
|
For the Three Months Ended March 31,
|
Three Months
|
||||||
(In millions)
|
2020
|
|
|
2019
|
|
||
Revenue
|
$
|
1,762
|
|
|
$
|
1,673
|
|
Compensation and Benefits
|
991
|
|
|
956
|
|
||
Other Operating Expenses
|
489
|
|
|
438
|
|
||
Expense
|
1,480
|
|
|
1,394
|
|
||
Operating Income
|
$
|
282
|
|
|
$
|
279
|
|
Operating Income Margin
|
16.0
|
%
|
|
16.7
|
%
|
|
(In millions)
|
Payment due by Period
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
|
Within
1 Year
|
|
|
1-3 Years
|
|
|
4-5 Years
|
|
|
After
5 Years
|
|
|||||
Commercial paper
|
$
|
193
|
|
|
$
|
193
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Term loan facility
|
1,000
|
|
|
500
|
|
|
500
|
|
|
—
|
|
|
—
|
|
|||||
Revolving credit facility
|
1,000
|
|
|
1,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Short-term debt
|
716
|
|
|
716
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Long-term debt
|
10,804
|
|
|
—
|
|
|
1,684
|
|
|
2,384
|
|
|
6,736
|
|
|||||
Interest on long-term debt
|
5,399
|
|
|
480
|
|
|
796
|
|
|
663
|
|
|
3,460
|
|
|||||
Net operating leases
|
2,568
|
|
|
401
|
|
|
682
|
|
|
520
|
|
|
965
|
|
|||||
Service agreements
|
303
|
|
|
150
|
|
|
84
|
|
|
60
|
|
|
9
|
|
|||||
Other long-term obligations
|
455
|
|
|
179
|
|
|
227
|
|
|
43
|
|
|
6
|
|
|||||
Total
|
$
|
22,438
|
|
|
$
|
3,619
|
|
|
$
|
3,973
|
|
|
$
|
3,670
|
|
|
$
|
11,176
|
|
(In millions)
|
Three Months Ended
March 31, 2019 |
||
MMC As Previously Reported
|
|
||
Risk & Insurance Services
|
|
||
Marsh
|
$
|
1,737
|
|
Guy Carpenter
|
663
|
|
|
Subtotal
|
2,400
|
|
|
Fiduciary Interest Income
|
23
|
|
|
Total Risk & Insurance Services
|
2,423
|
|
|
Consulting
|
|
||
Mercer
|
1,155
|
|
|
Oliver Wyman Group
|
518
|
|
|
Total Consulting
|
1,673
|
|
|
Corporate Eliminations
|
(25
|
)
|
|
Total Revenue
|
$
|
4,071
|
|
JLT 2019
|
|
||
Specialty (Marsh)
|
$
|
232
|
|
Reinsurance (Guy Carpenter)
|
118
|
|
|
Employee Benefits (Mercer)
|
74
|
|
|
Subtotal
|
424
|
|
|
Fiduciary Interest Income
|
4
|
|
|
Total Revenue
|
$
|
428
|
|
2019 Including JLT
|
|
||
Marsh
|
$
|
1,969
|
|
Guy Carpenter
|
781
|
|
|
Subtotal
|
2,750
|
|
|
Fiduciary Interest Income
|
27
|
|
|
Total Risk & Insurance Services
|
2,777
|
|
|
Consulting
|
|
||
Mercer
|
1,229
|
|
|
Oliver Wyman Group
|
518
|
|
|
Total Consulting
|
1,747
|
|
|
Corporate Eliminations
|
(25
|
)
|
|
Total Revenue Including JLT
|
$
|
4,499
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
(In millions)
|
March 31, 2020
|
||
Cash and cash equivalents invested in money market funds, certificates of deposit and time deposits
|
$
|
1,480
|
|
Fiduciary cash and investments
|
$
|
7,661
|
|
Item 4.
|
Controls & Procedures.
|
•
|
in our Risk and Insurance Services segment, a reduction in pricing and commission for specific lines of coverage most directly affected by the pandemic;
|
•
|
in our Consulting segment, a reduction of demand for our services as clients cut back on expenses, as well as the impact on our business model for delivering services to clients due to restrictions on travel and movement, and guidance around social distancing;
|
•
|
the timeliness and ultimate collectability of our receivables, including as a result of deferrals of premium payments directed by government authorities, which affects our ability to generate sufficient cash flows;
|
•
|
the impact of disruption in the credit or financial markets, or changes to our credit ratings, which may impact our ability to access capital or repay our significant outstanding indebtedness on favorable terms and our compliance with the covenants contained in the agreements that govern our indebtedness;
|
•
|
an increase in errors & omissions claims related to pandemic coverage;
|
•
|
the impact of financial market volatility, including our ability to execute timely trades in light of increased trading volume, which may reduce assets under management and revenue for Mercer’s Investments business;
|
•
|
failure of third parties upon which we rely to meet their obligations to us, or significant disruptions in their ability to meet those obligations in a timely manner, which may be caused by their own financial or operational difficulties;
|
•
|
the impact of an extended period of remote work arrangements on our business continuity plans, and our ability to continue to provide services to our clients;
|
•
|
increased risk of phishing and other cybersecurity attacks or unauthorized dissemination of personal, confidential, proprietary or sensitive data caused by remote work arrangements; and
|
•
|
the potential effects on our internal controls including those over financial reporting as a result of changes in working environments such as shelter-in-place and similar orders that are applicable to our team members and business partners.
|
Period
|
(a)
Total
Number of
Shares (or
Units)
Purchased
|
|
|
(b)
Average
Price
Paid per
Share
(or Unit)
|
|
|
(c)
Total Number of
Shares (or
Units)
Purchased as
Part of Publicly
Announced
Plans or
Programs
|
|
|
(d)
Maximum
Number (or
Approximate
Dollar Value) of
Shares (or
Units) that May
Yet Be
Purchased
Under the Plans
or Programs
|
|
||
January 1-31, 2020
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
2,422,987,756
|
|
February 1-29, 2020
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
2,422,987,756
|
|
March 1-31, 2020
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
2,422,987,756
|
|
Total
|
—
|
|
|
|
|
—
|
|
|
$
|
2,422,987,756
|
|
Date:
|
May 1, 2020
|
/s/ Mark C. McGivney
|
|
|
|
Mark C. McGivney
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
Date:
|
May 1, 2020
|
/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
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
Daniel S. Glaser
President and Chief Executive Officer
Marsh & McLennan Companies, Inc.
1166 Avenue of the Americas
New York, New York 10036
212 345 4874 Fax 212 345 6676
dan.glaser@mmc.com
www.mmc.com
|
1.
|
Your title is President & Chief Executive Officer, Marsh and Vice Chair, Marsh & McLennan.
|
2.
|
Exhibit A to the Letter Agreement shall be deleted and replaced in its entirety with the attached Exhibit A.
|
Board or Committee Memberships
|
The Board of New York Police and Fire Widows and Children’s Benefit Fund Inner City Scholarship Fund
|
Annual Base Salary
|
$1,000,000
|
Annual Target Bonus Opportunity
|
Bonus awards are discretionary. Target bonus of $2,500,000 commencing with the 2020 performance year (awarded in 2021). Actual bonus may range from 0% - 200% of target, based on achievement of individual performance objectives, Marsh’s performance and/or Marsh & McLennan Companies’ performance as Marsh & McLennan Companies may establish from time to time.
|
Annual Target Long-Term Incentive Opportunity
|
Long-term incentive awards are discretionary. Target award value of $3,000,000, commencing with the award made in 2020.
|
|
|
Daniel S. Glaser
President and Chief Executive Officer
Marsh & McLennan Companies, Inc.
