SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1999
Marsh & McLennan Companies, Inc.
1166 Avenue of the Americas
New York, New York 10036-2774
(212) 345-5000
Commission file number 1-5998
State of Incorporation: Delaware
I.R.S. Employer Identification No. 36-2668272
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
- ------------------- ---------------------
Common Stock (par value $1.00 New York Stock Exchange
per share) Chicago Stock Exchange
Preferred Stock Purchase Rights Pacific Exchange
London Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X . No .
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K .
As of February 29, 2000, the aggregate market value of the voting stock
held by non-affiliates of the registrant was approximately $20,325,910,803.
As of February 29, 2000, there were outstanding 267,860,712 shares of
common stock, par value $1.00 per share, of the registrant.
DOCUMENTS INCORPORATED BY REFERENCE
(ONLY TO THE EXTENT SET FORTH IN THE PART INDICATED)
Annual Report to Stockholders for the
year ended December 31, 1999 . . . . . . . Parts I, II and IV
Notice of Annual Meeting of
Stockholders and Proxy Statement dated
March 29, 2000 . . . . . . . . . . . . . . Part III
MARSH & McLENNAN COMPANIES, INC.
-------------------------
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 1999
-------------------------
PART I
ITEM 1. BUSINESS.
Marsh & McLennan Companies, Inc. ("MMC"), a professional services
organization with origins dating from 1871 in the United States, is primarily a
holding company which, through its subsidiaries and affiliates, provides clients
with analysis, advice and transactional capabilities in the fields of risk and
insurance services, investment management and consulting.
See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" on pages 33 through 40 of the Annual Report to
Stockholders for the year ended December 31, 1999 (the "1999 Annual Report"),
which is incorporated herein by reference, for a discussion of MMC's revenues
and operating income by industry segment for each of the last three fiscal
years.
RISK AND INSURANCE SERVICES. MMC's risk and insurance services are provided
by its subsidiaries and their affiliates on a worldwide basis, as broker, agent
or consultant for insureds, insurance underwriters and other brokers. These
services are provided by Marsh Inc. through its subsidiaries and affiliates
providing risk management and insurance broking services, and including Guy
Carpenter & Company, Inc., a reinsurance intermediary, and Seabury & Smith,
Inc., an insurance program manager. In addition, Marsh & McLennan Capital, Inc.
provides services principally in connection with originating, structuring and
managing insurance and related industry investments.
Risk management and insurance broking services, carried on throughout the
world, are provided principally by subsidiaries under the name Marsh for a
predominantly corporate clientele located in more than 100 countries, primarily
in North and South America, Europe and Asia Pacific. Client companies are
engaged in a broad range of commercial activities, including general industries,
financial and professional services, aviation,
marine, energy, construction, land transportation, healthcare and utility
services. Clients also include professional, institutional and public entities
and individuals.
Such risk management and insurance broking services relate to various types
of property and liability loss exposures, including large and complex risks that
require access to world insurance markets, as well as loss exposures other than
property and liability. Services provided to clients include insurance broking
and risk transfer activities and professional counseling services on risk
management issues, including risk analysis, coverage requirements,
self-insurance (in which the insured retains a portion of its insurance risks),
and alternative insurance and risk financing methods, as well as claims
collection, injury management, loss prevention and other insurance related
services. Services also include organization and administrative services for
special purpose insurance companies and other risk assumption alternatives.
Insurance placement services include the placement of insurance coverages with
insurers worldwide, sometimes involving other intermediaries. Correspondent
relationships are maintained with unaffiliated firms in certain countries.
Reinsurance broking services are provided to insurance and reinsurance risk
takers worldwide, principally by Guy Carpenter & Company, Inc. and its
subsidiaries and affiliates, from offices principally in North America and
Europe. Such services primarily involve acting as an intermediary for insurance
and reinsurance organizations on all classes of reinsurance, including specialty
lines such as professional liability, medical malpractice, accident, life and
health. The intermediary assists the insurer by providing advice, placing
reinsurance coverage with reinsurance organizations located around the world,
placing risk-transfer financing with capital markets, and furnishing related
services such as actuarial, financial and regulatory consulting, portfolio
analysis and catastrophe modeling. Claims services are often performed in
respect of policies placed a number of years ago. The insurance company may seek
reinsurance or other risk-transfer financing on all or a portion of the risks it
insures. Intermediary services are also provided to reinsurance companies, which
may also seek reinsurance on the risks they have reinsured.
Insurance and program services are provided by subsidiaries and divisions
under the name Seabury & Smith or Marsh to consumers and emerging businesses
(including the design, marketing and administration of life, health, accident,
disability, automobile, homeowners, professional liability and
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other insurance, and related products) on both a group and singular marketing
basis to individuals, businesses and their employees, and organizations,
associations and other affinity groups (both sponsored and non-sponsored) and
their members, largely in North America. Underwriting management services are
also provided to insurers in the United States, Canada and the United Kingdom,
primarily for professional liability coverages, as well as wholesale broking
services in the United States and the United Kingdom for a broad range of
products on behalf of both affiliated and unaffiliated retail brokers.
As part of the acquisition of Sedgwick Group plc in 1998, MMC acquired
several insurance companies that were in run-off.
MARSH & MCLENNAN CAPITAL, INC. Marsh & McLennan Capital, Inc. ("MMCAP") is
a private equity investment firm. It is an advisor to The Trident Partnership
L.P., an independent private investment partnership formed in 1993 with $660
million in capital commitments, and Trident II, L.P. formed in 1999 with $1.4
billion in capital commitments for investments in insurance and related
industries. MMCAP is also advisor to a technology fund with capital commitments
from MMCAP's corporate parent and certain other investors and an advisor to Risk
Capital Reinsurance Company.
MMCAP and its predecessor operations were instrumental in the formation of
several substantial insurance and reinsurance entities, including A.C.E.
Insurance Company, Ltd. and X.L. Insurance Company, Ltd. MMCAP advises its
immediate parent company, Marsh & McLennan Risk Capital Holdings, Ltd.,
regarding the latter's ownership holdings in certain insurance and reinsurance
entities and funds, primarily ones initiated by MMCAP.
As a result of the foregoing activities, subsidiaries and affiliates of MMC
may have direct or indirect investments in insurance and reinsurance companies,
including entities at Lloyd's, which are considered for client placements by
MMC's insurance and reinsurance brokerage businesses.
