<PAGE>
[LOGO]
1995
NOTICE OF ANNUAL MEETING
AND PROXY STATEMENT
<PAGE>
[LOGO]
Dear Marsh & McLennan Stockholder:
You are cordially invited to attend the 1995 Annual Meeting of Stockholders
of Marsh & McLennan Companies, Inc., which will be held at 10:00 a.m. on
Tuesday, May 16, 1995 in the auditorium on the second floor at 1221 Avenue of
the Americas, New York, New York.
The major items of business, as outlined in this Proxy Statement, will be
the election of seven persons to serve as Class I directors, the approval of the
Directors Stock Compensation Plan and the ratification of the appointment of
Deloitte & Touche LLP as independent public accountants for 1995.
Whether you plan to come to the Annual Meeting or not, your representation
and vote are important and your shares should be voted. Please complete, date,
sign and return the enclosed proxy card promptly.
We look forward to seeing you at the meeting.
Very truly yours,
[SIG]
Chairman of the Board March 30, 1995
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND
PROXY STATEMENT
OF
MARSH & MCLENNAN COMPANIES, INC.
1166 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036-2774
The Annual Meeting of Stockholders of Marsh & McLennan Companies, Inc., a
Delaware corporation (the "Company"), will be held on Tuesday, May 16, 1995 at
10:00 a.m. (local time) in the second floor auditorium at 1221 Avenue of the
Americas, New York, New York for the following purposes:
(1) To elect seven persons to serve as Class I directors;
(2) To approve the Directors Stock Compensation Plan;
(3) To ratify the appointment of Deloitte & Touche LLP as independent
public accountants for the Company for its fiscal year ending December 31,
1995; and
(4) To transact such other business as may properly be brought before
the meeting.
Only stockholders of record at the close of business on March 20, 1995 are
entitled to vote at the Annual Meeting or any adjournment thereof. As of that
date, 72,837,801 shares of common stock were outstanding and entitled to one
vote on all matters submitted to stockholders. A list of stockholders will be
available for inspection for at least ten days prior to the Annual Meeting at
the principal executive offices of the Company at 1166 Avenue of the Americas,
New York, New York.
This proxy solicitation material is being mailed on or about March 30, 1995
to stockholders as of the record date with a copy of the Company's 1994 Annual
Report to Stockholders, which includes financial statements for the period ended
December 31, 1994.
The matters to be acted upon are described in this Notice of Annual Meeting
of Stockholders and Proxy Statement. Proxies will be voted at the Annual
Meeting, or at any adjournment thereof, at which a quorum is present, in
accordance with the directions on the proxy card. The holders of a majority of
the Company's common stock outstanding and entitled to vote who are present
either in person or represented by proxy constitute a quorum for the Annual
Meeting.
Unless otherwise directed in the proxy, the persons named therein will vote
FOR the election of the director nominees listed below, FOR the approval of the
Directors Stock Compensation Plan and FOR the ratification of the appointment of
Deloitte & Touche LLP as the Company's independent public accountants for its
fiscal year ending December 31, 1995.
<PAGE>
Directors are elected by a plurality of the votes cast. "Plurality" means
that the individuals who receive the largest number of votes cast "For" are
elected as directors up to the maximum number of directors to be chosen at the
Annual Meeting. Consequently, any shares not voted "For" a particular director
(whether as a result of a direction to withhold or a broker nonvote) will not be
counted in such director's favor.
All other matters to be acted on at the Annual Meeting require the
affirmative vote of a majority of the shares present at the meeting to
constitute the action of the stockholders. In accordance with Delaware law,
abstentions will, while broker nonvotes will not, be treated as present for
purposes of the preceding sentence. A broker nonvote is a proxy submitted by a
broker in which the broker fails to vote on behalf of a client on a particular
matter for lack of instruction when such instruction is required by the New York
Stock Exchange.
As of the date hereof, the Board of Directors knows of no other business
that will be presented for consideration at the Annual Meeting. If other
business shall properly come before the Annual Meeting, the persons named in the
proxy will vote according to their best judgment.
DIRECTORS
The Board of Directors is divided into three classes. The regular terms of
office for the Class I, Class II and Class III directors expire at the 1995,
1996 and 1997 annual meetings of stockholders, respectively. Seven persons are
to be elected at the Annual Meeting to hold office as Class I directors for a
term of three years and until their respective successors are elected and
qualified. The Class II and the Class III directors will not be elected at the
Annual Meeting as their respective terms will continue.
It is intended that shares represented by the proxies will be voted for the
election of all of the Class I nominees listed below. In the unexpected event
that any nominee should become unavailable to serve as a director prior to the
Annual Meeting for any reason, the persons designated as proxies reserve full
discretion to cast their votes for another person whom the Board of Directors of
the Company might designate in substitution.
2
<PAGE>
NOMINEES FOR CLASS I DIRECTORS
(TERMS EXPIRING IN 1998)
<TABLE>
<S> <C>
[photo] LEWIS W. BERNARD*** DIRECTOR SINCE 1992
Mr. Bernard, age 53, is Chairman of Classroom, Inc., a non-profit
educational corporation. He retired in 1991 from Morgan Stanley &
Co., Inc. where for almost 30 years he held numerous positions,
most recently as chief administrative and financial officer. Mr.
Bernard is a trustee or director of the American Museum of Natural
History, the Central Park Conservancy, The Commonwealth Fund, the
Educational Broadcasting Corporation, the
Harvard Management Company, and the John and Mary R. Markle
Foundation.
