SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
_____________________________________________ 
FORM 10-Q
_____________________________________________ 
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2015
_____________________________________________ 
Marsh & McLennan Companies, Inc.
1166 Avenue of the Americas
New York, New York 10036
(212) 345-5000
_____________________________________________ 
Commission file number 1-5998
State of Incorporation: Delaware
I.R.S. Employer Identification No. 36-2668272
_____________________________________________ 
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  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No   ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting Company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting Company" in Rule 12b-2 of the Exchange Act. (Check one):
 
Large Accelerated Filer  x
  
Accelerated Filer  ¨
 
 
Non-Accelerated Filer  ¨(Do not check if a smaller reporting company)
  
Smaller Reporting Company  ¨
Indicate by check mark whether the registrant is a shell Company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ¨    No  ý
As of April 24, 2015, there were outstanding 536,881,743 shares of common stock, par value $1.00 per share, of the registrant.
 




INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains "forward-looking statements," as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management's current views concerning future events or results, use words like "anticipate," "assume," "believe," "continue," "estimate," "expect," "future," "intend," "plan," "project" and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will" and "would." For example, we may use forward-looking statements when addressing topics such as: the outcome of contingencies; the expected impact of acquisitions and dispositions; the impact of competition; pension obligations; the impact of foreign currency exchange rates; our effective tax rates; changes in our business strategies and methods of generating revenue; the development and performance of our services and products; changes in the composition or level of our revenues; our cost structure, dividend policy, cash flow and liquidity; future actions by regulators; and the impact of changes in accounting rules.
Forward-looking statements are subject to inherent risks and uncertainties. Factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements include, among other things:
•
our ability to maintain adequate safeguards to protect the security of confidential, personal or proprietary information, and the potential for the improper disclosure or use of such information, whether due to human error, improper action by employees, vendors or third parties, or as a result of a cyberattack;
•
the impact of fluctuations in foreign currency exchange rates, particularly in light of the recent strengthening of the U.S. dollar against most other currencies worldwide;
•
the impact of competition on our business, including the impact of our corporate tax rate, which is higher than the tax rate of some of our competitors;
•
the impact on our global pension obligations of changes in discount rates and asset returns, as well as projected salary increases, mortality rates, demographics, and inflation, and the impact of cash contributions required to be made to our global defined benefit pension plans due to changes in the funded status of those plans;
•
our exposure to potential liabilities arising from errors and omissions claims against us;
•
our exposure to potential civil remedies or criminal penalties if we fail to comply with foreign and U.S. laws that are applicable in the domestic and international jurisdictions in which we operate, including trade sanctions laws relating to countries such as Cuba, Iran, Russia, Sudan and Syria, anti-corruption laws such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010 and local laws prohibiting corrupt payments to government officials;
•
the extent to which we are able to retain existing clients and attract new business, and our ability to effectively incentivize and retain key employees;
•
our ability to make acquisitions and dispositions and to integrate, and realize expected synergies, savings or benefits from, the businesses we acquire;
•
our ability to successfully recover should we experience a disaster or other business continuity problem;
•
the impact of changes in interest rates and deterioration of counterparty credit quality on our cash balances and the performance of our investment portfolios;
•
the impact of potential rating agency actions on our cost of financing and ability to borrow, as well as on our operating costs and competitive position;
•
changes in applicable tax or accounting requirements; and
•
potential income statement effects from the application of FASB's ASC Topic No. 740 (“Income Taxes”) regarding accounting treatment of uncertain tax benefits and valuation allowances, including the effect of any subsequent adjustments to the estimates we use in applying this accounting standard.
The factors identified above are not exhaustive. Marsh & McLennan Companies and its subsidiaries operate in a dynamic business environment in which new risks may emerge frequently. Accordingly, we caution readers not to place undue reliance on any forward-looking statements, which are based only on information currently available to us and speak only as of the dates on which they are made. The Company undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date on which it is made. Further information concerning Marsh & McLennan Companies and its businesses, including information about factors that could materially affect our results of operations and financial condition, is contained in the Company's filings with the Securities and Exchange Commission, including the "Risk Factors" section and the "Management’s Discussion and Analysis of Financial Condition and Results of Operations" section of our most recently filed Annual Report on Form 10-K.

2


TABLE OF CONTENTS
 
 
 
 
ITEM 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ITEM 2.
 
OF OPERATIONS
 
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
 
 
ITEM 4.
 
 
 
 
 
ITEM 1.
 
 
 
ITEM 1A.
 
 
 
ITEM 2.
 
 
 
ITEM 3.
 
 
 
ITEM 4.
 
 
 
ITEM 5.
 
 
 
ITEM 6.


3


PART I.    FINANCIAL INFORMATION
 
Item 1.
Financial Statements.

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
Three Months Ended
March 31,
(In millions, except per share figures)
2015

 
2014

Revenue
$
3,215

 
$
3,264

Expense:
 
 
 
Compensation and benefits
1,730

 
1,839

Other operating expenses
750

 
752

Operating expenses
2,480

 
2,591

Operating income
735

 
673

Interest income
3

 
5

Interest expense
(36
)
 
(42
)
Investment income
2

 
13

Income before income taxes
704

 
649

Income tax expense
206

 
192

Income from continuing operations
498

 
457

Discontinued operations, net of tax
(3
)
 
(1
)
Net income before non-controlling interests
495

 
456

Less: Net income attributable to non-controlling interests
13

 
13

Net income attributable to the Company
$
482

 
$
443

Basic net income per share – Continuing operations
$
0.90

 
$
0.81

 – Net income attributable to
    the Company
$
0.89

 
$
0.81

Diluted net income per share – Continuing operations
$
0.89

 
$
0.80

 – Net income attributable to
    the Company
$
0.88

 
$
0.80

Average number of shares outstanding – Basic
539

 
548

– Diluted
545

 
556

Shares outstanding at March 31
538

 
549

The accompanying notes are an integral part of these consolidated statements.


4


MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
Three Months Ended
March 31,
(In millions)
2015

 
2014

Net income before non-controlling interests
$
495

 
$
456

Other comprehensive income (loss), before tax:
 
 
 
    Foreign currency translation adjustments
(426
)
 
71

    Gain (loss) related to pension/post-retirement plans
236

 
(199
)
Other comprehensive (loss) income, before tax
(190
)
 
(128
)
Income tax expense (credit) on other comprehensive income
53

 
(41
)
Other comprehensive (loss) income, net of tax
(243
)
 
(87
)
Comprehensive income
252

 
369

Less: comprehensive income attributable to non-controlling interest
13

 
13

Comprehensive income attributable to the Company
$
239

 
$
356

The accompanying notes are an integral part of these consolidated statements.

5


MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions, except share and per share figures)
March 31,
2015

 
December 31,
2014

ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
1,104

 
$
1,958

Receivables
 
 
 
Commissions and fees
3,135

 
3,142

Advanced premiums and claims
56

 
50

Other
285

 
280

 
3,476

 
3,472

Less-allowance for doubtful accounts and cancellations
(96
)
 
(95
)
Net receivables
3,380

 
3,377

Current deferred tax assets
466

 
521

Other current assets
227

 
199

Total current assets
5,177

 
6,055

Goodwill and intangible assets
7,832

 
7,933

Fixed assets
(net of accumulated depreciation and amortization of $1,635 at March 31, 2015 and $1,639 at December 31, 2014)
794

 
809

Pension related assets
1,010

 
967

Deferred tax assets
812

 
876

Other assets
1,209

 
1,200

 
$
16,834

 
$
17,840

 The accompanying notes are an integral part of these consolidated statements.


6


MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
(In millions, except share and per share figures)
March 31,
2015

 
December 31,
2014

LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Short-term debt
$
61

 
$
11

Accounts payable and accrued liabilities
1,699

 
1,883

Accrued compensation and employee benefits
706

 
1,633

Accrued income taxes
136

 
178

Dividends payable
151

 
—

Total current liabilities
2,753

 
3,705

Fiduciary liabilities
4,585

 
4,552

Less – cash and investments held in a fiduciary capacity
(4,585
)
 
(4,552
)
 
—

 
—

Long-term debt
3,828

 
3,376

Pension, post-retirement and post-employment benefits
2,070

 
2,244

Liabilities for errors and omissions
334

 
341

Other liabilities
986

 
1,041

Commitments and contingencies

 

Equity:
 
 
 
Preferred stock, $1 par value, authorized 6,000,000 shares, none issued
—

 
—

Common stock, $1 par value, authorized
 
 
 
1,600,000,000 shares, issued 560,641,640 shares at March 31, 2015
 
 
 
   and December 31, 2014
561

 
561

Additional paid-in capital
837

 
930

Retained earnings
10,515

 
10,335

Accumulated other comprehensive loss
(4,090
)
 
(3,847
)
Non-controlling interests
91

 
79

 
7,914

 
8,058

Less – treasury shares, at cost, 22,229,254 shares at March 31, 2015
 
 
 
   and 20,499,596 shares at December 31, 2014
(1,051
)
 
(925
)
Total equity
6,863

 
7,133

 
$
16,834

 
$
17,840

The accompanying notes are an integral part of these consolidated statements.


7


MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the Three Months Ended March 31,
 
 
 
(In millions)
2015

 
2014

Operating cash flows:
 
 
 
Net income before non-controlling interests
$
495

 
$
456

Adjustments to reconcile net income to cash used for operations:
 
 
 
Depreciation and amortization of fixed assets and capitalized software
77

 
75

Amortization of intangible assets
24

 
22

Adjustments to acquisition related contingent consideration liability
(2
)
 
(6
)
Provision for deferred income taxes
87

 
59

Gain on investments
(2
)
 
(13
)
Loss on disposition of assets
1

 
1

Share-based compensation expense
24

 
33

Changes in assets and liabilities:
 
 
 
Net receivables
(1
)
 
(150
)
Other current assets
28

 
(35
)
Other assets
(43
)
 
33

Accounts payable and accrued liabilities
(128
)
 
47

Accrued compensation and employee benefits
(927
)
 
(764
)
Accrued income taxes
(37
)
 
28

      Contributions to pension and other benefit plans in excess of current year expense/credit
(134
)
 
(93
)
Other liabilities
(82
)
 
(85
)
Effect of exchange rate changes
90

 
12

Net cash used for operations
(530
)
 
(380
)
Financing cash flows:
 
 
 
Purchase of treasury shares
(300
)
 
(100
)
Net increase in commercial paper
—

 
100

Proceeds from debt
500

 
—

Repayments of debt
(2
)
 
(3
)
Shares withheld for taxes on vested units – treasury shares
(47
)
 
(49
)
Issuance of common stock from treasury shares
104

 
92

Payments of deferred and contingent consideration for acquisitions
(32
)
 
(20
)
Distributions of non-controlling interests
(1
)
 
(1
)
Dividends paid
(151
)
 
(137
)
Net cash provided by (used for) financing activities
71

 
(118
)
Investing cash flows:
 
 
 
Capital expenditures
(91
)
 
(99
)
Net (purchases) sales of long-term investments
(87
)
 
—

Proceeds from sales of fixed assets
1

 
1

Acquisitions
(16
)
 
(319
)
Other, net
(1
)
 
1

Net cash used for investing activities
(194
)
 
(416
)
Effect of exchange rate changes on cash and cash equivalents
(201
)
 
(9
)
Decrease in cash and cash equivalents
(854
)
 
(923
)
Cash and cash equivalents at beginning of period
1,958

 
2,303

Cash and cash equivalents at end of period
$
1,104

 
$
1,380

The accompanying notes are an integral part of these consolidated statements.

8


MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
For the Three Months Ended March 31,
 
 
 
(In millions, except per share figures)
2015

 
2014

COMMON STOCK
 
 
 
Balance, beginning and end of period
$
561

 
$
561

ADDITIONAL PAID-IN CAPITAL
 
 
 
Balance, beginning of year
$
930

 
$
1,028

Change in accrued stock compensation costs
(40
)
 
(59
)
Issuance of shares under stock compensation plans and employee stock purchase plans and related tax impact
(53
)
 
(60
)
Balance, end of period
$
837

 
$
909

RETAINED EARNINGS
 
 
 
Balance, beginning of year
$
10,335

 
$
9,452

Net income attributable to the Company
482

 
443

Dividend equivalents declared – (per share amounts: $0.56 in 2015 and $0.50 in 2014)
(1
)
 
(1
)
Dividends declared – (per share amounts: $0.56 in 2015 and $0.50 in 2014)
(301
)
 
(274
)
Balance, end of period
$
10,515

 
$
9,620

ACCUMULATED OTHER COMPREHENSIVE LOSS
 
 
 
Balance, beginning of year
$
(3,847
)
 
$
(2,621
)
Other comprehensive income (loss), net of tax
(243
)
 
(87
)
Balance, end of period
$
(4,090
)
 
$
(2,708
)
TREASURY SHARES
 
 
 
Balance, beginning of year
$
(925
)
 
$
(515
)
Issuance of shares under stock compensation plans and employee stock purchase plans
174

 
194

Purchase of treasury shares
(300
)
 
(100
)
Balance, end of period
$
(1,051
)
 
$
(421
)
NON-CONTROLLING INTERESTS
 
 
 
Balance, beginning of year
$
79

 
$
70

Net income attributable to non-controlling interests
13

 
13

Distributions
(1
)
 
—

Other changes
—

 
(1
)
Balance, end of period
$
91

 
$
82

TOTAL EQUITY
$
6,863

 
$
8,043

The accompanying notes are an integral part of these consolidated statements.

9


MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.     Nature of Operations
Marsh & McLennan Companies, Inc. (the "Company"), a global professional services firm, is organized based on the different services that it offers. Under this organizational structure, the Company’s two business segments are Risk and Insurance Services and Consulting.
The Risk and Insurance Services segment provides risk management activities and insurance broking, reinsurance broking and insurance program management services for businesses, public entities, insurance companies, associations, professional services organizations, and private clients. The Company conducts business in this segment through Marsh and Guy Carpenter.
The Company conducts business in its Consulting segment through two main business groups. Mercer provides consulting expertise, advice, services and solutions in the areas of health, retirement, talent and investments. Within the investments business, Mercer provides delegated investment (fiduciary management) solutions to institutional investors (such as retirement plan sponsors and trustees) and to individual investors (primarily through the inclusion of funds managed by Mercer on defined contribution and wealth management platforms). As of March 31, 2015, Mercer had assets under management of $125 billion worldwide. Oliver Wyman Group provides specialized management and economic and brand consulting services.
Acquisitions impacting the Risk and Insurance Services and Consulting segments are discussed in Note 7 to the consolidated financial statements.
2.     Principles of Consolidation and Other Matters
The consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. While certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations for interim filings, the Company believes that the information and disclosures presented are adequate to make such information and disclosures not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 (the "2014 10-K").
The financial information contained herein reflects all adjustments consisting only of normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the Company’s consolidated financial statements as of and for the three-month periods ended March 31, 2015 and 2014.
Cash and Cash Equivalents
Cash and cash equivalents primarily consist of certificates of deposit and time deposits, with original maturities of three months or less, and money market funds. The estimated fair value of the Company's cash and cash equivalents approximates their carrying value. The Company is required to maintain operating funds of approximately $171 million related to regulatory requirements outside the U.S. or as collateral under captive insurance arrangements.
Investments  
The Company holds investments in private companies and private equity funds. Investments in private equity funds are accounted for under the equity method of accounting using a consistently applied three-month lag period adjusted for any known significant changes from the lag period to the reporting date of the Company. The underlying private equity funds follow investment company accounting, where investments within the fund are carried at fair value. The Company records in earnings, investment gains/losses for its proportionate share of the change in fair value of the funds. Investments using the equity method of accounting are included in other assets in the consolidated balance sheets.
The caption “Investment income” in the consolidated statements of income comprises realized and unrealized gains and losses from investments recognized in current earnings. It includes, when applicable, other than temporary declines in the value of debt and available for sale securities and the change in value of the Company’s holdings in certain private equity funds, including equity method gains (losses) on its investment in the Trident funds. The Company’s investments may include direct investments in insurance or consulting companies and investments in

10


private equity funds. The Company recorded investment income of $2 million in the first quarter of 2015 compared to $13 million for the same period in 2014.
Income Taxes
The Company's effective tax rate in the first quarter of 2015 was 29.2% compared with 29.5% in the first quarter of 2014. These rates reflect non-U.S. income taxed at rates below the U.S. statutory rate, including the effect of repatriation, as well as the impact of discrete tax matters such as changes in circumstances that result in a change in judgment about the beginning balance in valuation allowances, the resolution of tax examinations and expirations of statutes of limitations.
The Company is routinely examined by tax authorities in the jurisdictions in which it has significant operations. The Company regularly considers the likelihood of assessments in each of the taxing jurisdictions resulting from examinations. When evaluating the potential imposition of penalties, the Company considers a number of relevant factors under penalty statutes, including appropriate disclosure of the tax return position, the existence of legal authority supporting the Company's position, and reliance on the opinion of professional tax advisors.
The Company reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in tax returns. The Company's gross unrecognized tax benefits increased from
$97 million at December 31, 2014 to $100 million at March 31, 2015. It is reasonably possible that the total amount of unrecognized tax benefits will decrease between zero and approximately $22 million within the next twelve months due to settlements of audits and expirations of statutes of limitation.
3.     Fiduciary Assets and Liabilities
In its capacity as an insurance broker or agent, the Company collects premiums from insureds and, after deducting its commissions, remits the premiums to the respective insurance underwriters. The Company also collects claims or refunds from underwriters on behalf of insureds. Unremitted insurance premiums and claims proceeds are held by the Company in a fiduciary capacity. Risk and Insurance Services revenue includes interest on fiduciary funds of $5 million and $6 million for the three-month periods ended March 31, 2015 and 2014, respectively. The Consulting segment recorded fiduciary interest income of $1 million for each of the three-month periods ended March 31, 2015 and 2014. Since fiduciary assets are not available for corporate use, they are shown in the consolidated balance sheets as an offset to fiduciary liabilities.
Net uncollected premiums and claims and the related payables amounted to $8.1 billion at March 31, 2015 and $7.3 billion at December 31, 2014. The Company is not a principal to the contracts under which the right to receive premiums or the right to receive reimbursement of insured losses arises. Net uncollected premiums and claims and the related payables are, therefore, not assets and liabilities of the Company and are not included in the accompanying consolidated balance sheets.
In certain instances, the Company advances premiums, refunds or claims to insurance underwriters or insureds prior to collection. These advances are made from corporate funds and are reflected in the accompanying consolidated balance sheets as receivables.
Mercer manages approximately $26 billion of assets in trusts or funds for which Mercer’s management or trustee fee is considered a variable interest. Mercer is not the primary beneficiary of these trusts or funds. Mercer’s only variable interest in any of these trusts or funds is its unpaid fees, if any. Mercer’s maximum exposure to loss of its interests is, therefore, limited to collection of its fees.
4.    Per Share Data
Basic net income per share attributable to the Company and income from continuing operations per share are calculated by dividing the respective after-tax income by the weighted average number of outstanding shares of the Company’s common stock.
Diluted net income per share attributable to the Company and income from continuing operations per share are calculated by dividing the respective after-tax income by the weighted average number of outstanding shares of the Company’s common stock, which have been adjusted for the dilutive effect of potentially issuable common shares. Reconciliations of the applicable income components used for diluted EPS - Continuing operations and basic weighted average common shares outstanding to diluted weighted average common shares outstanding are presented below. The reconciling items related to the calculation of diluted weighted average common shares outstanding are the same for net income attributable to the Company.

11


Basic and Diluted EPS Calculation - Continuing Operations
 
Three Months Ended
March 31,
(In millions, except per share figures)
 
2015

 
2014

Net income from continuing operations
 
$
498

 
$
457

Less: Net income attributable to non-controlling interests
 
13

 
13

 
 
$
485

 
$
444

Basic weighted average common shares outstanding
 
539

 
548

Dilutive effect of potentially issuable common shares
 
6

 
8

Diluted weighted average common shares outstanding
 
545

 
556

Average stock price used to calculate common stock equivalents
 
$
56.37

 
$
47.84

There were 17.2 million and 21.6 million stock options outstanding as of March 31, 2015 and 2014, respectively.
5.    Supplemental Disclosures to the Consolidated Statements of Cash Flows
The following schedule provides additional information concerning acquisitions, interest and income taxes paid for the three-month periods ended March 31, 2015 and 2014.
(In millions of dollars)
 
2015

 
2014

Assets acquired, excluding cash
 
$
30

 
$
464

Liabilities assumed
 
(2
)
 
(38
)
Contingent/deferred purchase consideration
 
(12
)
 
(113
)
Net cash outflow for current year acquisitions
 
$
16

 
$
313

(In millions of dollars)
2015

 
2014

Interest paid
$
40

 
$
44

Income taxes paid
$
118

 
$
120

The Company paid deferred purchase consideration related to prior years' acquisitions of $26 million and $6 million for the three months ended March 31, 2015 and 2014, respectively.
The Company had non-cash issuances of common stock of $64 million and $92 million for the three months ended March 31, 2015 and 2014, respectively, primarily related to its share-based payment plans. The Company recorded share-based compensation expense related to equity awards (excluding stock options) of $16 million and $26 million for the three-month periods ended March 31, 2015 and 2014, respectively.
The consolidated statement of cash flows includes the cash flow impact of discontinued operations related to indemnification payments from the Putnam disposition, that reduced the net cash flow used for operations by $82 million for the quarter ended March 31, 2015.

12


6.    Other Comprehensive Income (Loss)
The changes in the balances of each component of Accumulated Other Comprehensive Income ("AOCI") for the three-month periods ended March 31, 2015 and 2014, including amounts reclassified out of AOCI, are as follows:
(In millions of dollars)
Unrealized Investment Gains
 
Pension/Post-Retirement Plans Gains (Losses)
 
Foreign Currency Translation Adjustments
 
Total
Balance as of January 1, 2015
$
5

 
$
(3,393
)
 
$
(459
)
 
$
(3,847
)
Other comprehensive income (loss) before reclassifications
—

 
128

 
(423
)
 
(295
)
Amounts reclassified from accumulated other comprehensive income
—

 
52

 
—

 
52

Net current period other comprehensive income (loss)
—

 
180

 
(423
)
 
(243
)
Balance as of March 31, 2015
$
5

 
$
(3,213
)
 
$
(882
)
 
$
(4,090
)
(In millions of dollars)
Unrealized Investment Gains
 
Pension/Post-Retirement Plans Gains (Losses)
 
Foreign Currency Translation Adjustments
 
Total
Balance as of January 1, 2014
$
5

 
$
(2,682
)
 
$
56

 
$
(2,621
)
Other comprehensive income (loss) before reclassifications
—

 
(199
)
 
78

 
(121
)
Amounts reclassified from accumulated other comprehensive income
—

 
34

 
—

 
34

Net current period other comprehensive income (loss)
—

 
(165
)
 
78

 
(87
)
Balance as of March 31, 2014
$
5

 
$
(2,847
)
 
$
134

 
$
(2,708
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The components of other comprehensive income (loss) for the three-month periods ended March 31, 2015 and 2014 are as follows:
Three Months Ended March 31,
2015
 
2014
(In millions of dollars)
Pre-Tax

Tax

Net of Tax

 
Pre-Tax

Tax

Net of Tax

Foreign currency translation adjustments
$
(426
)
$
(3
)
$
(423
)
 
$
71

$
(7
)
$
78

Unrealized investment gains (losses)
—

—

—

 
—

—

—

Pension/post-retirement plans:
 
 
 
 
 
 
 
Amortization of losses (gains) included in net periodic pension cost:
 
 
 
 
 


 
Prior service gains (a)
—

—

—

 
(3
)
(1
)
(2
)
Net actuarial losses (a)
77

25

52

 
51

15

36

Subtotal
77

25

52

 
48

14

34

Effect of remeasurement
(4
)
(1
)
(3
)
 
(166
)
(33
)
(133
)
Effect of curtailment
—

—

—

 
(65
)
(13
)
(52
)
Plan Termination
(6
)
(2
)
(4
)
 
—

—

—

Foreign currency translation adjustments
169

34

135

 
(17
)
(2
)
(15
)
Other
—

—

—

 
1

—

1

Pension/post-retirement plans (losses) gains
236

56

180

 
(199
)
(34
)
(165
)
Other comprehensive income (loss)
$
(190
)
$
53

$
(243
)
 
$
(128
)
$
(41
)
$
(87
)
(a) Components of net periodic pension cost are included in compensation and benefits in the Consolidated Statements of Income. Tax on prior service gains and net actuarial losses is included in income tax expense.

13


 
 
 
 
 
 
 
 
7.     Acquisitions
The Company completed 3 acquisitions during the first three months of 2015.
•
January – Marsh acquired INGESEG S.A., an insurance brokerage located in Argentina.
•
February – Oliver Wyman acquired TeamSAI, a Georgia-based provider of consulting and technical services to the transportation industry, and Mercer acquired Strategic Capital Management AG, a Switzerland-based institutional investment advisor.
Total purchase consideration for acquisitions made during the first three months of 2015 was $32 million, which consisted of cash paid of $20 million and deferred purchase and estimated contingent consideration of $12 million. Contingent consideration arrangements are primarily based on EBITDA and revenue targets over periods ranging from two to four years. The fair value of the contingent consideration was based on projected revenue and earnings of the acquired entities. The estimated fair values of assets acquired and liabilities assumed are subject to adjustment when purchase accounting is finalized. The Company also paid $26 million of deferred purchase consideration and $19 million of contingent consideration related to acquisitions made in prior years. In addition, the Company purchased other intangible assets in the amount of $3 million.
The following table presents the preliminary allocation of the acquisition cost to the assets acquired and liabilities assumed during 2015 based on their fair values:
 For the Three Months Ended March 31, 2015
 
(In millions of dollars)
 
Cash
$
20

Estimated fair value of deferred/contingent consideration
12

Total Consideration
$
32

Allocation of purchase price:
 
Cash and cash equivalents
$
4

Accounts receivable, net
3

Intangible assets
10

Goodwill
12

Other assets
5

Total assets acquired
34

Current liabilities
—

Other liabilities
2

Total liabilities assumed
2

Net assets acquired
$
32

Prior Year Acquisitions
The Risk and Insurance Services segment completed fifteen acquisitions during 2014.
•
January – Marsh & McLennan Agency ("MMA") acquired Barney & Barney, LLC, a San Diego-based insurance broking firm that provides insurance, risk management and employee benefits solutions to businesses and individuals throughout the U.S. and abroad, Great Lakes Employee Benefits Services, Inc., an employee group benefits consulting and brokerage firm based in Michigan, and Bond Network, Inc., a surety bonding agency based in North Carolina.
•
February – Marsh acquired Central Insurance Services, an independent insurance broker in Scotland that provides insurance broking and risk advisory services to companies of all sizes across industry sectors.
•
March – MMA acquired Capstone Insurance Services, LLC, an agency that provides property-casualty insurance and risk management solutions to businesses and individuals throughout South Carolina.
•
May – MMA acquired Kinker-Eveleigh Insurance Agency, an Ohio-based agency specializing in property-casualty and employee benefits solutions, VISICOR, a full-service employee benefits brokerage and consulting firm based in Texas, and Senn Dunn Insurance, a full-service insurance brokerage located in North Carolina.

14


•
August – Marsh acquired Seguros Morrice y Urrutia S.A., an insurance broker based in Panama City, Panama.
•
September – Marsh acquired Kocisko Insurance Brokers, Inc., a full-service commercial insurance brokerage located in Montreal, Quebec.
•
October – MMA acquired NuWest Insurance Services, Inc., a California-based property-casualty agency.
•
November – Marsh acquired Torrent Technologies, Inc., a Montana-based flood insurance specialist.
•
December – Marsh acquired Seafire Insurance Services, LLC, a Kansas-based managing general underwriter, and Trade Insure NV, a leading distributor of credit insurance policies in Belgium, and MMA acquired The Benefit Planning Group, Inc., a North Carolina-based employee benefit consulting firm.
The Consulting segment completed six acquisitions during 2014.
•
February – Mercer acquired Transition Assist, a retiree exchange specializing in helping retirees in employer-sponsored plans select Medicare supplemental health care insurance.
•
September – Oliver Wyman acquired Bonfire Communications, an agency specializing in employee engagement and internal communications based in San Francisco, California.
•
November – Mercer acquired AUSREM, a remuneration research and workforce consulting specialist based in Australia, and Jeitosa Group International, a global HR business consultancy and IT systems integration firm.
•
December – Mercer acquired Denarius, a compensation and benefits survey and information products consulting firm based in Chile, and Oliver Wyman acquired OC&C Strategy Consultants (Boston) LLC (part of the OC&C network), a Boston-based consulting firm specializing in the business media, information services and education sectors.
Total purchase consideration for acquisitions made during the first three months of 2014 was $444 million, which consisted of cash paid of $331 million and deferred purchase and estimated contingent consideration of $113 million. Contingent consideration arrangements are primarily based on EBITDA and revenue targets over periods ranging from two to four years. The fair value of the contingent consideration was based on projected revenue and earnings of the acquired entities. The estimated fair values of assets acquired and liabilities assumed are subject to adjustment when purchase accounting is finalized. The Company also paid $6 million of deferred purchase consideration and $30 million of contingent consideration related to acquisitions made in prior years.
Pro-Forma Information
The Company believes its acquisitions made during the first three months of 2015 are immaterial and no pro-forma adjustments to information presented for 2015 or 2014 has been made for those acquisitions. The information presented for the 2014 acquisitions is as if they occurred on January 1, 2013. The unaudited pro-forma information adjusts for the effects of amortization of acquired intangibles. The unaudited pro-forma financial data is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved if such acquisitions had occurred on the dates indicated, nor is it necessarily indicative of future consolidated results.
 
Three Months Ended
March 31,
(In millions, except per share figures)
2015

 
2014

Revenue
$
3,215

 
$
3,302

Income from continuing operations
$
498

 
$
460

Net income attributable to the Company
$
482

 
$
445

Basic net income per share:
 
 
 
– Continuing operations
$
0.90

 
$
0.81

– Net income attributable to the Company
$
0.89

 
$
0.81

Diluted net income per share:
 
 
 
– Continuing operations
$
0.89

 
$
0.80

– Net income attributable to the Company
$
0.88

 
$
0.80


15


The consolidated statements of income include the results of operations of acquired companies since their respective acquisition dates. The consolidated statement of income for the three-months ended March 31, 2015 includes approximately $3 million of revenue and $0 million of operating income related to acquisitions made in 2015.
8.     Dispositions
Summarized Statements of Income data for discontinued operations is as follows:
 
 
Three Months Ended
March 31,
(In millions of dollars, except per share figures)
2015

 
2014

Disposals of discontinued operations
$
(5
)
 
$
—

Income tax (credit) expense
(2
)
 
1

Disposals of discontinued operations, net of tax
(3
)
 
(1
)
Discontinued operations, net of tax
$
(3
)
 
$
(1
)
Discontinued operations, net of tax per share
 
 
 
– Basic
$
(0.01
)
 
$
—

– Diluted
$
(0.01
)
 
$
—

9.    Goodwill and Other Intangibles
The Company is required to assess goodwill and any indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate impairment may have occurred. The Company performs the annual impairment test for each of its reporting units during the third quarter of each year. In accordance with applicable accounting guidance, the Company assesses qualitative factors to determine whether it is necessary to perform the two-step goodwill impairment test. The Company considers numerous factors, which include that the fair value of each reporting unit exceeds its fair value by a substantial margin in its most recent estimate of reporting unit fair values, whether significant acquisitions or dispositions occurred which might alter the fair value of its reporting units, macroeconomic conditions and their potential impact on reporting unit fair values, actual performance compared with budget and prior projections used in its estimation of reporting unit fair values, industry and market conditions, and the year-over-year change in the Company’s share price. The Company completed its qualitative assessment in the third quarter of 2014 and concluded that a two-step goodwill impairment test was not required in 2014, that goodwill was not impaired.
Other intangible assets that are not deemed to have an indefinite life are amortized over their estimated lives and reviewed for impairment upon the occurrence of certain triggering events in accordance with applicable accounting literature.
Changes in the carrying amount of goodwill are as follows:
March 31,
 
 
 
(In millions of dollars)
2015

 
2014

Balance as of January 1, as reported
$
7,241

 
$
6,893

Goodwill acquired
12

 
267

Other adjustments(a)
(93
)
 
(1
)
Balance at March 31,
$
7,160

 
$
7,159

(a) 
Primarily reflects the impact of foreign exchange in each period.
Goodwill allocable to the Company’s reportable segments at March 31, 2015 is as follows: Risk & Insurance Services, $5 billion and Consulting, $2.2 billion.

