EXHIBIT 10.13
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
MARSH & McLENNAN COMPANIES, INC.
U.S. EMPLOYEE
2003 CASH BONUS AWARD VOLUNTARY DEFERRAL PLAN
1. ELIGIBILITY
All active U.S. employees of Marsh & McLennan Companies, Inc. (the
"Corporation") and its subsidiaries who are designated as eligible for
participation in the MMC Partners Bonus Plan or a Local Bonus Plan, and
who are presently receiving an annual base salary of $150,000 or above,
may, at management's discretion, be considered for participation in the
Marsh & McLennan Companies, Inc. U.S. Employee 2003 Cash Bonus Award
Voluntary Deferral Plan (the "2003 Plan"). Participants in the 2003
Plan may make deferral elections pursuant to the rules outlined in
Section 2 below.
2. PROGRAM RULES
Except as otherwise provided herein, the 2003 Plan shall be
administered by the Compensation Committee of the Board of Directors of
the Corporation (the "Committee"). The Committee shall have authority
in its sole discretion to interpret the 2003 Plan and make all
determinations, including the determination of bonus awards eligible to
be deferred, with respect to the 2003 Plan. All determinations made by
the Committee shall be final 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 2003 Plan, and references to
the Committee shall be deemed to include any such delegate. Exercise of
deferral elections under the 2003 Plan must be made in accordance with
the following rules.
a. RIGHTS TO AN AWARD AND TO A DEFERRAL ELECTION
(i) 2003 CASH BONUS DEFERRAL. The right of an employee to
a deferral election currently applies to the annual
cash bonus scheduled to be awarded in early 2004 in
respect of 2003 services, the payment of which bonus
would normally be made by the end of the first
quarter of the 2004 calendar year. The granting of
such an annual cash bonus award is discretionary, and
neither delivery of deferral election materials nor
an election to defer shall affect entitlement to such
an award. The right to a deferral election does not
apply to bonuses (including, but not limited to,
sign-on bonuses, commissions or non-annual incentive
payments) that are not awarded as part of an annual
cash bonus plan.
(ii) 2004 CASH BONUS DEFERRAL. The right of an employee to
a deferral election currently applies to the annual
cash bonus scheduled to be awarded in early 2005 in
respect of 2004 services, should the employee have a
guarantee for the bonus, the payment of which would
normally be made by the end of the first quarter of
the 2005 calendar year. The deferral of such a bonus
will be made pursuant to the U.S. Employee 2004 Cash
Bonus Award Voluntary Deferral Plan (the "2004 Plan")
and is contingent upon approval of the 2004 Plan by
the Committee. The terms and conditions for the 2004
Plan are expected to be essentially the same as for
the 2003 Plan.
b. ELECTION FORMS
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In order to ensure that elections to defer bonus amounts
(including such amounts for 2004 cash bonuses with a
guarantee) are effective under applicable tax laws, please
complete and sign the attached election form(s), and return
them (postmarked, delivered or faxed) no later than December
5, 2003. Form(s) should be returned, and any questions should
be directed, to:
William Palazzo
Senior Manager, Executive Compensation
Marsh & McLennan Companies, Inc.
1166 Avenue of the Americas
New York, NY 10036-2774
Telephone #: (212) 345-5663
Facsimile #: (212) 345-4767
c. DEFERRAL OPTIONS
(i) DEFERRAL AMOUNT. An eligible employee may elect to
defer a portion of such employee's bonus award until
January of a specific year ("year certain") or until
January of the year following retirement in an amount
represented by one of the following two choices:
1. 10% to 75% in 1% increments of the
employee's cash bonus award, subject to a
maximum limit established by the Committee,
or
2. the lowest of 10% to 75% in 1% increments of
the employee's cash bonus award which
results in a deferral of at least $10,000.
If the percentage selected times the amount of the
cash bonus award is less than $10,000, NO deferral
will be made or deducted from the award.
(ii) 2003 DEFERRED BONUS ACCOUNTS. If a deferral election
is made, deferrals may be made into one or both of
the two accounts which the Corporation shall make
available to the participating employee. The relevant
portion of the award deferral will be credited to the
relevant account on the first business day following
the date on which the bonus payment would have been
made had it not been deferred. The available accounts
for deferrals of bonuses (the "2003 Deferred Bonus
Accounts") shall consist of (a) the 2003 Putnam Fund
Account and (b) the 2003 Corporation Stock Account.