1166 Avenue of the Americas
New York, New York 10036
212 345 4874 Fax 212 345 6676
dan.glaser@mmc.com
www.mmc.com
|
1.
|
Duties and Responsibilities
|
a.
|
Annual Base Salary: You will receive an annual base salary of the amount set forth on Exhibit A, payable in installments in accordance with the Company’s payroll procedures in effect from time to time. Your base salary includes compensation for all time worked, as well as appropriate consideration for sick days, personal days, and other time off. Your base salary will be considered for adjustment in succeeding years as part of the Company’s normal performance management process.
|
b.
|
Vacation: You are entitled to 5 weeks of vacation annually, in accordance with our Company policy.
|
c.
|
Annual Bonus: You are eligible for an annual bonus on the terms set forth on Exhibit A. Bonus awards are discretionary and may be paid in the form of cash, deferred cash or Marsh & McLennan Companies stock units, or a combination thereof. Except as provided in this paragraph and in Section 3(a), to qualify for an annual bonus, you must remain continuously and actively employed by the Company, without having tendered a notice of resignation, through the date of the bonus payment, in accordance with the terms and conditions of the award. The annual bonus shall be paid no later than March 15 of the year following the year for which such bonus is earned. In the event of your Permanent Disability (as defined below) or death, the Company shall pay you (or your estate in the case of death) a prorated target annual bonus for the year in which your termination occurs based on the portion of the year elapsed as of the date of your termination. Any such bonus amount shall be paid within 30 days of your death. In the event of your Permanent Disability, your prorated annual bonus payment is conditioned upon, and subject to, your execution and delivery to the Company within 30 days of the date of such event a valid confidential waiver and release of claims agreement (including restrictive covenants) in a form satisfactory to the Company (the “Release”) and such Release has become irrevocable as provided therein (the “Release Effective Date”). Payment of any such annual bonus amount shall then be paid within 30 days following the Release Effective Date, but in no event later than March 15 of the year following the year for which such bonus is earned.
|
d.
|
Annual Long-Term Incentive Compensation: You are eligible to participate in Marsh & McLennan Companies’ long-term incentive program with a target long-term incentive compensation award as set forth on Exhibit A. Long-term incentive awards are discretionary and are governed by terms and conditions approved by the Compensation Committee of the Marsh & McLennan Companies Board of Directors (“Compensation Committee”) as set forth in the award agreement and in Marsh & McLennan Companies’ 2011 Incentive and Stock Award Plan (or other plan under which the long-term incentive award is granted). In accordance with Company practice, you may be required to enter into a “Restrictive Covenants Agreement” in connection with long-term incentive awards.
|
e.
|
Deferred Stock Unit Award: On March 1, 2019, you will be granted an award of deferred stock units (“DSU") as set forth on Exhibit A. Your award will be converted from the dollar value of the grant into DSUs based upon the average of the high and low sales prices of a share of Marsh & McLennan Companies common stock on the New York Stock Exchange one trading day prior to the effective date of the grant. The DSUs will vest on 15th of the month in which the third anniversary of the grant date occurs, subject to your continued employment, and will be subject to standard terms and conditions approved by the
|
f.
|
Benefit Programs: You and your eligible family members will continue to have the opportunity to participate in the employee benefit plans, policies and programs provided by Marsh & McLennan Companies, on such terms and conditions as are generally provided to similarly situated employees of Mercer and the Company. These plans may include retirement, savings, medical, life, disability, and other insurance programs as well as an array of work/life effectiveness policies and programs. Please be aware that nothing in this letter agreement shall limit Marsh & McLennan Companies’ ability to change, modify, cancel or amend any such policies or plans. In addition, you will be entitled to the benefits set forth on Exhibit A and you will continue to be eligible to participate in the Marsh & McLennan Companies Executive Financial Services Program, as in effect from time to time.
|
a.
|
You have been designated as a “Key Employee” under the Marsh & McLennan Companies, Inc. Senior Executive Severance Pay Plan (the “Senior Executive Severance Plan”). In the event that your employment with the Company terminates for any reason, the Senior Executive Severance Plan in effect at the time of your termination will exclusively govern the terms under which you may be eligible to receive severance and/or other transition benefits from the Company. In the event that you are entitled to receive severance benefits under Article 5 of the Senior Executive Severance Plan, the Company shall also pay you the earned annual bonus, if any, for the calendar year that preceded your termination to the extent not theretofore paid.
|
b.
|
Upon the termination of your employment for any reason, you shall immediately resign, as of your date of termination, from all positions that you then hold with any member of the Affiliated Group. You hereby agree to execute any and all documentation to effectuate such resignations upon request by the Company, but you shall be treated for all purposes as having so resigned upon your date of termination, regardless of when or whether you execute any such documentation.
|
c.
|
During the term of this letter agreement, and, subject to any other business obligations that you may have, following your date of termination, you agree to assist the Affiliated Group in the investigation and/or defense of any claims or potential claims that may be made or threatened to be made against any member of the Affiliated Group, including any of their officers or directors (a “Proceeding”), and will assist the Affiliated Group in connection with any claims that may be made by any member of the Affiliated Group in any Proceeding. You agree, unless precluded by law, to promptly inform Marsh & McLennan Companies if you are asked to participate in any Proceeding or to assist in any investigation of any member of the Affiliated Group. In addition, you agree to provide such services as are reasonably requested by the Company to assist any successor to you in the transition of duties and responsibilities to such successor. Following the receipt of reasonable documentation, the Company agrees to reimburse you for all of your reasonable out-of-pocket expenses
|
a.
|
Notices. Notices given pursuant to this letter agreement shall be in writing and shall be deemed received when personally delivered, or on the date of written confirmation of receipt by (i) overnight carrier, (ii) telecopy, (iii) registered or certified mail, return receipt requested, postage prepaid, or (iv) such other method of delivery as provides a written confirmation of delivery. Notice to the Company shall be directed to:
|
b.
|
Assignment of this Agreement. This letter agreement is personal to you and shall not be assignable by you without the prior written consent of Marsh & McLennan Companies. This letter agreement shall inure to the benefit of and be binding upon the Company and its respective successors and assigns. Marsh & McLennan Companies may assign this letter agreement, without your consent, to any member of the Affiliated Group or to any other respective successor (whether directly or indirectly, by agreement, purchase, merger, consolidation, operation of law or otherwise) to all, substantially all or a substantial portion of the business and/or assets of Mercer or the Company, as applicable. If and to the extent that this letter agreement is so assigned, references to “Mercer” or the “Company” throughout this letter agreement shall mean Mercer or the Company as hereinbefore defined and any successor to, or assignee of, its business and/or assets as applicable.
|
c.
|
Merger of Terms. This letter agreement supersedes all prior discussions and agreements between you and the Company or any member of the Affiliated Group with respect to the subject matters covered herein. For the avoidance of doubt, compensation that was paid or awarded to you prior to the effective date of this letter agreement will continue to be governed by the terms pursuant to which such compensation was paid or awarded.
|
d.
|
Indemnification. The Company shall indemnify you to the extent permitted by its bylaws, as in effect on the date hereof, with respect to the work you have performed for, or at the request of, the Company or any member of the Affiliated Group (as such term is defined in Section 1 above) during the term of this letter agreement.
|
e.
|
Governing Law; Amendments. This letter agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to principles of conflict of laws. This letter agreement may not be amended or modified other than by a written agreement executed by you and an authorized employee of Marsh & McLennan Companies.
|
f.
|
Choice of Forum. The Company and you each hereby irrevocably and unconditionally submits to the exclusive jurisdiction of any New York state court or federal court of the United States of America sitting in the State of New York, and any appellate court thereof, in any action or proceeding arising out of or relating to this letter agreement or for recognition or enforcement of any judgment relating thereto, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York state court or, to the extent permitted by law, in such federal court. The Company and you agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
|
g.
|
Severability; Captions. In the event that any provision of this letter agreement is determined to be invalid or unenforceable, in whole or in part, the remaining provisions of this letter agreement will be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law. The captions in this letter agreement are not part of the provisions of this letter agreement and will have no force or effect.
|
h.
|
Section 409A. The provisions of this Section 8(h) will only apply if and to the extent required to avoid the imposition of taxes, interest and penalties on you under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”). Section 409A applies to nonqualified deferred compensation which exists if an individual has a “legally binding right” to compensation that is or may be payable in a later year. In furtherance of the objective of this Section 8(h), to the extent that any regulations or other guidance issued under Section 409A would result in your being subject to payment of taxes, interest or penalties under Section 409A, you and the Company agree to use our best efforts to amend this letter agreement and any other plan, award, arrangement or agreement between you and the Company in order to avoid or limit the imposition of any such taxes, interest or penalties, while maintaining to the maximum extent practicable the original intent of the applicable provisions. This Section 8(h) does not guarantee that you will not be subject to taxes, interest or penalties under Section 409A with respect to compensation or benefits described or referenced in this letter agreement or any other plan, award, arrangement or agreement between you and the Company.