</TABLE>
<TABLE>
<S> <C>
[photo] RICHARD H. BLUM DIRECTOR SINCE 1985
Mr. Blum, age 56, has been Chairman and Chief Executive Officer of
Guy Carpenter & Company, Inc., a subsidiary of the Company, since
1990. He joined Carpenter in 1958. He is also a trustee of The
College of Insurance in New York City.
</TABLE>
<TABLE>
<S> <C>
[photo] FRANK J. BORELLI DIRECTOR SINCE 1988
Mr. Borelli, age 59, has been Senior Vice President and Chief
Financial Officer of the Company since 1984. He is a director of
Mid Ocean Reinsurance Company Ltd. and United Water Resources,
Inc. Mr. Borelli is treasurer and a director of the Financial
Executives Institute and is also a trustee of the New York City
Chapter of the National Multiple Sclerosis Society and the Nyack
Hospital.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
[photo] RAY J. GROVES** DIRECTOR SINCE 1994
Mr. Groves, age 59, retired as Chairman and Chief Executive
Officer of Ernst & Young in September 1994. He is a director of
Consolidated Natural Gas Company. Mr. Groves is a member of the
Board of Trustees of the Business Council of the United Nations
and of the New York Public Policy Institute. He is also a managing
director and treasurer of the Metropolitan Opera Association in
New York City.
</TABLE>
<TABLE>
<S> <C>
[photo] RICHARD E. HECKERT* *** DIRECTOR SINCE 1989
Mr. Heckert, age 71, retired as Chairman of the Board and Chief
Executive Officer of E.I. du Pont de Nemours and Company in 1989.
He is a director of The Seagram Company Ltd., and Remington Arms
Company, Inc. and its parent, RACI Holding, Inc. Mr. Heckert is
also a member of the Board of Trustees of the Carnegie Institution
of Washington.
</TABLE>
<TABLE>
<S> <C>
[photo] ROBERT M. G. HUSSON DIRECTOR SINCE 1985
Mr. Husson, age 57, is Chairman of Faugere & Jutheau S.A., an
insurance broking subsidiary of the Company in France. He has been
employed in various capacities by Faugere & Jutheau S.A. since
1972. Mr. Husson is chairman of several insurance broking firms in
Africa and in the Principality of Monaco, in which country he is
also an insurance general agent and a director of Societe des
Bains de Mer and of Credit Foncier de Monaco, a local
subsidiary of the Suez Group.
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
[photo] GEORGE PUTNAM DIRECTOR SINCE 1987
Mr. Putnam, age 68, is Chairman of Putnam Investment Management,
Inc., a subsidiary of the Company, and is Chairman of the Board of
Trustees and President of the various mutual funds managed by
Putnam. He is a director of The Boston Company, Inc., The Boston
Safe Deposit & Trust Company, Freeport-McMoRan, Inc., General
Mills, Inc., Houghton Mifflin Company, McMoran Oil & Gas Inc. and
Rockefeller Group, Inc. Mr. Putnam is also
Chairman of the WGBH Educational Foundation, President of McLean
Hospital, a trustee of the Museum of Fine Arts (Boston),
Massachusetts General Hospital, Trustees of Reservations and the
National Center for Non-Profit Boards, and an overseer of
Northeastern University.
</TABLE>
CLASS II DIRECTORS
(TERMS EXPIRING IN 1996)
<TABLE>
<S> <C>
[photo] ROBERT CLEMENTS DIRECTOR SINCE 1981
Mr. Clements, age 62, became Chairman and Chief Executive Officer
of Marsh & McLennan Risk Capital Corp., a subsidiary of the
Company, in January 1994. Prior thereto he served as President of
the Company from 1992, having been Vice Chairman during 1991. He
joined Marsh & McLennan, Ltd., a Canadian subsidiary of the
Company, in 1959. Mr. Clements is a director of EXEL Limited and
Mid Ocean Reinsurance Company Ltd. He is also an
Overseer of the Institute for Civil Justice and Chairman of the
Board of Trustees of The College of Insurance.
</TABLE>
<TABLE>
<S> <C>
[photo] RICHARD S. HICKOK** DIRECTOR SINCE 1983
Mr. Hickok, age 69, is Chairman of Hickok Associates, Inc., a
financial consulting firm. He retired in 1983 from KMG Main
Hurdman, Certified Public Accountants, where he had been Chairman.
Mr. Hickok is a director of Alpine Lace Brands, Inc., Comstock
Resources Inc., Geonex Corporation, Projectavision, Inc. and
Marcam Corporation.
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
[photo] DAVID D. HOLBROOK DIRECTOR SINCE 1992
Mr. Holbrook, age 56, became Chairman of Marsh & McLennan,
Incorporated, a subsidiary of the Company, in January 1995, having
served as its President from 1988 and its Co-Chief Executive
Officer from 1992 to December 1994. He joined Marsh & McLennan in
1960. Mr. Holbrook is Chairman of the Board of Directors of the
Theatre Development Fund in New York City, a director of Security
Equity Life Insurance Company, and a trustee
of The Millbrook School, Millbrook, N.Y., St. Luke's/Roosevelt
Hospital Center in New York, and Outward Bound, U.S.A.
</TABLE>
<TABLE>
<S> <C>
[photo] ADELE SMITH SIMMONS** DIRECTOR SINCE 1978
Mrs. Simmons, age 53, has been President of the John D. and
Catherine T. MacArthur Foundation since 1989. She is a director of
First Chicago Corporation and its subsidiary, The First National
Bank of Chicago, the Synergos Institute and the Union of Concerned
Scientists. She is also a member of the international Commission
on Global Governance.