COMPENSATION FOR SERVICES. The revenue attributable to MMC's risk and
insurance services consists primarily of fees paid by clients; commissions and
fees paid by insurance and reinsurance companies; interest income on funds held
in a fiduciary capacity for others, such as premiums and claims proceeds;
placement services revenues or contingent fees earned from insurers; and
compensation for services provided in
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connection with the organization, structuring and management of insurance and
related industry investments, including fees and dividends, as well as
appreciation that has been realized on sales of holdings in such entities.
Revenue generated by risk and insurance services is fundamentally derived
from the value of the service provided to clients and insurance markets, and is
affected by premium rate levels in the property and casualty insurance markets
and available insurance capacity, because compensation is frequently related to
the premiums paid by insureds. In many cases compensation may be negotiated in
advance based upon the estimated value of the services to be performed. Revenue
is also affected by fluctuations in the amount of risk retained by insurance and
reinsurance clients themselves and by insured values, the development of new
products, markets and services, new and lost business, merging of clients
(including insurance companies that are clients in the reinsurance intermediary
business) and the volume of business from new and existing clients, as well as
by interest rates for fiduciary funds.
Revenue and fees also may be received from originating, structuring and
managing investments in insurers and related industry investments, and income
and proceeds also may be derived from investments made by MMC. Placement
services revenue and contingent fees includes payments or allowances by
insurance companies based upon such factors as the overall volume of business
placed by the broker with that insurer, the aggregate commissions paid by the
insurer for that business during specific periods, or the loss performance to
the insurer of that business.
Revenues vary from quarter to quarter as a result of the timing of policy
renewals, the net effect of new and lost business and the realization of
investments, whereas expenses tend to be more uniform throughout the year.
Commission rates vary in amount depending upon the type of insurance or
reinsurance coverage provided, the particular insurer or reinsurer, and the
capacity in which the broker acts, in addition to negotiations with clients. In
some cases, compensation for brokerage or advisory services is paid directly as
a fee by the client. Occasionally, commissions are shared with other brokers
that have participated in placing insurance or servicing insureds.
The investment of fiduciary funds is governed by the applicable laws or
regulations of insurance authorities of the
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states in the United States and in other jurisdictions in which MMC's
subsidiaries do business. These laws and regulations typically limit the type of
investments that may be made with such funds. The general amount of funds
invested and interest rates vary from time to time.
INVESTMENT MANAGEMENT. Investment management and related services are
provided by Putnam Investments, Inc. and its subsidiaries ("Putnam"). Putnam has
been engaged in the investment management business since 1937, with its
principal offices in Boston, Massachusetts. Putnam also has offices in London
and Tokyo. Putnam provides individual and institutional investors with a broad
range of equity and fixed income investment products and services designed to
meet varying investment objectives and which afford its clients the opportunity
to allocate their investment resources among various alternative investment
products as changing worldwide economic and market conditions warrant.
INVESTMENT MANAGEMENT SERVICES. Putnam's investment management services,
which are performed principally in the United States, include securities
investment advisory and management services consisting of investment research
and management, and accounting and related services for a group of publicly-held
investment companies. As of December 31, 1999, there were 114 such funds (the
"Putnam Funds") registered under the Investment Company Act of 1940, including
16 closed-end investment companies whose shares are traded on various major
domestic stock exchanges. A number of the open-end funds serve as funding
vehicles for variable insurance contracts. Investment management services are
also provided to corporate profit-sharing and pension funds, state and other
governmental and public employee retirement funds, university endowment funds,
charitable foundations, collective investment vehicles (both U.S. and non-U.S.)
and other domestic and foreign institutional accounts.
Substantially all of Putnam's assets under management are derived from U.S.
individuals and institutions. In recent years Putnam has been expanding its
international client base on a selective basis through joint ventures and the
development of products such as offshore funds. Many international markets are
well developed with many established investment management firms. It may be
difficult for Putnam to establish businesses whose profitability equals that of
its business in the U.S. where it is one of the market leaders. Putnam seeks to
manage the risks of international expansion by using joint ventures with
established
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firms in selected countries and otherwise carefully choosing which markets to
enter.
On July 7, 1999 Putnam acquired a minority interest in Thomas H. Lee
Partners, a private equity investment firm. In addition, Putnam formed a joint
venture entity with Thomas H. Lee Partners called TH Lee, Putnam Capital. Putnam
holds a 25% interest in TH Lee, Putnam Capital. Thomas H. Lee Partners and TH
Lee, Putnam Capital offer private equity and alternative investment funds for
institutional and high-net worth investors.
Assets managed by Putnam, on which management fees are based, were
approximately $391 billion and $294.4 billion as of December 31, 1999 and 1998,
respectively. Mutual fund assets aggregated $289 billion at December 31, 1999
and $221.5 billion at December 31, 1998. Assets under management at December 31,
1999 consisted of approximately 82% equity securities and 18% fixed income
products, invested both domestically and globally.
Putnam's revenues are derived primarily from its investment management and
12b-1 fees received from the Putnam Funds and institutional accounts. Assets
under management and revenue levels are particularly affected by fluctuations in
domestic and international stock and bond market prices, and by the level of
investments and withdrawals for current and new fund shareholders and clients.
They are also affected by investment performance, service to clients, the
development and marketing of new investment products, the relative
attractiveness of the investment style under prevailing market conditions and
changes in the investment patterns of clients. Fluctuations in the prices of
stocks will have an effect on equity assets under management and may influence
the flow of monies to and from equity funds and accounts. Fluctuations in
interest rates and in the yield curve have a similar effect on fixed income
assets under management and may influence the flow of monies to and from
fixed-income funds and accounts. Putnam offers investment products that allow
investors to diversify between stocks and bonds, domestically and
internationally.
The investment management services provided to the Putnam Funds and
institutional accounts are performed pursuant to advisory contracts which
provide for a fee payable to the Putnam company that manages the account. The
amount of the fee varies depending on the individual mutual fund or account and
is usually based upon a sliding scale in relation to the level of assets under
management and, in certain instances, is also based on
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investment performance. Such contracts automatically terminate in the event of
their assignment, generally may be terminated by either party without penalty
and, as to contracts with the Putnam Funds, continue in effect only so long as
approved, at least annually, by their shareholders or by the Putnam Funds'
trustees, including a majority who are not affiliated with Putnam. "Assignment"
includes any direct or indirect transfer of a controlling block of voting stock
in Putnam or MMC. The management of Putnam and the trustees of the funds
regularly review the fund fee structure in light of fund performance, the level
and range of services provided, industry conditions and other relevant factors.