16


Amortized intangible assets consist of the cost of client lists, client relationships and trade names acquired. The gross cost and accumulated amortization are as follows:
  
March 31, 2015
 
December 31, 2014
(In millions of dollars)
Gross
Cost

 
Accumulated
Amortization

 
Net
Carrying
Amount

 
Gross
Cost

 
Accumulated
Amortization

 
Net
Carrying
Amount

Amortized intangibles
$
1,163

 
$
491

 
$
672

 
$
1,177

 
$
485

 
$
692

Aggregate amortization expense for the three months ended March 31, 2015 and 2014 was $24 million and $22 million, respectively. The estimated future aggregate amortization expense is as follows:
For the Years Ending December 31,
 
(In millions of dollars)
Estimated Expense

2015 (excludes amortization through March 31, 2015)
$
66

2016
77

2017
74

2018
72

2019
73

Subsequent years
310

 
$
672

10.     Fair Value Measurements
Fair Value Hierarchy
The Company has categorized its assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy as defined by the Financial Accounting Standards Board ("FASB"). The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). In some cases, the inputs used to measure fair value might fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy, for disclosure purposes, is determined based on the lowest level input that is significant to the fair value measurement. Assets and liabilities recorded in the consolidated balance sheets at fair value are categorized based on the inputs in the valuation techniques as follows:
Level 1.
Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market (examples include active exchange-traded equity securities and money market mutual funds).
Assets and liabilities utilizing Level 1 inputs include exchange-traded equity securities and mutual funds.
Level 2.
Assets and liabilities whose values are based on the following:
a)
Quoted prices for similar assets or liabilities in active markets;
b)
Quoted prices for identical or similar assets or liabilities in non-active markets (examples include corporate and municipal bonds, which trade infrequently);
c)
Pricing models whose inputs are observable for substantially the full term of the asset or liability (examples include most over-the-counter derivatives, including interest rate and currency swaps); and
d)
Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full asset or liability (for example, certain mortgage loans).
Assets and liabilities utilizing Level 2 inputs include corporate and municipal bonds, senior notes and interest rate swaps.

17


Level 3.
Assets and liabilities whose values are based on prices, or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability (examples include private equity investments, certain commercial mortgage whole loans, and long-dated or complex derivatives including certain foreign exchange options and long-dated options on gas and power).
Liabilities utilizing Level 3 inputs include liabilities for contingent purchase consideration.
Valuation Techniques
Equity Securities and Mutual Funds – Level 1
Investments for which market quotations are readily available are valued at the sale price on their principal exchange, or official closing bid price for certain markets.
Contingent Consideration Liability – Level 3
Purchase consideration for some acquisitions made by the Company includes contingent consideration arrangements. Contingent consideration arrangements are primarily based on meeting EBITDA and revenue targets over periods from two to four years. The fair value of contingent consideration is estimated as the present value of future cash flows resulting from the projected revenue and earnings of the acquired entities.
The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2015 and December 31, 2014.
 
Identical Assets
(Level 1)
 
Observable Inputs
(Level 2)
 
Unobservable
Inputs
(Level 3)
 
Total
(In millions of dollars)
03/31/15

 
12/31/14

 
03/31/15

 
12/31/14

 
03/31/15

 
12/31/14

 
03/31/15

 
12/31/14

Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial instruments owned:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mutual funds(a)
$
140

 
$
150

 
$
—

 
$
—

 
$
—

 
$
—

 
$
140

 
$
150

Money market funds(b)
36

 
107

 
—

 
—

 
—

 
—

 
36

 
107

Total assets measured at fair value
$
176

 
$
257

 
$
—

 
$
—

 
$
—

 
$
—

 
$
176

 
$
257

Fiduciary Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
$
95

 
$
57

 
$
—

 
$
—

 
$
—

 
$
—

 
$
95

 
$
57

Total fiduciary assets measured
at fair value
$
95

 
$
57

 
$
—

 
$
—

 
$
—

 
$
—

 
$
95

 
$
57

Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contingent purchase
consideration liability(c)
$
—

 
$
—

 
$
—

 
$
—

 
$
206

 
$
207

 
$
206

 
$
207

Total liabilities measured at fair value
$
—

 
$
—

 
$
—

 
$
—

 
$
206

 
$
207

 
$
206

 
$
207

(a) 
Included in other assets in the consolidated balance sheets.
(b) 
Included in cash and cash equivalents in the consolidated balance sheets.
(c) 
Included in accounts payable and accrued liabilities and other liabilities in the consolidated balance sheets.
During the three-month period ended March 31, 2015, there were no assets or liabilities that were transferred between any of the levels.
The table below sets forth a summary of the changes in fair value of the Company’s Level 3 liabilities as of March 31, 2015 and 2014 that represent contingent consideration related to acquisitions: 
(In millions of dollars)
2015

 
2014

 
Balance at January 1,
$
207

 
$
104

 
Additions
8

 
55

 
Payments
(19
)
 
(30
)
 
Revaluation Impact
10

 
4

 
Balance at March 31,
$
206

 
$
133

 

18


The fair value of the contingent liability is based on projections of revenue and earnings for the acquired entities that are reassessed on a quarterly basis. As set forth in the table above, based on the Company's ongoing assessment of the fair value of contingent consideration, the Company recorded a net increase in the estimated fair value of such liabilities for prior-period acquisitions of $10 million in the three-month period ended March 31, 2015. A 5% increase in the above mentioned projections would increase the liability by approximately $21 million. A 5% decrease in the above mentioned projections would decrease the liability by approximately $24 million.
Fair Value of Long-Term Investments
The Company holds investments in certain private companies, public companies and certain private equity investments that are accounted for using the equity method of accounting. The carrying value of these investments amounted to $399 million at March 31, 2015 and $388 million at December 31, 2014. The Company's investments in private equity funds were $74 million and $61 million at March 31, 2015 and December 31, 2014, respectively. The carrying values of these private equity investments approximates fair value. The underlying private equity funds follow investment company accounting, where investments within the fund are carried at fair value. The Company records in earnings, investment gains/losses for its proportionate share of the change in fair value of the funds. These investments would be classified as Level 3 in the fair value hierarchy and are included in other assets in the consolidated balance sheets.
During 2014, the Company purchased 34% of the common stock of Alexander Forbes. As of March 31, 2015, the carrying value of the Company’s investment in Alexander Forbes was approximately $278 million. As of March 31, 2015, the market value of the approximately 443 million shares of Alexander Forbes owned by the Company, based on the March 31, 2015 closing share price of 10.54 South African Rand per share, was approximately $386 million. The Company’s investment in Alexander Forbes and its other equity investments in private companies are accounted for using the equity method of accounting and included in revenue in the consolidated income statements and in other assets in the consolidated balance sheets. The Company records its share of income or loss on its equity method investments on a one quarter lag basis.
On February 24, 2015, Mercer purchased shares of common stock of Benefitfocus (NASDAQ:BNFT) constituting approximately 9.9% of BNFT's outstanding capital stock as of the acquisition date. The purchase price for the BNFT shares and certain other rights and other consideration was approximately $75 million. The Company has elected to account for this investment under the cost method of accounting as the shares purchased are categorized as restricted and cannot be sold for more than one year. When the restrictions on sale are less than one year in duration (January 1, 2017), the shares are expected to be classified as available for sale. This investment would then be classified as Level 2 in the fair value hierarchy and included in other assets in the consolidated balance sheets. The value of the BNFT shares based on the closing price on the NASDAQ at March 31, 2015 and without regard to the restrictions on sale was approximately $104 million.

19


11.    Retirement Benefits
The Company maintains qualified and non-qualified defined benefit pension plans for its U.S. and non-U.S. eligible employees. The Company’s policy for funding its tax-qualified defined benefit retirement plans is to contribute amounts at least sufficient to meet the funding requirements set forth by U.S. law and the laws of the non-U.S. jurisdictions in which the Company offers defined benefit plans.
The target asset allocation for the Company's U.S. Plan was 62% equities and equity alternatives and 38% fixed income and at March 31, 2015, the actual allocation for the Company's U.S. Plan was 61% equities and equity alternatives and 39% fixed income. The target asset allocation for the Company's U.K. Plans, which comprises approximately 83% of non-U.S. Plan assets, is 48% equities and equity alternatives and 52% fixed income. At March 31, 2015, the actual allocation for the U.K. Plans was 47% equities and equity alternatives and 53% fixed income. The assets of the Company's defined benefit plans are diversified and are managed in accordance with applicable laws and with the goal of maximizing the plans' real return within acceptable risk parameters. The Company generally uses threshold-based portfolio re-balancing to ensure the actual portfolio remains consistent with target asset allocation ranges.
The components of the net periodic benefit cost for defined benefit and other post-retirement plans are as follows:
Combined U.S. and significant non-U.S. Plans
Pension
 
Post-retirement
For the Three Months Ended March 31,
Benefits
 
Benefits
(In millions of dollars)
2015

 
2014

 
2015

 
2014

Service cost
$
52

 
$
61

 
$
1

 
$
1

Interest cost
146

 
161

 
2

 
3

Expected return on plan assets
(243
)
 
(248
)
 
—

 
—

Amortization of prior service credit
—

 
(3
)
 
—

 
—

Recognized actuarial loss
76

 
51

 
—

 
—

Net periodic benefit cost
$
31

 
$
22

 
$
3

 
$
4

Curtailment (credit)
—

 
(65
)
 
—

 
—

Plan termination
—

 
—

 
(128
)
 
—

Total cost (credit)
$
31

 
$
(43
)
 
$
(125
)
 
$
4

 
 
 
 
 
 
 
 
U.S. Plans only
Pension
 
Post-retirement
For the Three Months Ended March 31,
Benefits
 
Benefits
(In millions of dollars)
2015

 
2014

 
2015

 
2014

Service cost
$
30

 
$
22

 
$
1

 
$
—

Interest cost
62

 
63

 
1

 
2

Expected return on plan assets
(92
)
 
(86
)
 
—

 
—

Amortization of prior service credit
—

 
(2
)
 
—

 
—

Recognized actuarial loss
45

 
26

 
—

 
—

Net periodic benefit cost
$
45

 
$
23

 
$
2

 
$
2

Plan termination
—

 
—

 
(128
)
 
—

Total cost (credit)
$
45

 
$
23

 
$
(126
)
 
$
2

In March 2015, the Company amended its U.S. Post-65 retiree medical reimbursement plan (the "RRA plan"), resulting in its termination, with benefits to certain participants paid through December 31, 2016. As a result of the termination of the RRA plan, the Company recognized a net credit of approximately $125 million in the first quarter of 2015.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

20


Significant non-U.S. Plans only
Pension
 
Post-retirement
For the Three Months Ended March 31,
Benefits
 
Benefits
(In millions of dollars)
2015

 
2014

 
2015

 
2014

Service cost
$
22

 
$
39

 
$
—

 
$
1

Interest cost
84

 
98

 
1

 
1

Expected return on plan assets
(151
)
 
(162
)
 
—

 
—

Amortization of prior service cost
—

 
(1
)
 
—

 
—

Recognized actuarial loss
31

 
25

 
—

 
—

Net periodic benefit cost
$
(14
)
 
$
(1
)
 
$
1

 
$
2

Curtailment (credit)
—

 
(65
)
 
—

 
—

Total (credit) cost
$
(14
)
 
$
(66
)
 
$
1

 
$
2

 
 
 
 
 
 
 
 
After completion of a consultation period with affected colleagues, in January 2014, the Company amended its U.K. defined benefit pension plans to close those plans to future benefit accruals effective August 1, 2014 and replaced those plans, along with its existing U.K. defined contribution plans, with a new, comprehensive defined contribution arrangement. This change resulted in a curtailment of the U.K. defined benefit plans, and as required under GAAP, the Company re-measured the defined benefit plans’ assets and liabilities at the amendment date, based on assumptions and market conditions at that date. As a result of the re-measurement, the projected benefit obligation ("PBO") increased by approximately $147 million and the funded status decreased by approximately $137 million. The change in the PBO and in the funded status relates primarily to a decrease in the discount rate at the re-measurement date. The net periodic benefit costs recognized in 2014 were the weighted average resulting from the December 31, 2013 measurement and the January 2014 re-measurement. The Company recognized a curtailment gain of $65 million in the first quarter of 2014, primarily resulting from the recognition of the remaining unamortized prior service credit related to a plan amendment made in December 2012. This gain was mostly offset by the cost of a transition benefit for certain employees most impacted by the amendment, which is not part of net periodic pension cost.
The weighted average actuarial assumptions utilized to calculate the net periodic benefit costs for the U.S. and significant non-U.S. defined benefit plans are as follows:
Combined U.S. and significant non-U.S. Plans
Pension
Benefits
 
Post-retirement
Benefits
March 31,
2015

 
2014

 
2015

 
2014

Weighted average assumptions:
 
 
 
 
 
 
 
Expected return on plan assets
7.25
%
 
7.53
%
 
—
%
 
—
%
Discount rate
3.79
%
 
4.74
%
 
4.08
%
 
5.03
%
Rate of compensation increase
2.42
%
 
2.64
%
 
—
%
 
—
%
The Company made approximately $42 million of contributions to its U.S. and non-U.S. defined benefit plans in the first three months of 2015. The Company expects to contribute approximately $152 million to its non-qualified U.S. pension and non-U.S. pension plans during the remainder of 2015.

21


12.    Debt
The Company’s outstanding debt is as follows:
 
(In millions of dollars)
March 31,
2015

 
December 31,
2014

Short-term:
 
 
 
Current portion of long-term debt
$
61

 
$
11

 


 


Long-term:
 
 
 
Senior notes – 2.30% due 2017
249

 
249

Senior notes – 2.55% due 2018
249

 
249

Senior notes – 2.35% due 2019
300

 
300

Senior notes – 2.35% due 2020
500

 
—

Senior notes – 4.80% due 2021
497

 
497

Senior notes – 4.05% due 2023
248

 
248

Senior notes – 3.50% due 2024
599

 
595

Senior notes – 3.50% due 2025
498

 
498

Senior notes – 5.875% due 2033
297

 
297

Mortgage – 5.70% due 2035
400

 
403

Term Loan Facility – due 2016
50

 
50

Other
2

 
1

 
3,889

 
3,387

Less current portion
61

 
11

 
$
3,828

 
$
3,376

The senior notes in the table above are publicly registered by the Company with no guarantees attached.
In March 2015, the Company issued $500 million of 2.35% five-year senior notes. The Company intends to use the net proceeds for general corporate purposes.
In September 2014, the Company issued $300 million of 2.35% five-year senior notes and $500 million of 3.50% 10.5 year senior notes. In October 2014, a significant portion of the net proceeds of this offering were used to redeem $630 million of debt, including $230 million of 5.75% senior notes due in September 2015 and $400 million of 9.25% senior notes due in 2019. Total cash outflow related to this transaction was approximately $765 million, including a $137 million cost for early redemption, which was reflected as a charge in the consolidated statements of income in the fourth quarter of 2014.
In May 2014, the Company issued $600 million of 3.50% ten-year senior notes. The net proceeds of this offering were used for general corporate purposes, which included the repayment of $320 million of the existing 5.375% senior notes, which matured on July 15, 2014.
On March 27, 2014, the Company and certain of its foreign subsidiaries amended and restated its $1.0 billion facility into a $1.2 billion multi-currency five-year unsecured revolving credit facility. The interest rate on this facility is based on LIBOR plus a fixed margin which varies with the Company's credit ratings. This facility expires in March 2019 and requires the Company to maintain certain coverage and leverage ratios which are tested quarterly. There were no borrowings outstanding under this facility at March 31, 2015.
In December 2012, the Company closed on a $50 million, three-year term loan facility. The interest rate on this facility at March 31, 2015 was 1.17%, which is based on LIBOR plus a fixed margin which varies with the Company's credit ratings. The facility requires the Company to maintain coverage ratios and leverage ratios consistent with the revolving credit facility discussed above. The Company had $50 million of borrowings outstanding under this facility at March 31, 2015.

22


Fair Value of Short-term and Long-term Debt
The estimated fair value of the Company’s short-term and long-term debt is provided below. Certain estimates and judgments were required to develop the fair value amounts. The fair value amounts shown below are not necessarily indicative of the amounts that the Company would realize upon disposition, nor do they indicate the Company’s intent or need to dispose of the financial instrument.
  
March 31, 2015
 
December 31, 2014
(In millions of dollars)
Carrying
Amount

 
Fair
Value

 
Carrying
Amount

 
Fair
Value

Short-term debt
$
61

 
$
61

 
$
11

 
$
11

Long-term debt
$
3,828

 
$
4,009

 
$
3,376

 
$
3,493

The fair value of the Company’s short-term debt, which consists primarily of term debt maturing in the next year, approximates its carrying value. The estimated fair value of a primary portion of the Company's long-term debt is based on discounted future cash flows using current interest rates available for debt with similar terms and remaining maturities. Short- and long-term debt would be classified as Level 2 in the fair value hierarchy.
13.    Restructuring Costs
The Company recorded total restructuring costs of $2 million in the first three months of 2015 primarily for future rent under non-cancelable leases. These costs were incurred in Corporate.
Details of the restructuring activity from January 1, 2014 through March 31, 2015, which includes liabilities from actions prior to 2015, are as follows:
 
(In millions of dollars)
Liability at 1/1/14
 
Amounts
Accrued

 
Cash
Paid

 
Other 

 
Liability at 12/31/14
 
Amounts
Accrued

 
Cash
Paid

 
Other 

 
Liability at 3/31/15
Severance
$
11

 
$
4

 
$
(8
)
 
$
—

 
$
7

 
$
—

 
$
(2
)
 
$
—

 
$
5

Future rent under non-cancelable leases and other costs
113

 
8

 
(35
)
 
(1
)
 
85

 
2

 
(5
)
 
(1
)
 
81

Total
$
124

 
$
12

 
$
(43
)
 
$
(1
)
 
$
92

 
$
2

 
$
(7
)
 
$
(1
)
 
$
86

The expenses associated with the above initiatives are included in compensation and benefits and other operating expenses in the consolidated statements of income. The liabilities associated with these initiatives are classified on the consolidated balance sheets as accounts payable, other liabilities, or accrued compensation, depending on the nature of the items.
14.    Common Stock
During the first three months of 2015, the Company repurchased approximately 5.3 million shares of its common stock for consideration of $300 million. In May 2014, the Board of Directors of the Company authorized share repurchases of up to $2 billion of the Company's common stock. At March 31, 2015, the Company remains authorized to purchase additional shares of its common stock up to a value of approximately $1 billion. There is no time limit on the authorization. During the first three months of 2014, the Company repurchased 2 million shares of its common stock for consideration of $100 million.
15.    Claims, Lawsuits and Other Contingencies
Litigation Matters
The Company and its subsidiaries are subject to a significant number of claims, lawsuits and proceedings in the ordinary course of business. Such claims and lawsuits consist principally of alleged errors and omissions in connection with the performance of professional services, including the placement of insurance, the provision of actuarial services for corporate and public sector clients, the provision of investment advice and investment management services to pension plans, the provision of advice relating to pension buy-out transactions and the

23


provision of consulting services relating to the drafting and interpretation of trust deeds and other documentation governing pension plans. These claims may seek damages, including punitive and treble damages, in amounts that could, if awarded, be significant. In establishing liabilities for errors and omissions claims in accordance with FASB ASC Subtopic No. 450-20 (Contingencies-Loss Contingencies), the Company uses case level reviews by inside and outside counsel, an internal actuarial analysis and other analysis to estimate potential losses. A liability is established when a loss is both probable and reasonably estimable. The liability is reviewed quarterly and adjusted as developments warrant. In many cases, the Company has not recorded a liability, other than for legal fees to defend the claim, because we are unable, at the present time, to make a determination that a loss is both probable and reasonably estimable.
To the extent that expected losses exceed our deductible in any policy year, the Company also records an asset for the amount that we expect to recover under any available third-party insurance programs. The Company has varying levels of third-party insurance coverage, with policy limits and coverage terms varying significantly by policy year.
Governmental Inquiries and Enforcement Matters
Our activities are regulated under the laws of the United States and its various states, the European Union and its member states, and the other jurisdictions in which the Company operates. In the ordinary course of business, the Company is also subject to subpoenas, investigations, lawsuits and other regulatory actions undertaken by governmental authorities.
Other Contingencies-Guarantees
In connection with its acquisition of U.K.-based Sedgwick Group in 1998, the Company acquired several insurance underwriting businesses that were already in run-off, including River Thames Insurance Company Limited (“River Thames”), which the Company sold in 2001. Sedgwick guaranteed payment of claims on certain policies underwritten through the Institute of London Underwriters (the “ILU”) by River Thames. The policies covered by this guarantee are reinsured up to £40 million by a related party of River Thames. Payment of claims under the reinsurance agreement is collateralized by segregated assets held in a trust. As of March 31, 2015, the reinsurance coverage exceeded the best estimate of the projected liability of the policies covered by the guarantee. To the extent River Thames or the reinsurer is unable to meet its obligations under those policies, a claimant may seek to recover from us under the guarantee.
From 1980 to 1983, the Company owned indirectly the English & American Insurance Company (“E&A”), which was a member of the ILU. The ILU required the Company to guarantee a portion of E&A's obligations. After E&A became insolvent in 1993, the ILU agreed to discharge the guarantee in exchange for the Company's agreement to post an evergreen letter of credit that is available to pay claims by policyholders on certain E&A policies issued through the ILU and incepting between July 3, 1980 and October 6, 1983. Certain claims have been paid under the letter of credit and we anticipate that additional claimants may seek to recover against the letter of credit.
Kroll-related Matters
Under the terms of a stock purchase agreement with Altegrity, Inc. (“Altegrity”) related to Altegrity's purchase of Kroll from the Company in August 2010, a copy of which is attached as an exhibit to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2010, the Company agreed to provide a limited indemnity to Altegrity with respect to certain Kroll-related litigation and regulatory matters.
* * * *
The pending proceedings and other matters described in this Note 15 on Claims, Lawsuits and Other Contingencies may expose the Company or its subsidiaries to liability for significant monetary damages and other forms of relief. Where a loss is both probable and reasonably estimable, the Company establishes liabilities in accordance with FASB ASC Subtopic No. 450-20 (Contingencies - Loss Contingencies). Except as described above, the Company is not able at this time to provide a reasonable estimate of the range of possible loss attributable to these matters or the impact they may have on the Company's consolidated results of operations, financial position or cash flows. This is primarily because these matters are still developing and involve complex issues subject to inherent uncertainty. Adverse determinations in one or more of these matters could have a material impact on the Company's consolidated results of operations, financial condition or cash flows in a future period.
 

24


16.    Segment Information
The Company is organized based on the types of services provided. Under this organizational structure, the Company’s business segments are:
▪
Risk and Insurance Services, comprising insurance services (Marsh) and reinsurance services (Guy Carpenter); and
▪
Consulting, comprising Mercer and Oliver Wyman Group
The accounting policies of the segments are the same as those used for the consolidated financial statements described in Note 1 to the Company’s 2014 Form 10-K. Segment performance is evaluated based on segment operating income, which includes directly related expenses, and charges or credits related to integration and restructuring but not the Company’s corporate-level expenses. Revenues are attributed to geographic areas on the basis of where the services are performed.
Selected information about the Company’s operating segments for the three-month periods ended March 31, 2015 and 2014 are as follows:
 
 
Three Months Ended
March 31,
 
(In millions of dollars)
Revenue
 
Operating
Income
(Loss)
 
2015–
 
 
 
 
Risk and Insurance Services
$
1,803

(a) 
$
533

 
Consulting
1,421

(b) 
248

 
Total Operating Segments
3,224

  
781

 
Corporate / Eliminations
(9
)
 
(46
)
 
Total Consolidated
$
3,215

  
$
735

 
2014–
 
 
 
 
Risk and Insurance Services
$
1,839

(a) 
$
493

 
Consulting
1,432

(b) 
225

 
Total Operating Segments
3,271

  
718

 
Corporate / Eliminations
(7
)
 
(45
)
 
Total Consolidated
$
3,264

  
$
673

 
(a) 
Includes inter-segment revenue of $1 million and $0 million in 2015 and 2014, respectively, interest income on fiduciary funds of $5 million and $6 million in 2015 and 2014, respectively, and equity method income of $2 million and $0 million in 2015 and 2014, respectively.
(b) 
Includes inter-segment revenue of $8 million and $7 million in 2015 and 2014, respectively, interest income on fiduciary funds of $1 million in both 2015 and 2014, and equity method income of $3 million in 2015 and $0 million in 2014.
Details of operating segment revenue for the three-month periods ended March 31, 2015 and 2014 are as follows:
 
Three Months Ended
March 31,
 
(In millions of dollars)
2015

 
2014

 
Risk and Insurance Services
 
 
 
 
Marsh
$
1,434

 
$
1,457

 
Guy Carpenter
369

 
382

 
Total Risk and Insurance Services
1,803

 
1,839

 
Consulting
 
 
 
 
Mercer
1,037

 
1,061

 
Oliver Wyman Group
384

 
371

 
Total Consulting
1,421

 
1,432

 
Total Operating Segments
3,224

 
3,271

 
Corporate / Eliminations
(9
)
 
(7
)
 
Total
$
3,215

 
$
3,264

 

25


17.    New Accounting Guidance
In February 2015, the FASB issued new accounting guidance intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships, limited liability corporations and securitization structures. The guidance focuses on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. The guidance is effective for periods beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of the adoption of the guidance on its financial condition and results of operations.
In January 2015, the FASB issued new accounting guidance that eliminated the concept of extraordinary items. The guidance is effective for annual periods beginning after December 15, 2015. The guidance may be adopted prospectively, or retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided the guidance is applied from the beginning of the fiscal year of adoption. Adoption of the guidance is not expected to materially affect the Company's financial condition, results of operations or cash flows.
In June 2014, the FASB issued new accounting guidance to clarify the treatment of share-based payment awards that require a specific performance target to be achieved in order for employees to be eligible to vest in the awards which include terms that may provide that the performance conditions could be achieved after an employee completes the requisite service period. The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, a reporting entity should apply the existing guidance as it relates to awards with performance conditions that affect vesting. The guidance is effective for annual periods beginning after December 15, 2015. Early adoption is permitted. Adoption of the guidance is not expected to materially affect the Company's financial condition, results of operations or cash flows.
In May 2014, the FASB issued new accounting guidance to clarify the principles for revenue recognition. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that principle, the entity should apply the following steps: identify the contract(s) with the customer, identify the performance obligations in the contract(s), determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the entity satisfies a performance obligation. The guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. Entities are permitted to adopt the guidance under one of the following methods: retrospectively to each prior reporting period presented (with certain practical expedients allowed) or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application. If an entity elects this transition method, it must provide disclosures in reporting periods that include the date of initial application of the amount by which each financial statement line item is affected in the current reporting period by application of the guidance as compared to guidance that was in effect before the change, and an explanation for the reasons for significant changes. The Company is currently evaluating the impact of the adoption of the guidance on its financial condition and results of operations.
In April 2014, the FASB issued new accounting guidance which changes the criteria for reporting discontinued operations and enhances disclosures in this area. Under the new guidance, only disposals representing a strategic shift in operations, such as disposal of a major geographic area or a major line of business, should be presented as discontinued operations. Those strategic shifts should have a major impact on the organization's operations and financial results. In addition, the new guidance requires expanded disclosures about discontinued operations. The guidance is effective for fiscal years beginning on or after December 15, 2014. Adoption of the guidance did not affect the Company's financial condition, results of operations or cash flows.






26


Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations.
General
Marsh & McLennan Companies, Inc. (the "Company") is a global professional services firm offering clients advice and solutions in risk, strategy, and people. It is the parent company of a number of leading risk experts and specialty consultants, including: Marsh, the insurance broker, intermediary and risk advisor; Guy Carpenter, the risk and reinsurance specialist; Mercer, the provider of HR and related financial advice and services; and Oliver Wyman Group, the management, economic and brand consultancy. With approximately 57,000 employees worldwide and annual revenue of more than $13 billion, the Company provides analysis, advice and transactional capabilities to clients in more than 130 countries.
The Company conducts business through two segments:
•
Risk and Insurance Services includes risk management activities (risk advice, risk transfer and risk control and mitigation solutions) as well as insurance and reinsurance broking and services. We conduct business in this segment through Marsh and Guy Carpenter.
•
Consulting includes Health, Retirement, Talent and Investments consulting services and products, and specialized management, economic and brand consulting services. We conduct business in this segment through Mercer and Oliver Wyman Group.
A reconciliation of segment operating income to total operating income is included in Note 16 to the consolidated financial statements included in Part I Item 1 in this report. The accounting policies used for each segment are the same as those used for the consolidated financial statements.
This Management's Discussion & Analysis ("MD&A") contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. See “Information Concerning Forward-Looking Statements” at the outset of this report.


27


Consolidated Results of Operations
 
 
Three Months Ended
March 31,
(In millions, except per share figures)
2015

 
2014

Revenue
$
3,215

 
$
3,264

Expense:
 
 
 
Compensation and Benefits
1,730

 
1,839

Other Operating Expenses
750

 
752

Operating Expenses
2,480

 
2,591

Operating Income
735

 
673

Income from Continuing Operations
498

 
457

Discontinued Operations, net of tax
(3
)
 
(1
)
Net Income Before Non-Controlling Interests
495

 
456

Net Income Attributable to the Company
$
482

 
$
443

Income From Continuing Operations Per Share:
 
 
 
Basic
$
0.90

 
$
0.81

Diluted
$
0.89

 
$
0.80

Net Income Per Share Attributable to the Company:
 
 
 
Basic
$
0.89

 
$
0.81

Diluted
$
0.88

 
$
0.80

Average Number of Shares Outstanding:
 
 
 
Basic
539

 
548

Diluted
545

 
556

Shares Outstanding at March 31
538

 
549

The Company's consolidated operating income increased 9% to $735 million in the first quarter of 2015 compared with $673 million in the prior year. This reflects the combined impact of a 1% decrease in revenue and a 4% decrease in expense. In the first quarter of 2015, the Company was adversely impacted by the strengthening of the U.S. dollar, which had the effect of reducing the translated value of the Company’s foreign earnings while pension expense worldwide increased due to lower interest rates. The impact of these headwinds was more than offset in the quarter by the impact of a net credit from the termination of the Company's post-65 retiree medical reimbursement plan in the U.S. (the "RRA plan") of approximately $125 million. Risk and Insurance Services operating income increased $40 million or 8% while Consulting operating income increased $23 million or 10% compared with the same period last year.
Income from continuing operations increased $41 million, or 9%, primarily reflecting the increase in operating income discussed above and a decrease in interest expense, partly offset by a decrease in investment income. Diluted net income per share from continuing operations increased 11% to $0.89, reflecting the increase in income from continuing operations and a 2% decrease in the average number of diluted shares outstanding as compared to the same period last year. Shares issued related to the vesting of share awards and exercise of employee stock options were more than offset by share repurchases over the past four quarters.