</TABLE>
<TABLE>
<S> <C>
[photo] A. J. C. SMITH* DIRECTOR SINCE 1977
Mr. Smith, age 60, has been Chairman of the Board and Chief
Executive Officer of the Company since 1992. He previously served
as President from 1986 to 1992. He joined William M. Mercer
Limited, a Canadian subsidiary of the Company, in 1961. Mr. Smith
is a trustee of the various mutual funds managed by Putnam
Investment Management, Inc., a subsidiary of the Company. He is
also a member of the Board of Trustees of the Central Park
Conservancy and the Carnegie Hall Society, both in New York City.
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
[photo] PHILIP L. WROUGHTON DIRECTOR SINCE 1988
Mr. Wroughton, age 61, became Vice Chairman of the Company in
1994, having served as Chairman of Marsh & McLennan, Incorporated,
a subsidiary of the Company, from 1992. He was Deputy Chairman of
Marsh & McLennan, Incorporated from 1990 to 1992. Mr. Wroughton is
also Chairman of C.T. Bowring & Co. Limited, a subsidiary of the
Company. He is a member of the Council of Lloyd's of London, which
is the governing body of the Lloyd's
insurance market, and of the Lloyd's Market Board.
</TABLE>
CLASS III DIRECTORS
(TERMS EXPIRING IN 1997)
<TABLE>
<S> <C>
[photo] PETER COSTER DIRECTOR SINCE 1988
Mr. Coster, age 55, is President of Mercer Consulting Group, Inc.
and of William M. Mercer Companies, Inc., subsidiaries of the
Company. He joined Mercer in 1984 upon its acquisition of a U.K.
benefits consulting firm Mr. Coster joined in 1962.
</TABLE>
<TABLE>
<S> <C>
[photo] LAWRENCE J. LASSER DIRECTOR SINCE 1987
Mr. Lasser, age 52, is President and Chief Executive Officer of
Putnam Investments, Inc., a subsidiary of the Company. He joined
Putnam in 1969. Mr. Lasser is a trustee of the various mutual
funds managed by Putnam Investment Management, Inc., a subsidiary
of the Company. He is a director of INROADS/Central New England
Inc. and a member of the Boards of Overseers of the Museum of Fine
Arts and of The Isabella Stewart Gardner
Museum, all in Boston. He is also a trustee of Beth Israel
Hospital in Boston and of the Buckingham, Browne and Nichols
School in Cambridge, MA.
</TABLE>
7
<PAGE>
<TABLE>
<S> <C>
[photo] RICHARD M. MORROW** DIRECTOR SINCE 1991
Mr. Morrow, age 69, served as Chairman of the Board of
Westinghouse Electric Corporation during part of 1993. He retired
as Chairman and Chief Executive Officer of Amoco Corporation in
1991. Mr. Morrow is a director of First Chicago Corporation and
its subsidiary, The First National Bank of Chicago, and of R.R.
Donnelley & Sons Company, Potlatch Corporation, Seagull Energy
Corporation and Westinghouse Electric Corporation. He is
also a trustee of the University of Chicago and
Rush-Presbyterian-St. Lukes Medical Center.
</TABLE>
<TABLE>
<S> <C>
[photo] JOHN T. SINNOTT DIRECTOR SINCE 1992
Mr. Sinnott, age 55, became President and Chief Executive Officer
of Marsh & McLennan, Incorporated, a subsidiary of the Company, in
1995, having previously served as President from 1990 and Co-Chief
Executive from 1992. He joined Marsh & McLennan in 1963.
</TABLE>
<TABLE>
<S> <C>
[photo] FRANK J. TASCO* DIRECTOR SINCE 1979
Mr. Tasco, age 67, retired in 1992 as Chairman of the Board and
Chief Executive Officer of the Company, a position he had held
since 1986. From December 1993 to December 1994, he served as
Chairman of Borden, Inc. Mr. Tasco is a director of The Travelers
Corporation, New York Telephone Company, and New England Telephone
and Telegraph Company. He is also Chairman of Phoenix House
Foundation.
</TABLE>
8
<PAGE>
<TABLE>
<S> <C>
[photo] R.J. VENTRES*** DIRECTOR SINCE 1988
Mr. Ventres, age 70, is a director of Banc One Corporation and
Schering-Plough Corp., and a trustee of St. Clare's Hospital and
Health Center in New York City. He retired as Chairman of Borden,
Inc. in 1992, as Chief Executive Officer of Borden in 1991 and as
Chairman of its Executive Committee in 1993.
<FN>
* Member of the Executive Committee, of which Mr. Smith is Chairman.
** Member of the Audit Committee, of which Mr. Hickok is Chairman.
*** Member of the Compensation Committee, of which Mr. Heckert is Chairman.
</TABLE>
The Executive Committee has all the powers of the Board of Directors, when
it is not in session, in the management of the business and affairs of the
Company, except as otherwise provided in the Company's by-laws or in resolutions
of the Board of Directors and under applicable law. The Executive Committee held
one meeting during 1994.
The Audit Committee submits recommendations to the Board of Directors with
respect to the selection of the Company's independent public accountants and on
any other matters it deems appropriate. It reviews the annual financial
statements of the Company with the Company's independent public accountants, the
practices and procedures adopted by the Company in the preparation of such
statements, and the independent public accountants' annual scope of audit. The
Audit Committee is required to meet at least annually with such accountants and
at any time when considered appropriate by the Audit Committee or such
accountants. The Audit Committee held five meetings during 1994.