In recent years U.S. securities markets, especially equity markets, have
risen substantially, in many cases to historical highs. This increase has
contributed significantly to the assets under management and, accordingly, to
increases in revenues. A substantial slowdown in the rise of markets or an
actual decrease in general market levels will reduce revenue growth or, in some
circumstances, could lead to a decline in revenue.
PUTNAM FIDUCIARY TRUST COMPANY. A Putnam subsidiary, Putnam Fiduciary Trust
Company, a Massachusetts trust company, serves as transfer agent, dividend
disbursing agent, registrar and custodian for the Putnam Funds and provides
custody services to several external clients. Putnam Fiduciary Trust Company
receives compensation from the Putnam Funds for such services pursuant to
written investor servicing agreements which may be terminated by either party on
90 days' notice, and pursuant to written custody agreements which may be
terminated by either party on 30 days' notice. These contracts generally provide
for compensation on the basis of several factors which vary with the type of
service being provided. In addition, Putnam Fiduciary Trust Company provides
administrative and trustee (or custodial) services for employee benefit plans
(in particular 401(k) plans), IRA's and other clients for which it receives
compensation pursuant to service and trust or custodian contracts. In the case
of employee benefit plans, investment options are usually selected by the plan
sponsors and may include Putnam mutual funds and other Putnam managed products,
as well as employer stock and other non-Putnam investments.
PUTNAM MUTUAL FUNDS CORP. Putnam Mutual Funds Corp., a Putnam subsidiary,
acts as principal underwriter of the shares of the open-end Putnam Funds,
selling primarily through independent broker/dealers, financial planners and
financial institutions, including banks, and directly to certain large 401(k)
plans and
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other institutional accounts. Shares of open-end funds are generally sold at
their respective net asset value per share plus a sales charge, which varies
depending on the individual fund and the amount purchased. In some cases the
sales charge is assessed only if the shares are redeemed within a stated time
period. In accordance with certain terms and conditions described in the
prospectuses for such funds, certain investors are eligible to purchase shares
at net asset value or at reduced sales charges, and investors may generally
exchange their shares of a fund at net asset value for shares of another Putnam
Fund without the payment of additional sales charges.
Commissions to selling dealers are typically paid at the time of the
purchase as a percentage of the amount invested. Essentially all Putnam Funds
are available with a contingent deferred sales charge in lieu of a front-end
load. The related prepaid dealer commissions initially paid by Putnam to
broker/dealers for distributing such funds are recovered through charges and
fees received over a number of years.
Nearly all of the open-end Putnam Funds have adopted distribution plans
pursuant to Rule 12b-1 under the Investment Company Act of 1940 under which the
Putnam Funds make payments to Putnam Mutual Funds Corp., a Putnam subsidiary, to
cover costs relating to distribution of the Putnam Funds and services provided
to shareholders. These payments enable the Putnam subsidiary to pay service fees
and other continuing compensation to firms that provide services to Putnam Fund
shareholders and distribute shares of the Putnam Funds. Some Rule 12b-1 fees are
retained by the Putnam Mutual Funds Corp. as compensation for the costs of
distribution and other services provided by Putnam to shareholders and for
commissions advanced by Putnam at the point of sale (and recovered through fees
received over time) to firms that distribute shares of the Putnam Funds. These
distribution plans, and payments made by the Putnam Funds thereunder, are
subject to annual renewal by the trustees of the Putnam Funds and to termination
by vote of the shareholders of the Putnam Funds or by vote of a majority of the
Putnam Funds' trustees who are not affiliated with Putnam. Failure of the
Trustees to approve continuation of the Rule 12b-1 plans for Class B (deferred
sales charge) shares would have a material adverse effect on Putnam. The
Trustees also have the ability to reduce the level of 12b-1 fees paid by a fund
or to make other changes that would reduce the amount of 12b-1 fees received by
Putnam. Such changes could have a material adverse effect on Putnam.
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Putnam provides investor services through three separate facilities in the
Boston area and has one of the largest image processing facilities in the world.
CONSULTING. Through Mercer Consulting Group, Inc., subsidiaries and
affiliates of MMC, separately and in collaboration, provide consulting services
to a predominantly corporate clientele from locations around the world, in the
areas of human resources and employee benefit programs, including retirement,
health care and compensation, as well as communication and human resource
strategy; and general management consulting, which comprises strategy,
operations and marketing. Mercer Consulting Group, Inc. also provides economic
consulting and analysis.
William M. Mercer Companies LLC ("William M. Mercer"), through its
subsidiaries and affiliates provides professional advice and services to
corporate, government and institutional clients from offices in more than 35
countries and territories in North and South America, Europe, Asia, Australia,
New Zealand and the Middle East. Consultants help organizations design,
implement, administer and communicate employee benefit, compensation and other
human resource programs and strategies, and provide other types of actuarial
advice. Through its investment consultants, the firm assists trustees of pension
funds and others in the selection of investment managers and investment
strategies. William M. Mercer also advises investment managers on product design
and positioning. In certain locations outside of the United States, William M.
Mercer advises individuals in the investment and disposition of lump sum
retirement benefits and other retirement savings and offers a retirement trust
service, incorporating plan administration, trustee services and investment
manager selection.
Mercer Management Consulting, Inc. provides advice and assistance on issues
of business strategy, primarily to large corporations in North America, Europe
and Asia. Consultants help senior executives more fully understand the behavior
of their customers, optimize the economics of their business, and structure
their organizations, processes and systems to achieve their strategic goals and
maximize shareholder value. In addition, under the Lippincott & Margulies name,
Mercer Management Consulting, Inc. advises leading corporations on issues
relating to brand, corporate identity and image.
National Economic Research Associates, Inc. ("NERA"), a firm of consulting
economists, serves law firms, corporations, trade
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associations and governmental agencies, from offices in the United States,
Europe and Australia. NERA provides research and analysis of economic and
financial issues arising in litigation, regulation, public policy and
management.
The major component of Mercer Consulting Group's revenue is fees paid by
clients for advice and services. In a relatively small number of situations,
fees are partly contingent on the client having successful outcomes. In
addition, commission revenue is received from insurance companies for the
placement of individual and group insurance contracts, primarily life, health
and accident coverages. A relatively small amount of revenue is derived from
brokerage commissions in connection with a registered securities broker dealer,
and in the form of equity interests in clients of Mercer Management Consulting,
Inc.
Revenue in the consulting business is fundamentally derived from the value
of the advice and services provided to clients. It is affected by changes in
clients' industries, including government regulation, as well as new products
and services, the stage of the economic cycle and broad trends in employee
demographics and in the management of large organizations.
