Marsh & McLennan Companies, Inc.
Special Severance Pay Plan
(as amended and restated as of November 21, 1996)
1. Eligibility:
Eligibility for severance payments under this Plan will be limited to
executives who terminate from the Company or its subsidiaries for reasons
other than cause, death, total and permanent disability or normal
retirement and who at time of termination:
a. are grantees of outstanding awards ("Awards") of restricted stock,
incentive units awarded in lieu of restricted stock, restricted stock
units awarded in lieu of restricted stock or restricted stock units
awarded to replace another grant under the Marsh & McLennan Companies
Restricted Stock Plan (1985), the Marsh & McLennan Companies 1988
Incentive and Stock Award Plan, the Marsh & McLennan Companies 1992
Incentive and Stock Award Plan (the "1992 Plan") or any successor
thereto, but excluding any supplemental Awards ("Supplemental Awards")
issued under the 1992 Plan (or any successor thereto) in connection with
the granting of replacement awards under any such plan in exchange for
the surrender and cancellation of then outstanding Awards (the
outstanding Awards, other than any Supplemental Awards, shall
hereinafter be referred to as the "Covered Awards"); and
b. have at least ten years of service with the Company or its
subsidiaries.
2. Non-Solicitation Agreement:
In addition to satisfying the above eligibility criteria, the executive at
or before termination will be required to enter into a Non-Solicitation
Agreement with the Company providing that in order to receive severance
payments under this Plan, the executive must refrain, for a three year
period from the date of termination, from (i) soliciting or accepting
business from any clients of the Company or its subsidiaries, and (ii)
soliciting an employee of the Company or its subsidiaries to terminate his
or her employment.
3. Forfeiture:
All payments under this Plan made in accordance with Paragraph 4 below will
be made only after the executive has, to the satisfaction of the Company in
its sole discretion, demonstrated compliance with the Non-Solicitation
Agreement. If, in the judgment of the Company, the executive has violated
such agreement, all rights to severance payments remaining under this Plan
shall be forfeited.
Marsh & McLennan Companies, Inc.
Special Severance Pay Plan
Page Two
4. Severance Amount Determination:
The total severance amount shall be based on a percentage of the shares and
units subject to the executive's Covered Awards which were forfeited at the
executive's termination of employment (the "Forfeited Awards"). Such
percentage shall be determined by the executive's years of service at
termination as follows:
Severance Amount
(as a Percentage of
Years of Service Forfeited Awards)
---------------- -----------------
10-14 50%
15-19 60%
20-24 75%
25 and Above 90%
5. Dividends:
Dividends or dividend equivalents as appropriate, shall be paid on all
shares or share equivalents remaining unpaid under this Plan at the normal
times that dividends are paid to other Company common stock owners.
6. Form and Manner of Payment:
Payments under this Plan shall be made in shares of MMC common stock in
three annual installments commencing one year following termination of
employment. Such payments, however, will be made only after the executive
has, to the satisfaction of the Company, demonstrated compliance with the
Non-Solicitation Agreement.
Annual share installments will be issued in MMC stock, less the number of
shares needed to pay applicable withholding taxes. Such installments shall
be determined by multiplying (i) the number of shares remaining under this
Plan by (ii) a fraction, the numerator of which is 1 and the denominator of
which is the number of remaining installments, including the one being
made.
7. Death Benefits:
If the executive dies after termination of employment and before payment of
all installments under this Plan, shares remaining unpaid at death shall be
issued to the estate of the executive. Such payment, however, will be made
only after the executive's personal representative has to the satisfaction
of the company demonstrated compliance by the executive through the date of
his or her death with the Non-Solicitation Agreement.
Marsh & McLennan Companies, Inc.
Special Severance Pay Plan
Page Three
8. Administration:
This Plan shall be administered by the Compensation Committee, which shall
be composed of disinterested persons as such term is defined in the rules
of the Securities and Exchange Commission, and whose actions and
determination on matters related to this Plan shall be conclusive. Subject
to the express provisions of this Plan, the powers of the Committee include
having the authority, in its discretion, to:
a. define, prescribe, amend and rescind rules, regulations,
procedures, terms and conditions relating to this Plan,
including any addenda required to comply with applicable
non-United States law; and
b. make all other determinations necessary or advisable for
administering this Plan, including, but not limited to,
interpreting this Plan, correcting defects, reconciling
inconsistencies and resolving ambiguities.
9. Amendment and Termination:
This Plan may be amended or terminated at any time by the Board of
Directors of the Company.