The Compensation Committee determines the compensation of the Company's
Chief Executive Officer, approves the compensation of other senior executives of
the Company and approves the retention by the Company's management of
consultants on matters relating to the compensation of the Chief Executive
Officer and senior executives of the Company. In addition, the Compensation
Committee oversees general compensation policies and practices and administers
the Company's stock-based award plans. No member of the Compensation Committee
may be an employee of the Company or be eligible to receive grants under any
plan that the Compensation Committee administers. The Compensation Committee
held four meetings during 1994.
The Board of Directors conducted five meetings during 1994. The average
attendance by directors at the meetings of the Board of Directors and committees
thereof was 97% and all directors attended more than 75% of the meetings of the
Board of Directors and committees on which they served.
9
<PAGE>
DIRECTORS' COMPENSATION
As compensation for their services, Messrs. Bernard, Groves, Heckert,
Hickok, Morrow, Putnam, Tasco and Ventres, and Mrs. Simmons, each receive a
retainer of $35,000 per year. These directors also receive a fee of $1,000, and
reimbursement of related expenses, each time they attend or participate in a
meeting of the Board of Directors or a committee thereof. The chairman of each
committee (other than Mr. Smith as Chairman of the Executive Committee) receives
an additional retainer of $5,000 per year; other members of committees receive
an additional retainer of $2,000 per year.
Directors receiving compensation may enter into agreements with the Company
deferring payment to specified dates. Moreover, upon retirement from the Board,
these directors typically become advisory directors, available for consultation
with management, and receive, until age 80, an annual amount equal to their
Board retainer at the time of retirement. The remaining directors receive no
specific compensation for their services as directors or members of any
committee.
The Board of Directors has placed a proposal on the agenda to approve the
Directors Stock Compensation Plan, which is more fully described herein under
the title "Proposal to Approve Directors Stock Compensation Plan." The annual
retainer paid to the directors named above will be increased from $35,000 to
$40,000 per year effective following the Annual Meeting.
Upon his retirement from the Company on September 1, 1992, the Company
engaged Mr. Tasco as a consultant for specific business-related matters. He
received $185,618 for such services in 1994.
EMPLOYMENT AGREEMENT
Marsh & McLennan Risk Capital Corp. ("MMRCC"), a wholly-owned subsidiary of
the Company, has an employment agreement with Mr. Robert Clements, its Chairman
and Chief Executive Officer. Under the agreement, the term of which expires on
September 30, 1997, Mr. Clements is entitled to a base salary of $800,000 per
year; a stipend of $450,000 per year as a consultant to the Company with respect
to insurance-related matters and such matters as may be assigned to him by the
Chief Executive Officer of the Company; minimum bonuses of $800,000 per year for
the years 1994 through 1996 and $600,000 for 1997; and continued participation
in the Company's various retirement and welfare plans. In addition, Mr. Clements
will be entitled to certain performance payments based on the extent to which
the annual rate of return on The Trident Partnership, L.P., a Cayman Islands
limited partnership ("Trident") exceeds 15%. Such payments will be based upon
specified percentages of MMRCC's capital raising fee and, if the annual rate of
return exceeds 20%, specified percentages of amounts received by the Company
from Trident.
The agreement also provides for Mr. Clements to provide consulting services
for the period October 1997 through September 30, 1999, with potential annual
extensions thereafter, for which he will be compensated at the rate of $300,000
per year. The Company has guaranteed MMRCC's obligations under the agreement.
10
<PAGE>
If Mr. Clements' employment or consultancy is terminated by MMRCC (other
than for cause or disability) or if Mr. Clements terminates his employment or
consultancy for "Good Reason", Mr. Clements will be entitled to receive his base
salary and stipend for the remainder of the employment period, as well as annual
bonuses for the remainder of such period (at the rate of $1,000,000 per year or
$750,000 for the nine-month period ending September 30, 1997). In addition, he
will be entitled to his post-employment consulting fee through September 30,
1999 (or, if the consultancy has been extended beyond that date, through the
September 30 next following the date of termination) and receipt of the
performance payments on the basis described above. "Good Reason" is defined to
include a reduction in compensation; the failure to continue Mr. Clements in his
positions of Chairman and Chief Executive Officer of MMRCC during the employment
period; a change in duties materially inconsistent with the status of those
positions; and a change in control of the Company (as described in footnote 3 to
the "Summary Compensation Table" herein) or of MMRCC (defined to mean that the
Company no longer owns at least 50% of MMRCC).
11
<PAGE>
SECURITY OWNERSHIP
The following table reflects as of February 28, 1995 (except with respect to
interests in the Company's Stock Investment Plan, which are as of December 31,
1994) the number of shares of common stock which each director and each named
executive officer has reported as owning beneficially, and which all directors
and executive officers of the Company have reported as owning beneficially as a
group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(1)
-------------------------------------------------
OTHER
SOLE THAN SOLE SUBJECT TO
VOTING AND VOTING AND EXERCISABLE
INVESTMENT INVESTMENT STOCK
NAME POWER POWER(2) OPTIONS TOTAL
------------------------------------------------------ ---------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
Lewis W. Bernard...................................... 1,000 -- -- 1,000
Richard H. Blum....................................... -- 88,861 75,000 163,861
Frank J. Borelli...................................... 16,501 32,335 66,000 114,836
Robert Clements....................................... 8,681 48,830 130,000 187,511
Peter Coster.......................................... 5,797 27,730 68,000 101,527
Ray J. Groves......................................... -- 500 -- 500
Richard E. Heckert.................................... 500 -- -- 500
Richard S. Hickok..................................... -- 1,000 -- 1,000
David D. Holbrook..................................... 17,440 32,359 52,500 102,299
Robert M.G. Husson(3)................................. -- 200 -- 200
Lawrence J. Lasser.................................... 558 42,700 70,000 113,258
Richard M. Morrow..................................... 1,000 500 -- 1,500
George Putnam......................................... 151,849 23,000 -- 174,849
Adele Smith Simmons................................... 72,500 48,685 -- 121,185
John T. Sinnott....................................... 10,142 37,982 55,500 103,624
A.J.C. Smith.......................................... 98,652 73,320 180,375 352,347
Frank J. Tasco........................................ 89,675 30,136 180,000 299,811
R.J. Ventres.......................................... 5,000 -- -- 5,000
Philip L. Wroughton................................... 12,702 23,112 70,000 105,814
All directors and executive officers
as a group, including
the above (21 individuals).......................... 509,958 539,742 996,375 2,046,075
<FN>
---------
(1) As of February 28, 1995, no director or named executive officer
beneficially owned more than 1% of the outstanding common stock, and all
directors and executive officers as a group beneficially owned
approximately 2.76% of the outstanding common stock.