Amounts may not be transferred between the 2003
Corporation Stock Account and the 2003 Putnam Fund
Account.
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d. 2003 PUTNAM FUND ACCOUNT
(i) ACCOUNT VALUATION. The 2003 Putnam Fund Account is a
bookkeeping account, the value of which shall be
based upon the performance of selected funds of the
Putnam mutual fund group. The Corporation will
determine, in its sole discretion, the funds of the
Putnam mutual fund group into which deferrals may be
made. Deferrals among selected funds comprising the
2003 Putnam Fund Account must be made in multiples of
5% of the total amounts deferred into the 2003 Putnam
Fund Account. Deferred amounts will be credited to
the 2003 Putnam Fund Account with units each
reflecting one Class Y share of the elected fund.
Fractional units will also be credited to such
account, if applicable. The number of such credited
units will be determined by dividing the value of the
bonus award deferred into the elected fund by the net
asset value of such fund of the 2003 Putnam Fund
Account as of the close of business on the day on
which such bonus payment would have been made had it
not been deferred. All dividends paid with respect to
an elected fund of a 2003 Putnam Fund Account will be
deemed to be immediately reinvested in such fund.
(ii) FUND REALLOCATIONS. Amounts deferred into a 2003
Putnam Fund Account may be reallocated between
eligible funds of these respective accounts pursuant
to an election which may be made daily. Such election
shall be effective, and the associated reallocation
shall be based upon the net asset values of the
applicable funds of the 2003 Putnam Fund Account, as
of the close of business on the business day the
election is received by facsimile or mail, if
received by 2:30 p.m. Eastern Time of that day. If
received later than 2:30 p.m., the election shall be
effective as of the close of business on the
following business day.
e. 2003 CORPORATION STOCK ACCOUNT
(i) ACCOUNT VALUATION. The 2003 Corporation Stock Account
is a bookkeeping account, the value of which shall be
based upon the performance of the common stock of the
Corporation. Amounts deferred into the 2003
Corporation Stock Account will be credited to such
account with units each reflecting one share of
common stock of the Corporation. Fractional units
will also be credited to such account, if applicable.
The number of such credited units will be determined
by dividing the value of the bonus award deferred
into the 2003 Corporation Stock Account (plus the
"supplemental amount" referred to in clause (ii)
below) by the closing price of the common stock of
the Corporation on the New York Stock Exchange on the
day on which such bonus payment would have been made
had it not been deferred. Dividends paid on the
common stock of the Corporation shall be reflected in
a participant's 2003 Corporation Stock Account by the
crediting of additional units in such account equal
to the value of the dividend and based upon the
closing price of the common stock of the Corporation
on the New York Stock Exchange on the date such
dividend is paid. Deferrals into the 2003 Corporation
Stock Account must be deferred to a date not earlier
than January 1, 2007. (For deferrals relating to 2004
bonuses with a guarantee, such deferrals will be
allocated into the 2004 Corporation Stock Account and
must be deferred to a date not earlier than January
1, 2008.)
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(ii) SUPPLEMENTAL AMOUNT. With respect to that portion of
a bonus award which a participating employee defers
into the 2003 Corporation Stock Account, there shall
be credited to such participant's 2003 Corporation
Stock Account an amount equal to the amount deferred
into such account plus an additional amount equal to
15% of the amount so deferred (the "supplemental
amount"). The maximum percentage of any participating
employee's annual bonus award permitted to be
deferred into the 2003 Corporation Stock Account
(prior to giving effect to the supplemental amount)
is 50% of such award.
(iii) STOCK DISTRIBUTIONS. Distributions from the 2003
Corporation Stock Account will be deposited
automatically via book entry for your personal
account with the Corporation's stock transfer agent.