28


Consolidated Revenue and Expense
The Company conducts business in many countries, as a result of which the impact of foreign exchange rate movements may impact period-to-period comparisons of revenue. Similarly, certain items that affect comparability, such as the revenue impact of acquisitions and dispositions, including transfers among businesses, may impact period-to-period comparisons of revenue. Underlying revenue measures the change in revenue from one period to another by isolating these impacts. The impact of foreign currency exchange fluctuations, acquisitions and dispositions, including transfers among businesses, on the Company’s operating revenues by segment was as follows:
 
Three Months Ended
March 31,
 
%
Change
GAAP
Revenue
 
Components of Revenue Change*
Currency
Impact
 
Acquisitions/
Dispositions
Impact
 
Underlying
Revenue
(In millions of dollars)
2015

 
2014

 
Risk and Insurance Services
 
 
 
 
 
 
 
 
 
 
 
Marsh
$
1,430

 
$
1,452

 
(2
)%
 
(7
)%
 
3
 %
 
3
%
Guy Carpenter
368

 
381

 
(4
)%
 
(4
)%
 
(2
)%
 
2
%
Subtotal
1,798

 
1,833

 
(2
)%
 
(6
)%
 
2
 %
 
3
%
Fiduciary Interest Income
5

 
6

 
 
 
 
 
 
 
 
Total Risk and Insurance Services
1,803

 
1,839

 
(2
)%
 
(6
)%
 
2
 %
 
3
%
Consulting
 
 
 
 
 
 
 
 
 
 
 
Mercer
1,037

 
1,061

 
(2
)%
 
(6
)%
 
—

 
4
%
Oliver Wyman Group
384

 
371

 
4
 %
 
(6
)%
 
2
 %
 
8
%
Total Consulting
1,421

 
1,432

 
(1
)%
 
(6
)%
 
1
 %
 
5
%
Corporate/Eliminations
(9
)
 
(7
)
 
 
 
 
 
 
 
 
Total Revenue
$
3,215

 
$
3,264

 
(1
)%
 
(6
)%
 
1
 %
 
4
%
 
Three Months Ended
March 31,
 
%
Change
GAAP
Revenue
 
Components of Revenue Change*
Currency
Impact
 
Acquisitions/
Dispositions
Impact
 
Underlying
Revenue
(In millions of dollars)
2015

 
2014

 
Marsh:
 
 
 
 
 
 
 
 
 
 
 
EMEA
$
563

 
$
617

 
(9
)%
 
(12
)%
 
1
%
 
2
%
Asia Pacific
148

 
151

 
(2
)%
 
(7
)%
 
—

 
5
%
Latin America
81

 
84

 
(3
)%
 
(13
)%
 
4
%
 
6
%
Total International
792

 
852

 
(7
)%
 
(11
)%
 
1
%
 
3
%
U.S. / Canada
638

 
600

 
6
 %
 
(1
)%
 
5
%
 
3
%
Total Marsh
$
1,430

 
$
1,452

 
(2
)%
 
(7
)%
 
3
%
 
3
%
Mercer:
 
 
 
 
 
 
 
 
 
 
 
Health
$
384

 
$
388

 
(1
)%
 
(4
)%
 
—

 
3
%
Retirement
331

 
357

 
(7
)%
 
(7
)%
 
—

 
—

Investments
205

 
199

 
3
 %
 
(10
)%
 
1
%
 
13
%
Talent
117

 
117

 
—

 
(6
)%
 
3
%
 
4
%
Total Mercer
$
1,037

 
$
1,061

 
(2
)%
 
(6
)%
 
—

 
4
%
Underlying revenue measures the change in revenue using consistent currency exchange rates, excluding the impact of certain items that affect comparability such as: acquisitions, dispositions and transfers among businesses.
*
Components of revenue change may not add due to rounding.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

29


 
 
Revenue
Consolidated revenue for the first quarter of 2015 was $3.2 billion, a decrease of 1% on a reported basis, reflecting a 4% increase on an underlying basis and a 1% increase from the impact of acquisitions, which were more than offset by a decrease of 6% from the impact of foreign currency translation.
Revenue in the Risk and Insurance Services segment for the first quarter of 2015 was $1.8 billion, a decrease of 2% from the same period last year. Revenue increased 3% on an underlying basis and 2% from the impact of acquisitions, offset by a 6% decrease from the impact of foreign currency translation. Consulting revenue of $1.4 billion in the first quarter of 2015 decreased 1% from the same period in 2014. Revenue increased 5% on an underlying basis as compared to the same period last year, offset by the impact of foreign currency translation.
Operating Expense
Consolidated operating expense in the first quarter decreased 4% compared to the same period last year and was flat on an underlying basis. First quarter results reflect a net benefit from actions relating to the RRA plan that more than offset higher expenses related to pension plans.
Risk and Insurance Services
The results of operations for the Risk and Insurance Services segment are presented below:
 
For the Three Months Ended March 31,
 
(In millions of dollars)
2015

2014

Revenue
$
1,803

$
1,839

Compensation and Benefits
862

941

Other Expenses
408

405

Expense
1,270

1,346

Operating Income
$
533

$
493

Operating Income Margin
29.6
%
26.8
%
Revenue
Revenue in the Risk and Insurance Services segment in the first quarter of 2015 was $1.8 billion, a decrease of 2% as compared to the same period last year, reflecting the impact of a 6% decrease from foreign currency translation, partly offset by a 3% increase in underlying revenue and a 2% increase from acquisitions.
In Marsh, revenue in the first quarter of 2015 was $1.4 billion, a decrease of 2% compared with the same quarter of the prior year, reflecting a 7% decrease from foreign currency translation, partly offset by a 3% increase in acquisitions and an increase of 3% on an underlying basis. The increase in underlying revenue was driven primarily by new business. The international division grew 3% on an underlying basis, with growth of 2% in EMEA, 5% in Asia Pacific and 6% in Latin America. Underlying revenue increased 3% in U.S./Canada. Guy Carpenter's first quarter revenue decreased 4% compared to the same period in the prior year, reflecting a 4% decrease from the impact of foreign exchange translation. Underlying revenue increased 2% as compared to the same period last year due to growth in Global Specialties, primarily Marine and Lloyd's Property. International operations showed strong results and expansion in U.S. Treaty drove the U.S. Operations.
Expense
Expenses in the Risk and Insurance Services segment decreased 6% in the first quarter of 2015 compared with the same period last year, or 2% on an underlying basis. Foreign currency translation reduced expense by 6%, offset by a 2% increase related to acquisitions. The decrease in underlying expenses reflects the impact of the net benefit from the termination of the RRA plan, partly offset by higher base salaries and pension costs.

30


Consulting
The results of operations for the Consulting segment are presented below:
For the Three Months Ended March 31,
 
(In millions of dollars)
2015

2014

Revenue
$
1,421

$
1,432

Compensation and Benefits
783

813

Other Expenses
390

394

Expense
1,173

1,207

Operating Income
$
248

$
225

Operating Income Margin
17.4
%
15.8
%
Revenue
Consulting revenue in the first quarter of 2015 decreased 1% reflecting a 5% increase on an underlying basis and a 1% increase related to acquisitions, which were more than offset by a 6% decrease from the impact of foreign currency translation. Mercer's revenue decreased 2% to $1.0 billion. On an underlying basis, Mercer's revenue increased 4% compared to the same period last year. The increase in underlying revenue was driven by growth in Health,Talent and Investments, which increased 3%, 4% and 13%, respectively. Oliver Wyman's revenue increased 4% to $384 million in the first quarter of 2015 as compared to the same period last year, reflecting an 8% increase on an underlying basis, a 2% increase from acquisitions, partly offset by a decrease of 6% from the impact of foreign currency translation.
In February 2015, Mercer made a $75 million strategic investment in Benefitfocus (NASDAQ:BNFT), a benefits technology provider. The investment expands the relationship between Mercer Marketplace, MMC's private healthcare exchange, and Benefitfocus.
Expense
Consulting expenses in the first quarter of 2015 decreased 3% from the first quarter of 2014 as a 6% decrease from the impact of foreign currency translation was partly offset by a 3% increase in underlying expenses. The underlying expense increase in the first quarter of 2015 was primarily due to higher base salaries, partly offset by the impact of the net benefit from the termination of the RRA plan.
Corporate and Other
Corporate expenses in the first quarter of 2015 were $46 million compared with $45 million in the prior year.

Interest
Interest income earned on corporate funds was $3 million in the first quarter of 2015, compared with $5 million in the first quarter of 2014, reflecting a lower level of invested funds and lower effective interest rates. Interest expense decreased $6 million in 2015 compared with the first quarter of 2014. The decrease was due to lower average interest rates compared with the prior year.
Investment Income
The caption "Investment income" in the consolidated statements of income comprises realized and unrealized gains and losses from investments recognized in current earnings. It includes, when applicable, other than temporary declines in the value of debt and available-for-sale securities and equity method gains or losses on its investment in private equity. The Company's investments may include direct investments in insurance or consulting companies and investments in private equity funds. The Company recorded investment income of $2 million in the first quarter of 2015 compared to $13 million for the same period in 2014. The gains recorded in 2015 primarily relate to our investments in private equity funds. Investment income in 2014 included $7 million related to our general partner carried interest in Trident III that was no longer subject to claw-back, and gains of $6 million primarily related to our investments in private equity funds. At March 31, 2015, the Company had deferred performance fees of approximately $20 million related to Trident III. The timing of recognition of the remaining deferred performance fees from Trident III is unknown and is not controlled by the Company.

31


Income Taxes
The Company's effective tax rate in the first quarter of 2015 was 29.2% compared with 29.5% in the first quarter of 2014. The rates reflect non-U.S. income taxed at rates below the U.S. statutory rate, including the effect of repatriation.
The effective tax rate is sensitive to the geographic mix and repatriation of the Company's earnings, which may result in higher or lower tax rates. U.S. federal and state corporate tax rates substantially exceed tax rates applicable in most jurisdictions outside the U.S. A significant portion of the Company's profits are earned outside the U.S. In 2015, the forecasted pre-tax income in the U.K., Canada, Australia, Germany, and Bermuda is expected to account for approximately 60% of the Company's total non-U.S. pre-tax income, with estimated effective rates in those countries of 21%, 27%, 30%, 33% and 0%, respectively. Consequently, continued improvement in the profitability of the Company's U.S.-based operations would tend to result in higher effective tax rates. A loss in one jurisdiction generally cannot offset earnings in another, and within certain jurisdictions profits and losses may not offset between entities. Consequently, losses in certain operations may require valuation allowances affecting the effective tax rate, depending on estimates of the realizability of associated deferred tax assets. The tax rate is also sensitive to changes in unrecognized tax benefits, including the impact of settled tax audits and expired statutes of limitation.
Changes in tax laws or tax rulings may have a significant impact on our effective tax rate. Discussions continue within Congress and the Administration about broad reform of the corporate tax system in the U.S. It is not possible to predict the ultimate outcome of these discussions. Future legislation could have a material impact on our effective tax rate and consolidated financial statements due to reforms that could include changes in the corporate tax rate and in the way U.S. corporations are taxed on foreign earnings.
The Company reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in the tax return. The Company's gross unrecognized tax benefits increased from $97 million at December 31, 2014 to $100 million at March 31, 2015. It is reasonably possible that the total amount of unrecognized tax benefits will decrease by an amount between zero and approximately $22 million within the next twelve months due to settlements of audits and expirations of statutes of limitation.
Dispositions
Summarized Statements of Income data for discontinued operations is as follows:
 
Three Months
(In millions of dollars, except per share figures)
2015

2014

Disposals of discontinued operations
$
(5
)
$
—

Income tax (credit) expense
(2
)
1

Disposals of discontinued operations, net of tax
(3
)
(1
)
Discontinued operations, net of tax
$
(3
)
$
(1
)
Discontinued operations, net of tax per share
 
 
– Basic
$
(0.01
)
$
—

– Diluted
$
(0.01
)
$
—



32


Liquidity and Capital Resources
The Company is organized as a holding company, a legal entity separate and distinct from its operating subsidiaries. As a holding company without significant operations of its own, the Company is dependent upon dividends and other payments from its operating subsidiaries to meet its obligations for paying principal and interest on outstanding debt obligations, for paying dividends to stockholders, for share repurchases and for corporate expenses. Other sources of liquidity include borrowing facilities discussed below in Financing Cash Flows.
The Company derives a significant portion of its revenue and operating profit from operating subsidiaries located outside of the United States. Funds from the Company’s operating subsidiaries located outside of the United States are regularly repatriated to the United States out of annual earnings. At December 31, 2014, the Company had approximately $1.3 billion of cash and cash equivalents in its foreign operations, substantially all of which is considered to be permanently invested in those operations to fund foreign investments and working capital needs. At the current time, the Company does not intend to repatriate any of this cash. The non-U.S. cash and cash equivalents considered permanently reinvested includes approximately $171 million of operating funds required to be maintained for regulatory requirements or as collateral under certain captive insurance arrangements. The Company expects to continue its practice of repatriating foreign funds out of current annual earnings. The analysis of the portion of 2015 earnings that the Company expects to repatriate and the portion that will be permanently reinvested will be finalized later in the year as the amount of non-U.S. earnings and the Company's cash requirements become more certain. While management does not foresee a need to repatriate the funds which are currently deemed permanently invested, if facts or circumstances change, management could elect to repatriate them, which could result in higher effective tax rates in the future.
Cash and cash equivalents on our consolidated balance sheets includes funds available for general corporate purposes. Funds held on behalf of clients in a fiduciary capacity are segregated and shown separately in the consolidated balance sheets as an offset to fiduciary liabilities. Fiduciary funds cannot be used for general corporate purposes, and should not be considered as a source of liquidity for the Company.
Operating Cash Flows
The Company used $530 million of cash from operations for the three months ended March 31, 2015, compared with $380 million used by operations for the same period in 2014. These amounts reflect the net income of the Company during those periods, excluding gains or losses from investments and from the disposition of businesses, adjusted for non-cash charges, and changes in working capital which relate primarily to the timing of payments of accrued liabilities or receipts of assets and pension contributions. The use of cash is driven primarily by cash award payments, which are generally paid in the first quarter of each each year.
Pension Related Items
The Company's policy for funding its tax-qualified defined benefit plans is to contribute amounts at least sufficient to meet the funding requirements set forth in the applicable laws or regulations of the U.S. and other jurisdictions. During the first three months of 2015, the Company contributed $36 million to its non-U.S. pension plans and $6 million to its U.S. pension plans. In the first quarter of 2014, the Company contributed $47 million to its non-U.S. pension plans and $7 million to its U.S. pension plans.
In the U.S., contributions to the tax-qualified defined benefit plans are based on ERISA guidelines and the Company generally expects to maintain a funded status of 80% or more of the liability determined under the ERISA guidelines. The pension stabilization provisions included in the "Moving Ahead for Progress in the 21st Century Act", enacted on July 6, 2012, changed the methodology for determining the discount rate used for calculating plan liabilities under ERISA, which determines, in part, the funding requirements.
The Company has a large number of non-U.S. defined benefit pension plans, the largest of which are in the U.K., which comprise approximately 83% of non-U.S. plan assets. In the U.K., contributions to defined benefit pension plans are determined through a negotiation process between the Company and the plans' trustee that typically occurs every three years in conjunction with the actuarial valuation of the plans. This process is governed by U.K. pension regulations. The assumptions that result from the funding negotiations are different from those used for U.S. GAAP and currently result in a lower funded status than under U.S. GAAP. In March 2014, the Company and the Trustee of the U.K. Defined Benefits Plans agreed to a funding deficit recovery plan for the U.K. defined benefit pension plans. The current agreement with the Trustee sets out the annual deficit contributions which would be due based on the deficit at December 31, 2012. The funding level is subject to re-assessment, in most cases on November 1st of each year. If the funding level on November 1st has sufficiently improved, no deficit funding contributions will be required in the following year, and the contribution amount will be deferred. As part of a long-term strategy, which depends on having greater influence over asset allocation and overall investment decisions,

33


the Company has agreed to support annual deficit contributions by the U.K. operating companies under certain circumstances, up to GBP 450 million over a seven-year period.
As a result of the significant improvement in funded status during 2013, which included the $250 million deficit pre-funding contribution discussed above, no additional deficit recovery contributions were required in 2014. Based on the funding test carried out at November 1, 2014, Company contributions to the U.K. plans in 2015 are expected to be $54 million. The U.K. employers also contribute an expense allowance each year of approximately $9 million.
The Company expects to fund an additional $133 million to its non-U.S. defined benefit plans over the remainder of 2015, comprising approximately $84 million to plans outside of the U.K. and $49 million to the U.K. plans.
Funding amounts may be influenced by future asset performance, the level of discount rates and other variables impacting the funded status of the plan.
After completion of a consultation period with affected colleagues, in January 2014, the Company amended its U.K. defined benefit pension plans to close those plans to future benefit accruals effective August 1, 2014 and replaced those plans, along with its existing defined contribution plans, with a new, comprehensive defined contribution arrangement. This change resulted in a curtailment of the U.K. defined benefit plans, and as required under GAAP, the Company re-measured the defined benefit plans’ assets and liabilities at the amendment date, based on assumptions and market conditions at that date. As a result of the re-measurement, the Projected Benefit Obligation ("PBO") increased by approximately $147 million and the funded status decreased by approximately $137 million. The change in the PBO and in the funded status relates primarily to a decrease in the discount rate at the re-measurement date. The Company recognized a curtailment gain of $65 million in the first quarter of 2014, primarily resulting from the recognition of the remaining unamortized prior service credit related to a plan amendment made in December 2012. This gain was largely offset by the cost of a transition benefit to certain employees most impacted by the amendment.
Financing Cash Flows
Net cash provided by financing activities was $71 million for the period ended March 31, 2015, compared with $118 million net cash used for the same period in 2014.
In March 2015, the Company issued $500 million of 2.35% five-year senior notes. The Company intends to use the net proceeds for general corporate purposes.
In September 2014, the Company issued $300 million of 2.35% five-year senior notes and $500 million of 3.50% 10.5 year senior notes. In October 2014, a significant portion of the net proceeds of this offering was used to redeem $630 million of debt, including $230 million of 5.75% senior notes due in September 2015 and $400 million of 9.25% senior notes due in 2019. Total cash outflow related to this transaction was approximately $765 million, including a $137 million cost for early redemption, which is reflected as a charge in the consolidated statements of income in the fourth quarter of 2014.
During the second quarter of 2014, the Company issued $600 million of 3.5% ten-year senior notes. A portion of the net proceeds of this offering was used for general corporate purposes, including the repayment of $320 million of 5.375% senior notes that matured in July 2014.
The Company and certain of its foreign subsidiaries maintain a $1.2 billion multi-currency five-year unsecured revolving credit facility. The interest rate on this facility is based on LIBOR plus a fixed margin which varies with the Company's credit ratings, which are set forth below. This facility expires in March 2019 and requires the Company to maintain certain coverage and leverage ratios which are tested quarterly. There were no borrowings outstanding under this facility at March 31, 2015.
In December 2012, the Company closed on a $50 million, three-year delayed draw term loan facility. The interest rate on this facility is based on LIBOR plus an agreed fixed margin which varies with the Company's credit ratings. The facility requires the Company to maintain coverage ratios and leverage ratios consistent with the current revolving credit facility discussed above. The Company had $50 million of borrowings under this facility at March 31, 2015.
The Company's senior debt is currently rated Baa1 by Moody's and A- by Standard & Poor's. The Company's short-term debt is currently rated P-2 by Moody's and A-2 by Standard & Poor's. The Company carries a stable outlook from Moody's and Standard & Poor's.
During the first three months of 2015, the Company paid $19 million of contingent payments related to acquisitions made in prior periods. These payments are split between financing and operating cash flows in the consolidated statements of cash flows. The portion of these payments reflected as a financing activity is $6 million, which

34


represents payments related to the contingent consideration liability that was recorded on the date of acquisition. Payments related to increases in the contingent consideration liability subsequent to the date of acquisition, which were $13 million for the first quarter of 2015, are reflected as operating cash flows. In the first three months of 2015, the Company paid $26 million of deferred purchase consideration related to acquisitions made in prior years. Remaining deferred cash payments of approximately $72 million and estimated future contingent consideration payments of $206 million for acquisitions completed in the first three months of 2015 and in prior years are recorded in accounts payable and accrued liabilities or other liabilities in the consolidated balance sheet at March 31, 2015.
In the first three months of 2014, the Company paid $30 million of contingent payments related to acquisitions made in prior periods. Of this amount, $20 million was reported as financing cash flows and $10 million as operating cash flows. In addition, in the first three months of 2014, the Company paid $6 million of deferred purchase consideration related to acquisitions made in prior years.
In May 2014, the Board of Directors increased the Company's share repurchase program to $2 billion. At March 31, 2015, the Company remains authorized to purchase additional shares of its common stock up to a value of approximately $1 billion. There is no time limit on this authorization.
During the first three months of 2015, the Company repurchased approximately 5.3 million shares of its common stock for consideration of $300 million. During the first three months of 2014, the Company repurchased approximately 2 million shares of its common stock for consideration of $100 million.
The Company paid dividends on its common shares of $151 million ($0.28 per share) during the first three months of 2015, as compared with $137 million ($0.25 per share) during the first three months of 2014.
Investing Cash Flows
Net cash used for investing activities amounted to $194 million in the first three months of 2015, compared with $416 million used during the same period in 2014.
The Company made 3 acquisitions during the first three months of 2015. Cash used for these acquisitions, net of cash acquired, was $16 million.
During 2014, Mercer acquired 34% of the common shares of South Africa-based Alexander Forbes Group Holdings Limited ("Alexander Forbes"). Mercer purchased its stake in Alexander Forbes in two tranches at 7.50 South African Rand per share. On July 24, 2014, the Company purchased 14.9% of Alexander Forbes common shares for approximately $137 million, and on October 2014, the Company paid approximately $166 million for the remaining 19.1% of Alexander Forbes common shares. The investment in Alexander Forbes is accounted for using the equity method and included in other assets in the consolidated balance sheet.
The Company made six acquisitions during the first three months of 2014. Cash used for these acquisitions, net of cash acquired was $313 million.
The Company used cash of $91 million to purchase fixed assets and capitalized software in the first three months of 2015, compared with $99 million in the first three months of 2014, primarily related to computer equipment and software purchases, software development costs and the refurbishing and modernizing of office facilities.
On February 24, 2015, Mercer purchased shares of common stock of Benefitfocus (NASDAQ:BNFT) constituting approximately 9.9% of BNFT's outstanding capital stock as of the acquisition date. The purchase price for the BNFT shares and certain other rights and other consideration was approximately $75 million.
The Company has commitments for potential future investments of approximately $75 million in three private equity funds that invest primarily in financial services companies.

35


Commitments and Obligations
The Company’s contractual obligations of the types identified in the table below were of the following amounts as of March 31, 2015 (In millions of dollars):
  
Payment due by Period
Contractual Obligations
Total

 
Within
1 Year

 
1-3 Years

 
4-5 Years

 
After
5 Years

Current portion of long-term debt
$
61

 
$
61

 
$
—

 
$
—

 
$
—

Long-term debt
3,841

 
—

 
274

 
1,076

 
2,491

Interest on long-term debt
1,359

 
144

 
283

 
261

 
671

Net operating leases
2,138

 
309

 
516

 
383

 
930

Service agreements
393

 
175

 
159

 
54

 
5

Other long-term obligations
307

 
67

 
202

 
36

 
2

Total
$
8,099

 
$
756

 
$
1,434

 
$
1,810

 
$
4,099

The above does not include unrecognized tax benefits of $100 million, accounted for under ASC Topic No. 740, as the Company is unable to reasonably predict the timing of settlement of these liabilities, other than approximately $4 million that may become payable within one year. The above does not include the indemnified liabilities discussed in Note 15 as the Company is unable to reasonably predict the timing of settlement of these liabilities. The above does not include net pension liabilities for underfunded plans of approximately $1.9 billion because the timing and amount of ultimate payment of such liability is dependent upon future events, including, but not limited to, future returns on plan assets and changes in the discount rate used to measure the liabilities. The Company expects to contribute approximately $19 million and $133 million to its U.S. and non-U.S. pension plans, respectively, in the remainder of 2015.
New Accounting Guidance
Note 17 to the consolidated financial statements in this report contains a discussion of recently issued accounting guidance and their impact or potential future impact on the Company’s financial results, if determinable.

36


Item 3.
Quantitative and Qualitative Disclosures About Market Risk.
Market Risk and Credit Risk
Certain of the Company’s revenues, expenses, assets and liabilities are exposed to the impact of interest rate changes and fluctuations in foreign currency exchange rates and equity markets.
The Company had the following investments subject to variable interest rates:
(In millions of dollars)
March 31, 2015
Cash and cash equivalents invested in money market funds, certificates of deposit and time deposits
$
1,104

Fiduciary cash and investments
$
4,585

Based on the above balances, if short-term interest rates increased or decreased by 10%, or 8 basis points, over the course of the remainder of the year, annual interest income, including interest earned on fiduciary funds, would increase or decrease by approximately $2 million.
In addition to interest rate risk, our cash and cash equivalents and fiduciary fund investments are subject to potential loss of value due to counter-party credit risk. To minimize this risk, the Company and its subsidiaries invest pursuant to a Board-approved investment policy. The policy mandates the preservation of principal and liquidity and requires broad diversification with counter-party limits assigned based primarily on credit rating and type of investment. The Company carefully monitors its cash and fiduciary fund investments and will further restrict the portfolio as appropriate in response to market conditions. The majority of cash and fiduciary fund investments are invested in short-term bank deposits.
Foreign Currency Risk
The translated values of revenue and expense from the Company’s international operations are subject to fluctuations due to changes in currency exchange rates. The non-U.S. based revenue that is exposed to foreign exchange fluctuations is approximately 55% of total revenue. We periodically use forward contracts to limit foreign currency exchange rate exposure on net income and cash flows for specific, clearly defined transactions arising in the ordinary course of business. Although the Company has significant revenue generated in foreign locations which is subject to foreign exchange rate fluctuations, in most cases both the foreign currency revenue and expenses are in the functional currency of the foreign location. As such, the U.S. dollar translation of both the revenues and expenses, as well as the potentially offsetting movements of various currencies against the U.S. dollar, generally tend to mitigate the impact on net operating income of foreign currency risk. The Company estimates that a 10% movement of major foreign currencies (Euro, Sterling, Australian dollar and Canadian dollar) in the same direction against the U.S. dollar that held constant over the course of the year would increase or decrease full year net operating income by approximately $54 million. In the fourth quarter of 2014 and the first quarter of 2015, the U.S. dollar strengthened significantly against most currencies. If exchange rates at March 31, 2015 hold constant throughout 2015, the Company estimates the year-over-year impact from conversion of foreign currency earnings would reduce full year net operating income by approximately $120 million. In Continental Europe, the largest amount of revenue from renewals for the Risk & Insurance segment occurs in the first quarter. Consequently, a significant portion of the year-over-year foreign exchange impact occurs in the first quarter.
Equity Price Risk
The Company holds investments in both public and private companies as well as private equity funds that invest primarily in financial services companies. The Company holds publicly traded investments of $92 million of which $17 million are classified as available for sale and $75 million are accounted for using the cost method, as the shares are categorized as restricted and cannot be sold for more than one year. Non-publicly traded investments of $13 million are accounted for using the cost method and an additional $399 million of investments are accounted for using the equity method. These investments are subject to risk of changes in market value, which if determined to be other than temporary, could result in realized impairment losses. The Company periodically reviews the carrying value of such investments to determine if any valuation adjustments are appropriate under the applicable accounting pronouncements.
Other
See Note 15 to the consolidated financial statements included elsewhere in this report for a discussion of lawsuits and regulatory proceedings.

37


Item 4.
Controls & Procedures.
a. Evaluation of Disclosure Controls and Procedures
Based on their evaluation, as of the end of the period covered by this report, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934) are effective.
b. Changes in Internal Control
There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) or 15d-15(d) under the Securities Exchange Act of 1934 that occurred during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

38


PART II. OTHER INFORMATION
 
Item 1.        Legal Proceedings.
The information set forth in Note 15 to the consolidated financial statements provided in Part I of this report is incorporated herein by reference.
 
Item 1A.     Risk Factors.
The Company and its subsidiaries face a number of risks and uncertainties. In addition to the other information in this report and our other filings with the SEC, readers should consider carefully the risk factors discussed in "Part I, Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2014. If any of the risks described in our Annual Report on Form 10-K or such other risks actually occur, our business, results of operations or financial condition could be materially adversely affected.
 
Item 2.         Unregistered Sales of Equity Securities and Use of Proceeds.
Issuer Repurchases of Equity Securities
In May 2014, the Board of Directors of the Company authorized share repurchases up to a dollar value of $2 billion of the Company's common stock. The Company repurchased approximately 5.3 million shares of its common stock for $300 million during the first quarter of 2015. At March 31, 2015, the Company remains authorized to repurchase shares of its common stock up to a dollar value of approximately $1.0 billion. There is no time limit on the authorization. 
Period
(a)
Total
Number of
Shares (or
Units)
Purchased

 
(b)
Average
Price
Paid per
Share
(or Unit)

 
(c)
Total Number of
Shares (or
Units)
Purchased as
Part of Publicly
Announced
Plans or
Programs

 
(d)
Maximum
Number (or
Approximate
Dollar Value) of
Shares (or
Units) that May
Yet Be
Purchased
Under the Plans
or Programs

January 1-31, 2015
1,770,799

 
$
56.4717

 
1,770,799

 
$
1,247,246,704

February 1-28, 2015
1,457,370

 
$
56.6918

 
1,457,370

 
$
1,164,625,825

March 1-31, 2015
2,071,342

 
$
56.6681

 
2,071,342

 
$
1,047,246,728

Total
5,299,511

 
$
56.6090

 
5,299,511

 
$
1,047,246,728



39


Item 3.         Defaults Upon Senior Securities.
None.
 
Item 4.         Mine Safety Disclosure.
Not Applicable.
 
Item 5.         Other Information.
None.

Item 6.         Exhibits.
See the Exhibit Index immediately following the signature page of this report, which is incorporated herein by reference.


40


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
Date:
May 4, 2015
/s/ J. Michael Bischoff
 
 
 
J. Michael Bischoff
 
 
 
Chief Financial Officer
 
 
 
 
 
Date:
May 4, 2015
/s/ Robert J. Rapport
 
 
 
Robert J. Rapport
 
 
 
Senior Vice President & Controller
 
 
 
(Chief Accounting Officer)
 


41


EXHIBIT INDEX
 
Exhibit No.
  