(2) Reflects the number of shares of common stock (i) that are held in the form
of shares of restricted stock and restricted stock units that may in the
future vest to such individuals, (ii) that are held indirectly for the
benefit of such individuals or
</TABLE>
12
<PAGE>
<TABLE>
<S> <C>
directly or indirectly for certain members of such individuals' families,
with respect to which shares beneficial ownership may be, in certain cases,
disclaimed and (iii) that represent such individuals' interests as of
December 31, 1994 in the Company's Stock Investment Plan but not any such
interests which may have accrued since that date.
(3) Excludes 40,000 shares owned by the estate of Mr. Husson's late
father-in-law. Mr. Husson's wife is one of the beneficiaries of the estate,
and Mr. Husson, who disclaims beneficial ownership of the shares, is a
co-executor.
</TABLE>
The following table reflects the number of shares of common stock
beneficially owned by persons known to the Company to own more than 5% of the
outstanding shares:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT OF COMMON
BENEFICIAL STOCK OUTSTANDING AT
NAME AND ADDRESS OWNERSHIP DECEMBER 31, 1994
------------------------------------------------------------------------- ----------- -----------------------
<S> <C> <C>
Marsh & McLennan Companies Stock Investment Plan(1) ..................... 4,800,973 6.56%
1166 Avenue of the Americas
New York, New York 10036
Invesco PLC(2)........................................................... 4,202,235 5.74%
<FN>
---------
(1) Under the provisions of the Stock Investment Plan, voting rights are passed
through to the employees in proportion to their interests. Unvoted shares
will be voted by the trustee in proportion to the shares voted. Shares held
in the Plan are registered in the name of the Plan's trustee and not in the
names of the individual participants. Of the 4,800,973 shares held in the
Plan at December 31, 1994, 37,150 or 0.8% were held for directors and
executive officers of the Company and are included in the security
ownership table above.
(2) Based upon a Schedule 13G filed by Invesco PLC, dated February 10, 1995, on
behalf of itself and affiliated entities.
</TABLE>
13
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth cash and other compensation paid or accrued
for services rendered in 1994, 1993 and 1992 to the Chief Executive Officer and
each of the five most highly compensated executive officers of the Company
(other than the Chief Executive Officer) whose cash compensation exceeded
$100,000.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------------------------------- LONG TERM COMPENSATION
----------------------
OTHER RESTRICTED
ANNUAL STOCK SECURITIES ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARDS UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR ($) ($)(1) ($)(2) ($)(3) OPTIONS (#) ($)(4)
----------------------- --------- --------- --------- ----------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
A. J. C. Smith 1994 1,050,000 775,000 276,406 1,149,659 -- 42,000
Chairman and Chief 1993 1,000,000 675,000 82,911 449,400 100,000 40,000
Executive Officer 1992 893,750 1,160,000 154,542 814,320 30,000 9,177
Marsh & McLennan
Companies, Inc.
Lawrence J. Lasser 1994 820,000 10,500,000* -- 368,438 -- 123,000
President 1993 770,000 3,200,000 -- 346,413 50,000 3,115,500
Putnam Investments, 1992 725,000 1,650,000 -- 325,050 -- 108,750
Inc.
Peter Coster 1994 595,000 280,000 149,822 375,244 -- 23,800
President 1993 575,000 210,000 80,346 262,150 40,000 22,999
Mercer Consulting 1992 540,000 550,000 -- 336,166 -- 9,155
Group, Inc.
Richard H. Blum 1994 575,000 275,000 19,819 530,460 -- 23,000
Chairman 1993 540,000 250,000 -- 243,425 30,000 21,599
Guy Carpenter & 1992 540,000 330,000 61,624 336,166 -- 9,155
Company, Inc.
David D. Holbrook 1994 525,000 315,000 146,093 237,438 -- 21,000
Co-President 1993 515,000 225,000 57,903 234,063 35,000 20,600
Marsh & McLennan, 1992 430,000 200,000 49,026 192,075 15,000 9,389
Incorporated
John T. Sinnott 1994 525,000 315,000 138,501 237,438 -- 21,000
Co-President 1993 515,000 225,000 51,994 234,063 35,000 20,600
Marsh & McLennan, 1992 430,000 200,000 45,537 192,075 15,000 9,389
Incorporated
<FN>
---------
* 1994 bonuses for the named executive officers were awarded under the
stockholder approved Senior Management Incentive Compensation Plan. Of Mr.