|
i.
|
Withholding Requirements. All amounts paid or provided to you under this letter agreement shall be subject to any applicable income, payroll or other tax withholding requirements.
|
Annual Base Salary
|
$850,000 effective March 1, 2019
|
Annual Target Bonus Opportunity
|
Bonus awards are discretionary. Target bonus of $1,700,000 commencing with the 2019 performance year (awarded in 2020). Actual bonus may range from 0% - 200% of target, based on achievement of individual performance objectives, Mercer’s performance and/or Marsh & McLennan Companies’ performance as Marsh & McLennan Companies may establish from time to time.
|
Annual Target Long-Term Incentive Opportunity
|
Long-term incentive awards are discretionary. Target grant date fair value of $2,000,000, commencing with the award made in 2019.
|
Special Deferred Stock Unit Award
|
Deferred Stock Units (DSUs) with a grant date value of $1,000,000.
|
Other Benefits
|
You are being provided with relocation benefits for your transfer from the UK to New York under Marsh & McLennan Companies’ “Local-to-Local Transfer Policy” with certain limited exceptions, as described in your November 2018 Letter of Transfer. Any additional relocation benefits would be subject to approval by the Chairman of the Compensation Committee.
|
/s/ Daniel S. Glaser_
|
/s/ Martine Ferland
|
Daniel S. Glaser
|
Martine Ferland
|
President and Chief Executive Officer
|
|
Marsh & McLennan Companies, Inc.
|
|
1.
|
Executive understands and acknowledges that as a senior executive of the Company and a member of Marsh & McLennan Companies’ Executive Committee, Executive will learn or have access to, or may assist in the development of, highly confidential and sensitive information and trade secrets about the Company, its operations and its clients, and that providing its clients with appropriate assurances that their confidences will be protected is crucial to the Company’s ability to obtain clients, maintain good client relations, and conform to contractual obligations. Such Confidential Information and Trade Secrets include but are not limited to: (i) financial and business information relating to the Company, such as information with respect to costs, commissions, fees, profits, sales, markets, mailing lists, strategies and plans for future business, new business, product or other development, potential acquisitions or divestitures, and new marketing ideas; (ii) product and technical information relating to the Company, such as product concepts and structures, new and innovative product ideas, methods, procedures, devices, machines, equipment, data processing programs, software, software codes, computer models, and research and development projects; (iii) client information, such as the identity of the Company’s clients, the names of representatives of the Company’s clients responsible for entering into contracts with the Company, the amounts paid by such clients to the Company, specific client needs and requirements, specific client characteristics related to the provision of services by the Company, client consulting needs and information about the consulting services provided or planned by the Company to serve such clients, client insurance policy information, information regarding the markets or sources with which insurance is placed,
|
2.
|
Executive acknowledges and agrees that the Company is engaged in highly competitive businesses and that its competitive position depends upon its ability to maintain the confidentiality of the Confidential Information and Trade Secrets which were developed, compiled and acquired by the Company at its effort and expense and through the use of the Company’s resources. Executive further acknowledges and agrees that any disclosing, divulging, revealing, or using of any of the Confidential Information and Trade Secrets, other than in connection with the Company’s business or as specifically authorized by the Company, will be highly detrimental to the Company and cause it to suffer serious loss of business and pecuniary damage and loss of goodwill.
|
3.
|
At all times prior to and following Executive’s termination of employment, Executive shall not disclose to anyone or make use of any Confidential Information and Trade Secrets of the Company, including such trade secret or proprietary or confidential information of any client, prospective client or other entity to which the Company owes an obligation not to disclose such information, which Executive acquires during Executive’s employment with Marsh or the Company, including but not limited to records kept in the ordinary course of business except: (i) as such disclosure or use may be required or appropriate in connection with Executive’s work as an employee of Marsh or the Company; (ii) when required to do so by a court of law, by any governmental agency having supervisory authority over the business of the Company or by any administrative or legislative body (including a committee thereof) with apparent jurisdiction to order Executive to divulge, disclose or make accessible such information (but only to the extent required by such requirement or order); or (iii) as to such confidential information that becomes generally known to the public or trade without violation of this Agreement by Executive or by others under a duty of confidentiality to the Company.
|
4.
|
Immediately upon the termination of employment with Marsh or the Company for any reason, or at any time the Company so requests, Executive will return to the Company: (i) any
|
5.
|
Executive agrees to assign and hereby does assign to the Company all Executive’s present and future right, title and interest in and to any intellectual property conceived, discovered, reduced to practice and/or made by Executive during the period of time that Executive is employed by the Marsh or Company (whether before, on or after the date of this Agreement), whether such intellectual property was conceived, discovered and/or reduced to practice and/or made by Executive solely or jointly with others, on or off the premises of the Company’s business, or during or after working hours, if such intellectual property: (i) was conceived, discovered, reduced to practice and/or made with the Company’s facilities, equipment, supplies, confidential information, trade secrets or intellectual property; or (ii) relates to the Company’s current, or demonstrably anticipated or potential business activities, work or research; or (iii) results from work done or to be done by Executive or under Executive’s direction, alone or jointly, for the Company (“Intellectual Property”). Executive further acknowledges and agrees that such Intellectual Property as referred to herein belongs to the Company and that the Company may, in its sole discretion, keep such Intellectual Property and/or processes pertaining thereto, whether patentable or copyrightable or not, as trade secrets and make all decisions regarding whether and how to use such Intellectual Property and/or processes. Executive further agrees not to use or seek any commercial exploitation of or otherwise use any Intellectual Property transferred to the Company or required to be assigned under this Agreement for personal use.
|
6.
|
Executive acknowledges, agrees and intends that all copyrightable works Executive creates during the period of time that Executive is employed by Marsh or the Company (whether before, on or after the date of this Agreement) and within the scope of Executive’s employment shall be considered to be “works made for hire” as defined under the U.S. Copyright Act, 17 U.S.C. §§ 101 et seq. (or as defined under any UK act or legislation having such effect) (“Copyrightable Works”). Executive also acknowledges, agrees and intends that the Company will be deemed the author of all such works made for hire and the owner of all of the rights comprised in the copyright of such works. To the extent that
|
7.
|
Executive agrees to: (i) promptly disclose such Intellectual Property and Copyrightable Works to the Company; (ii) assign to the Company, without additional compensation, the entire rights to Intellectual Property and Copyrightable Works for the United States and all foreign countries; (iii) execute all documents, certifications, and all other papers and do all acts necessary to carry out the above, including enabling the Company to file and prosecute applications for, acquire, ascertain and enforce in all countries, letters patent, trademark registrations and/or copyrights covering or otherwise relating to Intellectual Property and Copyrightable Works and to enable the Company to protect its proprietary interests therein; and (iv) give testimony in any action or proceeding to enforce rights in the Intellectual Property and Copyrightable Works. In the event the Company is unable for any reason, after reasonable effort, to secure Executive’s signature on any document needed in connection with the actions specified in this Agreement, Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive’s agent and attorney in fact, to act for and on Executive’s behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of the preceding paragraph thereon with the same legal force and effect as if executed by Executive. Executive hereby assigns to the Company any and all claims, of any nature whatsoever, which Executive now or may hereafter have for infringement of any proprietary rights assigned or transferred hereunder to the Company.
|
8.
|
Executive understands and agrees: (i) no license or conveyance of any rights or warranty to Executive is granted or implied by the Company furnishing or disclosing any Intellectual Property or Copyrightable Works to Executive; and (ii) the Company shall retain whatever ownership and other proprietary rights it otherwise has in all Intellectual Property and Copyrightable Works.
|
9.
|
Executive acknowledges and agrees that the Company is engaged in highly competitive businesses and that by virtue of Executive’s position and responsibilities with the Company and Executive’s access to Confidential Information and Trade Secrets, engaging in any business which is directly competitive with the Company will cause it great and irreparable harm.
|
10.