If you (or you and your spouse, as joint tenants)
already have such an account with the stock transfer
agent, then the shares will be deposited into that
account. If you do not have such an account, then one
will be established in your name, and the shares will
be deposited in the account.
f. STATEMENT OF ACCOUNT
The Corporation shall provide periodically to each participant
(but not less frequently than once per calendar quarter) a
statement setting forth the balance to the credit of such
participant in such participant's 2003 Deferred Bonus
Accounts.
g. IRREVOCABILITY AND ACCELERATION
Subject to the provisions of paragraphs h. (iii) and h. (vii)
below, all deferral elections made under the 2003 Plan (and
the 2004 Plan) are irrevocable. However, the Committee may, in
its sole discretion, and upon finding that a participant has
demonstrated severe financial hardship, direct the
acceleration of the payment of any or all deferred amounts
then credited to the participant's 2003 Deferred Bonus
Accounts.
h. PAYMENT OF DEFERRED AMOUNTS
(i) YEAR CERTAIN DEFERRALS. If the participant remains
employed until the deferral year elected, all amounts
relating to "year certain" deferrals will be paid in
a single distribution, less applicable withholding
taxes, in January of the deferral year elected, or
the participant may elect (at the time of the
original deferral election) to have distributions
from the 2003 Corporation Stock Account or the 2003
Putnam Fund Account, as the case may be, made in up
to fifteen (15) annual installments payable each
January commencing with the deferral year elected.
Annual installments will be paid in an amount, less
applicable withholding taxes, determined by
multiplying (i) the balance of the 2003 Corporation
Stock Account or the 2003 Putnam Fund Account, as the
case may be, by (ii) a fraction, the numerator of
which is 1 and the denominator of which is a number
equal to the remaining unpaid annual installments.
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(ii) RETIREMENT DEFERRALS. For participants who retire,
amounts relating to deferrals until the year
following retirement will be paid in a single
distribution in January of the year following
retirement, or the participant may elect (at the time
of the original deferral election) to have
distributions from the 2003 Corporation Stock Account
or 2003 Putnam Fund Account, as the case may be, made
in up to fifteen (15) annual installments payable
each January commencing with the year following
retirement. Annual installments will be paid in an
amount, less applicable withholding taxes, determined
by multiplying (i) the balance of the 2003
Corporation Stock Account or 2003 Putnam Fund
Account, as the case may be, by (ii) a fraction, the
numerator of which is 1 and the denominator of which
is a number equal to the remaining unpaid annual
installments.
(iii) REDEFERRAL ELECTION. Participants shall be permitted
to delay the beginning date of distribution and/or
increase the number of annual installments (up to the
maximum number permitted under the 2003 Plan) for
awards previously deferred or redeferred under the
2003 Plan (and the 2004 Plan), provided that the
redeferral election must be made at least one full
calendar year prior to the beginning date of
distribution.
(iv) TERMINATION OF EMPLOYMENT PRIOR TO END OF DEFERRAL
PERIOD. Subject to the provisions of paragraph (vi)
below, in the event of termination of employment for
any reason prior to completion of the elected
deferral period, all amounts then in the
participant's 2003 Deferred Bonus Accounts will be
paid to the participant (or the participant's
designated beneficiary in the event of death) in a
single distribution, less applicable withholding
taxes, as soon as practicable after the end of the
quarter in which the termination occurred; PROVIDED,
HOWEVER, that, subject to the provisions of paragraph
(vi) below, upon a participant's retirement or
termination for total disability prior to completion
of the elected deferral period, all such amounts
shall be paid in January of the year following such
retirement or termination for total disability, as
the case may be.
(v) DEATH DURING INSTALLMENT PERIOD. If a participant
dies after the commencement of payments from his or
her 2003 Deferred Bonus Accounts, the designated
beneficiary shall receive the remaining installments
over the elected installment period.