Lasser's bonus, two-thirds is a non-recurring amount reflecting (1) his
role in the continued exceptional financial results of Putnam Investments,
Inc. and its contribution to Company stockholder value, (2) Putnam's market
share growth and profitability relative to publicly-owned investment
management companies and (3) the compensation of chief executives of
Putnam's competitors.
</TABLE>
14
<PAGE>
<TABLE>
<S> <C>
(1) As more fully explained in the 1993 proxy statement, a portion of the 1992
bonuses included an additional cash amount, which in other years has been
paid in the form of long term compensation and which appears under the
heading "Restricted Stock Awards." This accounted for $580,000 of Mr.
Smith's 1992 bonus, $275,000 of Mr. Coster's 1992 bonus, and $110,000 of
Mr. Blum's 1992 bonus. The Compensation Committee changed the form of these
payments in 1992 because of anticipated changes in the federal tax laws for
1993 that were expected to be unfavorable to the Company and its
executives. The 1993 and 1994 bonuses do not include these additional cash
awards. In 1994, the Compensation Committee returned to the practice of
awarding long term compensation in the form of restricted stock units to
each of these individuals.
(2) Represents the amount of payments in applicable years to the affected
individuals to cover tax liabilities arising from the funding of annuities
under the Benefit Equalization Plan, which is part of the U.S. Retirement
Program.
(3) At December 31, 1994, each individual in the Summary Compensation Table had
outstanding restricted stock units with an aggregate value as follows: Mr.
Smith, 8,350 units worth $661,738; Mr. Coster, 1,300 units worth $103,025;
and Mr. Blum 4,846 units worth $384,046. Holders of restricted stock units
receive dividend equivalents that are equal in value to dividends paid on
the outstanding shares of common stock and such units are subject to
vesting over a period of up to three years. Vesting of such units may be
accelerated upon a change of control. "Change in Control" of the Company
means generally any "person" owning securities with 50% or more of the
voting power of the Company; within a two-year period (with certain
exceptions) a change in directors constituting a majority of the Board of
Directors; or mergers resulting in the Company's stockholders not
constituting 50% or more in voting power of the surviving entity.
At December 31, 1994, each individual in the Summary Compensation Table had
outstanding shares of restricted stock with an aggregate value as follows:
Mr. Smith, 55,100 shares worth $4,366,675; Mr. Lasser, 42,700 shares worth
$3,383,975; Mr. Coster, 22,560 shares worth $1,787,880; Mr. Blum, 32,970
shares worth $2,612,873; Mr. Holbrook, 26,200 shares worth $2,076,350; and
Mr. Sinnott, 26,200 shares worth $2,076,350. Holders of shares of
restricted stock receive the same dividends as those paid on the
outstanding shares of common stock and such shares are subject to vesting
over a period of up to eleven years. Vesting of such shares may be
accelerated upon a change of control.
Under the Special Severance Pay Plan, holders of restricted stock or awards
in lieu of restricted stock with at least 10 years of service will receive
a cash payment upon forfeiture of their award if their employment with the
Company terminates. The amount of such payment is based on years of
service, with the individual receiving up to a maximum of 90% of the value
of the restricted shares after 25 years of service, and is subject to
execution of a non-solicitation agreement.
(4) Represents for 1994 (a) Company matching contributions under the Stock
Investment Plan for Messrs. Coster, Blum, Holbrook and Sinnott of $6,000
each, and under the Stock Investment Supplemental Plan of $42,000 for Mr.
Smith, $17,800 for Mr. Coster, $17,000 for Mr. Blum, $15,000 for Mr.
Holbrook, and $15,000 for Mr. Sinnott and (b) contributions by Putnam
Investments, Inc. of $22,500 to the Putnam Profit Sharing Retirement Plan
and $100,500 to the Putnam Executive Deferred Compensation Plan for Mr.
Lasser. In addition, Mr. Lasser received in 1993 a special payment of $3
million reflecting his contributions to Putnam's performance over several
years and not related to the annual incentive compensation program in which
he participates.
</TABLE>
15
<PAGE>
AGGREGATED STOCK OPTION EXERCISES IN 1994 AND
STOCK OPTION VALUE AT DECEMBER 31, 1994
The following table sets forth certain information concerning the number and
value of specified unexercised options at December 31, 1994 held by the Chief
Executive Officer and each of the five most highly compensated executive
officers of the Company (other than the Chief Executive Officer). The value of
unexercised in-the-money stock options at December 31, 1994 shown below is
presented pursuant to SEC rules and is based on the December 31, 1994 closing
price of the common stock on the New York Stock Exchange of $79.25 per share.
The actual amount, if any, realized upon exercise of stock options will depend
upon the market price of the common stock relative to the exercise price per
share at the time the stock option is exercised. There is no assurance that the
values of unexercised in-the-money stock options reflected in this table will be
realized. There were no options granted to, nor options exercised by, any of the
individuals listed in the table below in 1994.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1994 DECEMBER 31, 1994
-------------------------- --------------------------
SHARES
ACQUIRED VALUE
ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME (#) ($) (#) (#) ($) ($)
----------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
A.J.C. Smith........... -- -- 155,375 75,000 602,406 --
Lawrence J. Lasser..... -- -- 57,500 37,500 157,500 --
Peter Coster........... -- -- 58,000 30,000 116,625 --
Richard H. Blum........ -- -- 67,500 22,500 702,625 --
David D. Holbrook...... -- -- 43,750 26,250 80,625 --
John T. Sinnott........ -- -- 46,750 26,250 116,625 --
</TABLE>
UNITED STATES RETIREMENT PROGRAM
The Company maintains a United States retirement program consisting of the
Marsh & McLennan Retirement Plan, a non- qualified Benefit Equalization Plan and
a non-qualified Supplemental Retirement Plan.