|
Accordingly, both during Executive’s employment with Marsh or the Company and during the twelve (12) month period following the cessation of Executive’s employment with Marsh or the Company, whether voluntarily or involuntarily and for any reason, Executive shall not, without the express written consent of the Chief Executive Officer of Marsh & McLennan Companies, directly or indirectly engage in any activity – whether as an employee,
|
11.
|
Executive acknowledges and agrees that solely by reason of employment by Marsh or the Company, Executive has and will come into contact with and develop and maintain relationships with a significant number of the Company’s clients and prospective clients and has and will have access to Confidential Information and Trade Secrets relating thereto, including those regarding the Company’s clients, prospective clients and related information.
|
12.
|
Consequently, during the twelve (12) month period following the cessation of Executive’s employment with Marsh or the Company, whether voluntarily or involuntarily and for any reason, Executive shall not, without the express written consent of the Chief Executive Officer of Marsh & McLennan Companies, directly or indirectly: (i) solicit clients or prospective clients of the Company for the purpose of selling or providing products or services of the type sold or provided by Executive while employed by Marsh or the Company; (ii) induce clients or prospective clients of the Company to terminate, cancel, not renew, or not place business with the Company; (iii) perform or supervise the performance of services or provision of products of the type sold or provided by Executive while he was employed by Marsh or the Company on behalf of any clients or prospective clients of the Company; or (iv) assist others to do the acts specified in Sections 12 (i)-(iii). This restriction shall apply only to those clients or prospective clients of the Company with whom Executive had contact or about whom Executive obtained Confidential Information and Trade Secrets during the last two (2) years of Executive’s employment with Marsh or the Company. For the purposes of Sections 11 and 12, the term “contact” means interaction between Executive and the client which takes place to further the business relationship, or making (or assisting or supervising the performance or provision of) sales to or performing or providing (or assisting or supervising the performance or provision of) services or products for the client on behalf of the Company. For purposes of Sections 11 and 12, the term “contact” with respect to a “prospective” client means interaction between Executive and a potential client
|
13.
|
Executive acknowledges and agrees that solely as a result of employment with Marsh or the Company, and in light of the broad responsibilities of such employment, which include working with other employees of the Company, Executive has and will come into contact with and acquire Confidential Information and Trade Secrets regarding the Company’s other employees. Accordingly, during Executive’s employment with Marsh or the Company and during the twelve (12) month period following the cessation of Executive’s employment with Marsh or the Company, whether voluntarily or involuntarily and for any reason, Executive shall not, without the express written consent of the Chief Executive Officer of Marsh & McLennan Companies, either on Executive’s own account or on behalf of any person, company, corporation, or other entity, directly or indirectly, solicit, or endeavor to cause any employee of the Company with whom Executive, during the last two (2) years of his employment with Marsh or the Company, came into contact for the purpose of soliciting or servicing business or about whom Executive obtained Confidential Information and Trade Secrets, to leave employment with the Company.
|
14.
|
Executive acknowledges and agrees that the covenants contained in this Agreement are reasonable and necessary to protect the Confidential Information and Trade Secrets, business and goodwill of the Company and its subsidiaries. Executive further represents that his experience and capabilities are such that the provisions of this Agreement will not prevent him from earning a livelihood or cause undue hardship and that the covenants contained in this Agreement are reasonable in view of the benefits and consideration Executive has received or will receive from the Company.
|
15.
|
In recognition of the fact that irreparable harm will result to the Company in the event of any breach or anticipatory breach of this Agreement by Executive, or Executive’s claim in a declaratory judgment action that all or part of this Agreement is unenforceable, and that money damages may not provide adequate relief, the parties agree that the Company shall be entitled to the following particular forms of relief as a result of such breach, in addition to any remedies otherwise available to it at law or equity: (a) injunctions, both preliminary and permanent, enjoining or restraining such breach or anticipatory breach, and other equitable relief, and Executive hereby consents to the issuance thereof forthwith and without bond by any court of competent jurisdiction; and (b) recovery of all reasonable sums and costs, including attorneys’ fees, expert witness fees, expenses and costs incurred by the Company to defend or enforce the provisions of this Agreement.
|
16.
|
In the event that the Company is required to enforce any of its rights contained in this Agreement through legal proceedings, the parties acknowledge that it may be difficult or impossible to ascertain the precise amount of damages or lost profits incurred by the Company. Therefore, in the event of any breach by Executive of this Agreement, in addition to any other relief available to the Company at law or in equity, Executive agrees that the damages for each client lost in whole or in part by the Company as a result of Executive’s breach shall be two hundred percent (200%) of the gross commissions and fees received by the Company from such client during the twelve (12) months preceding the cessation of Executive’s employment. In arriving at this calculation, Executive agrees that the Company and Executive have considered the following factors: (i) the value of the clients; (ii) the business of the Company; (iii) the type and quality of the clients; (iv) the substantial amount of time, effort and expense incurred by the Company in acquiring, developing and maintaining the clients; (v) the number of years the Company typically retains such clients; (vi) the profitability of renewal business; and (vii) various other factors relating to the relationship between the Company and the clients. Executive further agrees that Executive shall be obligated to reimburse the Company for all reasonable costs, expenses and counsel fees incurred by the Company in connection with the enforcement of its rights hereunder.
|
17.
|
The restrictive periods set forth in this Agreement (i) shall be reduced by any period spent by Executive on paid suspension / garden leave, in accordance with Section 3(d) of the Letter Agreement; and (ii) shall not expire and shall be tolled during any period in which Executive is in violation of such restrictive periods, and therefore such restrictive periods shall be extended for a period equal to the duration of any violations thereof by Executive.
|
18.
|
The parties agree they have attempted to limit the scope of the post-employment restrictions contained herein to the extent necessary to protect Confidential Information and Trade Secrets, client relationships and goodwill. It is the desire and intent of the parties that the provisions of this Agreement shall be enforced to the fullest extent permissible under applicable laws and public policies. Accordingly, if any particular portion of this Agreement shall be adjudicated to be invalid or unenforceable, this Agreement shall be deemed amended to delete therefrom such invalid portion, and reformed to the extent valid and enforceable. Such deletion and reformation shall apply only with respect to the operation of this Agreement in the particular jurisdiction in which such adjudication is made.
|
19.
|
No modification of this Agreement shall be valid unless made in a written or electronic instrument signed by both parties hereto, wherein specific reference is made to this Agreement. Should Executive move to a different jurisdiction while employed by Marsh or the Company, or upon written request of the Company, Executive agrees to sign, without further consideration, upon direction by the Company, such further writings to effectuate the provisions of this Agreement as necessary to comply with applicable law. Executive’s failure to sign such additional agreements shall constitute a breach of this Agreement.
|
20.
|
The failure of either the Company or Executive, whether purposeful or otherwise, to exercise in any instance any right, power, or privilege under this Agreement or under law shall not constitute a waiver of the same or any other right, power, or privilege in any other instance. Any waiver by the Company or by Executive must be in a written or electronic instrument signed by either Executive, if Executive is seeking to waive any of his rights under this Agreement, or by the Compensation Committee of the Company’s Board of Directors, if the Company is seeking to waive any of its rights under this Agreement.
|
21.
|
This Agreement shall be binding upon Executive, Executive’s heirs, executors and administrators, and upon the Company, and its affiliates, successors and assigns, and shall inure to the benefit of the Company and its affiliates, successors and assigns. This Agreement may not be assigned by Executive. This Agreement may be enforced by the Company and its affiliates, successors and assigns.
|
22.
|
This Agreement shall be governed by and construed in accordance with English law without reference to principles of conflict of laws. This Agreement may not be amended or modified other than by a written agreement executed by Executive and the Chief Executive Officer of Marsh & McLennan Companies.
|
23.
|
The Company and Executive each hereby irrevocably and unconditionally agree to submit any dispute as to the terms of effects of this Agreement to the exclusive jurisdiction of the courts of England and Wales. The Company and Executive 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.
|
/s/ Daniel S. Glaser_
|
/s/ Dominic J. Burke
|
Daniel S. Glaser
|
DOMINIC J. BURKE
|
President and Chief Executive Officer
|
|
Marsh & McLennan Companies, Inc.
