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Securities and Exchange Commission
Washington, D.C. 20549
Form 11-K
Annual Report
Pursuant to Section 15 (d) of the
Securities Exchange Act of 1934
For Fiscal Year Ended December 31, 1993
A. Full title of the plan:
PUTNAM INVESTMENTS, INC.
PROFIT SHARING RETIREMENT PLAN
B. Name the issuer of the securities held pursuant to the Plan
and the address of its principal
executive office:
MARSH & McLENNAN COMPANIES, INC.
1166 Avenue of the Americas
New York, NY 10036
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PUTNAM INVESTMENTS, INC.
PROFIT SHARING RETIREMENT PLAN
The Trustees of the plan currently are Gregory F. Van Gundy,
Frank J. Borelli, and Francis N. Bonsignore. Mr. Van Gundy is
General Counsel and Secretary of Marsh & McLennan Companies,
Incorporated (MMC). Mr. Borelli is Senior Vice President and
Chief Financial Officer of MMC. Mr. Bonsignore is Senior Vice
President - Human Resources and Administration of MMC and has
been appointed as Plan Administrator. The business address of
all the Trustees is c/o MMC, 1166 Avenue of the Americas, New
York, NY 10036.
The members of the Application Review Committee currently are
Douglas B. Jamieson, Robert W. Burke, and Karen L. Kay. They are
officers of Putnam Investments, Inc. or its subsidiaries. The
business address of each Committee member is c/o Putnam
Investments, Inc. One Post Office Square, Boston, MA 02109.
The financial statements of the Plan are included in this Form
11-K and consists of the statements of net assets available for plan benefits
as of December 31, 1993 and 1992, and the statements
of changes in net assets available for plan benefits for the years
ended December 31, 1993, 1992, and 1991 and the report
and consent of Deloitte & Touche, independent public accountants,
with respect thereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Trustees of Putnam Investments, Inc. Profit Sharing
Retirement Plan have duly caused this annual report to be signed
this 27th day of June, 1994 by the undersigned thereunto duly
authorized.
PUTNAM INVESTMENTS, INC.
PROFIT SHARING RETIREMENT PLAN
By _______________________________
Francis N. Bonsignore
Plan Administrator
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PUTNAM INVESTMENTS, INC.
PROFIT SHARING RETIREMENT PLAN
Financial Statements for the Years Ended
December 31, 1993, 1992 and 1991 and
Supplemental Schedules for the
Year Ended December 31, 1993
and Independent Auditors' Report
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PUTNAM INVESTMENTS, INC.
PROFIT SHARING RETIREMENT PLAN
TABLE OF CONTENTS
Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Plan Benefits,
December 31, 1993 and 1992 2
Statements of Changes in Net Assets Available for Plan Benefits
for the Years Ended December 31, 1993, 1992 and 1991 3
Notes to Financial Statements 4-9
SUPPLEMENTAL SCHEDULES FOR THE YEAR ENDED DECEMBER 31, 1993:
I - Item 27a - Schedule of Assets Held for
Investment Purposes 10-11
II - Item 27d - Schedule of Reportable Transactions 12
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INDEPENDENT AUDITORS' REPORT
To the Trustees of
Putnam Investments, Inc.
Profit Sharing Retirement Plan:
We have audited the accompanying statements of net assets
available for plan benefits of Putnam Investments, Inc. Profit
Sharing Retirement Plan (formerly The Putnam Companies, Inc.
Profit Sharing Retirement Plan) as of December 31, 1993 and 1992,
and the related statements of changes in net assets available for
plan benefits for each of the three years in the period ended
December 31, 1993. These financial statements are the
responsibility of the Plan's trustees. Our responsibility is to
express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the net assets available for Plan benefits of
Putnam Investments, Inc. Profit Sharing Retirement Plan as of
December 31, 1993 and 1992, and the changes in its net assets
available for plan benefits for each of the three years in the
period ended December 31, 1993 in conformity with generally
accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
supplemental schedules listed in the table of contents are
presented for the purpose of additional analysis and are not a
required part of the basic financial statements, but are
supplementary information required by the Department of Labor's
Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974. These schedules
are the responsibility of the Plan's trustees. Such schedules
have been subjected to the auditing procedures applied in our
audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects when considered in
relation to the basic financial statements taken as a whole.