Exhibit Name
 
 
 
4.1
 
Sixth Supplemental Indenture, dated as of March 6, 2015, between Marsh & McLennan Companies, Inc. (the "Company") and The Bank of New York Mellon, as trustee
 
 
 
10.1
 
Letter Agreement, effective as of March 20, 2013, between the Company and Peter J. Beshar
 
 
 
10.2
 
Non-Competition and Non-Solicitation Agreement, effective as of November 21, 2013, between the Company and Peter J. Beshar
 
 
 
10.3
 
Form of 2015 Long-term Incentive Award under the Marsh & McLennan Companies, Inc. 2011 Incentive and Stock Award Plan
 
 
 
10.4
 
Form of Deferred Stock Unit Award, dated as of March 1, 2015, under the Marsh & McLennan Companies, Inc. 2011 Incentive and Stock Award Plan
 
 
 
12.1
  
Statement Re: Computation of Ratio of Earnings to Fixed Charges
 
 
31.1
  
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
 
 
31.2
  
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
 
 
32.1
  
Section 1350 Certifications
 
 
101.INS
  
XBRL Instance Document
 
 
101.SCH
  
XBRL Taxonomy Extension Schema
 
 
101.CAL
  
XBRL Taxonomy Extension Calculation Linkbase
 
 
101.DEF
  
XBRL Taxonomy Extension Definition Linkbase
 
 
101.LAB
  
XBRL Taxonomy Extension Label Linkbase
 
 
101.PRE
  
XBRL Taxonomy Extension Presentation Linkbase


42




 
Exhibit 4.1



MARSH & McLENNAN COMPANIES, INC.,
Issuer,
and
The Bank of New York Mellon,
Trustee
____________________
SIXTH SUPPLEMENTAL INDENTURE
Dated as of March 6, 2015
____________________
$500,000,000 aggregate principal amount of 2.350% Senior Notes due 2020













 



SIXTH SUPPLEMENTAL INDENTURE, dated as of March 6, 2015 between MARSH & McLENNAN COMPANIES, INC., a Delaware corporation (the “Issuer”), and THE BANK OF NEW YORK MELLON, a New York banking corporation, as Trustee (the “Trustee”)
W I T N E S S E T H:
WHEREAS, the Issuer and the Trustee executed and delivered an Indenture, dated as of July 15, 2011 (the “Base Indenture” and, as supplemented hereby, the “Indenture”), to provide for the issuance by the Issuer from time to time of senior debt securities evidencing its unsecured indebtedness, to be issued in one or more series as provided in the Indenture;
WHEREAS, pursuant to a Board Resolution, the Issuer has authorized the issuance of a series of securities evidencing its senior indebtedness, consisting initially of $500,000,000 aggregate principal amount of 2.350% Senior Notes due 2020 (the “Original Notes” and, together with all the Additional Notes (as defined herein), if any, hereinafter referred to, the “Notes”);
WHEREAS, the entry into this Sixth Supplemental Indenture by the parties hereto is in all respects authorized by the provisions of the Indenture;
WHEREAS, the Issuer desires to establish the terms of the Notes in accordance with Section 2.01 of the Indenture and to establish the form of the Notes in accordance with Section 2.02 of the Indenture; and
WHEREAS, all acts and requirements necessary to make this Sixth Supplemental Indenture a valid and legally binding indenture and agreement according to its terms have been done.
NOW, THEREFORE, for and in consideration of the premises, the Issuer and the Trustee mutually covenant and agree for the equal and proportionate benefit of the respective holders from time to time of the Notes as follows:
ARTICLE 1
Section 1.01. Terms of Notes. The following terms relating to the Notes are hereby established:
(a)The Notes shall constitute a series of securities having the title “2.350% Senior Notes due 2020.”
(b)The aggregate principal amount of the Original Notes that may be authenticated and delivered under the Indenture (except Notes authenticated and delivered upon registration of, transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 2.05, 2.06, 2.07 or 9.04 of the Base Indenture) shall be up to $500,000,000.
(c)The entire outstanding principal of the Notes shall be payable on March 6, 2020 plus any unpaid interest accrued to such date.
(d)The rate at which the Notes shall bear interest shall be 2.350% per annum; the date from which interest shall accrue on the Notes shall be March 6,



2015 or from the most recent Interest Payment Date to which interest has been paid; the Interest Payment Dates for the Notes on which interest will be payable shall be March 6 and September 6 in each year, beginning September 6, 2015; the regular record dates for the interest payable on the Notes on any Interest Payment Date shall be the February 21 or August 21 immediately preceding the applicable Interest Payment Date; and the basis upon which interest on the Notes shall be calculated shall be that of a 360‑day year consisting of twelve 30‑day months.
(e)(i) The Notes may be redeemed in whole at any time or in part from time to time, at the option of the Issuer.
(ii) The redemption price (the “Redemption Price”) of the Notes to be redeemed shall be calculated as follows, plus, in each case, accrued and unpaid interest on the principal amount being redeemed to but excluding the redemption date:
(A) If the redemption date is prior to February 6, 2020, the Notes to be redeemed may be redeemed by the Issuer at a Redemption Price equal to the greater of (1) 100% of the principal amount of the Notes to be redeemed and (2) the sum of the present values of the remaining scheduled payments of principal of and interest on the Notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the then current Treasury Rate plus 15 basis points.
(B) If the redemption date is on or after February 6, 2020, the Notes to be redeemed may be redeemed by the Issuer at a Redemption Price equal to 100% of the principal amount of the Notes to be redeemed.
(iii) (A) In case the Issuer shall desire to exercise such right to redeem all or, as the case may be, a portion of the Notes in accordance with Section 1.01(e)(i) above, the Issuer shall, or shall cause the Trustee to, give notice of such redemption to holders of the Notes to be redeemed by transmitting a notice of such redemption not less than 30 days and not more than 60 days before the date fixed for redemption to such holders. Any notice that is delivered in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the registered holder received the notice. In any case, failure duly to give such notice to the holder of any Note designated for redemption in whole or in part, or any defect in the notice, shall not affect the validity of the proceedings for the redemption of any other Note.
Each such notice of redemption shall specify the amount of Notes to be redeemed, the date fixed for redemption and the applicable Redemption Price at which the Notes to be redeemed are to be redeemed, and shall state that payment of the Redemption Price of such Notes to be redeemed will be made at the office or agency of the Issuer in the Borough of Manhattan, the City and State of New York, upon presentation and surrender of such Notes, that interest accrued to the date fixed for redemption will be paid as specified in said notice and, that from and after said date interest will cease to accrue; except that interest shall continue to

2


accrue on any Note or portion thereof with respect to which the Issuer defaults in the payment of such Redemption Price and accrued interest. If less than all the Notes are to be redeemed, the notice to the holders of the Notes to be redeemed in whole or in part shall specify the particular Notes to be redeemed. In case the Notes are to be redeemed in part only, the notice shall state the portion of the principal amount thereof to be redeemed, and shall state that on and after the redemption date, upon surrender of such security, a new Note in principal amount equal to the unredeemed portion thereof will be issued.
(B) If the Trustee is to provide notice to the holders of the Notes in accordance with this Section 1.01(e)(iv), for a partial or full redemption, the Issuer shall give the Trustee at least 45 days’ notice in advance of the date fixed for redemption as to the aggregate principal amount of Notes to be redeemed, and thereupon, in the case of a partial redemption, the Trustee shall select, in accordance with the procedures of the Depository or as the Trustee shall deem appropriate and fair in its discretion and that may provide for the selection of a portion or portions (equal to two thousand U.S. dollars ($2,000) or integral multiples of $1,000 in excess thereof) of the principal amount of Notes of a denomination larger than $2,000, the Notes to be redeemed and shall thereafter promptly notify the Issuer in writing of the numbers of the Notes to be redeemed, in whole or in part.
The Issuer may, if and whenever it shall so elect, by delivery of instructions signed on its behalf by its President or any Vice President, instruct the Trustee or any paying agent to call all or any part of the Notes for redemption and to give notice of redemption in the manner set forth in this Section, such notice to be in the name of the Issuer or its own name as the Trustee or such paying agent may deem advisable. In any case in which notice of redemption is to be given by the Trustee or any such paying agent, the Issuer shall deliver or cause to be delivered to, or permit to remain with, the Trustee or such paying agent, as the case may be, such Security Register, transfer books or other records, or suitable copies or extracts therefrom, sufficient to enable the Trustee or such paying agent to give any notice that may be required under the provisions of this Section.
Subject to Section 2.11 of the Base Indenture, the Issuer shall not be required (i) to issue, register the transfer of or exchange any Notes during a period beginning at the opening of business 15 days before the day of the delivery of a notice of redemption of the Notes selected for redemption and ending at the close of business on the day of such delivery, or (ii) to register the transfer of or exchange any Notes so selected for redemption in whole or in part, except the unredeemed portion of any such Notes being redeemed in part.
If the giving of notice of redemption shall have been completed as above provided, the Notes or portions of the Notes to be redeemed specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable Redemption Price, and interest on such Notes shall cease to accrue on and after the date fixed for redemption, unless the Issuer shall default in the payment of such Redemption Price and accrued interest.

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(iv)    As used herein:
“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to remain closed.
“Comparable Treasury Issue” means the United States Treasury security selected by the Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Notes.
“Comparable Treasury Price” means, with respect to any redemption date, (1) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (2) if the Independent Investment Banker is provided with fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.
“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Issuer.
“Reference Treasury Dealer” means (i) Citigroup Global Markets Inc. and its successors, (ii) HSBC Securities (USA) Inc. and its successors, (iii) Barclays Capital Inc. and its successors and (iv) Goldman, Sachs & Co. and its successors, or one or more Reference Treasury Dealers as the Issuer may specify from time to time; provided, however, that if any of them ceases to be a primary U.S. Government securities dealer for The City of New York (each a “Primary Treasury Dealer”), the Issuer will substitute another Primary Treasury Dealer.
“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed as a percentage of its principal amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such redemption date.
“Treasury Rate” means, with respect to any redemption date, the rate per year equal to the semiannual equivalent yield to maturity or interpolated (on a day count basis) of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.
The Treasury Rate shall be calculated on the third Business Day preceding the redemption date.
With respect to Section 1.01(e)(ii)(A) above, the Trustee shall be entitled to conclusively rely upon the calculations of the Independent Investment Banker.
(f)The Notes shall be issuable in denominations equal to two thousand U.S. dollars ($2,000) or integral multiples of $1,000 in excess thereof.

4


(g)The Trustee shall also be the security registrar and paying agent for the Notes.
(h)Payments of the principal of and interest on the Notes shall be made in U.S. dollars, and the Notes shall be denominated in U.S. dollars.
(i)The holders of the Notes shall have no special rights in addition to those provided in the Indenture upon the occurrence of any particular events.
(j)The Notes shall not be subordinated to any other debt of the Issuer, and shall constitute senior unsecured obligations of the Issuer.
(k)The Notes shall be issued as a Global Security and The Depository Trust Company, New York, New York shall be the initial Depository. The Notes are not convertible into shares of common stock or other securities of the Issuer.
Section 1.02. Form of Note. The form of the Notes is attached hereto as Exhibit A.
Section 1.03. Additional Notes. Subject to the terms and conditions contained herein, the Issuer may issue additional notes (the “Additional Notes”) having the same ranking and the same interest rate, maturity and other terms as the Original Notes (except as otherwise described in the form of the Notes), without the consent of the holders of the Original Notes then Outstanding. Any such Additional Notes will be a part of the series having the same terms as the Original Notes, provided that, if any additional notes subsequently issued are not fungible for U.S. federal income tax purposes with any notes previously issued, such additional notes shall trade under a separate CUSIP. The aggregate principal amount of the Additional Notes, if any, shall be unlimited. The Original Notes and the Additional Notes, if any, of such series shall constitute one series for all purposes under this Sixth Supplemental Indenture, including, without limitation, amendments, waivers and redemptions.
Section 1.04. Amendment of Section 6.01(a)(i) of the Base Indenture. Solely for the purposes of the Notes, Section 6.01(a)(i) of the Base Indenture is hereby amended by replacing that section in its entirety with the following:
“the Company defaults in the payment of any installment of interest on the Notes (as defined in this Supplemental Indenture), as and when the same shall become due and payable, and continuance of such default for a period of 30 days; provided, however, that a valid extension of an interest payment period by the Company in accordance with the terms of any indenture supplemental hereto, shall not constitute a default in the payment of interest for this purpose.”
ARTICLE 2
MISCELLANEOUS
Section 2.01. Definitions. Capitalized terms used but not defined in this Sixth Supplemental Indenture shall have the meanings ascribed thereto in the Indenture.
Section 2.02. Confirmation of Indenture. The Indenture, as heretofore supplemented and amended and as further supplemented and amended by this

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Sixth Supplemental Indenture, is in all respects ratified and confirmed, and the Indenture, this Sixth Supplemental Indenture and all indentures supplemental thereto shall be read, taken and construed as one and the same instrument.
Section 2.03. Concerning the Trustee. The Trustee assumes no duties, responsibilities or liabilities by reason of this Sixth Supplemental Indenture other than as set forth in the Indenture and, in carrying out its responsibilities hereunder, shall have all of the rights, protections and immunities which it possesses under the Indenture. The Trustee makes no representations as to the validity or sufficiency of this Sixth Supplemental Indenture. The recitals herein are deemed to be those of the Issuer and not of the Trustee.
Section 2.04. Governing Law. This Sixth Supplemental Indenture, the Indenture and the Notes shall be governed by and construed in accordance with the law of the State of New York.
Section 2.05. Separability. In case any provision in this Sixth Supplemental Indenture shall for any reason be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section 2.06. Counterparts. This Sixth Supplemental Indenture may be executed in any number of counterparts each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

6


IN WITNESS WHEREOF, this Sixth Supplemental Indenture has been duly executed by the Issuer and the Trustee as of the day and year first written above.
 
MARSH & McLENNAN COMPANIES, INC.
 
 
 
 
By:
/s/ Mark C. McGivney
 
 
Name:
Mark C. McGivney
 
 
Title:
Senior Vice President, Corporate Finance



Attest:
 
By:
/s/ Carey Roberts
 
 
Name: Carey Roberts
 
 
Title:
Deputy General Counsel & Corporate Secretary
 





[Signature Page to the Sixth Supplemental Indenture]



 
THE BANK OF NEW YORK MELLON,
   as Trustee
 
By:
/s/ Francine Kincaid
 
 
Name:
Francine Kincaid
 
 
Title:
Vice President











[Signature Page to the Sixth Supplemental Indenture]



Exhibit A
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO, HAS AN INTEREST HEREIN.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM IN ACCORDANCE WITH THE PROVISIONS OF THE INDENTURE AND THE TERMS OF THE SECURITIES AND EXCEPT AS OTHERWISE PROVIDED IN SECTION 2.11 OF THE BASE INDENTURE, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

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Certificate No. 1
CUSIP No. 571748 AY8
ISIN No. US571748AY80
 
$
500,000,000

MARSH & McLENNAN COMPANIES, INC.
2.350% Senior Notes due 2020

MARSH & McLENNAN COMPANIES, INC., a Delaware corporation (the “Issuer”, which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & Co., or its registered assigns, the principal sum of FIVE HUNDRED MILLION DOLLARS ($500,000,000) (which aggregate principal amount may from time to time be increased or decreased to such other aggregate principal amounts by adjustments made on the Schedule of Increases or Decreases in Global Security attached hereto) on March 6, 2020 and to pay interest on said principal sum from March 6, 2015 or from the most recent interest payment date (each such date, an “Interest Payment Date”) to which interest has been paid or duly provided for semiannually on March 6 and September 6 of each year commencing September 6, 2015 at the rate of 2.350% per annum until the principal hereof shall have become due and payable, and on any overdue principal and premium, if any, and (without duplication and to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the same rate per annum. The amount of interest payable on any Interest Payment Date shall be computed on the basis of a 360‑day year of twelve 30‑day months. In the event that any date on which interest is payable on this Note is not a Business Day, then payment of interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay). The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture (hereafter defined), be paid to the person in whose name this Note (or one or more Predecessor Securities, as defined in said Indenture) is registered at the close of business on the regular record date for such interest installment which shall be the February 21 or August 21 preceding such Interest Payment Date. Any such interest installment not punctually paid or duly provided for (as defined in the Indenture, the “Defaulted Interest”) shall forthwith cease to be payable to the registered holders on such regular record date, and may be paid to the person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a special record date to be fixed by the Trustee for the payment of such Defaulted Interest, which shall not be more than 15 nor less than 10 days prior to the date of the proposed payment, and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment or at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. The principal of (and premium, if any) and the interest on this Note shall be payable at the office or agency of the Trustee maintained for that purpose in any coin or currency of the United States of America which at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Issuer by check mailed to the registered holder at such address as shall appear in the Security Register. Notwithstanding the foregoing, so long as the registered holder of this Note is

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Cede & Co., the payment of the principal of (and premium, if any) and interest on this Note will be made at such place and to such account as may be designated by DTC.
The indebtedness evidenced by this Note is, to the extent provided in the Indenture, senior and unsecured and will rank in right of payment on parity with all other senior unsecured obligations of the Issuer.
This Note shall not be entitled to any benefit under the Indenture hereinafter referred to or be valid until the Certificate of Authentication hereon shall have been signed manually by or on behalf of the Trustee.
The provisions of this Note are continued on the reverse side hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place.

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IN WITNESS WHEREOF, the Issuer has caused this instrument to be executed.
Dated:
MARSH & McLENNAN COMPANIES, INC.
By:
 
 
Name:
J. Michael Bischoff
 
Title:
Chief Financial Officer
 
 
 
By:
 
 
Name:
Karen Farrell
 
Title:
Assistant Treasurer
 
 
 
 
 
 



Attest:

By:
 
 
Name:
Carey Roberts
 
Title:
Deputy General Counsel & Corporate Secretary











[Signature Page to Global Note]

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CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series of Notes described in the within‑mentioned Indenture.
THE BANK OF NEW YORK MELLON, as Trustee
By_____________________________
Authorized Signatory

Dated:__________________________    

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ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers to
(Insert Social Security number or other identifying number of assignee)
 
 
(Please print or typewrite name and address, including zip code of assignee)
 
 
 
the within Note of Marsh & McLennan Companies, Inc. and hereby does irrevocably constitute and appoint
Attorney to transfer said Note on the books of the within‑named Issuer with full power of substitution in the premises.
 
Dated:
 
 
Signature(s) must be guaranteed by an eligible Guarantor Institution (banks, stock brokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad‑15.
NOTICE: The signature to this assignment must correspond with the name as it appears on the first page of the within Note in every particular, without alteration or enlargement or any change whatever.


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SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

MARSH & McLENNAN COMPANIES, INC.
2.350% Senior Notes due 2020

The initial aggregate principal amount of this Global Security is $500,000,000. The following increases or decreases in this Global Security have been made:

No: _____

Date
Principal Amount of this Global Security
Notation Explaining Principal Amount Recorded
Signature of authorized officer of Trustee or Depositary
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




A-7


MARSH & McLENNAN COMPANIES, INC.
2.350% Senior Notes due 2020
This Note is one of a duly authorized series of Securities (referred to in the Base Indenture (hereafter defined)), of the Issuer (herein sometimes referred to as the “Notes”), all such Securities issued or to be issued in one or more series under and pursuant to an indenture (the “Base Indenture”), dated as of July 15, 2011 between the Issuer and The Bank of New York Mellon, as Trustee (the “Trustee”), as supplemented in the case of the Notes by the Sixth Supplemental Indenture, dated as of March 6, 2015, between the Issuer and the Trustee (the Base Indenture, as so supplemented, the “Indenture”), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Issuer and the holders of the Notes. This series of Notes is initially limited in aggregate principal amount as specified in said Sixth Supplemental Indenture. This series of Notes and any Additional Notes of this series shall constitute one series for all purposes under the Indenture, including without limitation, amendments, waivers and redemptions. The terms and conditions of this series of Notes and any Additional Notes of this series (other than the issue price, the date of issuance, the payment of interest accruing prior to the issue date of the Additional Notes and the first payment of interest following such issue date) shall be the same and shall bear the same CUSIP number.
The Notes may be redeemed in whole at any time or in part from time to time, at the option of the Issuer. The redemption price (the “Redemption Price”) of the Notes to be redeemed shall be calculated as follows, plus, in each case, accrued and unpaid interest on the principal amount being redeemed to but excluding the redemption date:
(a)If the redemption date is prior to February 6, 2020, the Notes to be redeemed may be redeemed by the Issuer at a Redemption Price equal to the greater of (1) 100% of the principal amount of the Notes to be redeemed and (2) the sum of the present values of the remaining scheduled payments of principal of and interest on the Notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the then current Treasury Rate plus 15 basis points.
(b)If the redemption date is on or after February 6, 2020, the Notes to be redeemed may be redeemed by the Issuer at a Redemption Price equal to 100% of the principal amount of the Notes to be redeemed.
In case the Issuer shall desire to exercise such right to redeem all or, as the case may be, a portion of the Notes, the Issuer shall, or shall cause the Trustee to, give notice of such redemption to holders of the Notes to be redeemed by transmitting a notice of such redemption not less than 30 days and not more than 60 days before the date fixed for redemption to such holders. Any notice that is delivered in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the registered holder received the notice. In any case, failure duly to give such notice to the holder of any Note designated for redemption in whole or in part, or any defect in the notice, shall not affect the validity of the proceedings for the redemption of any other Note.

A-8


Each such notice of redemption shall specify the amount of Notes to be redeemed, the date fixed for redemption and the applicable Redemption Price at which the Notes are to be redeemed, and shall state that payment of the Redemption Price of such Notes to be redeemed will be made at the office or agency of the Issuer in the Borough of Manhattan, the City and State of New York, upon presentation and surrender of such Notes, that interest accrued to the date fixed for redemption will be paid as specified in said notice and, that from and after said date interest will cease to accrue; except that interest shall continue to accrue on any such Note or portion thereof with respect to which the Issuer defaults in the payment of such Redemption Price and accrued interest. If less than all the Notes are to be redeemed, the notice to the holders of the Notes to be redeemed in whole or in part shall specify the particular Notes to be redeemed. In case any Note is to be redeemed in part only, the notice that relates to such Note shall state the portion of the principal amount thereof to be redeemed, and shall state that on and after the redemption date, upon surrender of such security, a new Note in principal amount equal to the unredeemed portion thereof will be issued.
If the Trustee is to provide notice to the holders of the Notes as described herein, for a partial or full redemption, the Issuer shall give the Trustee at least 45 days’ notice in advance of the date fixed for redemption as to the aggregate principal amount of Notes to be redeemed, and thereupon, in the case of a partial redemption, the Trustee shall select, in accordance with the procedures of the Depository or as the Trustee shall deem appropriate and fair in its discretion and that may provide for the selection of a portion or portions (equal to two thousand U.S. dollars ($2,000) or integral multiples of $1,000 in excess thereof) of the principal amount of such Notes of a denomination larger than $2,000, the Notes to be redeemed and shall thereafter promptly notify the Issuer in writing of the numbers of the Notes to be redeemed, in whole or in part.
The Issuer may, if and whenever it shall so elect, by delivery of instructions signed on its behalf by its President or any Vice President, instruct the Trustee or any paying agent to call all or any part of the Notes for redemption and to give notice of redemption in the manner set forth in this Note, such notice to be in the name of the Issuer or its own name as the Trustee or such paying agent may deem advisable. In any case in which notice of redemption is to be given by the Trustee or any such paying agent, the Issuer shall deliver or cause to be delivered to, or permit to remain with, the Trustee or such paying agent, as the case may be, such Security Register, transfer books or other records, or suitable copies or extracts therefrom, sufficient to enable the Trustee or such paying agent to give any notice by mail that may be required under the provisions stated herein.
Subject to Section 2.11 of the Base Indenture, the Issuer shall not be required (i) to issue, register the transfer of or exchange any Notes during a period beginning at the opening of business 15 days before the day of the delivery of a notice of redemption of the Notes selected for redemption and ending at the close of business on the day of such delivery, or (ii) to register the transfer of or exchange any Notes so selected for redemption in whole or in part, except the unredeemed portion of any such Notes being redeemed in part.
If the giving of notice of redemption shall have been completed as above provided, the Notes or portions of the Notes to be redeemed specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable Redemption Price, and interest on such Notes shall cease to accrue on and

A-9


after the date fixed for redemption, unless the Issuer shall default in the payment of such Redemption Price and accrued interest.
The Indenture contains provisions permitting the Issuer and the Trustee, with the consent of the holders of not less than a majority in aggregate principal amount of the Securities of all of the series at the time Outstanding affected thereby (all such series voting together as a single class), as defined in the Indenture, to execute supplemental indentures for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Base Indenture or of any supplemental indenture or of modifying in any manner the rights of the holders of the Notes; provided, however, that no such supplemental indenture shall, without the consent of the holders of each Security then Outstanding and affected thereby (i) extend the fixed maturity of any Securities, including the Notes, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, or (ii) reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture. The Indenture also contains provisions permitting the holders of a majority in aggregate principal amount of the Securities of all series at the time Outstanding affected thereby (all such series voting together as a single class), to waive any past default in the performance of any of the covenants contained in the Base Indenture, or established pursuant to the Base Indenture with respect to such series, and its consequences, except a default in the payment of the principal of or premium, if any, or interest on any Securities, including the Notes, in which case, each such affected series voting as a separate class. Any such consent or waiver by the registered holder of this Note (unless revoked as provided in the Base Indenture) shall be conclusive and binding upon such holder and upon all future holders and owners of this Note and of any Note issued in exchange herefor or in place hereof (whether by registration of transfer or otherwise), irrespective of whether or not any notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and premium, if any, and interest on this Note at the time and place and at the rate and in the money herein prescribed.
The Issuer is subject to certain covenants contained in the Indenture with respect to, and for the benefit of the holders of, the Notes. The Trustee shall not be obligated to monitor or confirm, on a continuing basis or otherwise, the Issuer’s compliance with the covenants contained in the Indenture or with respect to reports or other certificates filed under the Indenture; provided, however, that nothing herein shall relieve the Trustee of any obligations to monitor the Issuer’s timely delivery of all reports and certificates required under Section 5.03 of the Base Indenture and to fulfill its obligations under Article VII of the Indenture. If an Event of Default as defined in the Indenture with respect to the Notes shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture.
As provided in and subject to the provisions of the Indenture, the holder of this Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or Trustee or for any other remedy thereunder, unless such holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes, the holders of not less than 25% in principal amount

A-10


of the Outstanding Notes (in the case of an Event of Default described in clauses (a)(i) or (a)(ii) of Section 6.01 of the Base Indenture, each such series voting as a separate class, and in the case of an Event of Default described in clauses (a)(iii), (a)(iv), (a)(v) or (a)(vi) of Section 6.01 of the Base Indenture, all affected series voting together as a single class) shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity and the Trustee shall have failed to institute any such proceeding for 60 days after receipt of such notice, request and offer of indemnity and the Trustee shall not have received from the holders of a majority in principal amount of the Notes at the time Outstanding (voting as provided in Section 6.04(b) of the Base Indenture) a direction inconsistent with such request. The foregoing shall not apply to any suit instituted by the holder of this Note for the enforcement of any payment of principal hereof or any interest on or after the respective due dates expressed herein.
As provided in the Indenture and subject to certain limitations therein set forth, this Note is transferable by the registered holder hereof on the Security Register of the Issuer, upon surrender of this Note for registration of transfer at the office or agency of the Issuer in the Borough of Manhattan, the City and State of New York accompanied by a written instrument or instruments of transfer in form satisfactory to the Issuer or the Trustee duly executed by the registered holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of authorized denominations and for the same aggregate principal amount and series will be issued to the designated transferee or transferees. No service charge will be made for any such transfer, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Note, the Issuer, the Trustee, any paying agent and any Security Registrar may deem and treat the registered holder hereof as the absolute owner hereof (whether or not this Note shall be overdue and notwithstanding any notice of ownership or writing hereon made by anyone other than the Security Registrar) for the purpose of receiving payment of or on account of the principal hereof and premium, if any, and interest due hereon and for all other purposes, and neither the Issuer nor the Trustee nor any paying agent nor any Note Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the interest on this Note, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture, against any incorporator, stockholder, officer or director, past, present or future, as such, of the Issuer or of any predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly waived and released.
The Notes are issuable only in registered form without coupons in authorized denominations. As provided in the Indenture and subject to certain limitations herein and therein set forth, Notes so issued are exchangeable for a like aggregate principal amount of Notes of a different authorized denomination, as requested by the holder surrendering the same.
All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

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THE INDENTURE AND THE NOTES INCLUDING THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused “CUSIP” numbers to be printed on the Notes as a convenience to the holders of the Notes. No representation is made as to the correctness or accuracy of such CUSIP numbers as printed on the Notes, and reliance may be placed only on the other identification numbers printed hereon.
Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purposes.

A-12




 
Daniel S. Glaser
President and Chief Executive Officer
Marsh & McLennan Companies, Inc.
1166 Avenue of the Americas
New York, New York 10036
212 345 4874 Fax 212 345 6676
dan.glaser@mmc.com
www.mmc.com


Exhibit 10.1

November 21, 2013

Peter J. Beshar
[Address]
[City, State, Zip Code]

Subject:    Terms of Employment


Dear Peter:

This letter agreement is intended to set forth the terms of your continued employment by Marsh & McLennan Companies, Inc. (“Marsh & McLennan Companies” or the “Company”) as its Executive Vice President and General Counsel. This position currently reports to the President and Chief Executive Officer (the “Chief Executive Officer”) of the Company. Your current principal work location is in New York, NY. The terms of this letter agreement are effective as of March 20, 2013.

1.
Duties and Responsibilities
You will continue to devote all of your attention and time during working hours to the affairs and business of the Company and use your best efforts to perform such duties and responsibilities as shall be reasonably assigned to you by the Chief Executive Officer and are consistent with your position. In addition, you agree to serve, without additional compensation, as an officer and director for any member of the Affiliated Group. For purposes of this letter agreement, the term “Affiliated Group” means Marsh & McLennan Companies and any corporation, partnership, joint venture, limited liability company, or other entity in which Marsh & McLennan Companies has a 10% or greater direct or indirect interest. Except for those boards or committees set forth on Exhibit A, you may not serve on corporate, civic or charitable boards or committees without the prior written consent of Marsh & McLennan Companies.
    
2.
Compensation and Benefits
Your compensation and benefits are as set forth below and in Exhibit A.

a.
Annual Base Salary: You will receive an annual base salary of the amount set forth on Exhibit A, payable in installments in accordance with the Company’s payroll procedures in effect from time to time. Your base salary includes compensation for all time worked, as well as appropriate consideration for sick days, personal days, and other time off. Your base salary will be considered for adjustment in succeeding years as part of the Company’s normal performance management process.

b.
Vacation: You are entitled to 5 weeks of vacation annually, in accordance with our Company policy.


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Peter J. Beshar
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c.
Annual Bonus: You are eligible for an annual bonus on the terms set forth on Exhibit A. Bonus awards are discretionary and may be paid in the form of cash, deferred cash or Marsh & McLennan Companies stock units, or a combination thereof. Except as provided in this paragraph and in Section 3(a), to qualify for an annual bonus, you must remain continuously and actively employed by the Company, without having tendered a notice of resignation, through the date of the bonus payment, in accordance with the terms and conditions of the award. The annual bonus shall be paid no later than March 15 of the year following the year for which such bonus is earned. In the event of your Permanent Disability (as defined below) or death, the Company shall pay you (or your estate in the case of death) a prorated target annual bonus for the year in which your termination occurs based on the portion of the year elapsed as of the date of your termination. Any such bonus amount shall be paid within 30 days of your death. In the event of your Permanent Disability, your prorated annual bonus payment is conditioned upon, and subject to, your execution and delivery to the Company within 30 days of the date of such event a valid confidential waiver and release of claims agreement (including restrictive covenants) in a form satisfactory to the Company (the “Release”) and such Release has become irrevocable as provided therein (the “Release Effective Date”). Payment of any such annual bonus amount shall then be paid within 30 days following the Release Effective Date, but in no event later than March 15 of the year following the year for which such bonus is earned.