|
|
|
|
Date: 7/15/19
|
Date: 7/15/19
|
I. BACKGROUND
|
1
|
II. AWARDS
|
1
|
A. General
|
1
|
1. Award Acceptance
|
1
|
2. Rights of Award Holders
|
1
|
3. Restrictive Covenants Agreement
|
1
|
B. Stock Units
|
2
|
1. General
|
2
|
2. Vesting
|
2
|
3. Dividend Equivalents
|
2
|
4. Delivery
|
2
|
C. Satisfaction of Tax Obligations
|
3
|
1. Personal Tax Advisor
|
3
|
2. U.S. Employees
|
3
|
3. Non-U.S. Employees
|
3
|
a. Stock Units and Dividend Equivalents
|
3
|
b. Withholding
|
3
|
III. EMPLOYMENT EVENTS
|
4
|
A. Death
|
4
|
B. Permanent Disability
|
4
|
C. Termination by the Company Other Than for Cause
|
4
|
1. General
|
4
|
2. Important Notes
|
4
|
a. Sale of Business Unit
|
4
|
b. Constructive Discharge
|
4
|
D. All Other Terminations
|
4
|
E. Date of Termination of Employment
|
4
|
F. Conditions to Vesting of Award Prior to [a] [the] Scheduled Vesting Date
|
5
|
1. Restrictive Covenants Agreement
|
5
|
2. Waiver and Release and Restrictive Covenants Agreement
|
5
|
G. Determination of Pro-Rata Vesting upon Termination of
Employment
|
6
|
H. Section 409A of the Code for Award Recipients Subject to U.S.
Federal Income Tax
|
6
|
IV. CHANGE IN CONTROL PROVISIONS
|
7
|
V. DEFINITIONS
|
8
|
VI. ADDITIONAL PROVISIONS
|
9
|
A. Additional Provisions - General
|
9
|
1. Administrative Rules
|
9
|
2. Amendment
|
9
|
3. Limitations
|
9
|
4. Cancellation or Clawback of Awards
|
9
|
5. Governing Law; Choice of Forum
|
10
|
6. Severability; Captions
|
10
|
7. Electronic Delivery and Acceptance
|
10
|
8. Waiver
|
10
|
9. Eligibility for Award
|
10
|
B. Additional Provisions - Outside of the United States
|
10
|
1. Changes to Delivery
|
10
|
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 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 canceled 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, [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] [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][The] date on which a Stock Unit is scheduled to vest pursuant to this Section II.B.2. is [a][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 [a][the] Scheduled Vesting Date, your right to any Stock Units that are unvested immediately prior to your termination of employment or occurrence of your Permanent Disability, as applicable, will be determined in accordance with Section III. below. For the avoidance of doubt, the date of your termination of employment for purposes of determining vesting under this Section II.B.2. will be determined in accordance with Section III.E.
|
3.
|
Dividend Equivalents. 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 canceled 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 canceled 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
|
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.
|
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 canceled as of the date your employment is treated as having terminated as described in Section III.E.
|
E.
|
Date of Termination of Employment.
|
F.
|
Conditions to Vesting of Award Prior to [a][the] Scheduled Vesting Date.
|
1.
|
Restrictive Covenants Agreement. In the event of the occurrence of your Permanent Disability as described in Section III.B., you will be required to execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, and return to Marsh & McLennan Companies (or an agent appointed by Marsh & McLennan Companies) a Restrictive Covenants Agreement. Failure to (a) execute or reaffirm such an agreement by the date specified by the Company, which shall be in no event later than 60 days following the occurrence of your Permanent Disability as described in Section III.B., or (b) comply with the Restrictive Covenants Agreement, will result in the cancellation or forfeiture of any rights, title and interest in and to the Award 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.
|
A.
|
“Cause” shall mean:
|
1.
|
willful failure to substantially perform the duties consistent with your position which is not remedied within 30 days after receipt of written notice from the Company specifying such failure;
|
2.
|
willful violation of any written Company policies including, but not limited to, The Marsh & McLennan Companies Code of Conduct, The Greater Good;
|
3.
|
commission at any time of any act or omission that results in a conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated probation for any felony or crime involving moral turpitude;
|
4.
|
unlawful use (including being under the influence) or possession of illegal drugs;
|
5.
|
any gross negligence or willful misconduct resulting in a material loss to the Company, or material damage to the reputation of the Company; or
|
6.
|
any violation of any statutory or common law duty of loyalty to the Company, including the commission at any time of any act of fraud, embezzlement, or material breach of fiduciary duty against the Company.
|
B.
|
“Company” shall mean Marsh & McLennan Companies or any of its subsidiaries or affiliates.
|
C.
|
“Good Reason” shall mean any one of the following events without your written consent:
|
1.
|
material reduction in your base salary;
|
2.
|
material reduction in your annual incentive opportunity (including a material adverse change in the method of calculating your annual incentive);
|
3.
|
material diminution of your duties, responsibilities or authority; or
|
4.
|
relocation of more than 50 miles from your principal place of employment immediately prior to the Change in Control;
|
D.
|
“Permanent Disability” will be deemed to occur when it is determined (by Marsh & McLennan Companies’ disability carrier for the primary long-term disability plan or program applicable to you because of your employment with the Company) that you are unable to engage in any substantial gainful activity by reason of any medically
|
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).
|
VI.
|
ADDITIONAL PROVISIONS
|
A.
|
Additional Provisions-General
|
1.
|
Administrative Rules. The Award shall be subject to such additional administrative regulations as the Committee may, from time to time, adopt. All decisions of the Committee upon any questions arising under the Award Documentation and Grant Documentation shall be conclusive and binding. The Committee may delegate to any other individual or entity the authority to perform any or all of the functions of the Committee under the Award, and references to the Committee shall be deemed to include any such delegate.
|
2.
|
Amendment. The Committee may, in its sole discretion, amend the terms of the Award, including, without limitation, to impose additional requirements on the Award and on any shares of Common Stock with respect to the Award; provided, however, that if the Committee concludes, in its sole discretion, that such amendment is likely to materially impair your rights with respect to the Award, such amendment shall not be implemented with respect to the Award without your consent, except to the extent that any such action is made to cause the Award to comply with applicable law, currency controls, stock market or exchange rules and regulations, or accounting or tax rules and regulations, or is otherwise made in accordance with Section VI.A.4.
|
3.
|
Limitations. Payment of the Award is not secured by trust, insurance contract or other funding medium, and you do not have any interest in any fund or specific asset of Marsh & McLennan Companies by reason of the Award. Your right to payment of the Award is the same as the right of an unsecured general creditor of Marsh & McLennan Companies.
|
4.
|
Cancellation or Clawback of Awards.
|
a.
|
Marsh & McLennan Companies may, to the extent permitted or required by any applicable law, stock exchange rules, currency controls, or any applicable Company policy or arrangement in effect prior to the vesting of any unvested portion of the Award, or as specified in the Award Documentation or Grant Documentation, cancel, reduce or require reimbursement of the Award.
|
b.
|
If 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
|
5
|
1. General
|
5
|
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
|
6
|
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
|
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
|
15
|
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 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 Agreement by the date specified by the Company or failure to timely execute or reaffirm and comply with the Restrictive Covenants Agreement as
|
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
|
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
|
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 and 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.
|
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). For the avoidance of doubt, the date of your termination of employment for purposes of determining whether you have satisfied the minimum service requirement under this Section III.D. will be determined in accordance with Section III.G.
|
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
|
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 & 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
|
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
|
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 other than Section III.J.6., (and any Dividend Equivalents payable with respect to the Stock Units)
|
a.
|
If you have satisfied the Age and Service Criteria for Pro-Rata Vesting at any time prior to [DATE] and you do not satisfy the Age and Service Criteria for Full Vesting at any time prior to [DATE], then for each Scheduled Vesting Date following the date that you satisfy the Age and Service Criteria for Pro-Rata Vesting, shares of Common Stock and/or cash pursuant to Section II.B.4. will be delivered by March 15 of the year in which the Scheduled Vesting Date occurs.
|
b.
|
If you first satisfy the Age and Service Criteria for Full Vesting in calendar year [YEAR], then shares of Common Stock and/or cash pursuant to Section II.B.4. with respect to the [DATE] Scheduled Vesting Date will be delivered by March 15, [YEAR].
|
c.