//Deloitte & Touche//
March 31, 1994<PAGE>
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<TABLE>
<CAPTION>
PUTNAM INVESTMENTS, INC.
PROFIT SHARING RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1993 AND 1992
Notes 1993 1992
<S> <C> <C> <C>
ASSETS:
Investments at fair value: 1,2,3
Mutual funds $109,887,593 $ 86,087,200
Guaranteed investment contracts 11,408,537 11,161,824
Marsh & McLennan Companies, Inc.
common stock 1,271,968 1,345,860
Participant loans 1,752,053 1,268,180
-------------- --------------
Total investments at fair
value 124,320,151 99,863,064
Employer and employee contributions
receivable 2 2,200,930 2,033,311
-------------- --------------
TOTAL ASSETS $126,521,081 $101,896,375
NET ASSETS AVAILABLE FOR PLAN BENEFITS $126,521,081 $101,896,375
See notes to financial statements.
/TABLE
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<TABLE>
<CAPTION>
PUTNAM INVESTMENTS, INC.
PROFIT SHARING RETIREMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
Notes 1993 1992 1991
<S> <C> <C> <C> <C>
ADDITIONS:
Employer contributions 2 $ 8,290,627 $ 9,053,311 $ 8,482,364
Employee contributions 2 4,286,986 2,586,738 1,797,090
Dividend income 6,561,290 6,015,120 4,613,287
Interest income 939,537 1,129,974 1,266,216
Net appreciation
in fair value of investments 1,4 7,867,469 778,203 7,584,754
------------ ----------- -----------
Total additions 27,945,909 19,563,34623,743,711
DEDUCTIONS - Distributions to
participants 3,321,203 5,466,873 5,453,516
------------ ------------ -----------
NET ADDITIONS 24,624,706 14,096,47318,290,195
NET ASSETS AVAILABLE FOR PLAN
BENEFITS:
Beginning of year 101,896,375 87,799,902 69,509,707
------------- ------------ -----------
End of year $126,521,081 $101,896,375 $87,799,902
See notes to financial statements.
</TABLE>
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PUTNAM INVESTMENTS, INC.
PROFIT SHARING RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The accompanying financial
statements of Putnam Investments, Inc. Profit Sharing
Retirement Plan (formerly The Putnam Companies, Inc. Profit
Sharing Retirement Plan) (the Plan) have been prepared on
the accrual basis of accounting and present the net assets
available for Plan benefits and changes in those net assets.
Investments - Investments in equity securities and mutual
funds are stated at fair value as determined by quoted
market prices based on the last reported sales prices, or
the reported net asset value per share on the last business
day of the Plan year. Investments in insurance contracts
are stated at contract value which equals cost plus interest
accrued at the rate guaranteed by the issuer insurance
company.
Security transactions are recognized on a trade-date basis.
Dividend income is recorded on the ex-dividend date;
interest income is recorded as earned. The change in the
difference between fair value and the cost of investments,
including realized gains and losses, is reflected in the
statements of changes in net assets available for plan
benefits as net appreciation in fair value of investments.
Federal Income Taxes - The Plan obtained its latest
determination letter on December 24, 1986 in which the
Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable
requirements of the Internal Revenue Code. The Plan has
been amended since receiving the determination letter. The
plan administrator believes that the Plan is currently
designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code.
Therefore, no provision for income taxes has been included
in these financial statements.
Administrative Expenses - Expenses of the Plan have been
paid by Putnam Investments, Inc. (formerly The Putnam
Companies, Inc.) and its subsidiaries, but such payment is
at their discretion.
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2. DESCRIPTION OF THE PLAN
The following description of the Plan is provided for
general information purposes only. Participants should
refer to the Plan document for a more complete description
of the Plan's provisions.
(a) General - The Plan, as amended and restated January 1,
1989, is a defined contribution plan that is intended
to qualify as a profit- sharing plan under Section
401(a) of the Internal Revenue Code (the Code) and to
constitute a qualified cash or deferred arrangement
under Section 401(k) of the Code. The Plan is subject
to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
(b) Investment Programs - The Plan allows each participant
to elect to have employer contributions and reallocated
forfeitures invested in one or more of the following
authorized investment vehicles:
(1) Any one or a combination of the open-end
management investment companies, excluding
tax-exempt income funds, for which a subsidiary of
Putnam Investments, Inc. acts as an investment
adviser.