(vi) SPECIAL RULES APPLICABLE TO 2003 CORPORATION STOCK
ACCOUNT. Notwithstanding any provision in the 2003
Plan to the contrary (other than the second sentence
of Section 2.i. above), with respect to a
participant's 2003 Corporation Stock Account, in the
event that prior to January 1, 2007, a participant's
employment terminates for total disability or
retirement, all amounts in such account will be paid
to the participant, less applicable withholding
taxes, in January of 2007. In the event that, prior
to January 2007, a participant's employment
terminates on account of death, or a participant
whose employment was earlier terminated for total
disability or retirement should die, the distribution
rule in paragraph (iv) above will apply. If, however,
the termination of employment prior to January 1,
2007 is on account of a reason other than death,
total disability or retirement, the participant will
receive, as soon as practicable following the end of
the quarter in which the termination occurred, a
single distribution, less applicable withholding
taxes, of (a) the balance of the participant's 2003
Corporation
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Stock Account less (b) the portion of such balance
attributable to the supplemental amount (including
earnings thereon), which portion shall be forfeited
in its entirety. For purposes of determining the
portion of the balance of the 2003 Corporation Stock
Account attributable to the supplemental amount, the
supplemental amount shall be increased or decreased
by the respective gain or loss in the 2003
Corporation Stock Account attributable to such
supplemental amount.
(vii) ACCELERATION OF DISTRIBUTION. A participant may elect
to accelerate the distribution of all or a portion of
the 2003 Deferred Bonus Accounts for any reason prior
to the completion of the elected deferral period,
subject to the imposition of a significant penalty in
accordance with applicable tax rules. The penalty
shall be an account forfeiture equal to (i) 6% of the
amount that the participant elects to have
distributed from the 2003 Deferred Bonus Accounts and
(ii) 100% of any unvested supplemental amount as
provided in Section 2(e)(ii) above, including related
earnings, that the participant elects to have
distributed from the 2003 Corporation Stock Account.
Amounts distributed to the participant will be
subject to applicable tax withholding, but amounts
forfeited will not be subject to tax.
(viii) CHANGE IN CONTROL. Notwithstanding any other
provision in the 2003 Plan to the contrary, in the
event of a "change in control" of the Corporation, as
defined in the Corporation's 2000 Senior Executive
Incentive and Stock Award Plan (the "2000 Senior
Executive Plan") and 2000 Employee Incentive and
Stock Award Plan (the "2000 Employee Plan"), all
amounts credited to a participant's 2003 Deferred
Bonus Accounts as of the effective date of such
change in control will be distributed within five
days of such change in control as a lump sum cash
payment, less applicable withholding taxes.
(ix) FORM OF PAYMENT. All payments in respect of the 2003
Putnam Fund Account shall be made in cash and
payments in respect of the 2003 Corporation Stock
Account shall be made in shares of common stock of
the Corporation; provided, however, that in the event
of a change in control of the Corporation, payments
from the 2003 Corporation Stock Account shall be made
in cash based upon (A) the highest price paid for
shares of common stock of the Corporation in
connection with such change in control or (B) if
shares of common stock of the Corporation are not
purchased or exchanged in connection with such change
in control, the closing price of the common stock of
the Corporation on the New York Stock Exchange on the
last trading day on the New York Stock Exchange prior
to the date of the change in control.
i. TAX TREATMENT
Under present Federal income tax laws, no portion of the
balance credited to a participant's 2003 Deferred Bonus
Accounts will be includable in income for Federal income tax
purposes during the period of deferral. However, FICA tax
withholding is required currently on the cash bonus amount
(excluding any portion subject to a mandatory deferral)
awarded to the participant, and such withholding is required
on the supplemental amount in January of 2007. When any part
of the 2003 Deferred Bonus Accounts is actually paid to the
participant, such portion will be includable in income, and
Federal, state and local income tax withholding will
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apply. The Corporation may make necessary arrangements in
order to effectuate any such withholding, including the
mandatory withholding of shares of common stock of the
Corporation which would otherwise be distributed to a
participant.
j. BENEFICIARY DESIGNATION
Each participant shall have the right, at any time, to
designate any person or persons as beneficiary or
beneficiaries (both principal and contingent) to whom payment
shall be made under the 2003 Plan and every other Cash Bonus
Award Voluntary Deferral Plan for which the participant has or
will have an account balance (collectively, including the 2003
Plan, "the Plans"), in the event of death prior to complete
distribution to the participant of the amounts due under the
Plans. Any beneficiary designation may be changed by a
participant by the filing of such change in writing on a form
prescribed by the Corporation. The filing of a new beneficiary
designation form will cancel all beneficiary designations
previously filed and apply to all deferrals in the account. A
beneficiary designation form is attached for use by a
participant who either does not have such form on file or
wishes to make a change in the beneficiary designation. Upon
completion of the attached form, it should be forwarded to
William Palazzo, at the address set forth in Section 2.b.