The following table shows the estimated annual straight-life annuity benefit
payable (or in the case of those covered by the Benefit Equalization Plan, the
pre-tax equivalents of the after- tax benefits received) under this retirement
program to employees with the specified Maximum Average Salary
16
<PAGE>
(average salary over the 60 consecutive months of employment that produces the
highest average) and specified years of service upon retirement at age 65,
including any adjustment for Social Security benefits:
<TABLE>
<CAPTION>
YEARS OF SERVICE
MAXIMUM ----------------------------------------------------------
AVERAGE SALARY 15 20 25 30 35
------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$ 500,000.............................................. $ 141,367 $ 188,490 $ 235,612 $ 275,612 $ 300,612
$ 550,000.............................................. $ 156,367 $ 208,490 $ 260,612 $ 304,612 $ 332,112
$ 600,000.............................................. $ 171,367 $ 228,490 $ 285,612 $ 333,612 $ 363,612
$ 650,000.............................................. $ 186,367 $ 248,490 $ 310,612 $ 362,612 $ 395,112
$ 700,000.............................................. $ 201,367 $ 268,490 $ 335,612 $ 391,612 $ 426,612
$ 750,000.............................................. $ 216,367 $ 288,490 $ 360,612 $ 420,612 $ 458,112
$ 800,000.............................................. $ 231,367 $ 308,490 $ 385,612 $ 449,612 $ 489,612
$ 850,000.............................................. $ 246,367 $ 328,490 $ 410,612 $ 478,612 $ 521,112
$ 900,000.............................................. $ 261,367 $ 348,490 $ 435,612 $ 507,612 $ 552,612
$ 950,000.............................................. $ 276,367 $ 368,490 $ 460,612 $ 536,612 $ 584,112
$1,000,000............................................. $ 291,367 $ 388,490 $ 485,612 $ 565,612 $ 615,612
$1,050,000............................................. $ 306,367 $ 408,490 $ 510,612 $ 594,612 $ 647,112
$1,100,000............................................. $ 321,367 $ 428,490 $ 535,612 $ 623,612 $ 678,612
</TABLE>
The compensation of participants used to calculate the retirement benefit
consists of regular salary as disclosed in the "Salary" column of the Summary
Compensation Table and excludes bonuses and other forms of compensation not
regularly received. For the six individuals named above, other than Mr. Lasser
who participates in the Putnam Profit Sharing and related plans and not in the
Company's U.S. retirement program, the 1994 compensation used to calculate the
Maximum Average Salary and the number of years of credited service are as
follows: Mr. Smith, $1,050,000, 32 years; Mr. Coster, $595,000, 33 years; Mr.
Blum, $575,000, 37 years; Mr. Holbrook, $525,000, 35 years; and Mr. Sinnott,
$525,000, 32 years.
COMPENSATION COMMITTEE REPORT
COMPENSATION PHILOSOPHY, POLICIES AND PLANS FOR EXECUTIVE OFFICERS
The Company is a professional services firm with businesses having distinct
economic characteristics, marketplaces and operating conditions. The leadership
position attained over time by the Company's operating subsidiaries in their
respective industries--in terms of services rendered, market share, revenue,
profitability and rate of growth--has been earned largely through the selection,
training and development of top caliber executive, managerial and professional
talent. Ongoing
17
<PAGE>
investment in the firm's human capital has produced favorable long-term returns
to Company stockholders. Therefore, it is critical to the ongoing success of the
Company that its executives continue to be among the most highly qualified and
talented available in their respective business segments to lead the
organization in the creation of stockholder value.
The Compensation Committee of the Board of Directors, all of whose members
are disinterested outside directors, is charged by the Company's by-laws with
ensuring that the Company's compensation philosophy and policies, which are
intended to attract, retain and motivate a strongly competitive staff, are "in
the Corporation's best interests." To that end, the Company's executive
compensation program is designed to reinforce business strategies, reflect
marketplace practices and dynamics, and provide cost and tax effective forms of
remuneration. The Committee reviews the program annually to consider and
implement any changes necessary to achieve these ongoing objectives.
The Company has a pay-for-performance philosophy, which is implemented
through compensation policies and plans intended to enhance financial
performance in a highly competitive marketplace, which includes competition from
privately-held firms offering attractive equity ownership opportunities. In
terms of compensation data, the Committee periodically reviews the levels of
executive compensation from a number of general survey sources, with a focus on
available pay data relating to professional talent in the Company's lines of
business. In addition, the Committee periodically evaluates Chief Executive
Officer compensation by comparing it to data derived from a selected group of
25-30 major corporations in diversified financial, banking, insurance and
industrial business sectors. This selective grouping is broader than the peer
grouping in the Comparison of Cumulative Total Shareholder Return in order to
obtain a more meaningful representation of competitive compensation practices
and levels for senior executive positions.
The Chief Executive Officer of the Company heads a group of senior
management officers, most of whom are executives of the Company's operating
subsidiaries. These senior officers participate in a common set of compensation
plans and are remunerated in accordance with award guidelines and performance
criteria that reflect overall Company and individual operating unit performance.
The plans, which include short-term and long-term elements, are intended to be
retrospective, reflecting prior individual and organizational performance, as
well as prospective, providing motivation and rewards for achieving future
success. Such compensation is designed to vary directly with the combined annual
and long-term performance of the employee, the operating subsidiary and the
Company. Moreover, individual contributions by these executives are assessed in
the context of a top management team that views itself as a professional
partnership.