REGULATION. The activities of MMC are subject to licensing requirements and
extensive regulation under the laws of the United States and its various states,
territories and possessions, as well as laws of other countries in which MMC's
subsidiaries operate. These laws and regulations are primarily intended to
benefit clients.
MMC's three business segments depend on the validity of, and continued good
standing under, the licenses and approvals pursuant to which they operate, as
well as compliance with pertinent regulations. MMC therefore devotes significant
effort toward maintaining its licenses and to ensuring compliance with a diverse
and complex regulatory structure.
In all jurisdictions the applicable laws and regulations are subject to
amendment or interpretation by regulatory authorities. Generally, such
authorities are vested with relatively broad discretion to grant, renew and
revoke licenses and approvals, and to implement regulations. Licenses may be
denied or revoked for various reasons, including the violation of such
regulations, conviction of crimes and the like. Possible sanctions which may be
imposed include the suspension of individual employees, limitations on engaging
in a particular business for specified periods of time, revocation of licenses,
censures, redress to
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clients and fines. In some instances, MMC follows practices based on its
interpretations, or those generally followed by the industry, of laws or
regulations, which may prove to be different from those of regulatory
authorities. Accordingly, the possibility exists that MMC may be precluded or
temporarily suspended from carrying on some or all of its activities or
otherwise fined or penalized in a given jurisdiction.
No assurances can be given that MMC's risk and insurance services,
investment management or consulting activities can continue to be conducted in
any given jurisdiction as in the past.
RISK AND INSURANCE SERVICES. While the laws and regulations vary among
jurisdictions, every state of the United States and most foreign jurisdictions
require an insurance broker or agent (and in some cases a reinsurance broker or
intermediary) or insurance consultant, managing general agent or third party
administrator to have an individual and/or company license from a governmental
agency or self-regulatory organization. In addition, certain of MMC's risk and
insurance activities are governed by the rules of the Lloyd's insurance market
in London and self-regulatory organizations in the United Kingdom and in other
jurisdictions, as well as investment, securities and futures licensing and
regulatory authorities. A few jurisdictions issue licenses only to individual
residents or locally-owned business entities. In some of these jurisdictions, if
MMC has no licensed subsidiary, MMC may maintain arrangements with residents or
business entities licensed to act in such jurisdiction. Also, in some
jurisdictions, various insurance related taxes may also be due either by clients
directly or from the broker. In the latter case, the broker customarily looks to
the client for payment.
INVESTMENT MANAGEMENT. Putnam's securities investment management activities
are subject to regulation in the United States by the Securities and Exchange
Commission, and other federal, state and self regulatory authorities, as well as
in certain other countries in which it does business. Putnam's officers,
directors and employees may from time to time own securities which are also held
by the Putnam Funds or institutional accounts. Putnam's internal policies with
respect to individual investments require prior clearance and reporting of
transactions and restrict certain transactions so as to reduce the possibility
of conflicts of interest.
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To the extent that existing or future regulations affecting the sale of
Putnam fund shares or other investment products or their investment strategies,
cause or contribute to reduced sales of Putnam fund shares or investment
products or impair the investment performance of the Putnam Funds or such other
investment products, Putnam's aggregate assets under management and its revenues
might be adversely affected. Changes in regulations affecting the free movement
of international currencies might also adversely affect Putnam.
CONSULTING. In general, the consulting activities of MMC's subsidiaries are
not subject to licensing or other regulatory requirements; however, the subject
matter of certain consulting services is subject to regulation. For example,
employee benefit plans are subject to various governmental regulations, and
services related to brokerage activities, trustee services, investment matters
(including advice to individuals on the investment of personal pension assets)
and the placing of individual and group insurance contracts subject MMC's
subsidiaries to insurance, investment or securities regulations and licensing in
various jurisdictions.
COMPETITIVE CONDITIONS. Principal methods of competition in risk and
insurance services and consulting include the quality and types of services and
products that a broker or consultant provides its clients and their cost. Putnam
competes with other providers of investment products and services primarily on
the basis of the range of investment products offered, the investment
performance of such products, as well as the manner in which such products are
distributed, and the scope and quality of the shareholder and other services
provided. Sales of Putnam fund shares are also influenced by general securities
market conditions, government regulations, global economic conditions and
advertising and sales promotional efforts.
All these businesses also encounter strong competition from both public
corporations and private firms in attracting and retaining qualified employees.
RISK AND INSURANCE SERVICES. The combined insurance and reinsurance broking
services business of MMC is the largest of its type in the world.
MMC encounters strong competition in the risk and insurance services
business from other insurance brokerage firms which also operate on a nationwide
or worldwide basis, from a large number of regional and local firms in the
United States, the European
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Union and in other countries and regions, from insurance and reinsurance
companies that market and service their insurance products without the
assistance of brokers or agents and from other businesses, including commercial
and investment banks, accounting firms and consultants that provide risk-related
services and products.
Certain insureds and groups of insureds have established programs of self
insurance (including captive insurance companies), as a supplement or
alternative to third-party insurance, thereby reducing in some cases the need
for insurance placements. There are also many other providers of insurance
program management services, including many insurance companies, and many other
organizations seeking to structure and manage investments in the insurance
industry.
INVESTMENT MANAGEMENT. Putnam Investments is one of the largest investment
management firms in the United States. The investment management business is
highly competitive. In addition to competition from firms already in the
investment management business, including commercial banks, stock brokerage and
investment banking firms, and insurance companies, there is competition from
other firms offering financial services and other investment alternatives.
Many securities dealers, whose large retail distribution systems play an
important role in the sale of shares in the Putnam Funds, also sponsor competing
proprietary mutual funds. To the extent that such securities dealers value the
ability to offer customers a broad selection of investment alternatives, they
will continue to sell independent funds, notwithstanding the availability of
proprietary products. However, to the extent that these firms limit or restrict
the sale of Putnam fund shares through their brokerage systems in favor of their
proprietary mutual funds, assets under management might decline and Putnam's
revenues might be adversely affected. In addition, a number of mutual fund
sponsors presently market their funds to the general public without sales
charges. Certain firms also offer passively managed funds such as index funds to
the general public.
CONSULTING. Mercer Consulting Group, one of the largest global consulting
firms, is a leader in many of its businesses. William M. Mercer is the world's
largest human resources consulting organization. Mercer Management Consulting is
a leader in strategy consulting. NERA is a leading firm of consulting
economists.