As used in this letter agreement, “Permanent Disability” will be deemed to occur when it is determined (by Marsh & McLennan Companies’ disability carrier for the primary long-term disability plan or program applicable to you because of your employment with the Company) that you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.

d.
Annual Long-Term Incentive Compensation: You are eligible to participate in Marsh & McLennan Companies’ long-term incentive program with a target long-term incentive compensation award as set forth on Exhibit A. Long-term incentive awards are discretionary and are governed by terms and conditions approved by the Compensation Committee of the Marsh & McLennan Companies Board of Directors (“Compensation Committee”) as set forth in the award agreement and in Marsh & McLennan Companies’ 2011 Incentive and Stock Award Plan (or other plan under which the long-term incentive award is granted). In accordance with Company practice, you may be required to enter into a “Restrictive Covenants Agreement” in connection with long-term incentive awards.

e.
Benefit Programs: You and your eligible family members will continue to have the opportunity to participate in the employee benefit plans, policies and programs provided by Marsh & McLennan Companies, on such terms and conditions as are generally provided to similarly situated employees of the Company. These plans may include retirement, savings, medical, life, disability, and other insurance programs as well as an array of work/life effectiveness policies and programs. Please be aware that nothing in this letter agreement shall limit Marsh & McLennan Companies’ ability to change, modify, cancel or amend any such policies or plans. In addition, you will continue to be eligible to participate in the Marsh & McLennan Companies Executive Financial Services Program, as in effect from time to time.


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Peter J. Beshar
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3.
Termination of Employment
a.
You have been designated as a “Key Employee” under the Marsh & McLennan Companies, Inc. Senior Executive Severance Pay Plan (the “Senior Executive Severance Plan”). In the event that your employment with the Company terminates for any reason, the Senior Executive Severance Plan in effect at the time of your termination will exclusively govern the terms under which you may be eligible to receive severance and/or other transition benefits from the Company. In the event that you are entitled to receive severance benefits under Article 5 of the Senior Executive Severance Plan, the Company shall also pay you the earned annual bonus, if any, for the calendar year that preceded your termination to the extent not theretofore paid.

b.
Upon the termination of your employment for any reason, you shall immediately resign, as of your date of termination, from all positions that you then hold with any member of the Affiliated Group. You hereby agree to execute any and all documentation to effectuate such resignations upon request by the Company, but you shall be treated for all purposes as having so resigned upon your date of termination, regardless of when or whether you execute any such documentation.

c.
During the term of this letter agreement, and, subject to any other business obligations that you may have, following your date of termination, you agree to assist the Affiliated Group in the investigation and/or defense of any claims or potential claims that may be made or threatened to be made against any member of the Affiliated Group, including any of their officers or directors (a “Proceeding”), and will assist the Affiliated Group in connection with any claims that may be made by any member of the Affiliated Group in any Proceeding. You agree, unless precluded by law, to promptly inform Marsh & McLennan Companies if you are asked to participate in any Proceeding or to assist in any investigation of any member of the Affiliated Group. In addition, you agree to provide such services as are reasonably requested by the Company to assist any successor to you in the transition of duties and responsibilities to such successor. Following the receipt of reasonable documentation, the Company agrees to reimburse you for all of your reasonable out-of-pocket expenses associated with such assistance. Your request for any reimbursement, including reasonable documentation, must be submitted as soon as practicable and otherwise consistent with Company policy. In any event, your request for a taxable reimbursement, including reasonable documentation, must be submitted by the October 31st of the year following the year in which the expense is incurred. The Company will generally reimburse such expenses within 60 days of the date they are submitted, but in no event will they be reimbursed later than the December 31st of the year following the year in which the expense is incurred.

4. Restrictive Covenants
In consideration of and as a condition of your employment by Marsh & McLennan Companies as its Executive Vice President and General Counsel under the terms of this letter agreement, among other things, you agree to execute the attached Non-competition and Non-solicitation Agreement, which will supersede and terminate any and all previous agreements and


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Peter J. Beshar
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understandings between you and the Company, whether written or oral, with respect to noncompetition or nonsolicitation restrictions.

5. Code of Conduct & Other Mandatory Training
As a condition of your employment by Marsh & McLennan Companies as its Executive Vice President and General Counsel, you must read, understand and abide by all applicable Marsh & McLennan Companies, Inc. compliance policies found on the Marsh & McLennan Companies’ compliance website (www.compliance.mmc.com), as updated from time to time, including but not limited to The Marsh & McLennan Companies Code of Conduct, The Greater Good. You must complete any required online compliance training for your position within 30 days of your start date or within 30 days after it becomes available. In addition, you understand that you must complete any and all additional training that the Company determines is appropriate for your position during the course of your employment.

6. Stock Ownership Guidelines
In consideration of and as a condition of your employment by Marsh & McLennan Companies as its Executive Vice President and General Counsel under the terms of this letter agreement, among other things, you will be required to acquire and maintain a meaningful ownership interest, in the form of shares or stock units, in the Company’s common stock. The ownership levels vary by position and are equal to a multiple of your base salary as set forth under the Company’s stock ownership guidelines. You will receive additional information concerning these stock ownership guidelines separately. The stock ownership guidelines can be found on the Company’s website (www.mmc.com/about/ownershipGuidelines2006.pdf).

7. Credentialing
The Company supports continuing professional education. If you hold a professional license or certification, you acknowledge that you understand the obligations and the specific code of professional ethics associated with this license or certificate and agree to perform your duties in accordance with these standards. In addition, you acknowledge your responsibility to maintain any job-related licenses or certificates in accordance with the requirements issued by the applicable regulatory body or bodies. The Company agrees to reimburse you for the fees you incur during your employment with the Company in maintaining such licenses or certificates applicable to your position. You must submit your fees within 60 days after the date they are incurred. The Company will generally reimburse such fees within 60 days of the date they are submitted, but in no event will they be reimbursed later than December 31st of the year following the year in which the fee was incurred.



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Peter J. Beshar
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8. Miscellaneous
a. Notices. Notices given pursuant to this letter agreement shall be in writing and shall be deemed received when personally delivered, or on the date of written confirmation of receipt by (i) overnight carrier, (ii) telecopy, (iii) registered or certified mail, return receipt requested, postage prepaid, or (iv) such other method of delivery as provides a written confirmation of delivery. Notice to the Company shall be directed to:

Daniel S. Glaser
President and Chief Executive Officer
Marsh & McLennan Companies, Inc.
1166 Avenue of the Americas
New York, NY 10036

Notices to or with respect to you will be directed to you, or in the event of your death, your executors, personal representatives or distributees, at your home address as set forth in the records of the Company.
b. Assignment of this Agreement. This letter agreement is personal to you and shall not be assignable by you without the prior written consent of Marsh & McLennan Companies. This letter agreement shall inure to the benefit of and be binding upon the Company and its respective successors and assigns. Marsh & McLennan Companies may assign this letter agreement, without your consent, to any member of the Affiliated Group or to any other respective successor (whether directly or indirectly, by agreement, purchase, merger, consolidation, operation of law or otherwise) to all, substantially all or a substantial portion of the business and/or assets of the Company, as applicable. If and to the extent that this letter agreement is so assigned, references to the “Company” throughout this letter agreement shall mean the Company as hereinbefore defined and any successor to, or assignee of, its business and/or assets.

c. Merger of Terms. This letter agreement supersedes all prior discussions and agreements between you and the Company or any member of the Affiliated Group with respect to the subject matters covered herein, including without limitation, the Employment Agreement, dated as of November 22, 2004, between you and Marsh & McLennan Companies, the Employment Agreement, dated as of November 21, 2007, between you and Marsh & McLennan Companies, and the Letter Agreement, effective as of March 31, 2010, between you and Marsh & McLennan Companies. For the avoidance of doubt, compensation that was paid or awarded to you prior to the effective date of this letter agreement will continue to be governed by the terms pursuant to which such compensation was paid or awarded.

d. Indemnification. The Company shall indemnify you to the extent permitted by its bylaws, as in effect on the date hereof, with respect to the work you have performed for, or at the request of, the Company or any member of the Affiliated Group (as such term is defined in Section 1 above) during the term of this letter agreement.

e. Governing Law; Amendments. This letter agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to principles of conflict of laws. This letter agreement may not be amended or modified other than by a written agreement executed by you and an authorized employee of Marsh & McLennan Companies.


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Peter J. Beshar
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f. Choice of Forum. The Company and you each hereby irrevocably and unconditionally submits to the exclusive jurisdiction of any New York state court or federal court of the United States of America sitting in the State of New York, and any appellate court thereof, in any action or proceeding arising out of or relating to this letter agreement or for recognition or enforcement of any judgment relating thereto, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York state court or, to the extent permitted by law, in such federal court. The Company and you agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

g. Severability; Captions. In the event that any provision of this letter agreement is determined to be invalid or unenforceable, in whole or in part, the remaining provisions of this letter agreement will be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law. The captions in this letter agreement are not part of the provisions of this letter agreement and will have no force or effect.

h. Section 409A. The provisions of this Section 8(h) will only apply if and to the extent required to avoid the imposition of taxes, interest and penalties on you under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”). Section 409A applies to nonqualified deferred compensation which exists if an individual has a “legally binding right” to compensation that is or may be payable in a later year. In furtherance of the objective of this Section 8(h), to the extent that any regulations or other guidance issued under Section 409A would result in your being subject to payment of taxes, interest or penalties under Section 409A, you and the Company agree to use our best efforts to amend this offer letter and any other plan, award, arrangement or agreement between you and the Company in order to avoid or limit the imposition of any such taxes, interest or penalties, while maintaining to the maximum extent practicable the original intent of the applicable provisions. This Section 8(h) does not guarantee that you will not be subject to taxes, interest or penalties under Section 409A with respect to compensation or benefits described or referenced in this offer letter or any other plan, award, arrangement or agreement between you and the Company.

Furthermore, and notwithstanding any contrary provision in this offer letter or any other plan, award, arrangement or agreement between you and the Company, to the extent necessary to avoid the imposition of taxes, interest and penalties on you under Section 409A, if at the time of the termination of your employment you are a “specified employee” (as defined in Section 409A), you will not be entitled to any payments upon termination of employment until the first day of the seventh month after the termination of employment and any such payments to which you would otherwise be entitled during the first six months following your termination of employment will be accumulated and paid without interest on the first day of the seventh month after the termination of employment.

Furthermore, and notwithstanding any contrary provision in this offer letter or in any other plan, award, arrangement or agreement between you and the Company that: (i) provides for the payment of nonqualified deferred compensation that is subject to Section 409A; and (ii) conditions payment or commencement of payment on one or more employment-related actions,


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Peter J. Beshar
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such as the execution and effectiveness of a release of claims or a restrictive covenant (each an “Employment-Related Action”) (any such plan, award, arrangement or agreement is a “Relevant Plan”):
    
(1)
if the Relevant Plan does not specify a period or provides for a period of more than 90 days for the completion of an Employment-Related Action, then the period for completion of the Employment-Related Action will be the period specified by the Company, which shall be no longer than 90 days following the event otherwise
triggering the right to payment; and

(2)
if the period for the completion of an Employment-Related Action includes the January 1 next following the event otherwise triggering the right to payment, then the payment shall be made or commence following the completion of the Employment-Related Action, but in no event earlier than that January 1.

i. Withholding Requirements. All amounts paid or provided to you under this letter agreement shall be subject to any applicable income, payroll or other tax withholding requirements.



November 21, 2013
Peter J. Beshar
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Please acknowledge your agreement with the terms of this letter agreement by signing and dating the enclosed copy and returning it to me on or before December 6.


Sincerely,




/s/ Daniel S. Glaser
Daniel S. Glaser
President and Chief Executive Officer
Marsh & McLennan Companies, Inc.




Accepted and Agreed:



/s/ Peter J. Beshar     
(Signature)        


December 6, 2013
(Date)






November 21, 2013
Peter J. Beshar
Page 9

Exhibit A



Board or Committee Memberships
John Jay College Foundation, Inc. Board of Trustees
Annual Base Salary
$800,000
Annual Target Bonus Opportunity
Bonus awards are discretionary. Anticipated target bonus of $950,000 commencing with the 2013 performance year (awarded in 2014). Actual bonus may range from 0% - 200% of target, based on achievement of individual performance objectives, and/or Marsh & McLennan Companies’ performance as Marsh & McLennan Companies may establish from time to time.
Annual Target Long Term Incentive Opportunity
Long-term incentive awards are discretionary. Anticipated target grant date fair value of $2,000,000, commencing with the award made in 2014.







Exhibit 10.2

NON-COMPETITION AND NON-SOLICITATION AGREEMENT
AGREEMENT, dated as of November 21, 2013, between Marsh & McLennan Companies, Inc. (”MMC”) and Peter J. Beshar, an employee of the Company (“Executive”). The terms of this Agreement are effective as of November 21, 2013.

R E C I T A L S:

This Agreement is entered into in consideration of the Executive’s continued employment by the Company as Executive Vice President and General Counsel, the Company’s execution of the November 21, 2013 Letter Agreement regarding his terms of employment, Executive’s eligibility for a discretionary bonus and other compensation as an employee of the Company, and Executive’s access to confidential information and trade secrets belonging to the Company. For the purposes of this Agreement, the term “Company” means MMC and/or any corporation, partnership, joint venture, limited liability company, or other entity in which MMC has a 10% or greater direct or indirect interest.

NOW, THEREFORE, the Company and Executive hereby agree to be bound by this Non-Competition and Non-Solicitation Agreement, as follows:

1.Confidential Information and Trade Secrets
(a)    Executive understands and acknowledges that as a senior executive and member of MMC’s Executive Committee, Executive will learn or have access to, or may assist in the development of, highly confidential and sensitive information and trade secrets about the Company, its operations and its clients, and that providing its clients with appropriate assurances that their confidences will be protected is crucial to the Company’s ability to obtain clients, maintain good client relations, and conform to contractual obligations. Such Confidential Information and Trade Secrets include but are not limited to: (i) financial and business information relating to the Company, such as information with respect to costs, commissions, fees, profits, sales, markets, mailing lists, strategies and plans for future business, new business, product or other development, potential acquisitions or divestitures, and new marketing ideas; (ii) product and technical information relating to the Company, such as product concepts and structures, new and innovative product ideas, methods, procedures, devices, machines, equipment, data processing programs, software, software codes, computer models, and research and development projects; (iii) client information, such as the identity of the Company’s clients, the names of representatives of the Company’s clients responsible for entering into contracts with the Company, the amounts paid by such clients to the Company, specific client needs and requirements, specific client characteristics related to the provision of services by the Company, client consulting needs and information about the consulting services provided or planned by the Company to serve such clients, client insurance policy information, information regarding the markets or sources with which insurance is placed, and leads and referrals to prospective clients; (iv) personnel information, such as the identity and number of the Company’s other employees and officers, their salaries, bonuses, benefits, skills, qualifications, and abilities; (v) any and all information in whatever form relating to any client or prospective client of the Company, including but not limited to, its business, employees, operations, systems, assets, liabilities, finances, products, and marketing, selling and operating practices; (vi) any information not included in (i) or (ii) above which Executive knows or should know is subject to a restriction on disclosure or which Executive knows or should know is considered by the Company's clients or prospective clients to be confidential, sensitive, proprietary or a trade secret or is not readily available to the public; or (vii) intellectual property, including inventions and


Page 2

copyrightable works. Confidential Information and Trade Secrets have actual or potential value because they are not generally known or available to the general public, but have been developed, compiled or acquired by the Company at its effort and expense and through the use of the Company’s resources. Confidential Information and Trade Secrets can be in any form, including but not limited to: oral, written or machine readable, including electronic files.
(b)    Executive acknowledges and agrees that the Company is engaged in highly competitive businesses and that its competitive position depends upon its ability to maintain the confidentiality of the Confidential Information and Trade Secrets which were developed, compiled and acquired by the Company at its effort and expense and through the use of the Company’s resources. Executive further acknowledges and agrees that any disclosing, divulging, revealing, or using of any of the Confidential Information and Trade Secrets, other than in connection with the Company’s business or as specifically authorized by the Company, will be highly detrimental to the Company and cause it to suffer serious loss of business and pecuniary damage and loss of goodwill.
(c)    At all times prior to and following Executive’s termination of employment, Executive shall not disclose to anyone or make use of any Confidential Information and Trade Secrets of the Company, which for the purposes of this Agreement, including such trade secret or proprietary or confidential information of any client, prospective client or other entity to which the Company owes an obligation not to disclose such information, which Executive acquires during Executive’s employment with the Company, including but not limited to records kept in the ordinary course of business except: (i) as such disclosure or use may be required or appropriate in connection with Executive’s work as an employee of the Company or any affiliate; (ii) when required to do so by a court of law, by any governmental agency having supervisory authority over the business of the Company or by any administrative or legislative body (including a committee thereof) with apparent jurisdiction to order Executive to divulge, disclose or make accessible such information (but only to the extent required by such requirement or order); or (iii) as to such confidential information that becomes generally known to the public or trade without the violation of this Agreement by Executive or by others under a duty of confidentiality to the Company.
(d)    Immediately upon the termination of employment with the Company for any reason or no reason, or at any time the Company so requests, Executive will return to the Company: (i) any originals and all copies of all files, notes, documents, slides (including transparencies), computer disks, hard drives, printouts, reports, lists of the Company’s clients or leads or referrals to prospective clients, and other media or property in Executive’s possession or control which contain or pertain to Confidential Information and Trade Secrets and will cooperate with the Company in arranging to remove any electronic copies of such information from personal digital storage devices which Executive uses; and (ii) all property of the Company, including but not limited to supplies, keys, access devices, books, identification cards, computers, telephones and other equipment. Executive agrees that upon completion of the obligations set forth in this subparagraph and if requested by the Company, Executive will execute a statement in a form provided by the Company declaring that he has retained no property of the Company or materials containing Confidential Information and Trade Secrets nor has he supplied the same to any person, except as required to carry out his duties as an employee of the Company.


Page 3

2.    Assignment of Rights to Intellectual Property; Ownership of Copyrightable Works
(a)    Executive agrees to assign and hereby does assign to the Company all Executive’s present and future right, title and interest in and to any intellectual property conceived, discovered, reduced to practice and/or made by Executive during the period of time that Executive is employed by the Company (whether before, on or after the date of this Agreement), whether such intellectual property was conceived, discovered and/or reduced to practice and/or made by Executive solely or jointly with others, on or off the premises of the Company’s business, or during or after working hours, if such intellectual property: (i) was conceived, discovered, reduced to practice and/or made with the Company’s facilities, equipment, supplies, confidential information, trade secrets or intellectual property; or (ii) relates to the Company’s current, or demonstrably anticipated or potential business activities, work or research; or (iii) results from work done or to be done by Executive or under Executive’s direction, alone or jointly, for the Company (“Intellectual Property”). Executive further acknowledges and agrees that such Intellectual Property as referred to herein belongs to the Company and that the Company may, in its sole discretion, keep such Intellectual Property and/or processes pertaining thereto, whether patentable or copyrightable or not, as trade secrets and make all decisions regarding whether and how to use such Intellectual Property and/or processes. Executive further agrees not to use or seek any commercial exploitation of or otherwise use any Intellectual Property transferred to the Company or required to be assigned under this Agreement for personal use.
(b)    Executive acknowledges, agrees and intends that all copyrightable works Executive creates during the period of time that Executive is employed by the Company (whether before, on or after the date of this Agreement) and within the scope of Executive’s employment shall be considered to be “works made for hire” as defined under the U.S. Copyright Act, 17 U.S.C. §§ 101 et seq. (“Copyrightable Works”). Executive also acknowledges, agrees and intends that the Company will be deemed the author of all such works made for hire and the owner of all of the rights comprised in the copyright of such works. To the extent that any Copyrightable Works Executive creates within the scope of Executive’s employment or using the resources of the Company do not fully qualify as works made for hire, Executive agrees to assign and hereby does assign all such Copyrightable Works to the Company, including the right to sue for past, present, or future infringement.
(c)    Executive agrees to: (i) promptly disclose such Intellectual Property and Copyrightable Works to the Company; (ii) assign to the Company, without additional compensation, the entire rights to Intellectual Property and Copyrightable Works for the United States and all foreign countries; (iii) execute all documents, certifications, and all other papers and do all acts necessary to carry out the above, including enabling the Company to file and prosecute applications for, acquire, ascertain and enforce in all countries, letters patent, trademark registrations and/or copyrights covering or otherwise relating to Intellectual Property and Copyrightable Works and to enable the Company to protect its proprietary interests therein; and (iv) give testimony in any action or proceeding to enforce rights in the Intellectual Property and Copyrightable Works.
(d)    In the event the Company is unable for any reason, after reasonable effort, to secure Executive’s signature on any document needed in connection with the actions specified in this Section 2, Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive’s agent and attorney in fact, to act for and on Executive’s behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of the preceding paragraph thereon with the same legal force and effect as if executed by Executive. Executive hereby assigns to the Company any and all claims, of any


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nature whatsoever, which Executive now or may hereafter have for infringement of any proprietary rights assigned or transferred hereunder to the Company.
(e)    Executive understands and agrees: (i) no license or conveyance of any rights or warranty to Executive is granted or implied by the Company furnishing or disclosing any Intellectual Property or Copyrightable Works to Executive; and (ii) the Company shall retain whatever ownership and other proprietary rights it otherwise has in all Intellectual Property and Copyrightable Works.
3.    Non-Competition
(a)    Executive acknowledges and agrees that the Company is engaged in highly competitive businesses and that by virtue of Executive’s position and responsibilities with the Company and Executive’s access to Confidential Information and Trade Secrets, engaging in any business which is directly competitive with the Company will cause it great and irreparable harm.
(b)    Accordingly, both during Executive’s employment with the Company and during the twelve (12) month period following the cessation of Executive’s employment with the Company, whether voluntarily or involuntarily and for any reason, Executive shall not, without the express written consent of the Chief Executive Officer of the Company, directly or indirectly engage in any activity - whether as an employee, consultant, principal, member, agent, officer, director, partner or shareholder (except as a less than 1% shareholder of a publicly traded company) - that is competitive with any business of the Company and that is conducted by the Company as of the date of the termination of the Executive’s employment. For purposes of this Agreement, the Company’s “business” means the provision of services and/or products of the type provided by the Company including but not limited to risk management, risk consulting, insurance broking, alternative risk financing, and insurance program management services; reinsurance broking and consulting, and risk assessment analytics; talent, health, benefits, retirement and investment consulting and services; and management and economic consulting. In recognition of the international nature of the Company’s business, which includes the sale of its products and services globally, this restriction shall apply in all countries throughout the world where the Company does business as of the date of termination of Executive’s employment with the Company. The practice of law by the Executive following his termination of employment with the Company will not be considered an activity that is competitive with the Company. This provision will not prohibit the Executive from being employed by an insurance or reinsurance carrier that is not engaged in activity that is competitive with any business of the Company.
4.    Non-Solicitation/Non-Servicing of Clients
(a)Executive acknowledges and agrees that solely by reason of employment by the Company, Executive has and will come into contact with and develop and maintain relationships with a significant number of the Company’s clients and prospective clients and has and will have access to Confidential Information and Trade Secrets relating thereto, including those regarding the Company’s clients, prospective clients and related information.
(b)    Consequently, during the twelve (12) month period following the cessation of Executive’s employment with the Company, whether voluntarily or involuntarily and for any reason, Executive shall not, without the express written consent of the Chief Executive Officer of the Company, directly or indirectly: (i) solicit clients or prospective clients of the Company for the purpose of selling or providing products or services of the type sold or provided by Executive while employed by the Company; (ii) induce clients or prospective clients of the Company to terminate, cancel, not renew, or not place business with the Company; (iii) perform or supervise the


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performance of services or provision of products of the type sold or provided by Executive while he was employed by the Company on behalf of any clients or prospective clients of the Company; or (iv) assist others to do the acts specified in Sections 4(b) (i)-(iii). This restriction shall apply only to those clients or prospective clients of the Company with whom Executive had contact or about whom Executive obtained Confidential Information and Trade Secrets during the last two (2) years of Executive’s employment with the Company. For the purposes of this Section 4, the term “contact” means interaction between Executive and the client which takes place to further the business relationship, or making (or assisting or supervising the performance or provision of) sales to or performing or providing (or assisting or supervising the performance or provision of) services or products for the client on behalf of the Company. For purposes of this Section 4, the term “contact” with respect to a “prospective” client means interaction between Executive and a potential client of the Company which takes place to obtain the business of the potential client on behalf of the Company. It shall not be a defense to a claim that this Section has been breached that Executive’s new employer or entity for which Executive is performing services has previously solicited or served the client.
5.    Non-Solicitation of Employees
Executive acknowledges and agrees that solely as a result of employment with the Company, and in light of the broad responsibilities of such employment, which include working with other employees of the Company, Executive has and will come into contact with and acquire Confidential Information and Trade Secrets regarding the Company’s other employees. Accordingly, during Executive’s employment with the Company and during the twelve (12) month period following the cessation of Executive’s employment with the Company or any affiliate, whether voluntarily or involuntarily and for any reason, Executive shall not, without the express written consent of the Chief Executive Officer of the Company, either on Executive’s own account or on behalf of any person, company, corporation, or other entity, directly or indirectly, solicit, or endeavor to cause any employee of the Company with whom Executive, during the last two (2) years of his employment with the Company, came into contact for the purpose of soliciting or servicing business or about whom Executive obtained Confidential Information and Trade Secrets, to leave employment with the Company.
6.    Enforcement
(a)    Executive acknowledges and agrees that the covenants contained in Sections 1, 2, 3, 4 and 5 of this Agreement are reasonable and necessary to protect the Confidential Information and Trade Secrets, business and goodwill of the Company and its subsidiaries. Executive further represents that his experience and capabilities are such that the provisions of this Agreement will not prevent him from earning a livelihood or cause undue hardship and that the covenants contained in Sections 1, 2, 3, 4 and 5 are reasonable in view of the benefits and consideration Executive has received or will receive from the Company.
(b)    In recognition of the fact that irreparable harm will result to the Company in the event of any breach or anticipatory breach of Section 1, 2, 3, 4 or 5 of this Agreement by Executive, or Executive’s claim in a declaratory judgment action that all or part of this Agreement is unenforceable, and that money damages may not provide adequate relief, the parties agree that the Company shall be entitled to the following particular forms of relief as a result of such breach, in addition to any remedies otherwise available to it at law or equity: (a) injunctions, both preliminary and permanent, enjoining or restraining such breach or anticipatory breach, and other equitable relief, and Executive hereby consents to the issuance thereof forthwith and without bond by any court of competent jurisdiction; and (b) recovery of all reasonable sums and costs, including


Page 6

attorneys’ fees, expert witness fees, expenses and costs incurred by the Company to defend or enforce the provisions of this Agreement.
(c)    In the event the Company is required to enforce any of its rights contained in Section 4 through legal proceedings, the parties acknowledge that it may be difficult or impossible to ascertain the precise amount of damages or lost profits incurred by the Company. Therefore, in the event of any breach by Executive of Section 4 of this Agreement, in addition to any other relief available to the Company at law or in equity, Executive agrees that the damages for each client lost in whole or in part by the Company as a result of Executive’s breach shall be two hundred percent (200%) of the gross commissions and fees received by the Company from such client during the twelve (12) months preceding the cessation of Executive’s employment. In arriving at this calculation, Executive agrees that the Company and Executive have considered the following factors: (i) the value of the clients; (ii) the business of the Company; (iii) the type and quality of the clients; (iv) the substantial amount of time, effort and expense incurred by the Company in acquiring, developing and maintaining the clients; (v) the number of years the Company typically retains such clients; (vi) the profitability of renewal business; and (vii) various other factors relating to the relationship between the Company and the clients. Executive further agrees that Executive shall be obligated to reimburse the Company for all reasonable costs, expenses and counsel fees incurred by the Company in connection with the enforcement of its rights hereunder.
(d)    The restrictive periods set forth in this Agreement (including those set forth in Sections 3, 4 and 5 hereof) shall not expire and shall be tolled during any period in which Executive is in violation of such restrictive periods, and therefore such restrictive periods shall be extended for a period equal to the duration of any violations thereof by Executive.
7.    Employment At-Will
Executive understands that this Agreement does not constitute a contract of employment and does not promise or imply that his employment will continue for any period of time. Unless otherwise agreed to under any employment agreement between Executive and the Company whether executed prior to this Agreement or at any time hereafter, employment with the Company is “at will” and may be terminated either by Executive or the Company at any time, with or without cause, and with or without notice.
8.    Miscellaneous
(a)    Governing Law; Choice of Forum. The parties acknowledge that MMC and its operating companies are headquartered in New York, that senior members of the leadership team of the Company are based in New York, and that breach of this Agreement will cause injury in New York. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to its conflict of laws provisions. The parties, being desirous of having any disputes resolved in a forum having a substantial body of law and experience with the matters contained herein, agree that any action or proceeding with respect to this Agreement and Executive’s employment shall be brought exclusively in the Civil Court of the City of New York, New York County, or in the Supreme Court of the State of New York, New York County, or in the United States District Court for the Southern District of New York, and the parties agree to the jurisdiction thereof. The parties hereby irrevocably waive any objection they may now or hereafter have to the laying of venue of any such action in the said court(s), and further irrevocably waive any claim they may now or hereafter have that any such action brought in said court(s) has been brought in an inconvenient forum. Executive recognizes that, should any dispute or controversy arising from or relating to this Agreement be submitted for adjudication to any court, arbitration


Page 7

panel or other third party, the preservation of the secrecy of Confidential Information and Trade Secrets may be jeopardized. Consequently, Executive agrees that all issues of fact shall be severed for trial without a jury.
(b)    Severability. The parties agree they have attempted to limit the scope of the post-employment restrictions contained herein to the extent necessary to protect Confidential Information and Trade Secrets, client relationships and goodwill. It is the desire and intent of the parties that the provisions of this Agreement shall be enforced to the fullest extent permissible under applicable laws and public policies. Accordingly, if any particular portion of this Agreement shall be adjudicated to be invalid or unenforceable, this Agreement shall be deemed amended to delete therefrom such invalid portion, and reformed to the extent valid and enforceable. Such deletion and reformation shall apply only with respect to the operation of this Agreement in the particular jurisdiction in which such adjudication is made.
(c)    Modification; Agreement to Enter into Additional Agreements. No modification of this Agreement shall be valid unless made in a written or electronic instrument signed by both parties hereto, wherein specific reference is made to this Agreement. Should Executive move to a different state or jurisdiction while employed by the Company or upon written request of the Company, Executive agrees to sign, without further consideration, upon direction by the Company, such further writings to effectuate the provisions of this Agreement as necessary to comply with applicable law. Executive’s failure to sign such additional agreements shall constitute a breach of this Agreement.
(d)    Non-Waiver. The failure of either the Company or Executive, whether purposeful or otherwise, to exercise in any instance any right, power, or privilege under this Agreement or under law shall not constitute a waiver of the same or any other right, power, or privilege in any other instance. Any waiver by the Company or by Executive must be in a written or electronic instrument signed by either Executive, if Executive is seeking to waive any of his rights under this Agreement, or by the Chief Executive Officer of the Company, if the Company is seeking to waive any of its rights under this Agreement.
(e)    Binding Effect. This Agreement shall be binding upon Executive, Executive’s heirs, executors and administrators, and upon the Company, and its affiliates, successors and assigns, and shall inure to the benefit of the Company and its affiliates, successors and assigns. This Agreement may not be assigned by Executive. This Agreement may be enforced by the Company and its affiliates, successors and assigns.
(f)    Other Agreements. This Agreement contains the entire agreement between Executive and the Company with respect to non-competition and non-solicitation restrictions, and supersedes and terminates any and all previous such agreements and understandings between Executive and the Company, whether written or oral, with respect to noncompetition or nonsolicitation restrictions. If the non-competition and non-solicitation restrictions contained in this Agreement are ruled invalid for any reason by a court of competent jurisdiction, then the non-competition and non-solicitation restrictions contained in any and all previous agreements shall be revived. The obligations under this Agreement also shall survive any changes made in the future to the employment terms of Executive, including but not limited to changes in salary, benefits, bonus plans, job title and job responsibilities.