|
If your employment is terminated on or after March 1 but on or before December 31 in any year pursuant to Section III.B. (Permanent Disability), C.1. (Age and Service Pro-rata Vesting), or E. (Termination Other Than for Cause), then shares of Common Stock and/or cash pursuant to Section II.B.4. will be delivered by March 15 of the year following the year of such termination.
|
5.
|
Notwithstanding any provision herein, for distributions of Stock Units or cash attributable to such Stock Units that are subject to one or more Employment-Related Actions (as defined in Section V.E.) where you have not satisfied, and would not satisfy, the Age and Service Criteria for Full Vesting prior to [DATE]:
|
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 [DATE] 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 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 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 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
|
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 this Section IV.; 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).
|
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.
|
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
|
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
|
4
|
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
|
5
|
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
|
14
|
3. Limitations
|
14
|
4. Cancellation or Clawback of Awards
|
15
|
5. Governing Law; Choice of Forum
|
15
|
6. Severability; Captions
|
15
|
7. Electronic Delivery and Acceptance
|
15
|
8. Waiver
|
15
|
9. Eligilibity 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
|
16
|
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
|
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 Company earnings per share performance factor (the “EPS Performance Factor”) and relative shareholder return modifier (“Relative TSR Modifier”) 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 (as defined in Section V.J.) or the occurrence of a Change in Control (as defined in the Plan) 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 canceled 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
|
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. In the event your employment is terminated because of your death, all of the unvested PSUs that are outstanding as of the date of your death will fully vest and will be distributed within 60 days following such date. The Performance Period will be deemed to have ended on December 31 of the year immediately preceding the date of your death, and the number of shares of Common Stock distributable in respect of the PSUs will be determined in accordance with Section II.B.1.; provided that, in the event that your death occurs on or prior to December 31 of the year in which the PSUs are granted, you will receive one (1) share of Common Stock in respect of each PSU.
|
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
|
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
|
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 canceled. 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
|
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 canceled 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 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 as of the delivery date for Performance Stock Units (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.
|
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 state and local taxes, penalties, additional taxes and interest, if applicable, imposed under any state tax law similar to Section 409A of the Code.
|
2.
|
Notwithstanding any other provision herein, if any portion of the Award is determined to be nonqualified deferred compensation subject to Section 409A of the Code, any references to “termination of employment,” or “when you are no longer employed” in these Terms and Conditions shall have the following meaning:
|
3.
|
Notwithstanding any other provision herein, if at the time of your termination of employment you are a “specified employee” (as defined in Section 409A of the Code), no portion of the Award that is determined to be nonqualified deferred compensation subject to Section 409A of the Code can be distributed prior to the first day of the seventh month after your termination of employment and any such distributions to which you would otherwise be entitled during the first six months following your termination of employment will be accumulated and paid without interest on the first day of the seventh month after your termination of employment. The provisions of this subparagraph will only apply if and to the extent required to avoid any “additional tax” under Section 409A of the Code.
|
4.
|
Notwithstanding any provision herein, if (i) a Change in Control occurs on or prior to December 31 of the second year of the three-year Performance Period and (ii) no earlier than in the third year of the three-year Performance Period, (A) you satisfy the Age and Service Criteria for Pro-Rata Vesting, (B) you satisfy the Age and Service Criteria for Full Vesting, (C) you are determined by the Retirement Treatment Committee to be eligible for retirement treatment on or following your termination of employment, (D) you are terminated by the Company other than for Cause, or (E) the occurrence of your Permanent Disability, then shares of Common Stock deliverable on the PSU Scheduled Vesting Date in respect of the PSUs covered by the Award shall be distributed to you as soon as practicable following the PSU Scheduled Vesting Date, and in no event later than March 15 of the year in which the PSU Scheduled Vesting Date occurs.
|
5.
|
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,
|
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 (i) December 31 of the year preceding the year in which the Change in Control occurs for determination of the EPS Performance Factor and (ii) the date of the occurrence of the Change in Control for determination of the Relative TSR Modifier, 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, the number of shares of Common Stock distributable with respect to the PSUs will be determined based on (i) the “target” EPS Performance Factor and (ii) the actual Relative TSR modifier, determined as of the date of the occurrence of the Change in Control.
|
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
|
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 (i) December 31 of the year prior to the occurrence of such Change in Control for determination of the EPS Performance Factor and (ii) the date of the occurrence of such Change in Control for determination of the Relative TSR Modifier.
|
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).
|
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.
|
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
|
11
|
A. Additional Provisions - General
|
11
|
1. Administrative Rules
|
11
|
2. Amendment
|
11
|
3. Limitations
|
11
|
4. Cancellation or Clawback of Awards
|
11
|
5. Governing Law; Choice of Forum
|
12
|
6. Severability; Captions
|
12
|
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
|
13
|
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 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 canceled 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
|
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. In the event your employment is terminated because of your death, the Option will fully vest with respect to any unvested Option Shares and will become exercisable as of the date of your death. The person or persons to whom your rights under the Option shall pass by will or the laws of descent and distribution shall be entitled to exercise such Option with respect to any Option Shares that vest (and any Option Shares that were already vested at the time of your death) within two years after the date of death, but in no event shall the Option be exercisable after the Option Expiration Date.
|
B.
|
Permanent Disability. Upon the occurrence of your Permanent Disability, the Option will fully vest with respect to any unvested Option Shares and will become exercisable; provided that you satisfy the conditions described in Section III.H.1; and provided further that any such Option Shares that vest in accordance with this Section III.B. (and any Option Shares that were already vested at the time your Permanent Disability occurred) shall be exercisable for two years following the occurrence of your Permanent Disability, but in no event shall the Option be exercisable after the Option Expiration Date.
|
C.
|
Termination by You Outside of the European Union - Age and Service 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.
|
1.
|
Treatment of Stock Options.
|
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 canceled 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 canceled 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., 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., 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 an Award to Remain Outstanding Following a Termination of Employment and Exercisability of Options Following a Termination of Employment.
|
1.
|
Restrictive Covenants Agreement. In the event of (i) the occurrence of your Permanent Disability as described in Section III.B., (ii) your termination of employment after satisfying the Age and Service Criteria for 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.
|
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
|
A.
|
Treatment of Stock Options.
|
B.
|
Waiver and Release.
|
C.
|
Other Matters.
|
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.
|
B.
|
“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.
|
C.
|
“Change in Control” shall have the meaning set forth in the Plan.
|
D.
|
“Committee” shall mean the Compensation Committee of the Board of Directors of Marsh & McLennan Companies.
|
E.
|
“Company” shall mean Marsh & McLennan Companies or any of its subsidiaries or affiliates.
|
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.
|
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 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
|
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.