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William M. Mercer, Mercer Management Consulting and NERA compete with other
privately held and publicly held worldwide and national consulting companies, as
well as regional and local firms. Competitors include independent consulting
firms and consulting organizations affiliated with accounting, information
systems, technology and financial services firms, some of which provide
administrative or consulting services as an adjunct to other primary services.
SEGMENTATION OF ACTIVITY BY TYPE OF SERVICE AND GEOGRAPHIC AREA OF
OPERATION. Financial information relating to the types of services provided by
MMC and the geographic areas of its operations is incorporated herein by
reference to Note 16 of the Notes to Consolidated Financial Statements on pages
59 and 60 of the 1999 Annual Report. MMC's non-U.S. operations are subject to
the customary risks involved in doing business in other countries, including
currency fluctuations and exchange controls.
EMPLOYEES. As of December 31, 1999, MMC and its consolidated subsidiaries
employed about 52,900 people worldwide, of whom approximately 32,900 were
employed by subsidiaries providing risk and insurance services, approximately
5,500 were employed by subsidiaries providing investment management services,
approximately 14,100 were employed by subsidiaries providing consulting
services, and approximately 400 were employed by MMC.
INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS. This report and MMC's
financial statements and other documents incorporated herein by reference
contain certain statements relating to future results, which are forward-looking
statements as that term is defined in the Private Securities Litigation Reform
Act of 1995. Such statements may include, without limitation, discussions
concerning revenue and expense growth, cost savings and efficiencies expected
from the integration of Sedgwick Group plc, Year 2000 remediation and testing of
computer systems, market and industry conditions, interest rates, foreign
exchange rates, contingencies and matters relating to MMC's operations and
income taxes. Such forward-looking statements are based on available current
market and industry materials, experts' reports and opinions, as well as
management's expectations concerning future events impacting MMC.
Forward-looking statements by their very nature involve risks and uncertainties.
Factors that may cause actual results to differ materially from those
contemplated by any forward-looking statements contained or incorporated herein
include, in the case of MMC's risk and insurance services and consulting
businesses,
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the failure to successfully integrate the business of Sedgwick Group plc
(including the achievement of synergies and cost reductions) or other adverse
consequences from that transaction; in the case of MMC's risk and insurance
service business, changes in competitive conditions, a decrease in the premium
rate levels in the global property and casualty insurance markets, and the
impact of changes in insurance markets and natural catastrophes; in the case of
MMC's investment management business, changes in worldwide and national equity
and fixed income markets; and with respect to all of MMC's activities,
interruptions to data processing services arising out of Year 2000 remediation
efforts, changes in general worldwide and national economic conditions,
fluctuations in foreign currencies, actions of competitors or regulators,
changes in interest rates, developments relating to claims and lawsuits,
prospective and retrospective changes in the tax or accounting treatment of
MMC's operations and the impact of tax and other legislation and regulation in
the jurisdictions in which MMC operates. A description of certain of these
factors is included elsewhere in this Annual Report and is incorporated herein
by reference.
ITEM 2. PROPERTIES.
MMC and four of its subsidiaries, as tenants in common, own a 69%
condominium interest in a 44-story building in New York City which serves as
their worldwide headquarters.
The principal offices of MMC's risk and insurance services subsidiaries in
the UK are located on the eastern side of the City of London in The Marsh
Centre. This freehold building, owned by a subsidiary of MMC, comprises 360,000
square feet containing offices located around a central atrium, and ancillary
facilities including a shopping mall.
The remaining business activities of MMC and its subsidiaries are conducted
principally in leased office space in cities throughout the world. In general,
no difficulty is anticipated in negotiating renewals as leases expire or in
finding other satisfactory space if the premises become unavailable. From time
to time, MMC may have unused space and may seek to sublet such space to third
parties, depending upon the demands for office space in the locations involved.
15
ITEM 3. LEGAL PROCEEDINGS.
MMC and its subsidiaries are subject to various claims and lawsuits
consisting principally of alleged errors and omissions in connection with the
placement of insurance or reinsurance and in rendering investment and consulting
services. Some of these claims and lawsuits seek damages, including punitive
damages, in amounts which could, if assessed, be significant.
An action captioned "AIENA, ET AL. v. OLSEN, ET AL." is pending in the
United States District Court for the Southern District of New York by certain
former directors of Johnson & Higgins ("J&H"), which was acquired by MMC in
1997, against twenty-four selling shareholders of J&H, as well as J&H itself and
MMC. The action essentially challenges the allocation of the consideration paid
in connection with MMC's combination with J&H as between the defendants who were
directors and shareholders of J&H at the time of the transaction and the
plaintiffs who were former directors and shareholders of J&H. The complaint
asserts, among others, claims for breach of fiduciary duty, federal securities
law violations, breach of contract, and ERISA violations. Plaintiffs seek
compensatory and punitive damages. Two other former directors of J&H have
brought similar actions (SEMPIER V. OLSEN ET AL.; and CLEMENS V. OLSEN ET AL.),
which are also pending before the United States District Court for the Southern
District of New York. On October 12, 1999, the Court dismissed MMC entirely from
these three cases and dismissed certain (but not all) of the claims brought
against J&H. The principal surviving claims asserted against J&H in these cases
include a claim under the federal securities laws and a claim for breach of
ERISA. In December 1999, two additional cases were filed by two former directors
of J&H (VALENTINE V. OLSEN ET AL.; and BIANCHI V. OLSEN ET AL.), and have been
assigned to the judge hearing the AIENA, SEMPIER and CLEMENS matters. Although
the VALENTINE and BIANCHI cases raise substantially similar issues as the AIENA,
SEMPIER and CLEMENS actions, they also raise certain additional claims under
ERISA and state law relating to the plaintiffs' departure as J&H's employees.
All these actions are in their initial stages.
Sedgwick Group plc, since prior to its acquisition, has been engaged in a
review of previously undertaken personal pension plan business as required by
United Kingdom regulators to determine whether redress should be made to
customers. As of December 31, 1999, settlements and related costs previously
paid amount to approximately $125 million of which approximately $30 million is
due from or has been paid by insurers. The contingent
16
exposure of Sedgwick for pension redress and related costs is estimated to be
$350 million. Sedgwick has recorded $190 million of reserves and recognized
approximately $160 million of insurance recoveries related to this exposure.
Other present and former subsidiaries of MMC are engaged in a comparable
review of their personal pension plan businesses, although the extent of their
activity in this area, and consequently their financial exposure, was
proportionally much less than Sedgwick. The contingent exposure of the present
and former non-Sedgwick subsidiaries of MMC for pension redress and related
costs is estimated to be approximately $150 million. Approximately $140 million
of this amount is expected to be recovered from insurers and accounting reserves
have been provided for the remaining balance. As of December 31, 1999,
settlements and related costs previously paid total approximately $35 million.