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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first hereinabove set forth.


/s/ Daniel S. Glaser
/s/ Peter J. Beshar
Daniel S. Glaser
Peter J. Beshar
President and Chief Executive Officer
 
Marsh & McLennan Companies, Inc.
 






Exhibit 10.3









MARSH & McLENNAN COMPANIES, INC.

2011 INCENTIVE AND STOCK AWARD PLAN


TERMS AND CONDITIONS
OF
RESTRICTED STOCK UNIT, PERFORMANCE
STOCK UNIT AND STOCK OPTION AWARDS
GRANTED ON [DATE]


2015 LTI Combined Terms & Conditions
TABLE OF CONTENTS

 
 
PAGE

I. BACKGROUND
 
1

 
 
 
II. AWARDS
 
1

A. General
 
1

1. Grant of Award and Award Types
 
1

2. Award Acceptance
 
1

3. Rights of Award Holders
 
1

4. Restrictive Covenants Agreement
 
1

B. Stock Units
 
2

1. General
 
2

2. Vesting
 
2

3. Dividend Equivalents
 
2

4. Delivery
 
2

C. Performance Stock Units
 
3

1. General
 
3

2. Vesting
 
3

3. Dividend Equivalents
 
3

4. Delivery
 
4

D. Options
 
4

1. General
 
4

2. Vesting
 
4

3. Term
 
5

4. Exercisability
 
5

5. Method of Exercise of an Option
 
5

E. Satisfaction of Tax Obligations
 
5

1. Personal Tax Advisor
 
5

2. U.S. Employees
 
5

3. Non-U.S. Employees
 
6

 
 
 
III. EMPLOYMENT EVENTS
 
7

A. Death
 
7

1. Stock Units
 
7

2. Performance Stock Units
 
7

3. Options
 
7

B. Permanent Disability
 
7

1. Stock Units
 
7

2. Performance Stock Units
 
7

3. Options
 
8

C. Termination by You Outside of the European Union – Age and Service
     Pro-Rata Vesting
 
8

1. Stock Units
 
8

2. Performance Stock Units
 
8

3. Options
 
8

D. Termination by You Outside of the European Union – Age and Service Full Vesting
 
9

1. Stock Units
 
9

2. Performance Stock Units
 
9

3. Options
 
9


2015 LTI Combined Terms & Conditions

E. Termination by You Within the European Union – Retirement Treatment
 
10

1. Stock Units
 
10

2. Performance Stock Units
 
10

3. Options
 
10

F. Termination by the Company Other Than for Cause
 
11

1. Stock Units
 
11

2. Performance Stock Units
 
11

3. Options
 
12

4. Important Notes
 
13

G. All Other Terminations
 
13

H. Date of Termination of Employment
 
13

 I. Conditions for All or a Portion of an Award to Remain Outstanding Following a
    Termination of Employment and Exercisability of Options Following a Termination
    of Employment
 
14

1. Restrictive Covenants Agreement
 
14

2. Waiver and Release and Restrictive Covenants Agreement
 
14

J. Determination of Pro-Rata Calculation upon Termination of Employment
 
15

K. Section 409A of the Code for Award Recipients Subject to U.S. Federal Income Tax
 
15

 
 
 
IV. CHANGE IN CONTROL PROVISIONS
 
19

A. Treatment of Awards – Stock Units and Performance Stock Units
 
19

1. General
 
19

2. Awards Not Assumed
 
19

3. Calculation of Shares Distributable with Respect to PSUs
 
19

B. Treatment of Awards – Stock Options
 
20

C. Waiver and Release
 
20

D. Other Matters
 
20

 
 
 
V. DEFINITIONS
 
21

 
 
 
VI. ADDITIONAL PROVISIONS
 
23

A. Additional Provisions—General
 
23

1. Administrative Rules
 
23

2. Amendment
 
23

3. Limitations
 
23

4. Cancellation or Clawback of Awards
 
23

5. Governing Law; Choice of Forum
 
24

6. Severability; Captions
 
24

7. Electronic Delivery and Acceptance
 
24

8. Waiver
 
24

B. Additional Provisions—Outside of the United States
 
25

1. Changes to Delivery
 
25

2. Amendment and Modification
 
25

 
 
 
VII. QUESTIONS AND ADDITIONAL INFORMATION
 
25


2015 LTI Combined Terms & Conditions

I.    BACKGROUND
An award (“Award”) has been granted to you under the Marsh & McLennan Companies, Inc. 2011 Incentive and Stock Award Plan (the “Plan”), subject to your acceptance as described in Section II.A.2. The Award types, the number of shares of Marsh & McLennan Companies, Inc. (“Marsh & McLennan Companies”) common stock covered by the Award, instructions on how to accept or decline the Award and the deadline for accepting the Award are specified in materials provided to you by Global & Executive Compensation (“Grant Documentation”). The Award is also subject to the terms and conditions set forth herein (the “Terms and Conditions”). For employees outside the United States, the Awards are subject to additional terms and conditions as set forth in the country-specific notices (the “Country-Specific Notices”). The Prospectus dated [DATE], also describes important information about the Plan. The Terms and Conditions, the Country-Specific Notices (if applicable) and the Plan will be referred to herein as the “Award Documentation”. As used herein, “Common Stock” means common stock of Marsh & McLennan Companies.
Capitalized terms in these Terms and Conditions are defined in Section V.
II.    AWARDS
A.
General.
1.
Grant of Award and Award Types. The types of awards that may have been granted to you under the Plan are described below. The description of a type of award in these Terms and Conditions that is not part of the Award does not give or imply any right to such type of award.
2.
Award Acceptance. The grant of this Award is contingent upon your acceptance, by the date and in the manner specified in the Grant Documentation, of these Terms and Conditions, the Country-Specific Notices (if applicable) and Restrictive Covenants Agreement as described in Section II.A.4. If you decline the Award or if you do not accept the Award and any applicable documents described in the preceding sentence by the date and in the manner specified in the Grant Documentation, then the Award will be cancelled as of the grant date of the Award.
3.
Rights of Award Holders. Unless and until the vesting conditions of the Award have been satisfied and cash or shares of Common Stock, as applicable, have been delivered to you in accordance with the Award Documentation, you have only the rights of a general unsecured creditor of Marsh & McLennan Companies. Unless and until shares of Common Stock have been delivered to you, you have none of the rights of ownership to such shares (e.g., units cannot be used as payment for stock option exercises; units may not be transferred or assigned; units have no voting rights).
4.
Restrictive Covenants Agreement. As described in Section II.A.2., a Restrictive Covenants Agreement (“Restrictive Covenants Agreement”) in a form determined by Marsh & McLennan Companies must be in place in order to accept the Award, you must execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, the Restrictive Covenants Agreement in order for the Award to vest pursuant to certain employment events

1

2015 LTI Combined Terms & Conditions

as described in Section III., and you must further execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, and be in compliance with the Restrictive Covenants Agreement in order for the Award to become distributable to you or to exercise an Option whether or not you are employed by the Company (as defined in Section V.D.) at that time. Failure to timely execute the Restrictive Covenants Agreement by the date specified in the Grant Documentation or failure to timely execute or reaffirm and comply with the Restrictive Covenants Agreement as described in Section III.I.1. or 2., as applicable, will result in cancellation or forfeiture of any rights, title and interest in and to the Award, without any liability to the Company.
B.
Stock Units.
1.
General. A restricted stock unit (“Stock Unit”) represents an unfunded and unsecured promise to deliver (or cause to be delivered) to you, subject to the terms of the Award Documentation, one share of Common Stock after vesting.
2.
Vesting. Subject to your continued employment, 33-1/3% of the Stock Units will vest on [DATE] of [YEAR], [YEAR] and [YEAR]. Each date on which a Stock Unit is scheduled to vest pursuant to this Section II.B.2. is a “Stock Unit Scheduled Vesting Date.” In the event of your termination of employment, the occurrence of your Permanent Disability (as defined in Section V.H.) or the occurrence of a “Change in Control” (as defined in the Plan) prior to a Stock Unit Scheduled Vesting Date, your right to any Stock Units that are unvested immediately prior to your termination of employment or occurrence of your Permanent Disability, as applicable, will be determined in accordance with Section III. or Section IV., as applicable. For the avoidance of doubt, the date of your termination of employment for purposes of determining vesting under this Section II.B.2. will be determined in accordance with Section III.H.
3.
Dividend Equivalents. For each outstanding Stock Unit covered by the Award, an amount equal to the dividend payment (if any) made in respect of one share of Common Stock (a “Dividend Equivalent”) will accrue in U.S. dollars on each dividend record date that occurs on or after the grant date of the Award while the Award is outstanding, with no interest paid on such amounts. Accrued Dividend Equivalents will vest when the Stock Units in respect of which such Dividend Equivalents were accrued vest. Accrued Dividend Equivalents will not be paid, and no further Dividend Equivalents will accrue, on Stock Units that do not vest or are cancelled or forfeited.
4.
Delivery.
a.
Shares of Common Stock deliverable in respect of the Stock Units covered by the Award shall be delivered to you as soon as practicable following the Stock Unit Scheduled Vesting Date, and in no event later than 60 days following the Stock Unit Scheduled Vesting Date, except as otherwise provided in Sections III., IV., and VI.B.

b.
The value of vested Dividend Equivalents will be delivered to you in cash as soon as practicable after delivery of the shares of Common Stock described

2

2015 LTI Combined Terms & Conditions

in II.B.4.a above, and in no event later than 60 days following the Stock Unit Scheduled Vesting Date, except as otherwise provided in Sections III., IV., and VI.B.

c.
The delivery of shares of Common Stock and/or cash or other property that may be deliverable under these Terms and Conditions, is conditioned on the satisfaction or withholding of any applicable tax obligations, as described in Section II.E.

d.
Any shares of Common Stock and/or cash or other property that may be deliverable following your death shall be delivered to the person or persons to whom your rights pass by will or the law of descent and distribution, and such delivery shall completely discharge Marsh & McLennan Companies and any of its subsidiaries or affiliate’s obligations under the Award.

e.
Notwithstanding the foregoing, additional delivery rules for certain Award recipients subject to U.S. federal income tax (whether or not the recipient is a U.S. citizen or employed in the U.S.) are reflected in Section III.K.
C.
Performance Stock Units.
1.
General. A performance stock unit (“PSU”) represents an unfunded and unsecured promise to deliver (or cause to be delivered) to you, subject to the terms of the Award Documentation, a minimum of zero (0) and up to a maximum of two (2) shares of Common Stock after vesting, depending on the achievement, as determined by the Compensation Committee of the Board of Directors of Marsh & McLennan Companies (the “Committee”), of the financial performance objectives established by the Committee for the Performance Period (as defined in Section V.G.). In the event of your termination of employment or occurrence of your Permanent Disability prior to the PSU Scheduled Vesting Date (defined below), the number of shares of Common Stock deliverable in respect of a PSU shall be determined as provided in Sections III. and IV.A.3.
2.
Vesting. Subject to your continued employment, the PSUs are scheduled to vest on [DATE] (the “PSU Scheduled Vesting Date”). In the event of your termination of employment, the occurrence of your Permanent Disability or a Change in Control prior to the PSU Scheduled Vesting Date, your right to the PSUs will be determined in accordance with Section III. or Section IV., as applicable. For the avoidance of doubt, the date of your termination of employment for purposes of this Section II.C.2. will be determined in accordance with Section III.H.
3.
Dividend Equivalents. Dividend Equivalents (if any) will be paid for each share of Common Stock that is determined under Section II.C.1. to be delivered in respect of a vested PSU. Dividend Equivalents will be calculated as if such share that is to be delivered in respect of a vested PSU was outstanding as of each dividend record date that occurs on or after the grant date of the Award while the Award is outstanding with no interest paid on such amounts. Dividend Equivalents will vest when the PSUs, in respect of which such Dividend

3

2015 LTI Combined Terms & Conditions

Equivalents were calculated, vest. Dividend Equivalents will not be paid on PSUs that do not vest or are cancelled or forfeited.
4.
Delivery.
a.
Shares of Common Stock deliverable, if any, in respect of the PSUs covered by the Award that vest on the PSU Scheduled Vesting Date shall be delivered to you as soon as practicable following the PSU Scheduled Vesting Date, and in no event later than 60 days following the PSU Scheduled Vesting Date, except as otherwise provided in Sections III., IV., and VI.B.

b.
The value of vested Dividend Equivalents that vest on the PSU Scheduled Vesting Date will be delivered to you in cash as soon as practicable after delivery of the shares of Common Stock described in II.C.4.a. above, and in no event later than 60 days following the PSU Scheduled Vesting Date, except as otherwise provided in Sections III., IV., and VI.B.

c.
The delivery of shares of Common Stock and/or cash or other property that may be deliverable under these Terms and Conditions, is conditioned on the satisfaction or withholding of any applicable tax obligations, as described in Section II.E.

d.
Any shares of Common Stock and/or cash or other property that may be deliverable following your death shall be delivered to the person or persons to whom your rights pass by will or the law of descent and distribution, and such delivery shall completely discharge the Company’s obligations under the Award.

e.
Notwithstanding the foregoing, additional delivery rules for certain Award recipients subject to U.S. federal income tax (whether or not the recipient is a U.S. citizen or employed in the U.S.) are reflected in Section III.K.
D.
Options.
1.
General. A stock option (“Option”), whether qualified or nonqualified, represents the right to purchase the number of shares of Common Stock specified in the Grant Documentation (the “Option Shares”) each at the exercise price specified in the Grant Documentation.
2.
Vesting. Subject to your continued employment, 25% of the Option Shares covered by the Option will vest on each of the first four anniversaries of the grant date of the Award. Each date on which an Option Share covered by the Option is scheduled to vest is an “Option Scheduled Vesting Date.” In the event of your termination of employment or occurrence of your Permanent Disability prior to an Option Scheduled Vesting Date, your right to any Option Shares covered by the Option that are unvested immediately prior to your termination of employment or occurrence of your Permanent Disability, as applicable, will be determined in accordance with Section III. For the avoidance of doubt, the date of your termination of employment for purposes of this Section II.D.2. will be determined in accordance with Section III.H.

4

2015 LTI Combined Terms & Conditions

3.
Term. Subject to your continued employment, the Option will expire on the day immediately preceding the tenth anniversary of the grant date of the Award (“Option Expiration Date”). If your employment terminates before the Option Expiration Date, your right to exercise any vested Option Shares covered by the Option will be determined in accordance with Section III.
4.
Exercisability. The Option Shares covered by the Option will become exercisable when they vest. You are responsible for keeping track of exercise periods while actively employed and, if applicable, any post-termination exercise periods.
5.
Method of Exercise of an Option.
a.
General Procedures. An Option may be exercised by written notice to Marsh & McLennan Companies or an agent appointed by Marsh & McLennan Companies, in form and substance satisfactory to Marsh & McLennan Companies, which must state the election to exercise such Option, the number of Option Shares for which such Option is being exercised and such other representations and agreements as may be required pursuant to the provisions of the Award Documentation (the “Exercise Notice”). The Exercise Notice must be accompanied by (i) any required income tax forms and (ii) a reaffirmation of the Restrictive Covenants Agreement, unless (A) the Option is being exercised after your death in accordance with Section III. or (B) as otherwise determined by Marsh & McLennan Companies.
b.
Payment of Exercise Price. Payment of the aggregate exercise price may be made with U.S. dollars or by tendering shares of Common Stock (including shares of Common Stock acquired from a stock option exercise or a stock unit award vesting).
c.
Distribution of Option Shares. The shares of Common Stock from the Option exercise will be distributed as specified in the Exercise Notice, after you have satisfied applicable tax obligations, as described in Section II.E., and fees.
E.
Satisfaction of Tax Obligations.
1.
Personal Tax Advisor. Neither the Company nor any Company employee is authorized to provide personal tax advice to you. It is recommended that you consult with your personal tax advisor for more detailed information regarding the tax treatment of the Award, especially before making any decisions that rely on that tax treatment.
2.
U.S. Employees.
a.
Stock Units, Performance Stock Units and Dividend Equivalents. Applicable employment taxes are required by law to be withheld when a Stock Unit, PSU or Dividend Equivalent vests, or, if later, when the number of shares of Common Stock deliverable in respect of a PSU (or the amount of cash payable in respect of a Dividend Equivalent corresponding to a PSU) is

5

2015 LTI Combined Terms & Conditions

determined. Applicable income taxes are required by law to be withheld when shares of Common Stock in respect of Stock Units, PSUs or cash in respect of Dividend Equivalents are delivered to you. A sufficient number of whole shares of Common Stock, cash or other property, as applicable, will be retained by Marsh & McLennan Companies to satisfy the tax-withholding obligation.
b.
Options. Applicable taxes (including employment taxes) are required by law to be withheld when a nonqualified Option is exercised. A sufficient number of whole shares of Common Stock resulting from the Option exercise will be retained by Marsh & McLennan Companies to satisfy the tax-withholding obligation unless you elect in the Exercise Notice to satisfy all applicable tax withholding in another manner.
3.
Non-U.S. Employees.
a.
Stock Units, Performance Stock Units and Dividend Equivalents. In most countries, the value of a Stock Unit, PSU or Dividend Equivalent is generally not taxable on the grant date. If the value of the Stock Unit, PSU or Dividend Equivalent is not taxable on the grant date, it will, in most countries, be taxed at a later time, for example, upon delivery of a share of Common Stock in respect of the Stock Unit or PSU that vests, and/or the subsequent sale of the share of Common Stock received in connection with the vesting of the Stock Unit or PSU, or upon delivery of cash in respect of a Dividend Equivalent.
b.
Options. In most countries, the value of an Option is generally not taxable on the grant date. If the value of the Option is not taxable on the grant date, it will, in most countries, be taxed at a later time, for example, upon exercise of the Option and delivery of shares of Common Stock in respect of the Option, and/or the subsequent sale of the shares of Common Stock.
c.
Withholding. Marsh & McLennan Companies and/or your employer shall have the power and the right to deduct and withhold from the Award and other compensation or to require you to remit to Marsh & McLennan Companies and/or to your employer, an amount sufficient to satisfy any taxes that Marsh & McLennan Companies expects to be payable under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, payroll taxes, fringe benefits, payment on account, capital gain taxes, transfer taxes, social security contributions and National Insurance Contributions with respect to the Award, and any and all associated tax events derived therefrom. If applicable, Marsh & McLennan Companies and/or your employer may retain and sell a sufficient number of whole shares of Common Stock distributable in respect of the Award for this purpose.


6

2015 LTI Combined Terms & Conditions

III.     EMPLOYMENT EVENTS
A.
Death.
1.
Stock Units. In the event your employment is terminated because of your death, all of the unvested Stock Units that are outstanding as of such termination of employment will fully vest and will be distributed within 60 days following such termination of employment.
2.
Performance Stock Units. In the event your employment is terminated because of your death, all of the unvested PSUs that are outstanding as of such termination of employment will fully vest and will be distributed within 60 days following such termination of employment. The Performance Period will be deemed to have ended on December 31 of the year immediately preceding such termination, and the number of shares of Common Stock distributable in respect of the PSUs will be determined in accordance with Section II.C.1.; provided that, in the event that your death occurs on or prior to December 31 of the year in which the PSUs are granted, you will receive one (1) share of Common Stock in respect of each PSU.
3.
Options. In the event your employment is terminated because of your death, the Option will fully vest with respect to any unvested Option Shares and will become exercisable at such termination of employment. The person or persons to whom your rights under the Option shall pass by will or the laws of descent and distribution shall be entitled to exercise such Option with respect to any Option Shares that vest (and any Option Shares that were already vested at the time of your death) within two years after the date of death, but in no event shall the Option be exercisable after the Option Expiration Date.
B.
Permanent Disability.
1.
Stock Units. Upon the occurrence of your Permanent Disability, all of the unvested Stock Units that are outstanding as of the occurrence of your Permanent Disability will remain outstanding and will be distributed as soon as practicable following the next Stock Unit Scheduled Vesting Date as described in Section II.B.4.; provided that you have satisfied the conditions described in Section III.I.1. For the avoidance of doubt, if the occurrence of your Permanent Disability occurs on a Stock Unit Scheduled Vesting Date, distribution will occur as soon as practicable following such Stock Unit Scheduled Vesting Date as described in Section II.B.4.
2.
Performance Stock Units. Upon the occurrence of your Permanent Disability, all of the unvested PSUs that are outstanding as of the occurrence of your Permanent Disability will remain outstanding until the PSU Scheduled Vesting Date and will be distributed as soon as practicable following the PSU Scheduled Vesting Date as described in Section II.C.4; provided that you have satisfied the conditions described in Section III.I.1., and provided further that the number of shares of Common Stock distributable in respect of such PSUs will be determined in accordance with Section II.C.1.

7

2015 LTI Combined Terms & Conditions

3.
Options. Upon the occurrence of your Permanent Disability, the Option will fully vest with respect to any unvested Option Shares and will become exercisable; provided that you satisfy the conditions described in Section III.I.1. Provided that you satisfy the conditions described in Section III.I.1., any such Option Shares that vest (and any Option Shares that were already vested at the time your Permanent Disability occurred) shall be exercisable for two years following the occurrence of your Permanent Disability, but in no event shall the Option be exercisable after the Option Expiration Date.
C.
Termination by You Outside of the European Union – Age and Service Pro-Rata Vesting. If you have satisfied the Age and Service Criteria for Pro-Rata Vesting (as defined in Section V.B.) but do not satisfy the Age and Service Criteria for Full Vesting (as defined in Section V.A.) on or before the date you terminate your employment with the Company for any reason other than death or the occurrence of your Permanent Disability and you are determined by Marsh & McLennan Companies, in its sole discretion, to be employed outside of the European Union, then this Section III.C. shall apply. For the avoidance of doubt, Section III.F. will govern the treatment of the Award in the event your employment is terminated by the Company other than for Cause (as defined in Section V.C.).
1.
Stock Units. Upon such termination of employment, a pro-rata portion of the unvested Stock Units that are outstanding as of such termination of employment will remain outstanding (as described in Section III.J.) and will be distributed as soon as practicable following the next Stock Unit Scheduled Vesting Date as described in Section II.B.4.; provided that you have satisfied the conditions described in Section III.I.1. The portion of the unvested Stock Units that does not remain outstanding pursuant to this paragraph will be forfeited and cancelled. For the avoidance of doubt, if your termination of employment occurs on a Stock Unit Scheduled Vesting Date, distribution will occur as soon as practicable following such Stock Unit Scheduled Vesting Date as described in Section II.B.4.
2.
Performance Stock Units. Upon such termination of employment, a pro-rata portion of the unvested PSUs that are outstanding as of such termination of employment will remain outstanding (as described in Section III.J.) until the PSU Scheduled Vesting Date and will be distributed as soon as practicable following the PSU Scheduled Vesting Date as described in Section II.C.4; provided that you have satisfied the conditions described in Section III.I.1., and provided further that the number of shares of Common Stock distributable in respect of such PSUs will be determined in accordance with Section II.C.1. The portion of the unvested PSUs that does not remain outstanding pursuant to this paragraph will be forfeited and cancelled.
3.
Options. Upon such termination of employment, the Option will continue to vest with respect to any unvested Option Shares as provided in Section II.D.2. as if your employment had not terminated and the Option Shares will become exercisable as provided in Section II.D.4., provided that you satisfy the conditions described in Section III.I.1. Provided that you satisfy the conditions described in Section III.I.1., any such Option Shares that vest (and any Option Shares that were already vested at the time of your termination of employment) shall be

8

2015 LTI Combined Terms & Conditions

exercisable until the earlier of the fifth anniversary of your termination of employment and the Option Expiration Date.
D.
Termination by You Outside of the European Union – Age and Service Full Vesting. If you have satisfied the Age and Service Criteria for Full Vesting on or before you terminate your employment with the Company for any reason other than death or the occurrence of your Permanent Disability and you are determined by Marsh & McLennan Companies, in its sole discretion, to be employed outside of the European Union, then this Section III.D. shall apply. For the avoidance of doubt, Section III.F. will govern the treatment of the Award in the event your employment is terminated by the Company other than for Cause.
1.
Stock Units. Upon such termination of employment, all of the unvested Stock Units that are outstanding as of such termination of employment will remain outstanding and be distributed as soon as practicable following the next Stock Unit Scheduled Vesting Date as described in Section II.B.4.; provided that you have satisfied the conditions described in Section III.I.1. For the avoidance of doubt, if your termination of employment occurs on a Stock Unit Scheduled Vesting Date, distribution will occur as soon as practicable following such Stock Unit Scheduled Vesting Date as described in Section II.B.4.
2.
Performance Stock Units. Upon such termination of employment, all of the unvested PSUs that are outstanding as of such termination of employment will remain outstanding until the PSU Scheduled Vesting Date and will be distributed as soon as practicable following the PSU Scheduled Vesting Date as described in Section II.C.4; provided that you have satisfied the conditions described in Section III.I.1., and provided further that the number of shares of Common Stock distributable in respect of such PSUs will be determined in accordance with Section II.C.1.
3.
Options. Upon such termination of employment, the Option will continue to vest with respect to any unvested Option Shares as provided in Section II.D.2. as if your employment had not terminated and the Option Shares will become exercisable as provided in Section II.D.4.; provided that you satisfy the conditions described in Section III.I.1. Provided that you satisfy the conditions described in Section III.I.1., any such Option Shares that vest (and any Option Shares that were already vested at the time of your termination of employment) shall be exercisable until the earlier of the fifth anniversary of your termination of employment and the Option Expiration Date.

9

2015 LTI Combined Terms & Conditions

E.
Termination by You Within the European Union - Retirement Treatment. If you are determined by the Retirement Treatment Committee (as defined in Section V.I.) to be eligible for retirement treatment on or following the time you terminate your employment with the Company for any reason other than death or the occurrence of your Permanent Disability and you are determined by the Company, in its sole discretion, to be employed within the European Union, then this Section III.E. shall apply. Prior to distribution, Marsh & McLennan Companies in its sole discretion may ask you to reaffirm the existence of the facts and factors upon which the determination to provide retirement treatment was made. For the avoidance of doubt, Section III.F. will govern the treatment of the Award in the event your employment is terminated by the Company other than for Cause.
1.
Stock Units. Upon your termination of employment, a pro-rata portion of the unvested Stock Units that are outstanding as of such termination of employment will remain outstanding (as described in Section III.J.) until the later to occur of the next Stock Unit Scheduled Vesting Date or the determination by the Retirement Treatment Committee that you are eligible for retirement treatment, and will be distributed as soon as practicable, and in no event later than 60 days thereafter; provided that you have satisfied the conditions described in Section III.I.1. The portion of the unvested Stock Units that does not remain outstanding pursuant to this paragraph will be forfeited and cancelled. For the avoidance of doubt, if your termination of employment occurs on a Stock Unit Scheduled Vesting Date, distribution will occur within 60 days following such Stock Unit Scheduled Vesting Date (or, if later, within 60 days following the determination by the Retirement Treatment Committee that you are eligible for retirement treatment).
2.
Performance Stock Units. Upon your termination of employment, a pro-rata portion of the unvested PSUs that are outstanding as of such termination of employment will remain outstanding (as described in Section III.J.) until the later to occur of the PSU Scheduled Vesting Date or the determination by the Retirement Treatment Committee that you are eligible for retirement treatment, and will be distributed as soon as practicable, and in no event later than 60 days, thereafter; provided that you have satisfied the conditions described in Section III.I.1., and provided further that the number of shares of Common Stock distributable in respect of such PSUs will be determined in accordance with Section II.C.1. The portion of the unvested PSUs that does not remain outstanding pursuant to this paragraph will be forfeited and cancelled.
3.
Options. Upon such termination of employment, the Option will continue to vest with respect to any unvested Option Shares as provided in Section II.D.2. as if your employment had not terminated and the Option Shares will become exercisable as provided in Section II.D.4.; provided that you satisfy the conditions described in Section III.I.1. Provided that you satisfy the conditions described in Section III.I.1., any such Option Shares that vest (and any Option Shares that were already vested at the time of your termination of employment) shall be exercisable until the earlier of the fifth anniversary of your termination of employment and the Option Expiration Date. For the avoidance of doubt, if an Option Scheduled Vesting Date occurs following the date that you terminate your employment but prior to the date the Retirement Treatment Committee

10

2015 LTI Combined Terms & Conditions

determines that you are eligible for retirement treatment, the Options Shares that were scheduled to vest on such Option Scheduled Vesting Date will vest on the date you are determined by the Retirement Treatment Committee to be eligible for retirement treatment.
F.
Termination by the Company Other Than for Cause.
1.
Stock Units.
a.
General. Except as otherwise provided in Sections III.F.1.b. and IV., in the event the Company, in its sole discretion, determines that your employment is terminated by the Company other than for Cause, a pro-rata portion of the unvested Stock Units that are outstanding as of such termination of employment will remain outstanding (as described in Section III.J.) and will be distributed as soon as practicable following the next Stock Unit Scheduled Vesting Date as described in Section II.B.4.; provided that you have satisfied the conditions described in Section III.I.2. The portion of the unvested Stock Units that does not remain outstanding pursuant to this paragraph will be forfeited and cancelled. For the avoidance of doubt, this Section III.F.1.a. shall apply regardless of whether you are determined by the Retirement Treatment Committee to be eligible for retirement treatment on or following your termination of employment or you have satisfied the Age and Service Criteria for Pro-Rata Vesting on or before your termination of employment by the Company. For the further avoidance of doubt, if the occurrence of your termination of employment occurs on a Stock Unit Scheduled Vesting Date, distribution will occur as soon as practicable following such Stock Unit Scheduled Vesting Date as described in Section II.B.4.
b.
Termination by the Company Other Than for Cause After Satisfaction of Age and Service Criteria for Full Vesting. In the event the Company, in its sole discretion, determines that your employment is terminated by the Company other than for Cause, and on or before your termination of employment you satisfy the Age and Service Criteria for Full Vesting, all of the unvested Stock Units that are outstanding as of such termination of employment will remain outstanding and will be distributed as soon as practicable following the next Stock Unit Scheduled Vesting Date as described in Section II.B.4.; provided that you have satisfied the conditions described in Section III.I.2. For the avoidance of doubt, if your termination of employment occurs on a Stock Unit Scheduled Vesting Date, distribution will occur as soon as practicable following such Stock Unit Scheduled Vesting Date as described in Section II.B.4.
2.
Performance Stock Units.
a.
General. Except as otherwise provided in Sections III.F.2.b. and IV., in the event the Company, in its sole discretion, determines that your employment is terminated other than for Cause, a pro-rata portion of the unvested PSUs that are outstanding as of such termination of employment will remain outstanding (as described in Section III.J.) until the PSU Scheduled Vesting Date and will be distributed as soon as practicable following the PSU Scheduled Vesting