(2) Any one or a combination of contracts with
insurance companies which guarantee principal and
interest at a fixed rate.
(3) Marsh & McLennan Companies, Inc. common stock.
(4) Other investment options approved by the Board of
Directors of Putnam Investments, Inc., the
trustees of the Plan, and the Chief Executive
Officer of Marsh & McLennan Companies, Inc.
There were no investments in this option at
December 31, 1993, 1992 or 1991.
Employer contributions and forfeitures must generally be
allocated to not fewer than three or more than eight
investments, with apportionments to be no less than 10% and
no more than 50% per investment. Participants may, however,
at their discretion, allocate 100% of their balance to
either (1) the Putnam Daily Dividend Trust or (2) a
contract, or combination of contracts, with insurance
companies which guarantees principal and interest at a
fixed rate.
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Participants may also elect to have their voluntary
contributions invested in any one or more of the authorized
investments noted above in (1), (2), (3) and/or (4),
provided such elections are allocated to not more than eight
authorized investments, with apportionments to be at least
10% to any one investment.
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2. DESCRIPTION OF THE PLAN (CONTINUED)
(b) Investment Programs (Continued) - With proper written
notice, participants may elect to change their
investment in either their participation or voluntary
accounts twice during a fiscal quarter, not to exceed
six investment changes per year.
(c) Contributions - The Plan covers substantially all of
the employees of Putnam Investments, Inc. and its
subsidiaries that have adopted the Plan. Employer
contributions are determined at the discretion of each
company's Board of Directors. Contributions may not
exceed the amount permitted as a deduction under the
applicable provisions of the Internal Revenue Code.
Employer contributions, by company, for 1993, 1992 and
1991 were as follows:
Employer Contributions 1993 1992 1991
Putnam Investments, Inc. $ 812,839 $ 844,831 $ 741,204
Putnam Investment
Management, Inc. 1,397,177 1,658,748 1,626,624
Putnam Mutual Funds Corp.
and Subsidiary 933,114 949,817 816,381
Putnam Fiduciary Trust
Company 3,625,466 4,335,253 4,252,945
The Putnam Advisory
Company, Inc. and
Subsidiary 1,522,031 1,264,662 1,045,210
Total $ 8,290,627 $ 9,053,311 $ 8,482,364
Voluntary employee contributions are accepted within certain
limits as defined in the Plan. Participants making
contributions are not allowed to withdraw any appreciation
on such contributions before termination of employment, but
may withdraw their contributions, subject to certain
restrictions. Employee contributions, by company, for 1993,
1992 and 1991 were as follows:
Employee Contributions 1993 1992 1991
Putnam Investments, Inc. $ 280,811 $ 245,242 $ 169,739
Putnam Investment
Management, Inc. 1,275,263 323,813 478,401
Putnam Mutual Funds Corp.
and Subsidiary 284,452 305,472 455,931
Putnam Fiduciary Trust
Company 1,457,016 1,067,971 591,612
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The Putnam Advisory
Company, Inc. and
Subsidiary 989,444 644,240 101,407
Total $ 4,286,986 $ 2,586,738 $ 1,797,090
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2. DESCRIPTION OF THE PLAN (CONTINUED)
(d) Forfeitures - Forfeitures of invested employer
contributions are reallocated among the remaining
eligible participants one year after the fiscal year in
which the forfeitures occur. Reallocation of
forfeitures amounted to $1,317,892 in 1993, $571,906 in
1992 and $432,342 in 1991.
(e) Participant Accounts and Vesting - The Plan provides
that the market value of investments in participant
accounts shall be determined each quarter. Unrealized
appreciation or depreciation, equal to the difference
between actual cost and the quoted market price of the
investments at the applicable valuation date, is
recognized in determining the value of each fund. The
change in unrealized appreciation or depreciation,
investment income received and realized gains or losses
on investments sold or distributed are allocated to
participants' accounts based on each participant's
proportionate interest in the investment.