MMC's ultimate exposure from the United Kingdom Personal Investment
Authority review, as presently calculated and including Sedgwick, is subject to
a number of variable factors including, among others, the interest rate
established quarterly by the U.K. Personal Investment Authority for calculating
compensation, equity markets, and the precise scope, duration, and methodology
of the review as required by that Authority.
On the basis of present information, anticipated insurance coverage and
advice received from counsel, it is the opinion of MMC's management that the
disposition or ultimate determination of these claims, lawsuits and proceedings
will not have a material adverse effect on MMC's consolidated results of
operations or its consolidated financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
PART II
ITEM 5. MARKET FOR MMC'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
Market and dividend information regarding MMC's common stock on page 62 of
the 1999 Annual Report is incorporated herein by reference.
17
ITEM 6. SELECTED FINANCIAL DATA.
The selected financial data on page 63 of the 1999 Annual Report are
incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Information on pages 33 through 40 of the 1999 Annual Report is
incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
Information under the heading "Market Risk" on pages 39 and 40 of the 1999
Annual Report is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Consolidated Financial Statements and the Report of Independent
Auditors thereto on pages 41 through 61 of the 1999 Annual Report and Selected
Quarterly Financial Data (Unaudited) on page 62 of the 1999 Annual Report are
incorporated herein by reference. Supplemental Notes to Consolidated Financial
Statements are included on pages 28 and 29 hereof.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF MMC.
Information as to the directors and nominees for the Board of Directors of
MMC is incorporated herein by reference to the material under the heading
"Election of Directors" in the Notice of Annual Meeting of Stockholders and
Proxy Statement dated March 29, 2000 (the "2000 Proxy Statement").
The executive officers of MMC as of March 24, 2000 are Messrs. Barham,
Borelli, Cabiallavetta, Coster, Davis, Greenberg, Lasser, Sinnott, Smith and
White-Cooper, with respect to whom information is incorporated herein by
reference to the 2000 Proxy Statement, and:
18
Francis N. Bonsignore, age 53, has been Senior Vice President-Human
Resources & Administration of MMC since 1990. Immediately prior thereto, he
was partner and National Director-Human Resources for Price Waterhouse.
Gregory F. Van Gundy, age 54, is Secretary and General Counsel of MMC.
He joined MMC in 1974.
Sandra S. Wijnberg, age 43, became Senior Vice President and Chief
Financial Officer of MMC in January 2000. Before joining MMC, Ms. Wijnberg
was a senior vice president and treasurer of Tricon Global Restaurants,
Inc. from 1997 until December 1999. Prior to that, Ms. Wijnberg spent three
years with PepsiCo., last serving as senior vice president and chief
financial officer of its KFC corporation division.
ITEM 11. EXECUTIVE COMPENSATION.
Information under the headings "Executive Compensation",
"Compensation Committee Report" and "Comparison of Cumulative
Total Stockholder Return" in the 2000 Proxy Statement is
incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Information under the heading "Security Ownership" in the 2000 Proxy
Statement is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information under the headings "Employment Agreement" and "Transactions
with Management and Others; Other Information" in the 2000 Proxy Statement is
incorporated herein by reference.
19
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K.
(a) The following documents are filed as a part of this report:
1. Consolidated Financial Statements (incorporated herein by
reference to pages 41 through 61 of the 1999 Annual Report):
Consolidated Statements of Income for each of the three
years in the period ended December 31, 1999
Consolidated Balance Sheets as of December 31, 1999 and 1998
Consolidated Statements of Cash Flows for each of the
three years in the period ended December 31, 1999
Consolidated Statements of Stockholders' Equity and
Comprehensive Income for each of the three years in the
period ended December 31, 1999
Notes to Consolidated Financial Statements
Report of Independent Auditors
Supplemental Notes to Consolidated Financial Statements
Report of Independent Auditors
Other:
Selected Quarterly Financial Data and Supplemental
Information (Unaudited) for the three years ended December
31, 1999 (incorporated herein by reference to page 62 of the
1999 Annual Report)
Five-Year Statistical Summary of Operations (incorporated
herein by reference to page 63 of the 1999 Annual Report)
20
2. All required Financial Statement Schedules are included in the
Consolidated Financial Statements, the Notes to Consolidated
Financial Statements or the Supplemental Notes to Consolidated
Financial Statements.
3. The following exhibits are filed as a part of this report:
(3.1)- the registrant's restated certificate of incorporation.
(3.2)- the registrant's by-laws
(4.1)- Indenture dated as of June 14, 1999 between MMC and State
Street Bank and Trust Company, as trustee (incorporated by
reference to the registrant's Registration Statement on Form
S-3, Registration No. 333-67543)
(4.2)- First Supplemental Indenture dated as of June 14, 1999 between
MMC and State Street Bank and Trust Company, as trustee
(incorporated by reference to the registrant's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1999)
(4.3)- Amended and Restated Rights Agreement dated as of January 20,
2000 between the registrant and Harris Trust Company of New
York (incorporated by reference to the registrant's
Registration Statement on Form 8-A/A filed on January 27,
2000)
(10.1)- Stock Purchase Agreement, dated as of March 12, 1997, by and
among the registrant, Johnson & Higgins and the stockholders
of Johnson & Higgins (incorporated by reference to the
registrant's Current Report on Form 8-K dated March 14, 1997)
(10.2)- First Amendment to the Stock Purchase Agreement, dated as of
March 27, 1997 by and among the registrant, Johnson & Higgins
and the stockholders of Johnson & Higgins (incorporated by
reference to the registrant's Current Report on Form 8-K dated
April 7, 1997)
21
(10.3)*- Marsh & McLennan Companies, Inc. 2000 Senior Executive
Incentive and Stock Award Plan(subject to stockholder approval
at the 2000 annual meeting)
(10.4)*- Marsh & McLennan Companies, Inc. 1997 Senior Executive
Incentive and Stock Award Plan (incorporated by reference to
the registrant's Annual Report on Form 10-K for the year ended
December 31, 1996)
(10.5)*- Marsh & McLennan Companies Stock Investment Supplemental Plan
(incorporated by reference to the registrant's Annual Report
on Form 10-K for the year ended December 31, 1994)
(10.6)*- Amendment to Marsh & McLennan Companies Stock Investment
Supplemental Plan dated June 16, 1997 (incorporated by
reference to the registrant's Annual Report on Form 10-K for
the year ended December 31, 1997)
(10.7)*- Marsh & McLennan Companies Special Severance Pay Plan
(incorporated by reference to the registrant's Annual Report
on Form 10-K for the year ended December 31, 1996)
(10.8)*- Putnam Investments, Inc. Executive Deferred Compensation Plan
(incorporated by reference to the registrant's Annual Report
on Form 10-K for the year ended December 31, 1994)
(10.9)*- Marsh & McLennan Companies Supplemental Retirement Plan
(incorporated by reference to the registrant's Annual Report
on Form 10-K for the year ended December 31, 1992)
(10.10)*-Marsh & McLennan Companies Senior Management Incentive
Compensation Plan (incorporated by reference to the
registrant's Annual Report on Form 10-K for the year ended
December 31, 1994)
(10.11)*-Marsh & McLennan Companies, Inc. U.S. Employee 1999 Cash
Bonus Award Voluntary Deferral Plan
- --------
* Management contract or compensatory plan or arrangement required to be filed
as an exhibit pursuant to Item 14(c) of Form 10-K.