11

2015 LTI Combined Terms & Conditions

Date as described in Section II.C.4; provided that you have satisfied the conditions described in Section III.I.2., and provided further that the number of shares of Common Stock distributable in respect of such PSUs will be determined in accordance with Section II.C.1. The portion of the unvested PSUs that does not remain outstanding pursuant to this paragraph will be forfeited and cancelled. For the avoidance of doubt, this Section III.F.2.a. shall apply regardless of whether you are determined by the Retirement Treatment Committee to be eligible for retirement treatment on or following your termination of employment or you have satisfied the Age and Service Criteria for Pro-Rata Vesting on or before your termination of employment by the Company.
b.
Termination by the Company Other Than for Cause After Satisfaction of Age and Service Criteria for Full Vesting. In the event the Company, in its sole discretion, determines that your employment is terminated other than for Cause, and on or before such time you satisfy the Age and Service Criteria for Full Vesting, all unvested PSUs that are outstanding as of such termination of employment will remain outstanding until the PSU Scheduled Vesting Date and will be distributed as soon as practicable following the PSU Scheduled Vesting Date as described in Section II.C.4; provided that you have satisfied the conditions described in Section III.I.2., and provided further that the number of shares of Common Stock distributable in respect of such PSUs will be determined in accordance with Section II.C.1.
3.
Options.
a.
General. Except as otherwise provided in Sections III.F.3.b. and IV., in the event the Company, in its sole discretion, determines that your employment is terminated other than for Cause, your rights, title and interest in and to any unvested Option Shares will be canceled upon such termination of employment. Provided that you satisfy the conditions to vesting described in Section III.I.2., any Option Shares that were vested at the time of your termination of employment shall be exercisable until the earlier of 90 days following your termination of employment and the Option Expiration Date.
b.
Termination by the Company Other Than for Cause After Satisfaction of Age and Service Criteria for Pro-Rata Vesting or Full Vesting or You Are Determined to Be Eligible for Retirement Treatment. In the event the Company, in its sole discretion, determines that your employment is terminated other than for Cause, and on or before such time you satisfy the Age and Service Criteria for Pro-Rata Vesting or the Age and Service Criteria for Full Vesting or you are determined by the Retirement Treatment Committee to be eligible for retirement treatment on or following your termination of employment, the Option will continue to vest with respect to any unvested Option Shares as provided in Section II.D.2. as if your employment had not terminated and the Option Shares will become exercisable as provided in Section II.D.4.; provided that you satisfy the conditions to vesting described in Section III.I.2. Provided that you satisfy the conditions described in Section III.I.2., any such Option Shares that vest (and any Option Shares that were already vested at the time of your termination of

12

2015 LTI Combined Terms & Conditions

employment) shall be exercisable until the earlier of the fifth anniversary of your termination of employment and the Option Expiration Date. For the avoidance of doubt, if an Option Scheduled Vesting Date occurs following the date that your employment is terminated by the Company but prior to the date the Retirement Treatment Committee determines that you are eligible for retirement treatment, the Options Shares that were scheduled to vest on such Option Scheduled Vesting Date will vest on the date you are determined by the Retirement Treatment Committee to be eligible for retirement treatment.
4.
Important Notes.
a.
Sale of Business Unit. For purposes of this Award, in the event of a sale or similar transaction involving the business unit for which you work (“Employing Company”) as a result of which the Employing Company ceases to be a subsidiary or affiliate of Marsh & McLennan Companies, your employment will be deemed terminated by the Company other than for Cause, even if your employment with the Employing Company continues after the sale or similar transaction.
b.
Constructive Discharge. The Award will not vest, whether on a pro-rata or full basis, upon a constructive discharge, including if any court or regulatory agency retroactively concludes or interprets events to have constituted a constructive discharge.
G.
All Other Terminations. For all other terminations of employment not described in Sections III.A. through F. or Section IV. (including, but not limited to, a termination by the Company for Cause, your resignation without having satisfied the Age and Service Criteria for Pro-Rata Vesting as described in Section III.C., your resignation without having satisfied the Age and Service Criteria for Full Vesting as described in Section III.D., or your resignation without having been determined by the Retirement Treatment Committee to be eligible for retirement treatment on or following your termination of employment as described in Section III.E.), any rights, title and interest in and to any remaining unvested portion of the Award shall be cancelled as of the date your employment is treated as having terminated as described in Section III.H.
H.
Date of Termination of Employment.
1.
If Section III.H.2. does not apply to you, then for purposes of determining vesting under Sections II.B.2., II.C.2. and II.D.2. and the number of unvested Stock Units or PSUs, as applicable, that vest on a pro-rata basis as described in Section III.J., your employment will be treated as having terminated on your last day of employment with the Company.
2.
If you are a Guy Carpenter employee in the United States who is obligated to provide the Company at least 60 days advance written notice of your intention to terminate your employment for any reason, then, if your employment terminates pursuant to Section III.G. your employment will be treated as having terminated for purposes of determining vesting under Sections II.B.2., II.C.2. and II.D.2. on the date that is 60 days prior to your last day of employment with the Company. Notwithstanding the foregoing, if your employment is terminated after providing notice pursuant to the preceding sentence but prior to the intended termination

13

2015 LTI Combined Terms & Conditions

date provided in such notice (i) by the Company other than for Cause or (ii) pursuant to a written agreement, the terms of which provide that your termination of employment has been by mutual agreement between you and the Company, then the Company may, in its sole discretion, determine that for purposes of determining vesting under Sections II.B.2., II.C.2. and II.D.2. your employment will be treated as having terminated on a date later than the date that is 60 days prior to your last day of employment with the Company, but in no event later than your last day of employment with the Company.
I.
Conditions for All or a Portion of an Award to Remain Outstanding Following a Termination of Employment and Exercisability of Options Following a Termination of Employment.
1.
Restrictive Covenants Agreement. In the event of (i) the occurrence of your Permanent Disability as described in Section III.B., (ii) your termination of employment after satisfying the Age and Service Criteria for Pro-Rata Vesting or the Age and Service Criteria for Full Vesting as described in Sections III.C. and D. or (iii) a determination by the Retirement Treatment Committee that you are eligible for retirement treatment as described in Section III.E., you will be required to execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, and return to Marsh & McLennan Companies (or an agent appointed by Marsh & McLennan Companies) a Restrictive Covenants Agreement. Failure to (a) execute or reaffirm such an agreement by the date specified by the Company, which shall be in no event later than 60 days following the occurrence of your Permanent Disability as described in Section III.B. or your termination of employment as described in Sections III.C. and D., and no later than 60 days following vesting if your termination of employment is pursuant to III.E., or (b) comply with the Restrictive Covenants Agreement or to continue to be in compliance with the Restrictive Covenants Agreement as of the delivery date for Stock Units and Performance Stock Units (as described in Section II.B.4. or II.C.4., as applicable) or, at the Company’s discretion, to reaffirm compliance prior to the delivery date, will result in the cancellation or forfeiture of any rights, title and interest in and to the Award without any liability to the Company.
2.
Waiver and Release and Restrictive Covenants Agreement. In the event of your termination of employment by the Company other than for Cause as described in Section III.F., you will be required to (i) execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, and return to Marsh & McLennan Companies (or an agent appointed by Marsh & McLennan Companies) a Restrictive Covenants Agreement and (ii) execute and not revoke a waiver and release agreement, if provided to you by the Company at the time of your termination of employment. Failure to meet these requirements by the date specified by the Company, which shall be in no event later than 60 days following your termination of employment, or failure to comply with the waiver and release agreement or the Restrictive Covenants Agreement, as applicable, or continue to be in compliance with the applicable agreement as of the delivery date for Stock Units and Performance Stock Units (as described in Section II.B.4. or II.C.4., as applicable) and, at the Company’s discretion, to reaffirm compliance prior to the delivery date, will result in the cancellation or forfeiture of any rights, title and interest in and to the Award without any liability to the Company.

14

2015 LTI Combined Terms & Conditions

J.
Determination of Pro-Rata Calculation upon Termination of Employment.
The pro-rata portion of the unvested Stock Units or PSUs, as applicable, that are outstanding as of a termination of employment that will become distributable under certain circumstances described in Section III. will be determined using the following formula:
where
A
=     the number of Stock Units or PSUs covered by the Award, as applicable;
B
=    the number of days in the period beginning on the grant date of the Award and ending on the date of your termination of employment, as determined in accordance with Section III.H.1.;
C
=    the number of days in the period beginning on the grant date of the Award and ending on the last Stock Unit Scheduled Vesting Date or the PSU Scheduled Vesting Date, as applicable; and
D
=    the number of Stock Units or PSUs, as applicable, that have previously vested.
K.
Section 409A of the Code for Award Recipients Subject to U.S. Federal Income Tax (whether or not the recipient is a U.S. citizen or employed in the U.S.)
1.
For Award recipients subject to U.S. federal income tax, notwithstanding any other provision herein, the Award may be subject to additional restrictions to ensure compliance with (or continued exemption from) the requirements of Section 409A of the Code (as defined in V.I.). The Committee intends to administer the Award in accordance with Section 409A of the Code and reserves the right to make changes in the terms or operations of the Award (including changes that may have retroactive effect) deemed necessary or desirable to comply with Section 409A of the Code. This means, for example, that the timing of distributions may be different from those described in the Award Documentation that do not reflect Section 409A of the Code. If the Award is not in compliance with Section 409A of the Code, you may be subject to immediate taxation of all unpaid awards under the Plan that are subject to Section 409A of the Code at your regular federal income tax rate, plus a 20% additional tax, plus interest at the underpayment rate plus 1%, as well as any state and local taxes, penalties, additional taxes and interest, if applicable, imposed under any state tax law similar to Section 409A of the Code.
2.
Notwithstanding any other provision herein, if any portion of the Award is determined to be nonqualified deferred compensation subject to Section 409A of the Code, any references to “termination of employment,” or “when you are no longer employed” in these Terms and Conditions shall have the following meaning:
Your “termination of employment” (or similar terms) shall occur when you have incurred a “separation from service” within the meaning of Section 409A of the Code and as further defined herein. Specifically, you will have incurred a

15

2015 LTI Combined Terms & Conditions

“separation from service” when the level of services you provide to the Company in any capacity, including as an employee, director, independent contractor or consultant, does not exceed 20% of the average level of services that you provided to the Company in the preceding 36 months (or shorter period of service if, for example, your total service with the Company is less than 36 months), all as determined in accordance with Section 409A of the Code. In determining whether a “separation from service” has occurred, any period of up to six months during which you are on a bona fide leave of absence or up to 29 months during which you are absent from work due to a disability for which you are receiving Marsh & McLennan Companies long-term disability benefits will be ignored.
3.
Notwithstanding any other provision herein, if at the time of your termination of employment you are a “specified employee” (as defined in Section 409A of the Code), no portion of the Award that is determined to be nonqualified deferred compensation subject to Section 409A of the Code can be distributed prior to the first day of the seventh month after your termination of employment and any such distributions to which you would otherwise be entitled during the first six months following your termination of employment will be accumulated and paid without interest on the first day of the seventh month after your termination of employment. The provisions of this subparagraph will only apply if and to the extent required to avoid any “additional tax” under Section 409A of the Code.
4.
Notwithstanding any provision herein, if (i) a Change in Control occurs on or prior to December 31 of the second year of the three-year Performance Period and (ii) no earlier than in the third year of the three-year Performance Period, (A) you satisfy the Age and Service Criteria for Pro-Rata Vesting, (B) you satisfy the Age and Service Criteria for Full Vesting, (C) you are determined by the Retirement Treatment Committee to be eligible for retirement treatment on or following your termination of employment, (D) you are terminated by the Company other than for Cause, or (E) the occurrence of your Permanent Disability, then shares of Common Stock deliverable on the PSU Scheduled Vesting Date in respect of the PSUs covered by the Award shall be distributed to you as soon as practicable following the PSU Scheduled Vesting Date, and in no event later than March 15 of the year in which the PSU Scheduled Vesting Date occurs.
5.
Notwithstanding any other provision herein (other than Section III.K.6.a.) with respect to Stock Units (and any dividend equivalents payable with respect to Stock Units),
a.
If you have satisfied the Age and Service Criteria for Pro-Rata Vesting at any time prior to [DATE] and you do not satisfy the Age and Service Criteria for Full Vesting at any time prior to [DATE], then for each Stock Unit Scheduled Vesting Date following the date that you satisfy the Age and Service Criteria for Pro-Rata Vesting, shares of Common Stock and/or cash pursuant to Section II.B.4. will be delivered by March 15 of the year in which the Stock Unit Scheduled Vesting Date occurs.
b.
If you first satisfy the Age and Service Criteria for Full Vesting in calendar year [YEAR], then shares of Common Stock and/or cash pursuant to Section

16

2015 LTI Combined Terms & Conditions

II.B.4. with respect to the [DATE] Stock Unit Scheduled Vesting Date will be delivered by [DATE].
c.
If your employment is terminated on or after March 1 but on or before December 31 in any year pursuant to Section III.B.1. (Permanent Disability), C.1. (Age and Service Pro-Rata Vesting), or E.1. (Termination Other Than for Cause), then shares of Common Stock and/or cash pursuant to Section II.B.4. will be delivered by March 15 of the year following the year of such termination.
6.
Special 409A Distribution Provisions for Stock Units and payments attributable to Stock Units.
a.
Notwithstanding any provision herein, for distributions of Stock Units or cash attributable to such Stock Units that are subject to one or more Employment-Related Actions where you have not satisfied, and would not satisfy, the Age and Service Criteria for Full Vesting prior to [DATE]:
i.
With respect to Stock Units, no later than March 15th of the year following the year in which the substantial risk of forfeiture (as determined under Section 409A of the Code) (the “Substantial Risk of Forfeiture”) lapses with respect to such Stock Units, shares of Common Stock underlying such Stock Units shall be delivered to you (to the extent not previously delivered), subject to a stop transfer order and subject to withholding of any applicable tax obligations, as described in Section II.E. at the time of such delivery. Upon your timely satisfaction of all applicable Employment-Related Actions, Marsh & McLennan Companies will remove or cause to be removed such stop transfer order; and
ii.
With respect to a cash payment attributable to Stock Units, to the extent that such payment will not be made by March 15th of the year following the year in which the Substantial Risk of Forfeiture lapses with respect to such payment, such payment shall be placed in escrow or contributed to a secular trust (in the sole discretion of the Marsh & McLennan Companies) for your benefit on or before such March 15th and subject to withholding of any applicable tax obligations, as described in Section II.E. at the time of such placement or contribution. Upon your timely satisfaction of all applicable Employment-Related Actions, Marsh & McLennan Companies shall cause such amounts to be released from escrow or paid to you out of such trust.
In either case, if any Employment-Related Action is not timely satisfied, the shares of Common Stock or the cash payment shall revert to the Marsh & McLennan Companies with no further compensation due to you.
b.
Notwithstanding any provision herein, with respect to distributions of Stock Units or cash attributable to such Stock Units (i) where you have satisfied or would satisfy the Age and Service Criteria for Full Vesting prior to [DATE] and

17

2015 LTI Combined Terms & Conditions

(ii) where such distributions are subject to one or more Employment-Related Actions:
i.
With respect to Stock Units, no later than December 31st of the year in which the Stock Unit Scheduled Vesting Date occurs, shares of Common Stock underlying such Stock Units shall be delivered to you (to the extent not previously delivered), subject to a stop transfer order and subject to withholding of any applicable tax obligations, as described in Section II.E. at the time of such delivery. Upon your timely satisfaction of all applicable Employment-Related Actions, Marsh & McLennan Companies will remove or cause to be removed such stop transfer order; and
ii.
With respect to a cash payment attributable to Stock Units, to the extent any such payment will not be made by December 31st of the year in which the Scheduled Vesting Date occurs, any payment that relates to such Stock Unit Scheduled Vesting Date shall be placed in escrow or contributed to a secular trust (in the sole discretion of the Marsh & McLennan Companies) for your benefit on or before such December 31st and subject to withholding of any applicable tax obligations, as described in Section II.E. at the time of such placement or contribution. Upon your timely satisfaction of all applicable Employment-Related Actions, Marsh & McLennan Companies shall cause such amounts to be released from escrow or paid to you out of such trust.
In either case, if any Employment-Related Action is not timely satisfied, the shares of Common Stock or the cash payment shall revert to the Marsh & McLennan Companies with no further compensation due to you.
7.
Special 409A Distribution Provisions for Performance Stock Units and payments attributable to Performance Stock Units.
a.
Notwithstanding any provision herein, with respect to distributions of PSUs or cash attributable to such PSUs (i) where, prior to [DATE], you have satisfied or would satisfy the Age and Service Criteria either for Full Vesting or Pro-Rata Vesting and (ii) where such distributions are subject to one or more Employment-Related Actions:
i.
With respect to PSUs, no later than December 31st of the year in which the PSU Scheduled Vesting Date occurs, shares of Common Stock underlying such PSUs that relate to the PSU Scheduled Vesting Date, shall be delivered to you (to the extent not previously delivered), subject to a stop transfer order and subject to withholding of any applicable tax obligations, as described in Section II.E. at the time of such delivery. Upon your timely satisfaction of all applicable Employment-Related Actions, Marsh & McLennan Companies will remove or cause to be removed such stop transfer order; and
ii.
With respect to a cash payment attributable to PSUs, to the extent any such payment will not be made by December 31st of the year in

18

2015 LTI Combined Terms & Conditions

which the PSU Scheduled Vesting Date occurs, any payment that relates to the PSU Scheduled Vesting Date shall be placed in escrow or contributed to a secular trust (in the sole discretion of the Marsh & McLennan Companies) for your benefit on or before such December 31st and subject to withholding of any applicable tax obligations, as described in Section II.E. at the time of such placement or contribution. Upon your timely satisfaction of all applicable Employment-Related Actions, Marsh & McLennan Companies shall cause such amounts to be released from escrow or paid to you out of such trust.
In either case, if any Employment-Related Action is not timely satisfied, the shares of Common Stock or the cash payment shall revert to the Marsh & McLennan Companies with no further compensation due to you.
8.
Nothing in this Section III.K. is intended to nor does it guarantee that the Award will not be subject to “additional tax” or other adverse tax consequences under Section 409A of the Code or any similar state tax law.
IV.    CHANGE IN CONTROL PROVISIONS
A.
Treatment of Awards - Stock Units and Performance Stock Units.
1.
General. Upon the occurrence of a Change in Control, the Stock Units and PSUs will continue to vest in accordance with the vesting schedule specified in Sections II.B.2. and II.C.2., subject to earlier vesting or forfeiture pursuant to Section III.; provided that upon your termination of employment by the Company other than for Cause, or by you for Good Reason (as defined in Section V.F.), during the 24-month period following such Change in Control, all unvested Stock Units and PSUs that are outstanding as of your termination of employment will remain outstanding and will be distributed as soon as practicable following the next Stock Unit Scheduled Vesting Date or the PSU Scheduled Vesting Date, as described in Section II.B.4. or II.C.4., as applicable; provided that you have satisfied the conditions described in Section IV.C.; provided further that the number of shares distributable with respect to PSUs is as described in IV.A.3.
2.
Awards Not Assumed. Notwithstanding the foregoing, if the Stock Units or PSUs are not assumed, converted or replaced in connection with a Change in Control on an equivalent basis, such Stock Units or PSUs will fully vest immediately prior to the Change in Control and will be distributed as soon as practicable following vesting and in no event later than 60 days following vesting.
3.
Calculation of Shares Distributable with Respect to PSUs. Upon the occurrence of a “Change in Control”, the Performance Period shall be deemed to have ended on December 31 of the year preceding the year in which the Change in Control occurs, and the number of shares of Common Stock distributable in respect of the PSUs (subject to the vesting conditions applicable thereto) will be determined in accordance with Section II.C.1.; provided that, in the event that the Change in Control occurs on or prior to December 31 of the year in which the PSUs are granted, you will receive one (1) share of Common Stock in respect of each PSU that vests.

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2015 LTI Combined Terms & Conditions

B.
Treatment of Awards - Stock Options
Upon the occurrence of a Change in Control, the Option Shares will continue to vest in accordance with the vesting schedule specified in Section II.D.2 and subject to earlier vesting or forfeiture pursuant to Section III.; provided that the Option Shares will become fully vested at your termination of employment by the Company other than for Cause, or by you for Good Reason, during the 24-month period following such Change in Control and will be treated as set forth below, provided that you satisfy the conditions described in Section IV.C Notwithstanding the foregoing, if the Option Share is not assumed, converted or replaced in connection with a Change in Control on an equivalent basis, the Option Shares will fully vest immediately prior to the Change in Control and will be treated as follows:
Provided that you satisfy the conditions described in Section IV.C., any such Option Shares that vest (and any Option Shares that were already vested at the time of your termination of employment) shall be exercisable until the earlier of (a) 90 days following your termination of employment or the occurrence of the Change in Control, as applicable, and (b) the Option Expiration Date.
C.
Waiver and Release
In the event of your termination of employment by the Company other than for Cause or by you for Good Reason during the 24-month period following such Change in Control, you will be required to execute and not revoke a waiver and release agreement, if provided by the Company at the time of your termination of employment. Failure to meet these requirements by the date specified by the Company, which shall be in no event later than 60 days following your termination of employment, or failure to comply with the waiver and release agreement, and be in compliance with the agreement, if applicable, as of the delivery date for Stock Units and Performance Stock Units (as described in
Section II.B.4. or II.C.4., as applicable), will result in the cancellation or forfeiture of any rights, title and interest in and to the Award.
D.
Other Matters
For the avoidance of doubt, in the event of your termination of employment by the Company other than for Cause or by you for Good Reason during the 24-month period following such Change in Control and, on or before the date of your termination of employment you satisfy the Age and Service Criteria for Pro-Rata Vesting or the Age and Service Criteria for Full Vesting as described in Sections III.C. and D., or you are determined by the Retirement Treatment Committee to be eligible for retirement treatment on or following your termination of employment as described in Section III.E., any unvested Stock Units, PSUs or Options covered by the Award will be treated as described in this Section IV.; provided that you satisfy or have satisfied, as applicable, the conditions described in Section IV.C.; provided further that any such Option Shares that vest (and any Option Shares that were already vested at the time of your termination of employment) shall be exercisable until the earlier of the fifth anniversary of your termination of employment and the Option Expiration Date.

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2015 LTI Combined Terms & Conditions

V.    DEFINITIONS
As used in these Terms and Conditions:

A.
“Age and Service Criteria for Full Vesting” means you are at least age 65 and have a minimum of one year of service with the Company.

B.
“Age and Service Criteria for Pro-Rata Vesting” means you are at least age 55 but are not yet age 65 and have a minimum of five years of service with the Company.

C.
“Cause” shall mean:    
1.
willful failure to substantially perform the duties consistent with your position which is not remedied within 30 days after receipt of written notice from the Company specifying such failure;
2.
willful violation of any written Company policies including but not limited to, the Marsh & McLennan Companies code of business conduct and ethics;
3.
commission at any time of any act or omission that results in a conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated probation for any felony or crime involving moral turpitude;
4.
unlawful use (including being under the influence) or possession of illegal drugs;
5.
any gross negligence or willful misconduct resulting in a material loss to the Company, or material damage to the reputation of the Company; or
6.
any violation of any statutory or common law duty of loyalty to the Company, including the commission at any time of any act of fraud, embezzlement, or material breach of fiduciary duty against the Company.

D.
“Company” shall mean Marsh & McLennan Companies or any of its subsidiaries or affiliates.
E.
“Employment-Related Action” shall mean the execution and effectiveness of a release of claims and/or a restrictive covenant.
F.
“Good Reason” shall mean any one of the following events without your written consent:
1.
material reduction in your base salary;
2.
material reduction in your annual incentive opportunity (including a material adverse change in the method of calculating your annual incentive);
3.
material diminution of your duties, responsibilities or authority; or
4.
relocation of more than 50 miles from your principal place of employment immediately prior to the Change in Control; provided that you provide Marsh & McLennan Companies with written notice of your intent to terminate your employment for Good Reason within 60 days of your becoming aware of any circumstances set forth above (with such notice indicating the specific termination provision above on which you are relying and describing in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the indicated provision) and that you provide Marsh & McLennan Companies with at least 30 days following receipt of such notice to remedy such circumstances.

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2015 LTI Combined Terms & Conditions

G.
“Performance Period” shall mean the period that begins on [DATE] and ends on [DATE]; provided that in the event of a termination of your employment due to death prior to a Change in Control, such period will end on December 31 of the year prior to such termination of employment for the PSUs covered by the Award; and provided further that in the event of a Change in Control, such period will end on December 31 of the year prior to the occurrence of such Change in Control.
H.
“Permanent Disability” will be deemed to occur when it is determined (by Marsh & McLennan Companies’ disability carrier for the primary long-term disability plan or program applicable to you because of your employment with the Company) that you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.
I.
“Retirement Treatment Committee” is comprised of employees of the Company appointed by the Committee.
J.
“Section 409A of the Code” shall mean Section 409A of the U.S. Internal Revenue Code of 1986, as amended, and the regulations and guidance thereunder (regarding nonqualified deferred compensation).
K.
Additional Definitions.
The terms below are defined on the following pages
Award
 
1

Award Documentation
 
1

Change in Control
 
2

Committee
 
3

Common Stock
 
1

Country-Specific Notices
 
1

Dividend Equivalent
 
2

Employing Company
 
13

Exercise Notice
 
5

Grant Documentation
 
1

Marsh & McLennan Companies
 
1

Option
 
4

Option Expiration Date
 
5

Option Scheduled Vesting Date
 
4

Option Shares
 
4

Plan
 
1

PSU
 
3

PSU Scheduled Vesting Date
 
3

Restrictive Covenants Agreement
 
1

Stock Unit
 
2

Stock Unit Scheduled Vesting Date
 
2

Substantial Risk of Forfeiture
 
17

Terms and Conditions
 
1


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2015 LTI Combined Terms & Conditions

VI.
ADDITIONAL PROVISIONS
A.
Additional Provisions—General
1.
Administrative Rules. The Award shall be subject to such additional administrative regulations as the Committee may, from time to time, adopt. All decisions of the Committee upon any questions arising under the Award Documentation and Grant Documentation shall be conclusive and binding. The Committee may delegate to any other individual or entity the authority to perform any or all of the functions of the Committee under the Award, and references to the Committee shall be deemed to include any such delegate.
2.
Amendment. The Committee may, in its sole discretion, amend the terms of the Award, including, without limitation, to impose additional requirements on the Award and on any shares of Common Stock acquired with respect to the Award; provided, however, that if the Committee concludes, in its sole discretion, that such amendment is likely to materially impair your rights with respect to the Award, such amendment shall not be implemented with respect to the Award without your consent, except to the extent that any such action is made to cause the Award to comply with applicable law, currency controls, stock market or exchange rules and regulations, or accounting or tax rules and regulations, or is otherwise made in accordance with Section VI.A.4.
3.
Limitations. Payment of the Award is not secured by trust, insurance contract or other funding medium, and you do not have any interest in any fund or specific asset of Marsh & McLennan Companies by reason of the Award. Your right to payment of the Award is the same as the right of an unsecured general creditor of Marsh & McLennan Companies.
4.
Cancellation or Clawback of Awards.
a.
Marsh & McLennan Companies may, to the extent permitted or required by any applicable law, stock exchange rules, currency controls, or any applicable Company policy or arrangement in effect prior to the vesting of any unvested portion of the Award, or as specified in the Award Documentation or Grant Documentation, cancel, reduce or require reimbursement of the Award.
b.
If (i) Section III.H.2. is applicable to you, (ii) you terminate your employment with the Company under Section III.G. and such termination of employment occurs within 60 days following a Stock Unit Scheduled Vesting Date or the PSU Scheduled Vesting Date, (iii) you receive delivery of the portion of the Award that was thought to have vested on such Stock Unit Scheduled Vesting Date or the PSU Scheduled Vesting Date pursuant to Section II.B.4. or II.C.4. and (iv) the date of your termination of employment as determined pursuant to Section III.H.2. is before the Stock Unit Scheduled Vesting Date or the PSU Scheduled Vesting Date, then you will be required to reimburse the Company for the portion of the Award you received following such Stock Unit Scheduled Vesting Date or the PSU Scheduled Vesting Date.

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2015 LTI Combined Terms & Conditions

c.
If you fail to repay any amount due pursuant to this Section VI.A.4., the Company may bring an action in court to recover the amount due. You acknowledge that, by accepting the Award, you agree to pay all costs, expenses and attorney’s fees incurred by the Company in any proceeding for the collection of amounts due pursuant to this Section VI.A.4., provided that the Company prevails in whole or in part in any such proceeding. The Company may also, to the extent permitted by applicable law, reduce any amounts owed to you by the Company in an amount up to the full amount of the repayment due.
5.
Governing Law; Choice of Forum. The Award and the Award Documentation applicable to the Award are governed by and subject to the laws of the state of Delaware, without regard to the conflict of law provisions, as set forth in Section 10.J of the Plan. For purposes of any action, lawsuit, or other proceedings arising out of or relating to this Award, including without limitation, to enforce the Award Documentation, the Company and you each hereby irrevocably and unconditionally submits to the exclusive jurisdiction of any New York state court or federal court of the United States of America sitting in the State of New York, and any appellate court thereof. The Company and you agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
6.
Severability; Captions. In the event that any provision of this Award is determined to be invalid or unenforceable, in whole or in part, the remaining provisions of this Award will be unaffected thereby and will remain in full force and effect to the fullest extent permitted by law. The captions of this Award are not part of the provisions of this Award and will have no force or effect.
7.
Electronic Delivery and Acceptance. Marsh & McLennan Companies may, in its sole discretion, decide to deliver any documents related to the Award and/or your current or future participation in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by Marsh & McLennan Companies or an agent appointed by Marsh & McLennan Companies.
8.
Waiver. You acknowledge that neither a waiver by Marsh & McLennan Companies of your breach of any provision of the Award Documentation nor a prior waiver by Marsh & McLennan Companies of a breach of any provision of the Award Documentation by any other participant of the Plan shall operate or be construed as a waiver of any other provision of the Award Documentation, or of any subsequent breach by you.

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2015 LTI Combined Terms & Conditions

B.
Additional Provisions—Outside of the United States
1.
Changes to Delivery. In the event that Marsh & McLennan Companies considers that due to legal, regulatory or tax issues the normal delivery of an Award (as described in these Terms and Conditions) to a participant outside the United States would not be appropriate, then Marsh & McLennan Companies may, in its sole discretion, determine how and when the value of the Award will be delivered. Without limitation, this may include making any payments due under the Award in cash instead of shares of Common Stock, or in shares of Common Stock instead of cash, in an amount equivalent to the value of the Award on the date of exercise (for Options) or vesting after payment of applicable taxes and fees and any exercise price or, delivering or paying out the Award as soon as practicable following a termination of employment. If the value of an Award is to be delivered in cash instead of shares of Common Stock, Marsh & McLennan Companies may sell any shares of Common Stock distributable in respect of the Award on your behalf and use the proceeds (after payment of applicable taxes, fees and any exercise price) to satisfy the Award.
2.
Amendment and Modification. The Committee may modify the terms of any Award under the Plan granted to you in any manner deemed by the Committee to be necessary or appropriate in order for such Award to conform to laws, regulations and customs of the country (other than the United States) in which you are then resident or primarily employed or were resident or primarily employed at the time of grant or during the term of the Award, or so that the value and other benefits of the Award to you, as affected by non-U.S. tax laws and other restrictions applicable as a result of your residence or employment outside of the United States, shall be comparable to the value of such an Award to an individual who is resident or primarily employed in the United States.
VII.    QUESTIONS AND ADDITIONAL INFORMATION
Please retain this document in your permanent records. If you have any questions regarding the Award Documentation or Grant Documentation or if you would like an account statement detailing each type of equity-based award and the number of shares of Common Stock covered by such equity-based award that comprises the Award, and the exercise price, vesting date(s) and expiration date of such equity-based awards that comprise the Award, or any other information, please contact:
 
Global & Executive Compensation
Marsh & McLennan Companies, Inc.
1166 Avenue of the Americas
New York, NY 10036-2774
United States of America
Telephone Number: +1 212 345-9722
Facsimile Number: +1 212 948-8481
Email: mmc.compensation@mmc.com
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


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2015 LTI Combined Terms & Conditions

IN WITNESS WHEREOF, Marsh & McLennan Companies has caused these Terms & Conditions to be duly executed by the facsimile signature of its Senior Vice President, Chief Human Resources Officer as of the day and year first above written. By consenting to these Terms and Conditions, you agree to the following: (i) you have carefully read, fully understand and agree to all of the terms and conditions described herein and in the Award Documentation; and (ii) you understand and agree that these Terms & Conditions and the Award Documentation constitute the entire understanding between you and Marsh & McLennan Companies regarding the Award, and that any prior agreements, commitments or negotiations concerning the Award are replaced and superseded. The grant of the Award is contingent upon your acceptance of these Terms and Conditions, Country-Specific Notices (if applicable) and Restrictive Covenants Agreement (if applicable) by the date and in the manner specified in materials provided to you by Global & Executive Compensation. If you decline the Award or you do not accept the Award and any applicable documents described in the preceding sentence by the date and in the manner specified, the Award will be cancelled as of the grant date of the Award.