|
Article 1 DEFINITIONS
|
1
|
|
Section 1.1
|
Definitions
|
1
|
Section 1.2
|
Accounting Terms and Determinations
|
29
|
Section 1.3
|
Additional Committed Currencies
|
30
|
Section 1.4
|
Other Interpretive Decisions
|
30
|
Article 2 THE CREDITS
|
31
|
|
Section 2.1
|
The Committed Advances and Letters of Credit
|
31
|
Section 2.2
|
Making the Committed Advances
|
33
|
Section 2.3
|
The Competitive Bid Advances
|
37
|
Section 2.4
|
Issuance of and Drawings and Reimbursement Under Letters of Credit
|
41
|
Section 2.5
|
Commitment Fee; Letter of Credit Fees
|
44
|
Section 2.6
|
Termination or Reductions of the Commitments
|
44
|
Section 2.7
|
Repayment of Committed Advances and Letter of Credit Drawings
|
45
|
Section 2.8
|
Interest on Committed Advances
|
46
|
Section 2.9
|
Interest Rate Determination
|
47
|
Section 2.10
|
Optional Conversion of Committed Advances
|
50
|
Section 2.11
|
Prepayment of Advances
|
50
|
Section 2.12
|
General Provisions as to Payments
|
51
|
Section 2.13
|
Sharing of Payments, Ect
|
53
|
Section 2.14
|
Evidence of Debt
|
54
|
Section 2.15
|
Increase in the Aggregate Commitments
|
54
|
Section 2.16
|
Extension of Termination Date
|
56
|
Section 2.17
|
(Reserved)
|
58
|
Section 2.18
|
Funding Losses
|
58
|
Section 2.19
|
Defaulting Lenders
|
58
|
Article 3 CONDITIONS
|
60
|
|
Section 3.1
|
Effectiveness of Amendment and Reinstatement
|
60
|
Section 3.2
|
Initial Advance to Each Designated Subsidiary
|
61
|
Section 3.3
|
Conditions Precedent to Each Committed Borrowing and Issuance
|
62
|
Section 3.4
|
Conditions Precedent to Each Competitive Bid Borrowing
|
63
|
Article 4 REPRESENTATIONS AND WARRANTIES
|
63
|
|
Section 4.1
|
Corporate Existence and Power
|
64
|
Section 4.2
|
Corporate and Governmental Authorization; No Contravention
|
64
|
Section 4.3
|
Binding Effect
|
64
|
Section 4.4
|
Financial Information
|
64
|
Section 4.5
|
Litigation
|
6
|
Section 4.6
|
Compliance with ERISA
|
65
|
Section 4.7
|
Taxes
|
65
|
Section 4.8
|
Subsidiaries
|
65
|
Section 4.9
|
Regulatory Restrictions on Borrowing
|
65
|
Section 4.10
|
Full Disclosure
|
65
|
Section 4.11
|
Use of Credit
|
66
|
Section 4.12
|
Anti-Corruption Laws and Sanctions
|
66
|
Section 4.13
|
EEA Financial Institution
|
66
|
Section 4.14
|
Beneficial Ownership Certification
|
66
|
Article 5 COVENANTS
|
66
|
|
Section 5.1
|
Information
|
66
|
Section 5.2
|
Conduct of Business and Maintenance of Existence
|
68
|
Section 5.3
|
Compliance with Laws; Borrowing Authorization
|
68
|
Section 5.4
|
Financial Covenants
|
69
|
Section 5.5
|
Consolidations, Mergers and Sales of Assets
|
69
|
Section 5.6
|
Use of Proceeds
|
70
|
Section 5.7
|
Negative Pledge
|
71
|
Section 5.8
|
Taxes, Ect
|
71
|
Section 5.9
|
Maintenance of Insurance
|
71
|
Section 5.10
|
Subsidiary Debt
|
71
|
Article 6 DEFAULTS
|
72
|
|
Section 6.1
|
Events of Default
|
72
|
Section 6.2
|
Actions in Respect of the Letters of Credit Upon Default
|
74
|
Section 6.3
|
Notice of Default by Lenders
|
75
|
Article 7 THE ADMINISTRATIVE AGENT
|
75
|
|
Section 7.1
|
Authorization and Authority
|
75
|
Section 7.2
|
Rights as a Lender
|
75
|
Section 7.3
|
Duties of Administrative Agent; Exculpatory Provisions
|
76
|
Section 7.4
|
Reliance by Administrative Agent
|
77
|
Section 7.5
|
Delegation of Duties
|
77
|
Section 7.6
|
Resignation of Administrative Agent
|
77
|
Section 7.7
|
Non-Reliance on Agent and Other Lenders
|
78
|
Section 7.8
|
Indemnification
|
79
|
Section 7.9
|
Administrative Agent's Fee
|
79
|
Section 7.10
|
No Other Duties, ect
|
80
|
Section 7.11
|
Certain ERISA Matters
|
80
|
Article 8 CHANGE IN CIRCUMSTANCES
|
81
|
|
Section 8.1
|
Basis for Determining Interest Rate Inadequate or Unfair
|
81
|
Section 8.2
|
Illegality
|
82
|
Section 8.3
|
Increased Cost and Reduced Return
|
82
|
Section 8.4
|
Taxes
|
83
|
Section 8.5
|
Replacement of Lenders
|
87
|
Section 8.6
|
VAT
|
88
|
Article 9 GUARANTY
|
89
|
|
Section 9.1
|
The Guaranty
|
89
|
Section 9.2
|
Guaranty Unconditional
|
89
|
Section 9.3
|
Limit of Liability
|
90
|
Section 9.4
|
Discharge of Company's Obligations; Reinstatement in Certain Circumstances
|
90
|
Section 9.5
|
Waivers by the Company
|
91
|
Section 9.6
|
Subrogation
|
91
|
Section 9.7
|
Stay of Acceleration
|
91
|
Article 10 MISCELLANEOUS
|
91
|
|
Section 10.1
|
Notices
|
91
|
Section 10.2
|
No Waivers
|
93
|
Section 10.3
|
Expenses; Indemnification; Damage Waiver
|
93
|
Section 10.4
|
No Liability of the Issuing Banks
|
94
|
Section 10.5
|
Amendments and Waivers
|
94
|
Section 10.6
|
Successors and Assigns
|
95
|
Section 10.7
|
Governing Law; Submission to Jurisdiction
|
100
|
Section 10.8
|
Counterparts; Integration
|
100
|
Section 10.9
|
Waiver of Jury Trial
|
100
|
Section 10.10
|
Survival
|
100
|
Section 10.11
|
Confidentiality
|
101
|
Section 10.12
|
USA Patriot Act
|
101
|
Section 10.13
|
Designated Subsidiaries
|
101
|
Section 10.14
|
Judgment
|
101
|
Section 10.15
|
Substitution of Currency
|
103
|
Section 10.16
|
Determinations under Section 2.15, 3.1 and 3.2
|
103
|
Section 10.17
|
No Fiduciary Duty
|
104
|
Section 10.18
|
Acknowledgment and Consent to Bail-In of EEA Financial Institutions
|
104
|
Section 10.19
|
Effect of Amendment of Reinstatement
|
105
|
COMMITMENT SCHEDULE
PRICING SCHEDULE
UK TAX SCHEDULE
|
||
|
|
|
EXHIBIT A
|
0
|
Assignment and Assumption Agreement
|
EXHIBIT B-1
|
0
|
Notice of Revolving Credit Borrowing
|
EXHIBIT B-2
|
0
|
Notice of Canadian Borrowing
|
EXHIBIT B-3
|
0
|
Notice of Australian Borrowing
|
EXHIBIT B-4
|
0
|
Notice of Competitive Bid Borrowing
|
EXHIBIT C
|
0
|
Opinion of Deputy General Counsel for Marsh & McLennan Companies, Inc.
|
EXHIBIT D
|
0
|
Opinion of Special Counsel for the Administrative Agent
|
EXHIBIT E
|
0
|
Form of Designation Agreement
|
EXHIBIT F-1
|
0
|
Form of Revolving Credit Note
|
EXHIBIT F-2
|
0
|
Form of Canadian Note
|
EXHIBIT F-3
|
0
|
Form of Australian Note
|
EXHIBIT F-4
|
0
|
Form of Competitive Bid Note
|
(a)
|
the rate of interest announced publicly by Citibank in New York, New York, from time to time, as Citibank’s base rate;
|
(b)
|
½ of one percent per annum above the Federal Funds Rate; and
|
(c)
|
the Eurocurrency Rate applicable to US Dollars for a period of one month (“One Month LIBOR”) plus 1.00% (for the avoidance of doubt, the One Month LIBOR for any day shall be based on the rate appearing on applicable Bloomberg screen (or other commercially available source providing such quotations as designated by the Administrative Agent from time to time) at approximately 11:00 A.M. London time on such day ); provided, that if One Month LIBOR is less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
|
/s/ Yun Wang
|
|
/s/ Michael Forde
|
Signature of Director
|
|
Signature of Director / Company Secretary
|
Yun Wang, Country Controller
|
|
Michael Forde, Company Secretary
|
Name of Director
|
|
Name of Director / Company Secretary
|
Address:
|
10th Floor Citi Tower, One Bay East,
83 Hoi Bun Road , Kwun Tong, Kowloon, Hong Kong |
Lenders
|
Revolving Credit
Commitments |
Letter of Credit
Commitments |
Canadian
Commitments |
Australian Commitments
|
Swing Line Commitments
|
||||||||||
|
|
|
|
|
|
||||||||||
Citibank, N.A.
|
|
$155,000,000
|
|
|
$125,000,000
|
|
|
|
|
$500,000,000
|
|
||||
Citibank, N.A., Canadian Branch
|
|
|
|
$45,000,000
|
|
|
|
||||||||
Citibank, N.A., Sydney Branch
|
|
|
|
|
$55,000,000
|
|
|
||||||||
Bank of America, N.A.