22
(10.12)*-Marsh & McLennan Companies, Inc. Canadian Employee 1999 Cash
Bonus Award Voluntary Deferral Plan
(10.13)*-Marsh & McLennan Companies, Inc. Directors Stock Compensation
Plan as amended and restated 6/27/97) (incorporated by
reference to the registrant's Annual Report on Form 10-K for
the year ended December 31, 1997)
(10.14)*-Employment Agreement between Lawrence J. Lasser and Putnam
Investments, Inc. effective as of December 31, 1997
(incorporated by reference to the registrant's Annual Report
on Form 10-K for the year ended December 31, 1997)
(10.15)*-Marsh & McLennan Capital, Inc. Long Term Incentive Plan
(incorporated by reference to the registrant's Annual Report
on Form 10-K for the year ended December 31, 1998)
(10.16)- First Amendment dated as of May 20, 1999 to the Marsh &
McLennan Capital, Inc. Long Term Incentive Plan (incorporated
by reference to the registrant's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1999)
(12)- Statement Re: Computation of Ratio of Earnings to Fixed
Charges
(13)- Annual Report to Stockholders for the year ended December 31,
1999, to be deemed filed only with respect to those portions
which are expressly incorporated by reference
(21)- list of subsidiaries of the registrant (as of 2/28/2000)
(23)- consent of independent auditors
(24)- powers of attorney
(27)- Financial Data Schedule (filed with SEC for EDGAR purposes
only)
- --------
* Management contract or compensatory plan or arrangement required to be filed
as an exhibit pursuant to Item 14(c) of Form 10-K.
23
(b) No reports on Form 8-K were filed by the registrant in the fiscal
quarter ended December 31, 1999
24
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
this 29th day of March, 2000 on its behalf by the undersigned, thereunto duly
authorized.
MARSH & McLENNAN COMPANIES, INC.
By /s/ Jeffrey W. Greenberg
-----------------------------
Jeffrey W. Greenberg
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated this 29th day of March, 2000.
/s/ JEFFREY W. GREENBERG NORMAN BARHAM*
- ------------------------------ ------------------------------
JEFFREY W. GREENBERG NORMAN BARHAM*
Director, President and Chief Director
Executive Officer
/s/ SANDRA S. WIJNBERG LEWIS W. BERNARD*
- ------------------------------ ------------------------------
SANDRA S. WIJNBERG LEWIS W. BERNARD
Senior Vice President and Director
Chief Financial Officer
/s/ ROBERT J. RAPPORT FRANK J. BORELLI*
- ------------------------------ ------------------------------
ROBERT J. RAPPORT FRANK J. BORELLI
Vice President and Controller Director
(Chief Accounting Officer)
25
PETER COSTER* DAVID A. OLSEN*
- ---------------------------------- ----------------------------------
PETER COSTER DAVID A. OLSEN
Director Director
ROBERT F. ERBURU* JOHN D. ONG*
- ---------------------------------- ----------------------------------
ROBERT F. ERBURU JOHN D. ONG
Director Director
RAY J. GROVES* ADELE SIMMONS*
- ---------------------------------- ----------------------------------
RAY J. GROVES ADELE SIMMONS
Director Director
STEPHEN R. HARDIS* JOHN T. SINNOTT*
- ---------------------------------- ----------------------------------
STEPHEN R. HARDIS JOHN T. SINNOTT
Director Director
GWENDOLYN S. KING* A.J.C. SMITH*
- ---------------------------------- ----------------------------------
GWENDOLYN S. KING A.J.C. SMITH
Director Director and Chairman of the Board
THE RT. HON. LORD LANG OF MONKTON* FRANK J. TASCO*
- ---------------------------------- ----------------------------------
THE RT. HON. LORD LANG OF MONKTON FRANK J. TASCO
Director Director
LAWRENCE J. LASSER* W.R.P. WHITE-COOPER*
- ---------------------------------- ----------------------------------
LAWRENCE J. LASSER W.R.P. WHITE-COOPER
Director Director
- ----------
* Gregory F. Van Gundy, pursuant to Powers of Attorney executed by each of
the individuals whose name is followed by an (*) and filed herewith, by
signing his name hereto does hereby sign and execute this Form l0-K of
Marsh & McLennan Companies, Inc. on behalf of such individual in the
capacities in which the names of each appear above.
/s/ GREGORY F. VAN GUNDY
------------------------
GREGORY F. VAN GUNDY
26
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders of
Marsh & McLennan Companies, Inc.:
We have audited the consolidated balance sheets of Marsh & McLennan Companies,
Inc. and subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of income, stockholders' equity and comprehensive
income, and cash flows for each of the three years in the period ended December
31, 1999, and have issued our report thereon dated March 3, 2000; such financial
statements and report are included in your 1999 Annual Report to Stockholders
and are incorporated herein by reference. Our audits also included the
supplemental notes to the consolidated financial statements (the "Supplemental
Notes") listed in Item 14. These Supplemental Notes are the responsibility of
the Company's management. Our responsibility is to express an opinion based on
our audits. In our opinion, such Supplemental Notes, when considered in relation
to the basic consolidated financial statements taken as a whole, present fairly
in all material respects the information set forth therein.