Employer contributions and forfeitures are allocated
annually based on a uniform percentage of eligible
earnings per participant. This percentage was 15% in
1993.
An employee is not eligible to become a participant
until the nearest July 1 or January 1 following the
completion of twelve months of continuous service. The
vesting of participants, other than voluntary
contributions, is as follows:
Vested
Interest
Years of continuous service:
Less than two None
Two but less than three 25%
Three but less than four 50%
Four but less than five 75%
Five or more 100%
If a participant has reached age 60 100%
Participants are automatically fully vested in their
voluntary contributions.
<PAGE>
Distributions are based on the vested portion of the
participant's account valuation as of the liquidation date
coinciding with or following the next valuation date after
the individual ceases to be a participant. Such
distributions are made within a reasonable period after the
individual ceases to be a participant, but not later than
sixty days after the close of the fiscal year. The Plan
allows terminated participants to maintain their accounts in
the Plan, but such accounts do not share in contributions
and forfeiture reallocations. The value of these accounts
will continue to be determined each quarter.
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2. DESCRIPTION OF THE PLAN (CONTINUED)
(f) Salary Savings Contributions - It is the intention of
the Trustees that the salary savings program be
qualified under Section 401(k) of the Internal Revenue
Code. The terms of the salary savings agreement
provide that the participants' earnings contribution
to the Plan will be deducted from their payroll, and
that the employer shall contribute this amount to the
Plan on behalf of the participants. Investments into
the various investment vehicles are at the discretion
of the participant. The market value of assets
relating to the salary savings program at December 31,
1993 and 1992 was $12,321,913 and $8,963,369,
respectively.
(g) Loans - Upon the approval of the loan committee,
appointed by the Trustees, participants of the Plan may
borrow from their accounts, to alleviate financial need
as defined by the Plan, an amount which, when added to
all other loans to the participant, would not exceed
the lesser of (1) a maximum borrowing limit of $50,000
or (2) 50% of the vested balance of the participant's
account. All loans shall be secured by the
participant's account and will be repaid through
payroll deductions according to a fixed repayment
schedule which includes interest at a rate consistent
with area lending institutions personal loan rates.
Loans outstanding at December 31, 1993 and 1992 were
$1,752,053 and $1,268,180, respectively.
3. INVESTMENTS
Investments that represent 5% or more of total Plan assets
at December 31 are as follows:
1993
Putnam Daily Dividend Trust $15,113,221
Putnam Voyager Fund 13,753,676
The Putnam Fund for Growth and Income 12,529,306
The George Putnam Fund of Boston 8,828,419
Putnam New Opportunities Fund 8,328,314
1992
Putnam Daily Dividend Trust $16,526,735
Putnam Voyager Fund 10,705,903
The George Putnam Fund of Boston 8,212,230
The Putnam Fund for Growth and Income 8,550,758
Hartford Life Insurance, 8.50%, 1/31/96 5,738,415
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4. NET APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENTS
The net appreciation (depreciation) in fair value of each
significant class of investment for the year ended December
31 is as follows:
1993 1992 1991
Mutual funds $8,024,221 $ 621,572 $7,540,862
Marsh & McLennan Companies,
Inc. common stock (156,752) 156,631 43,892
----------- ---------- ----------
Total $7,867,469 $778,203 $7,584,754
5. SUBSEQUENT DISTRIBUTIONS
At December 31, 1993, terminated employees had requested
distributions of the vested portion of their accounts,
including the applicable 1993 employer contributions,
totaling $2,126,068. The source of these distributions by
investment program is as follows:
Source Amount
Mutual Funds $2,020,496
Unallocated assets* 105,572
-----------
$2,126,068
*These assets represent 1993 employer contributions
receivable which will be allocated to participant accounts
prior to distribution.
* * * * * *
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<TABLE>
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SCHEDULE I
PUTNAM INVESTMENTS, INC.