|
|
$155,000,000
|
|
|
$125,000,000
|
|
|
|
|
$125,000,000
|
|
||||
Bank of America, N.A., Canada Branch
|
|
|
|
$45,000,000
|
|
|
|
||||||||
Bank of America, N.A. (Australian Branch)
|
|
|
|
|
$55,000,000
|
|
|
||||||||
Deutsche Bank AG New York Branch
|
|
$155,000,000
|
|
|
$125,000,000
|
|
|
|
|
||||||
Deutsche Bank AG Canada Branch
|
|
|
|
$45,000,000
|
|
|
|
||||||||
HSBC Bank USA, National Association
|
|
$155,000,000
|
|
|
$125,000,000
|
|
|
|
|
$125,000,000
|
|
||||
Barclays Bank PLC
|
|
$120,000,000
|
|
|
|
|
|
||||||||
JPMorgan Chase Bank, N.A.
|
|
$120,000,000
|
|
|
|
$45,000,000
|
|
|
$55,000,000
|
|
|
||||
MUFG Bank, Ltd.
|
|
$120,000,000
|
|
|
|
|
|
||||||||
Wells Fargo Bank, National Association
|
|
$120,000,000
|
|
|
|
$45,000,000
|
|
|
|
||||||
Australia and New Zealand Banking Group Limited
|
|
$90,000,000
|
|
|
|
|
$50,000,000
|
|
|
||||||
Royal Bank of Canada
|
|
$90,000,000
|
|
|
|
|
|
||||||||
TD Bank, N.A.
|
|
$90,000,000
|
|
|
|
|
|
||||||||
The Bank of Nova Scotia
|
|
$90,000,000
|
|
|
|
|
|
||||||||
The Northern Trust Company
|
|
$90,000,000
|
|
|
|
|
|
||||||||
U.S. Bank National Association
|
|
$90,000,000
|
|
|
|
|
|
||||||||
BNP Paribas
|
|
$55,000,000
|
|
|
|
|
|
||||||||
Goldman Sachs Bank USA
|
|
$55,000,000
|
|
|
|
|
|
PNC Bank, National Association
|
|
$25,000,000
|
|
|
|
|
|
||||||||
The Bank of New York Mellon
|
|
$25,000,000
|
|
|
|
|
|
||||||||
TOTAL:
|
|
US$1,800,000,000
|
|
|
US$500,000,000
|
|
|
US$225,000,000
|
|
|
US$215,000,000
|
|
|
US$750,000,000
|
|
|
LEVEL I
|
LEVEL II
|
LEVEL III
|
LEVEL IV
|
LEVEL V
|
LEVEL VI
|
Commitment Fee Rate (bps)
|
6.0
|
7.0
|
9.0
|
11.0
|
15.0
|
20.0
|
Eurocurrency Margin (bps)
|
75
|
87.5
|
100.0
|
112.5
|
125.0
|
150.0
|
Base Rate Margin (bps)
|
0.0
|
0.0
|
0.0
|
12.5
|
25.0
|
50.0
|
Canadian Prime Rate Margin (bps)
|
0.0
|
0.0
|
0.0
|
12.5
|
25.0
|
50.0
|
Name of UK Treaty Lender
|
DTTP Scheme reference number
|
Jurisdiction of tax residence
|
ANZ Banking Group Limited
|
2/A/204986/DTTP
|
Australia
|
Bank of America, N.A.
|
13/B/7418/DTTP
|
United States
|
BNP PAribas SA, (NY Branch)
|
5/B/255139/DTTP
|
France
|
Citibank, N.A.
|
13/C/62301/DTTP
|
United States
|
JPMorgan Chase Bank, N.A.
|
013/M/0268710/DTTP
|
United States
|
The Bank of Nova Scotia
|
3/T/366714/DTTP
|
Canada
|
TD Bank, N.A.
|
13/T/358618/DTTP
|
United States
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of UK Non-Bank Lender
|
|
2.
|
Assignee[s]: ______________________________
|
3.
|
Borrower(s): ______________________________
|
4.
|
Administrative Agent: Citibank, N.A., as the administrative agent under the Credit Agreement
|
5.
|
Credit Agreement: The Amended and Restated 5 Year Credit Agreement, dated as of October 12, 2018 among Marsh & McLennan Companies, Inc. and certain of its Subsidiaries, as borrowers, the Lenders parties thereto, Citibank, N.A., as Administrative Agent
|
6.
|
Assigned Interest[s]:
|
(E)
|
Day Count Convention ________________________
|
(a)
|
I am a member of the Bar of the State of New York. The opinions expressed above are limited to the laws of the State of New York, the Federal laws of the United States of America and the Delaware General Corporation Law, in each case as currently in effect.
|
(b)
|
In rendering the opinion expressed in paragraph 3 above, I have assumed that borrowings by the Borrowers under the Credit Agreement do not cause the Company to exceed any limitations established by its Board of Directors with respect to the Company’s permitted aggregate borrowings.
|
(c)
|
The opinions expressed above are subject to the effects of (i) bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, reorganization and moratorium laws, and other similar laws relating to or affecting enforcement of creditors’ rights or remedies generally, (ii) general principles of equity (whether such principles are considered in a proceeding at law or equity), including, without limitation, concepts of good faith, reasonableness and fair dealing, and standards of materiality, and (iii) possible judicial action giving effect to foreign laws or foreign governmental or judicial actions affecting or relating to the rights or remedies of creditors.
|
(e)
|
I express no opinion as to the validity, binding effect or enforceability of any provision of any Loan Document that purports to (i) grant rights to exculpation, indemnification or contribution, (ii) provide indemnity against loss in converting into a specified currency the proceeds or amount of a court judgment in another currency or (iii) authorize or permit any purchaser of a participation interest from any party to set off or apply any deposit, property or indebtedness with respect to any participation. I express no opinion concerning whether a United States Federal court would accept jurisdiction to adjudicate any dispute, action, suit or proceeding arising out of or relating to any Loan Document or the transactions contemplated thereby. I express no opinion as to the effect of, or compliance with, any United States Federal or state securities laws, rules or regulations. I express no opinion with respect to Section 7.11 and 10.18 of the Credit Agreement.
|
(A)
|
The genuineness of all signatures.
|
(B)
|
The authenticity of the originals of the documents submitted to us.
|
(C)
|
The conformity to authentic originals of any documents submitted to us as copies.
|
(D)
|
As to matters of fact, the truthfulness of the representations made in the Credit Agreement.
|
(E)
|
That each of the Opinion Documents is the legal, valid and binding obligation of each party thereto, other than the Borrowers, enforceable against each such party in accordance with its terms.
|
(F)
|
That:
|
Date Made,
Continued or Converted |
Amount
of Committed Advance |
Type
of Committed Advance |
Principal
Amount of Advance Repaid |
Last Day
of Interest Period |
Made
By |
Notation
|
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
Date Made,
Continued or Converted |
Amount
of Canadian Advance |
Type
of Canadian Advance |
Principal
Amount of Advance Repaid |
Last Day
of Interest Period |
Made
By |
Notation
|
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
Date Made,
Continued or Converted |
Amount
of Committed Advance |
Type
of Committed Advance |
Principal
Amount of Advance Repaid |
Last Day
of Interest Period |
Made
By |
Notation
|
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
||||||
|
Date:
|
May 1, 2020
|
|
/s/ Daniel S. Glaser
|
|
|
|
Daniel S. Glaser
|
|
|
|
President and Chief Executive Officer
|
Date:
|
May 1, 2020
|
|
/s/ Mark C. McGivney
|
|
|
|
Mark C. McGivney
|
|
|
|
Chief Financial Officer
|
1.
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Marsh & McLennan Companies, Inc.
|
Date:
|
May 1, 2020
|
|
/s/ Daniel S. Glaser
|
|
|
|
Daniel S. Glaser
|
|
|
|
President and Chief Executive Officer
|
Date:
|
May 1, 2020
|
|
/s/ Mark C. McGivney
|
|
|
|
Mark C. McGivney
|
|
|
|
Chief Financial Officer
|