above. If a participant does not have a beneficiary
designation in effect, or if all designated beneficiaries
predecease the participant, then any amounts payable to the
beneficiary shall be paid to the participant's estate. The
payment to the designated beneficiary or to the participant's
estate shall completely discharge the Corporation's
obligations under the Plans.
k. CHANGES IN CAPITALIZATION
If there is any change in the number or class of shares of
common stock of the Corporation through the declaration of
stock dividend or other extraordinary dividends, or
recapitalization resulting in stock splits, or combinations or
exchanges of such shares or in the event of similar corporate
transactions, each participant's 2003 Corporation Stock
Account shall be equitably adjusted by the Committee to
reflect any such change in the number or class of issued
shares of common stock of the Corporation or to reflect such
similar corporate transaction.
3. AMENDMENT AND TERMINATION OF THE 2003 PLAN
The Committee may, at its discretion and at any time, amend the 2003
Plan in whole or in part. The Committee may also terminate the 2003
Plan in its entirety at any time and, upon any such termination, each
participant shall be paid in a single distribution, or over such period
of time as determined by the Committee (not to extend beyond the
earlier of 15 years or the elected deferral period), the then remaining
balance in such participant's 2003 Deferred Bonus Accounts.
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4. MISCELLANEOUS
a. A participant under the 2003 Plan is merely a general (not
secured) creditor, and nothing contained in the 2003 Plan
shall create a trust of any kind or a fiduciary relationship
between the Corporation and the participant or the
participant's estate. Nothing contained herein shall be
construed as conferring upon the participant the right to
continued employment with the Corporation or its subsidiaries,
or to a cash bonus award. Except as otherwise provided by
applicable law, benefits payable under the 2003 Plan may not
be assigned or hypothecated, and no such benefits shall be
subject to legal process or attachment for the payment of any
claim of any person entitled to receive the same. The adoption
of the 2003 Plan and any elections made pursuant to the 2003
Plan are subject to approval of the 2003 Plan by the
Committee.
b. Participation in the 2003 Plan is subject to these terms and
conditions and to the terms and conditions of (i) the 2000
Senior Executive Plan with respect to those participants
hereunder who are subject thereto and (ii) the 2000 Employee
Plan with respect to all other participants. Participation in
the 2003 Plan shall constitute an agreement by the participant
to all such terms and conditions and to the administrative
regulations of the Committee. In the event of any
inconsistency between these terms and conditions and the
provisions of the 2000 Senior Executive Plan or the 2000
Employee Plan, as applicable, the provisions of the latter
shall prevail. The 2000 Senior Executive Plan and the 2000
Employee Plan are not subject to any of the provisions of the
Employee Retirement Income Security Act Of 1974.
c. Not more than eight million (8,000,000) shares of the
Corporation's common stock, plus such number of shares
remaining unused under pre-existing stock plans approved by
the Corporation's stockholders, may be issued under the 2000
Senior Executive Plan.
d. Not more than eighty million (80,000,000) shares of the
Corporation's common stock, plus such number of shares
authorized and reserved for awards pursuant to certain
preexisting share resolutions adopted by the Corporation's
Board of Directors, may be issued under the 2000 Employee
Plan.
5. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Annual Report on Form 10-K of the Corporation for its last fiscal
year, the Corporation's Registration Statement on Form 8 dated February
3, 1987, describing Corporation common stock, including any amendment
or reports filed for the purpose of updating such description, and the
Corporation's Registration Statement on Form 8-A/A dated January 26,
2000, describing the Preferred Stock Purchase Rights attached to the
common stock, including any further amendment or reports filed for the
purpose of updating such description, which have been filed by the
Corporation under the Securities Exchange Act of 1934, as amended (the
Exchange Act), are incorporated by reference herein.
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All documents subsequently filed by the Corporation pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, subsequent to
the end of the Corporation's last fiscal year and prior to the filing
of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing of such
documents.
Participants may receive without charge, upon written or oral request,
a copy of any of the documents incorporated herein by reference and any
other documents that constitute part of this Prospectus by contacting
Mr. William Palazzo, Senior Manager, Executive Compensation, as
indicated above.
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