PROFIT SHARING RETIREMENT PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1993
Number Current
of Shares Cost Value
<S> <C> <C> <C>
MUTUAL FUNDS:
The George Putnam Fund of Boston 636,971 $ 8,464,346$ 8,828,419
The Putnam Fund for Growth and Income 921,273 11,679,14512,529,306
Putnam Investors Fund 379,540 3,219,056 3,097,044
Putnam Income Fund 420,443 2,940,467 3,035,597
Putnam Global Growth Fund 586,720 4,439,715 5,644,245
Putnam Vista Basic Value Fund 578,163 4,077,317 4,347,786
Putnam Voyager Fund 1,147,096 10,264,57613,753,676
Putnam Convertible Income - Growth Trust 162,694 2,696,963 3,192,049
Putnam American Government Income Fund 37,163 369,557 333,351
Putnam Managed Income Trust 17,801 158,269 162,170
Putnam High Yield Advantage 417,537 4,102,844 4,396,663
Putnam Federal Income Trust 13,624 141,732 139,786
Putnam Global Governmental Income Trust 244,331 3,731,178 3,743,150
Putnam OTC Emerging Growth Fund 446,540 4,036,303 5,112,882
Putnam Adjustable Rate U.S. Government Fund 13,642 152,350 143,245
Putnam Diversified Income Trust 70,982 879,445 921,349
Putnam Utilities Growth and Income Fund 73,718 706,029 729,811
Putnam Overseas Growth Fund 14,137 135,813 168,231
Putnam Asia Pacific Growth Fund 186,199 2,138,475 2,614,236
Putnam Dividend Growth Fund 75,029 734,733 742,037
Putnam Europe Growth Fund 119,088 1,256,585 1,395,712
Putnam New Opportunities Fund 337,726 5,860,206 8,328,314
Putnam Daily Dividend Trust 15,113,221 15,113,22115,113,221
Putnam Equity Income Fund 123,986 1,076,862 1,081,160
Putnam High Yield Trust 336,505 4,401,999 4,475,514
Putnam Health Sciences Trust 108,940 2,738,156 2,895,615
Putnam U.S. Government Income Trust 125,943 1,715,205 1,693,929
Putnam Energy - Resources Trust 87,827 1,438,394 1,269,095
---------- ----------- -----------
Total Mutual Funds 98,668,941 109,887,593
(Continued)<PAGE>
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SCHEDULE I
PUTNAM INVESTMENTS, INC.
PROFIT SHARING RETIREMENT PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1993
Number Current
of Shares Cost Value
GUARANTEED INVESTMENT CONTRACTS:
New York Life, 9.30%, 9/30/94 621,261 621,261 621,261
Hartford Life, 8.50%, 1/31/96 4,906,238 4,906,238 4,906,238
Principle Mutual Life Insurance Co.,
5.00%, 1/30/97 2,756,832 2,756,832 2,756,832
Putnam Fiduciary Trust Co. Stable
Value Fund, 6.00% 3,124,206 3,124,206 3,124,206
------------ ------------ ------------
Total Guaranteed Investment
Contracts 11,408,537 11,408,53711,408,537
MARSH & McLENNAN COMPANIES, INC.
COMMON STOCK 15,655 1,071,082 1,271,968
PARTICIPANT LOANS (Various maturities from
1994 to 2004 at interest rates ranging
from 7.5% to 12.75%) - 1,752,053 1,752,053
----------- -----------
TOTAL ASSETS HELD FOR INVESTMENT PURPOSES $112,900,613$124,320,151
(Concluded)
/TABLE
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<TABLE>
<CAPTION>
SCHEDULE II
PUTNAM INVESTMENTS, INC.
PROFIT SHARING RETIREMENT PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1993
Purchases Sales
-------------------------- -----------------------
Number of Number of
Date Description of Investment Transactions Principal Transactions Principal
<S> <C> <C> <C> <C> <C>
Various Putnam Daily Dividend Trust 4,601 $12,734,325 783 $14,147,840
/TABLE
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INDEPENDENT AUDITORS' CONSENT
Putnam Investments, Inc. Profit Sharing Retirement Plan:
We hereby consent to the incorporation by reference in
Registration Statement No. 2-65096 on Form S-8 of our report
dated March 31, 1994, appearing in this Annual Report on Form
11-K of Putnam Investments, Inc. Profit Sharing Retirement Plan
for the year ended December 31, 1993.
//Deloitte & Touche//
June 27, 1994
Boston, Massachusetts