DELOITTE & TOUCHE LLP
New York, New York
March 3, 2000
27
MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
SUPPLEMENTAL NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
16. Information concerning MMC's valuation accounts follows:
An analysis of the allowance for doubtful accounts for the three years ended
December 31, 1999 follows (in millions of dollars):
1999 1998 1997
---- ---- ----
Balance at beginning of year...... $128 $53 $43
Provision charged to operations... 18 19 8
Accounts written-off, net of
recoveries...................... (12) (5) (4)
Effect of exchange rate changes... (2) 2 (1)
Other (A)......................... -- 59 7
---- ---- ---
Balance at end of year............ $132 $128 $53
==== ==== ===
(A) Relates primarily to the acquisitions of Sedgwick and Johnson &
Higgins in 1998 and 1997, respectively.
An analysis of the valuation allowance for certain foreign deferred tax assets
as of December 31, 1999, 1998 and 1997 follows (in millions of dollars):
1999 1998 1997
---- ---- ----
Balance at beginning of year.... -- -- $27
Effect of exchange rate changes. -- -- --
Other .......................... -- -- (27)(A)
---- ---- ----
Balance at end of year ......... $-- $-- $--
==== ==== ===
(A) Reflects the write-off of the underlying tax assets, since it
was determined that MMC will not realize any future tax
benefit.
28
MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
SUPPLEMENTAL NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
17. An analysis of intangible assets at December 31, 1999 and 1998 follows (in
millions of dollars):
1999 1998
------ ------
Goodwill.......................... $5,799 $4,965
Other intangible assets........... 142 141
------ ------
Subtotal........................ 5,941 5,106
Less - accumulated amortization... (399) (280)
------ ------
Total........................ $5,542(A) $4,826
====== ======
(A) The increase from December 31, 1998 is primarily due to purchase
accounting adjustments related to the acquisition of Sedgwick.
29
EXHIBIT INDEX
(3.1)- the registrant's restated certificate of incorporation.
(3.2)- the registrant's by-laws
(4.1)- Indenture dated as of June 14, 1999 between MMC and State
Street Bank and Trust Company, as trustee (incorporated by
reference to the registrant's Registration Statement on Form
S-3, Registration No. 333-67543)
(4.2)- First Supplemental Indenture dated as of June 14, 1999 between
MMC and State Street Bank and Trust Company, as trustee
(incorporated by reference to the registrant's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1999)
(4.3)- Amended and Restated Rights Agreement dated as of January 20,
2000 between the registrant and Harris Trust Company of New
York (incorporated by reference to the registrant's
Registration Statement on Form 8-A/A filed on January 27,
2000)
(10.1)- Stock Purchase Agreement, dated as of March 12, 1997, by and
among the registrant, Johnson & Higgins and the stockholders
of Johnson & Higgins (incorporated by reference to the
registrant's Current Report on Form 8-K dated March 14, 1997)
(10.2)- First Amendment to the Stock Purchase Agreement, dated as of
March 27, 1997 by and among the registrant, Johnson & Higgins
and the stockholders of Johnson & Higgins (incorporated by
reference to the registrant's Current Report on Form 8-K dated
April 7, 1997)
(10.3)*- Marsh & McLennan Companies, Inc. 2000 Senior Executive
Incentive and Stock Award Plan(subject to stockholder approval
at the 2000 annual meeting)
- --------
* Management contract or compensatory plan or arrangement required to be filed
as an exhibit pursuant to Item 14(c) of Form 10-K.
30
(10.4)*- Marsh & McLennan Companies, Inc. 1997 Senior Executive
Incentive and Stock Award Plan (incorporated by reference to
the registrant's Annual Report on Form 10-K for the year ended
December 31, 1996)
(10.5)*- Marsh & McLennan Companies Stock Investment Supplemental Plan
(incorporated by reference to the registrant's Annual Report
on Form 10-K for the year ended December 31, 1994)
(10.6)*- Amendment to Marsh & McLennan Companies Stock Investment
Supplemental Plan dated June 16, 1997 (incorporated by
reference to the registrant's Annual Report on Form 10-K for
the year ended December 31, 1997)
(10.7)*- Marsh & McLennan Companies Special Severance Pay Plan
(incorporated by reference to the registrant's Annual Report
on Form 10-K for the year ended December 31, 1996)
(10.8)*- Putnam Investments, Inc. Executive Deferred Compensation Plan
(incorporated by reference to the registrant's Annual Report
on Form 10-K for the year ended December 31, 1994)
(10.9)*- Marsh & McLennan Companies Supplemental Retirement Plan
(incorporated by reference to the registrant's Annual Report
on Form 10-K for the year ended December 31, 1992)
(10.10)*-Marsh & McLennan Companies Senior Management Incentive
Compensation Plan (incorporated by reference to the
registrant's Annual Report on Form 10-K for the year ended
December 31, 1994)
(10.11)*-Marsh & McLennan Companies, Inc. U.S. Employee 1999 Cash
Bonus Award Voluntary Deferral Plan
- --------
* Management contract or compensatory plan or arrangement required to be filed
as an exhibit pursuant to Item 14(c) of Form 10-K.
31
(10.12)*-Marsh & McLennan Companies, Inc. Canadian Employee 1999 Cash
Bonus Award Voluntary Deferral Plan
(10.13)*-Marsh & McLennan Companies, Inc. Directors Stock Compensation
Plan as amended and restated 6/27/97) (incorporated by
reference to the registrant's Annual Report on Form 10-K for
the year ended December 31, 1997)
(10.14)*-Employment Agreement between Lawrence J. Lasser and Putnam
Investments, Inc. effective as of December 31, 1997
(incorporated by reference to the registrant's Annual Report
on Form 10-K for the year ended December 31, 1997)
(10.15)*-Marsh & McLennan Capital, Inc. Long Term Incentive Plan
(incorporated by reference to the registrant's Annual Report
on Form 10-K for the year ended December 31, 1998)
(10.16)- First Amendment dated as of May 20, 1999 to the Marsh &
McLennan Capital, Inc. Long Term Incentive Plan (incorporated
by reference to the registrant's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1999)
(12)- Statement Re: Computation of Ratio of Earnings to Fixed
Charges
(13)- Annual Report to Stockholders for the year ended December 31,
1999, to be deemed filed only with respect to those portions
which are expressly incorporated by reference
(21)- list of subsidiaries of the registrant (as of 2/28/2000)
(23)- consent of independent auditors
(24)- powers of attorney
(27)- Financial Data Schedule (filed with SEC for EDGAR purposes
only)
- --------
* Management contract or compensatory plan or arrangement required to be filed
as an exhibit pursuant to Item 14(c) of Form 10-K.
32