 
/s/ Laurie Ledford
 
Laurie Ledford
SVP, Chief Human Resources Officer
 
 


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2015 LTI Combined Terms & Conditions



Exhibit 10.4









MARSH & McLENNAN COMPANIES, INC.

2011 INCENTIVE AND STOCK AWARD PLAN


TERMS AND CONDITIONS
OF
DEFERRED STOCK UNIT AWARDS
GRANTED ON [DATE], 2015





TABLE OF CONTENTS

 
 
PAGE

I. BACKGROUND
 
2

II. AWARDS
 
2

A. General
 
2

1. Award Acceptance
 
2

2. Rights of Award Holders
 
2

3. Restrictive Covenants Agreement
 
2

B. Stock Units
 
3

1. General
 
3

2. Vesting
 
3

3. Dividend Equivalents
 
3

4. Delivery
 
3

C. Satisfaction of Tax Obligations
 
4

1. Personal Tax Advisor
 
4

2. U.S. Employees
 
4

3. Non-U.S. Employees
 
4

a. Stock Units and Dividend Equivalents
 
4

b. Withholding
 
4

III. EMPLOYMENT EVENTS
 
4

A. Death
 
4

B. Permanent Disability
 
4

C. Termination by the Company Other Than for Cause
 
5

1. General
 
5

2. Important Notes
 
5

a. Sale of Business Unit
 
5

b. Constructive Discharge
 
5

D. All Other Terminations
 
5

E. Date of Termination of Employment
 
5

F. Conditions to Vesting of Award Prior to [a] Scheduled Vesting Date
 
6

1. Restrictive Covenants Agreement
 
6

2. Waiver and Release and Restrictive Covenants Agreement
 
6

G. Determination of Pro-Rata Vesting upon Termination of Employment
 
6

H. Section 409A of the Code for Award Recipients Subject to U.S.
     Federal Income Tax
 
7

IV. CHANGE IN CONTROL PROVISIONS
 
8

V. DEFINITIONS
 
8

VI. ADDITIONAL PROVISIONS
 
10

A. Additional Provisions—General
 
10

1. Administrative Rules
 
10

2. Amendment
 
10

3. Limitations
 
10

4. Cancellation or Clawback of Awards
 
11

5. Governing Law; Choice of Forum
 
11

6. Severability; Captions
 
11

7. Electronic Delivery and Acceptance
 
11

8. Waiver
 
12

B. Additional Provisions—Outside of the United States
 
12

1. Changes to Delivery
 
12

2. Amendment and Modification
 
12

VII. QUESTIONS AND ADDITIONAL INFORMATION
 
13



I.
BACKGROUND
An award (“Award”) has been granted to you under the Marsh & McLennan Companies, Inc. 2011 Incentive and Stock Award Plan (the “Plan”), subject to your acceptance as described in Section II.A.1. The Award type, the number of shares of Marsh & McLennan Companies, Inc. (“Marsh & McLennan Companies”) common stock covered by the Award, instructions on how to accept or decline the Award and the deadline for accepting the Award are specified in materials provided to you by Global & Executive Compensation (“Grant Documentation”). The Award is also subject to the terms and conditions set forth herein (the “Terms and Conditions”). For employees outside the United States, the Award is subject to additional terms and conditions as set forth in the country-specific notices (the “Country-Specific Notices”). The Prospectus dated [DATE] also describes important information about the Plan. The Terms and Conditions, the Country-Specific Notices (if applicable), and the Plan will be referred to herein as the “Award Documentation”. As used herein, “Common Stock” means common stock of Marsh & McLennan Companies.
Capitalized terms in these Terms and Conditions are defined in Section V.
II.
AWARDS
A.
General.
1. Award Acceptance. The grant of this Award is contingent upon your acceptance, by the date and in the manner specified in the Grant Documentation, of these Terms and Conditions, the Country-Specific Notices (if applicable) and Restrictive Covenants Agreement as described in Section II.A.3. If you decline the Award or if you do not accept the Award and any applicable documents described in the preceding sentence by the date and in the manner specified in the Grant Documentation, then the Award will be cancelled as of the grant date of the Award.
2. Rights of Award Holders. Unless and until the vesting conditions of the Award have been satisfied and cash or shares of Common Stock, as applicable, have been delivered to you in accordance with the Award Documentation, you have only the rights of a general unsecured creditor of Marsh & McLennan Companies. Unless and until shares of Common Stock have been delivered to you, you have none of the rights of ownership to such shares (e.g., units cannot be used as payment for stock option exercises; units may not be transferred or assigned; units have no voting rights).
3. Restrictive Covenants Agreement. As described in Section II.A.1., a Restrictive Covenants Agreement (“Restrictive Covenants Agreement”) in a form determined by Marsh & McLennan Companies must be in place in order to accept the Award and you must execute or reaffirm, as determined by Marsh & McLennan Companies, in its sole discretion, the Restrictive Covenants Agreement in order for the Award to vest pursuant to certain employment events as described in Section III. Failure to timely execute the Restrictive Covenants Agreement by the date specified in the Grant Documentation or failure to timely execute or reaffirm and comply with the Restrictive Covenants Agreement as described in Section III.F.1. or 2., as applicable, will result in cancellation or forfeiture of any rights, title and interest in and to the Award, without any liability to the Company (as defined in Section V.B.).

2

B.
Stock Units.
1.
General. A deferred stock unit (“Stock Unit”) represents an unfunded and unsecured promise to deliver (or cause to be delivered) to you, subject to the terms of the Award Documentation, one share of Common Stock after vesting.
2.
Vesting. Subject to your continued employment, [PERCENTAGE] of the Stock Units will vest on the 15th of the month in which the [VESTING DATE(S)] of the grant date of the Award occurs. [Each] date on which a Stock Unit is scheduled to vest pursuant to this Section II.B.2. is [a] “Scheduled Vesting Date.” In the event of your termination of employment or the occurrence of your Permanent Disability (as defined in Section V.D.) prior to [a] Scheduled Vesting Date, your right to any Stock Units that are unvested immediately prior to your termination of employment or occurrence of your Permanent Disability, as applicable, will be determined in accordance with Section III. below. For the avoidance of doubt, the date of your termination of employment for purposes of determining vesting under this Section II.B.2. will be determined in accordance with Section III.E.
3.
Dividend Equivalents. For each outstanding Stock Unit covered by the Award, an amount equal to the dividend payment (if any) made in respect of one share of Common Stock (a “Dividend Equivalent”) will accrue in U.S. dollars on each dividend record date that occurs on or after the grant date of the Award while the Award is outstanding, with no interest paid on such amounts. Accrued Dividend Equivalents will vest when the Stock Units in respect of which such Dividend Equivalents were accrued vest. Accrued Dividend Equivalents will not be paid, and no further Dividend Equivalents will accrue, on Stock Units that do not vest or are cancelled or forfeited.
4.
Delivery.
a.
Shares of Common Stock deliverable in respect of the Stock Units covered by the Award shall be delivered to you as soon as practicable after vesting, and in no event later than 60 days after vesting.
b.
The value of vested Dividend Equivalents will be delivered to you in cash as soon as practicable after vesting and in no event later than 60 days after vesting.
c.
The delivery of shares of Common Stock and/or cash or other property that may be deliverable under these Terms and Conditions, is conditioned on the satisfaction or withholding of any applicable tax obligations, as described in Section II.C.
d.
Any shares of Common Stock and/or cash or other property that may be deliverable following your death shall be delivered to the person or persons to whom your rights pass by will or the law of descent and distribution, and such delivery shall completely discharge Marsh & McLennan Companies and any of its subsidiaries’ or affiliates’ obligations under the Award.
e.
Notwithstanding the foregoing, additional delivery rules for certain Award recipients subject to U.S. federal income tax (whether or not the recipient is a U.S. citizen or employed in the U.S.) are reflected in Section III.H.

3

C.
Satisfaction of Tax Obligations.
1.
Personal Tax Advisor. Neither the Company nor any Company employee is authorized to provide personal tax advice to you. It is recommended that you consult with your personal tax advisor for more detailed information regarding the tax treatment of the Award, especially before making any decisions that rely on that tax treatment.
2.
U.S. Employees. Applicable employment taxes are required by law to be withheld when a Stock Unit or Dividend Equivalent vests. Applicable income taxes are required by law to be withheld when shares of Common Stock in respect of Stock Units or cash in respect of Dividend Equivalents are delivered to you. A sufficient number of whole shares of Common Stock, cash or other property, as applicable, will be retained by Marsh & McLennan Companies to satisfy the tax-withholding obligation.
3.
Non-U.S. Employees.

a.
Stock Units and Dividend Equivalents. In most countries, the value of a Stock Unit or Dividend Equivalent is generally not taxable on the grant date. If the value of the Stock Unit or Dividend Equivalent is not taxable on the grant date, it will, in most countries, be taxed at a later time, for example, upon delivery of a share of Common Stock in respect of the Stock Unit that vests, and/or the subsequent sale of the share of Common Stock received in connection with the vesting of the Stock Unit or upon delivery of cash in respect of a Dividend Equivalent.
b.
Withholding. Marsh & McLennan Companies and/or your employer shall have the power and the right to deduct and withhold from the Award and other compensation or to require you to remit to Marsh & McLennan Companies and/or to your employer, an amount sufficient to satisfy any taxes that Marsh & McLennan Companies expects to be payable under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, payroll taxes, fringe benefits, payment on account, capital gain taxes, transfer taxes, social security contributions, and National Insurance Contributions with respect to the Award, and any and all associated tax events derived therefrom. If applicable, Marsh & McLennan Companies and/or your employer may retain and sell a sufficient number of whole shares of Common Stock distributable in respect of the Award for this purpose.
III.
EMPLOYMENT EVENTS
A.
Death. In the event your employment is terminated because of your death, the unvested Stock Units will fully vest at such termination of employment and will be distributed as described in Section II.B.4.
B.
Permanent Disability. Upon the occurrence of your Permanent Disability, the unvested Stock Units will fully vest and will be distributed as described in Section II.B.4., provided that you satisfy the conditions to vesting described in Section III.F.1.

4

C.
Termination by the Company Other Than for Cause.
1.
General. Except as otherwise provided in Section IV., in the event the Company, in its sole discretion, determines that your employment is terminated by the Company other than for Cause (as defined in Section V.A.), the unvested Stock Units will vest at such termination of employment on a pro-rata basis as described in Section III.G. and will be distributed as described in Section II.B.4., provided that you satisfy the conditions to vesting described in Section III.F.2.
2.
Important Notes.
a.
Sale of Business Unit. For purposes of this Award, in the event of a sale or similar transaction involving the business unit for which you work (“Employing Company”) as a result of which the Employing Company ceases to be a subsidiary or affiliate of Marsh & McLennan Companies, your employment will be deemed terminated by the Company other than for Cause, even if your employment with the Employing Company continues after the sale or similar transaction.
b.
Constructive Discharge. The Award will not vest, whether on a pro-rata or full basis, upon a constructive discharge, including if any court or regulatory agency retroactively concludes or interprets events to have constituted a constructive discharge.
D.
All Other Terminations. For all other terminations of employment not described in Sections III.A. through C. or Section IV. (including, but not limited to, a termination by the Company for Cause or a resignation by you of your employment with the Company), any rights, title and interest in and to any remaining unvested portion of the Award shall be cancelled as of the date your employment is treated as having terminated as described in Section III.E.
E.
Date of Termination of Employment.
1.
If Section III.E.2. does not apply to you, then for purposes of determining vesting under Section II.B.2. and the number of unvested Stock Units that vest on a pro-rata basis as described in Section III.G., your employment will be treated as having terminated on your last day of employment with the Company.
2.
If you are a Guy Carpenter employee in the United States who is obligated to provide the Company at least 60 days advance written notice of your intention to terminate your employment for any reason, then, if your employment terminates pursuant to Section III.D., your employment will be treated as having terminated for purposes of determining vesting under Section II.B.2. on the date that is 60 days prior to your last day of employment with the Company. Notwithstanding the foregoing, if your employment is terminated after providing notice pursuant to the preceding sentence but prior to the intended termination date provided in such notice (i) by the Company other than for Cause or (ii) pursuant to a written agreement, the terms of which provide that your termination of employment has been by mutual agreement between you and the Company, then the Company may, in its sole discretion, determine that for purposes of determining vesting under Section II.B.2. your employment will be treated as having terminated on a date later than the date that is 60 days prior to your last day of employment with the Company, but in no event later than your last day of employment with the Company.

5

F.
Conditions to Vesting of Award Prior to [a] Scheduled Vesting Date.
1.
Restrictive Covenants Agreement. In the event of the occurrence of your Permanent Disability as described in Section III.B., you will be required to execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, and return to Marsh & McLennan Companies (or an agent appointed by Marsh & McLennan Companies) a Restrictive Covenants Agreement. Failure to (a) execute or reaffirm such an agreement by the date specified by the Company, which shall be in no event later than 60 days following the occurrence of your Permanent Disability as described in Section III.B., or (b) comply with the Restrictive Covenants Agreement, will result in the cancellation or forfeiture of any rights, title and interest in and to the Award without any liability to the Company.
2.
Waiver and Release and Restrictive Covenants Agreement. In the event of your termination of employment by the Company other than for Cause as described in Section III.C., you will be required to (i) execute or reaffirm, as determined by Marsh & McLennan Companies in its sole discretion, and return to Marsh & McLennan Companies (or an agent appointed by Marsh & McLennan Companies) a Restrictive Covenants Agreement and (ii) execute and not revoke a waiver and release agreement, if provided to you by the Company at the time of your termination of employment. Failure to meet these requirements by the date specified by the Company, which shall be in no event later than 60 days following your termination of employment, or failure to comply with the waiver and release agreement or the Restrictive Covenants Agreement, as applicable, will result in the cancellation or forfeiture of any rights, title and interest in and to the Award without any liability to the Company.
G.
Determination of Pro-Rata Vesting upon Termination of Employment.
The number of Stock Units that vests on a pro-rata basis upon your termination of employment will be determined using the following formula:


where
A
=     the number of Stock Units covered by the Award;
B
=    the number of days in the period beginning on the grant date of the Award and ending on the date of your termination of employment, as determined in accordance with Section III.E.1.;
C
=    the number of days in the period beginning on the grant date of the Award and ending on the [last] Scheduled Vesting Date; and
D
=    the number of Stock Units that have previously vested.



6

H.
Section 409A of the Code for Award Recipients Subject to U.S. Federal Income Tax (whether or not the recipient is a U.S. citizen or employed in the U.S.).
1.
For Award recipients subject to U.S. federal income tax, notwithstanding any other provision herein, the Award may be subject to additional restrictions to ensure compliance with (or continued exemption from) the requirements of Section 409A of the Code (as defined in Section V.E.). The Compensation Committee of the Board of Directors of Marsh & McLennan Companies (the “Committee”) intends to administer the Award in accordance with Section 409A of the Code and reserves the right to make changes in the terms or operations of the Award (including changes that may have retroactive effect) deemed necessary or desirable to comply with Section 409A of the Code. This means, for example, that the timing of distributions may be different from those described in the Award Documentation that do not reflect Section 409A of the Code. If the Award is not in compliance with Section 409A of the Code, you may be subject to immediate taxation of all unpaid awards under the Plan that are subject to Section 409A of the Code at your regular federal income tax rate, plus a 20% additional tax, plus interest at the underpayment rate plus 1%, as well as any state and local taxes, penalties, additional taxes and interest, if applicable, imposed under any state tax law similar to Section 409A of the Code.
2.
Notwithstanding any other provision herein, if any portion of the Award is determined to be nonqualified deferred compensation subject to Section 409A of the Code, any references to “termination of employment,” or “when you are no longer employed” in these Terms and Conditions shall have the following meaning:
Your "termination of employment" (or similar terms) shall occur when you have incurred a “separation from service” within the meaning of Section 409A of the Code and as further defined herein. Specifically, you will have incurred a “separation from service” when the level of services you provide to the Company in any capacity, including as an employee, director, independent contractor or consultant, does not exceed 20% of the average level of services that you provided to the Company in the preceding 36 months (or shorter period of service if, for example, your total service with the Company is less than 36 months), all as determined in accordance with Section 409A of the Code. In determining whether a “separation from service” has occurred, any period of up to six months during which you are on a bona fide leave of absence or up to 29 months during which you are absent from work due to a disability for which you are receiving Marsh & McLennan Companies long-term disability benefits will be ignored.
3.
Notwithstanding any other provision herein, if at the time of your termination of employment you are a “specified employee” (as defined in Section 409A of the Code) no portion of the Award that is determined to be nonqualified deferred compensation subject to Section 409A of the Code shall be distributed until the first day of the seventh month after your termination of employment and any such distributions to which you would otherwise be entitled during the first six months following your termination of employment will be accumulated and paid without interest on the first day of the seventh month after your termination of employment. The provisions of this subparagraph will only apply if and to the extent required to avoid any “additional tax” under Section 409A of the Code.

7

4.
Nothing in this Section III.H. is intended to nor does it guarantee that the Award will not be subject to “additional tax” or other adverse tax consequences under Section 409A of the Code or any similar state tax law.
IV.
CHANGE IN CONTROL PROVISIONS
A.
Upon the occurrence of a “Change in Control”, as defined in the Plan, the Award will continue to vest in accordance with the vesting schedule specified in Section II.B.2. and subject to earlier vesting or forfeiture pursuant to Section III., provided that the Award will become fully vested at your termination of employment by the Company other than for Cause, or by you for Good Reason (as defined in Section V.C.), during the 24-month period following such Change in Control and will be distributed as described in Section II.B.4., provided that you satisfy the conditions to vesting described in Section IV.B. Notwithstanding the foregoing, if the Award is not assumed, converted or replaced in connection with a Change in Control on an equivalent basis, the Award will fully vest immediately prior to the Change in Control and will be distributed as described in Section II.B.4.
B.
As a condition to vesting of any unvested portion of the Award, in the event of your termination of employment by the Company other than for Cause or by you for Good Reason during the 24-month period following such Change in Control, you will be required to execute and not revoke a waiver and release agreement, if provided by the Company at the time of your termination of employment. Failure to meet these requirements by the date specified by the Company, which shall be in no event later than 60 days following your termination of employment, or failure to comply with the waiver and release agreement, if applicable, will result in the cancellation or forfeiture of any rights, title and interest in and to the Award.
V.
DEFINITIONS
As used in these Terms and Conditions:
A.
“Cause” shall mean:
1.
willful failure to substantially perform the duties consistent with your position which is not remedied within 30 days after receipt of written notice from the Company specifying such failure;
2.
willful violation of any written Company policies including but not limited to, the Marsh & McLennan Companies code of business conduct and ethics;
3.
commission at any time of any act or omission that results in a conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated probation for any felony or crime involving moral turpitude;
4.
unlawful use (including being under the influence) or possession of illegal drugs;
5.
any gross negligence or willful misconduct resulting in a material loss to the Company, or material damage to the reputation of the Company; or
6.
any violation of any statutory or common law duty of loyalty to the Company, including the commission at any time of any act of fraud, embezzlement, or material breach of fiduciary duty against the Company.

8

B.
“Company” shall mean Marsh & McLennan Companies or any of its subsidiaries or affiliates.
C.
“Good Reason” shall mean any one of the following events without your written consent:
1.
material reduction in your base salary;
2.
material reduction in your annual incentive opportunity (including a material adverse change in the method of calculating your annual incentive);
3.
material diminution of your duties, responsibilities or authority; or
4.
relocation of more than 50 miles from your principal place of employment immediately prior to the Change in Control;
provided that you provide Marsh & McLennan Companies with written notice of your intent to terminate your employment for Good Reason within 60 days of your becoming aware of any circumstances set forth above (with such notice indicating the specific termination provision above on which you are relying and describing in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the indicated provision) and that you provide Marsh & McLennan Companies with at least 30 days following receipt of such notice to remedy such circumstances.
D.
“Permanent Disability” will be deemed to occur when it is determined (by Marsh & McLennan Companies’ disability carrier for the primary long-term disability plan or program applicable to you because of your employment with the Company) that you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.
E.
“Section 409A of the Code” shall mean Section 409A of the U.S. Internal Revenue Code of 1986, as amended, and the regulations and guidance thereunder (regarding nonqualified deferred compensation).

9

F.
Additional Definitions.
The terms below are defined on the following pages:
Award
 
2

Award Documentation
 
2

Change in Control
 
8

Committee
 
7

Common Stock
 
2

Country-Specific Notices
 
2

Dividend Equivalent
 
3

Employing Company
 
5

Grant Documentation
 
2

Marsh & McLennan Companies
 
2

Plan
 
2

Restrictive Covenants Agreement
 
2

Scheduled Vesting Date
 
3

Stock Unit
 
3

Terms and Conditions
 
2

VI.
ADDITIONAL PROVISIONS
A.
Additional Provisions—General
1.
Administrative Rules. The Award shall be subject to such additional administrative regulations as the Committee may, from time to time, adopt. All decisions of the Committee upon any questions arising under the Award Documentation and Grant Documentation shall be conclusive and binding. The Committee may delegate to any other individual or entity the authority to perform any or all of the functions of the Committee under the Award, and references to the Committee shall be deemed to include any such delegate.
2.
Amendment. The Committee may, in its sole discretion, amend the terms of the Award, including, without limitation, to impose additional requirements on the Award and on any shares of Common Stock with respect to the Award; provided, however, that if the Committee concludes, in its sole discretion, that such amendment is likely to materially impair your rights with respect to the Award, such amendment shall not be implemented with respect to the Award without your consent, except to the extent that any such action is made to cause the Award to comply with applicable law, currency controls, stock market or exchange rules and regulations, or accounting or tax rules and regulations, or is otherwise made in accordance with Section VI.A.4.
3.
Limitations. Payment of the Award is not secured by trust, insurance contract or other funding medium, and you do not have any interest in any fund or specific asset of Marsh & McLennan Companies by reason of the Award. Your right to payment of the Award is the same as the right of an unsecured general creditor of Marsh & McLennan Companies.

10

4.
Cancellation or Clawback of Awards.
a.
Marsh & McLennan Companies may, to the extent permitted or required by any applicable law, stock exchange rules, currency controls, or any applicable Company policy or arrangement in effect prior to the vesting of any unvested portion of the Award, or as specified in the Award Documentation or Grant Documentation, cancel, reduce or require reimbursement of the Award.
b.
If (i) Section III.E.2. is applicable to you, (ii) you terminate your employment with the Company under Section III.D. and such termination of employment occurs within 60 days following [a] Scheduled Vesting Date, (iii) you receive delivery of the portion of the Award that was thought to have vested on [such] Scheduled Vesting Date pursuant to Section II.B.4. and (iv) the date of your termination of employment as determined pursuant to Section III.E.2. is before the Scheduled Vesting Date, then you will be required to reimburse the Company for the portion of the Award you received following [such] Scheduled Vesting Date.
c.
If you fail to repay any amount due pursuant to this Section VI.A.4., the Company may bring an action in court to recover the amount due. You acknowledge that, by accepting the Award, you agree to pay all costs, expenses and attorney’s fees incurred by the Company in any proceeding for the collection of amounts due pursuant to this Section VI.A.4., provided that the Company prevails in whole or in part in any such proceeding. The Company may also, to the extent permitted by applicable law, reduce any amounts owed to you by the Company in an amount up to the full amount of the repayment due.
5.
Governing Law; Choice of Forum. The Award and the Award Documentation applicable to the Award are governed by, and subject to the laws of the state of Delaware, without regard to the conflict of law provisions, as set forth in Section 10.J of the Plan. For purposes of any action, lawsuit, or other proceedings arising out of or relating to this Award, including without limitation, to enforce the Award Documentation, the Company and you each hereby irrevocably and unconditionally submits to the exclusive jurisdiction of any New York state court or federal court of the United States of America sitting in the State of New York, and any appellate court thereof. The Company and you agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
6.
Severability; Captions. In the event that any provision of this Award is determined to be invalid or unenforceable, in whole or in part, the remaining provisions of this Award will be unaffected thereby and will remain in full force and effect to the fullest extent permitted by law. The captions of this Award are not part of the provisions of this Award and will have no force or effect.
7.
Electronic Delivery and Acceptance. Marsh & McLennan Companies may, in its sole discretion, decide to deliver any documents related to the Award and/or your current or future participation in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan

11

through an on-line or electronic system established and maintained by Marsh & McLennan Companies or an agent appointed by Marsh & McLennan Companies.
8.
Waiver. You acknowledge that neither a waiver by Marsh & McLennan Companies of your breach of any provision of the Award Documentation nor a prior waiver by Marsh & McLennan Companies of a breach of any provision of the Award Documentation by any other participant of the Plan shall operate or be construed as a waiver of any other provision of the Award Documentation, or of any subsequent breach by you.
B.
Additional Provisions—Outside of the United States
1.
Changes to Delivery. In the event that Marsh & McLennan Companies considers that due to legal, regulatory or tax issues the normal delivery of an Award (as described in these Terms and Conditions) to a participant outside the United States would not be appropriate, then Marsh & McLennan Companies may, in its sole discretion, determine how and when the value of the Award will be delivered. Without limitation, this may include making any payments due under the Award in cash instead of shares of Common Stock or in shares of Common Stock instead of cash, in an amount equivalent to the value of the Award on the date of vesting after payment of applicable taxes and fees. If the value of an Award is to be delivered in cash instead of shares of Common Stock, Marsh & McLennan Companies may sell any shares of Common Stock distributable in respect of the Award on your behalf and use the proceeds (after payment of applicable taxes and fees) to satisfy the Award.
2.
Amendment and Modification. The Committee may modify the terms of any Award under the Plan granted to you in any manner deemed by the Committee to be necessary or appropriate in order for such Award to conform to laws, regulations, and customs of the country (other than the United States) in which you are then resident or primarily employed or were resident or primarily employed at the time of grant or during the term of the Award, or so that the value and other benefits of the Award to you, as affected by non-U.S. tax laws and other restrictions applicable as a result of your residence or employment outside of the United States, shall be comparable to the value of such an Award to an individual who is resident or primarily employed in the United States.

12

VII.
QUESTIONS AND ADDITIONAL INFORMATION
Please retain this document in your permanent records. If you have any questions regarding the Award Documentation or Grant Documentation or if you would like an account statement detailing the number of shares of Common Stock covered by the Award and the vesting date(s) of the Award, or any other information, please contact:
 
Global & Executive Compensation
Marsh & McLennan Companies, Inc.
1166 Avenue of the Americas
New York, NY 10036-2774
United States of America
Telephone Number: +1 212 345-9722
Facsimile Number: +1 212 948-8481
Email: mmc.compensation@mmc.com
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


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IN WITNESS WHEREOF, Marsh & McLennan Companies has caused these Terms & Conditions to be duly executed by the facsimile signature of its Senior Vice President, Chief Human Resources Officer as of the day and year first above written. By consenting to these Terms and Conditions, you agree to the following: (i) you have carefully read, fully understand and agree to all of the terms and conditions described herein and in the Award Documentation; and (ii) you understand and agree that these Terms & Conditions and the Award Documentation constitute the entire understanding between you and Marsh & McLennan Companies regarding the Award, and that any prior agreements, commitments or negotiations concerning the Award are replaced and superseded. The grant of the Award is contingent upon your acceptance of these Terms and Conditions, Country-Specific Notices (if applicable) and Restrictive Covenants Agreement (if applicable) by the date and in the manner specified in materials provided to you by Global & Executive Compensation. If you decline the Award or you do not accept the Award and any applicable documents described in the preceding sentence by the date and in the manner specified, the Award will be cancelled as of the grant date of the Award. Please return a signed copy of these Terms and Conditions to the Company at the address below:

 
Marsh & McLennan Companies, Inc.
Attention: Global & Executive Compensation
1166 Avenue of the Americas
New York, New York 10036-2774
United States of America
Telephone Number: +1 212 345-9722
Facsimile Number: +1 212 948-8481
Email: mmc.compensation@mmc.com
 



 
/s/ Laurie Ledford
 
Laurie Ledford
SVP, Chief Human Resources Officer
 
 
 
 
 
Participant's Signature
 
 
 
Participant's Name (Printed)
 
 
 
Participant's Employee ID#
 
 
 
Date


14




Exhibit 12.1

Marsh & McLennan Companies, Inc. and Subsidiaries
Ratio of Earnings to Fixed Charges
(In millions, except ratios)
 
Three Months Ended
March 31, 2015
Years Ended December 31,
 
(Unaudited)
 
2014
 
2013
 
2012
 
2011
 
2010
Earnings
 
 
 
 
 
 
 
 
 
 
 
Income before income taxes
$
704

 
$
2,057

 
$
1,973

 
$
1,696

 
$
1,404

 
$
769

Interest expense
36

 
165

 
167

 
181

 
199

 
233

Portion of rents representative of the interest factor
38

 
131

 
134

 
139

 
143

 
140

 
$
778

 
$
2,353

 
$
2,274

 
$
2,016

 
$
1,746

 
$
1,142

Fixed Charges
 
 
 
 
 
 
 
 
 
 
 
Interest expense
$
36

 
$
165

 
$
167

 
$
181

 
$
199

 
$
233

Portion of rents representative of the interest factor
38

 
131

 
134

 
139

 
143

 
140

 
$
74

 
$
296

 
$
301

 
$
320

 
$
342

 
$
373

Ratio of Earnings to Fixed Charges
10.5

 
7.9

 
7.6

 
6.3

 
5.1

 
3.1









Exhibit 31.1
CERTIFICATIONS
I, Daniel S. Glaser, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Marsh & McLennan Companies, Inc. (the “registrant”);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
 
Date:
May 4, 2015
 
/s/ Daniel S. Glaser
 
 
 
Daniel S. Glaser
 
 
 
President and Chief Executive Officer








Exhibit 31.2
CERTIFICATIONS
I, J. Michael Bischoff, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Marsh & McLennan Companies, Inc. (the “registrant”);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
 
Date:
May 4, 2015
 
/s/ J. Michael Bischoff
 
 
 
J. Michael Bischoff
 
 
 
Chief Financial Officer








Exhibit 32.1

Certification of Chief Executive Officer and Chief Financial Officer
The certification set forth below is being submitted in connection with the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2015 of Marsh & McLennan Companies, Inc. (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code.
Daniel S. Glaser, the President and Chief Executive Officer, and J. Michael Bischoff, Chief Financial Officer, of Marsh & McLennan Companies, Inc. each certifies that, to the best of his knowledge:
1.
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
2.
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Marsh & McLennan Companies, Inc.


Date:
May 4, 2015
 
/s/ Daniel S. Glaser
 
 
 
Daniel S. Glaser
 
 
 
President and Chief Executive Officer

Date:
May 4, 2015
 
/s/ J. Michael Bischoff
 
 
 
J. Michael Bischoff
 
 
 
Chief Financial Officer




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