SHORT-TERM COMPENSATION (SALARY AND ANNUAL INCENTIVE AWARDS)
With regard to short-term compensation, salaries are reviewed annually and
increases granted by the Committee on a discretionary basis in consideration of
current individual and organizational
18
<PAGE>
performance, length of service, affordability and the competitive marketplace.
Organizational performance refers to the business unit's success in achieving
business objectives and addressing conditions affecting long-term growth and
profits. For participants in the senior management compensation program,
salaries are compared to the top quartile of the relevant marketplace, with
aggregate annual cash compensation adjusted to reflect Company performance.
Salaries comprised 36% of their total compensation (excluding stock options) in
1994.
The size of the incentive award pool for senior management cash bonuses is
based on profit and reflects the Company's growth in net operating income.
However, the Committee may, in its sole discretion, authorize a payout of less
than the full bonus pool as it did for 1994. In this regard, a specific target
level is not established for the award pool, nor are minimum award levels
guaranteed for bonus recipients. With respect to individual award
determinations, such assessments by the Committee are largely judgmental, not
formulaic, and reflect the executive's role within the organization, relative
contribution (compared to the internal peer group) to the firm's earnings
growth, and marketplace compensation levels. For 1994, bonus awards at Putnam
Investments, Inc. reflected continued exceptional financial performance, while
awards to executives in the Company's other business sectors were, on average,
eight percentage points above the prior year. In the senior management group,
individual bonuses averaged 46% of total compensation (excluding stock options)
for 1994.
LONG-TERM COMPENSATION (RESTRICTED STOCK, RESTRICTED STOCK UNIT AND STOCK OPTION
AWARDS)
It is the Committee's strong belief that the continuing success of the
Company is dependent on the effective retention and motivation of its
executives. Accordingly, long-term compensation is designed to recognize the
individual's past and potential contributions to the organization, and to align
the executive's financial interests with those of the Company's stockholders by
fostering Company stock ownership. Such equity opportunities for Company
executives are made available through stockholder-approved plans that provide
for restricted stock, restricted stock unit and stock option grants. Moreover,
in order to help promote retention of key talent through stock ownership that is
at risk, ownership rights to restricted stock, restricted stock units and stock
options are acquired over time.
Within this framework, the size of each executive's equity grants is
determined at the sole discretion of the Committee. Such determinations include
consideration of the Company's future profit performance expectations and the
individual's organizational role, current performance and potential to
contribute to the long-term success of the Company, as well as a review of
competitive practices on which award guidelines are based. The Committee also
intends to provide for equity awards that approximate the median range of
awards, according to data provided by an external consultant. These
considerations, and not prior stock-based awards or Company stock ownership
targets, determine the size of stock grants to individuals.
19
<PAGE>
Most members of the senior management group are eligible to receive annual
discretionary restricted stock grants on the basis described above. In 1994,
such awards for this group accounted for 15% of total compensation (excluding
stock options).
The most senior members of the executive group are also eligible for an
annual discretionary grant of restricted stock units, which are deferred
stock-based awards. The awards reflect the Company's earnings and growth, with
individual grants based on the subjective factors outlined above including each
executive's organizational level and performance. Historically, the grant value
of individual awards has ranged from approximately 50% to 100% of the
executive's cash bonus. Units earned are distributable in shares and generally
vest after completion of three years of service from the date of grant. The
restricted stock units granted in 1994 made up 3% of total compensation
(excluding stock options) for the year.
Stock options are another element of senior management compensation. Options
are generally granted on a three-year cycle. Mid-cycle grants may be awarded to
promoted employees, new hires and individuals recognized for major
contributions. Grants are made without reference to present holdings of
unexercised options or appreciation thereon. The size of an individual grant
reflects the factors discussed above including organization level, performance
and marketplace practices.
TAX CONSIDERATIONS
As noted above, the Company's executive compensation program is designed to
be cost and tax effective. The Committee's policy is to take actions which it
deems to be in the best interest of the Company and its stockholders,
recognizing, however, that payment of compensation may not in all instances
qualify for tax deductibility because of the restrictions set forth in Section
162(m) of the Internal Revenue Code.
BASIS FOR CEO COMPENSATION
Both the quantitative and qualitative criteria referenced above are applied
in assessing the performance and determining the compensation of the Chairman
and Chief Executive Officer of the Company, A.J.C. Smith. The current and
long-term financial performance of the Company--information which is available
to all Company stockholders--are major factors in the judgmental compensation
determinations made by the Committee relative to Mr. Smith. Consideration is
also given to his leadership and the impact of his decision-making on the
long-term health and performance of the Company. Critical aspects considered in
this performance evaluation include: (1) mastery of the market and economic
dynamics of each operating subsidiary, thus enabling the Chief Executive Officer
to evaluate effectively and approve business strategies intended to exploit
business opportunities;
20
<PAGE>
(2) the selection, assignment and motivation of executives at the Company and
operating subsidiary levels; and (3) providing perspective and counsel to
business heads to foster initiatives that enhance the position of the Company
and the value of its services on a global basis.
On January 1, 1994, Mr. Smith's annual base salary was increased by $50,000,
or 5.0%, from its previous level of $1,000,000, as part of the Company's annual
merit increases. With regard to cash bonus, Mr. Smith participates in the same
Company annual incentive plan as other senior management officers. His 1994
award under the plan was $775,000, an increase of $100,000, or 14.8%, from the
prior year. This was reflective of the Company's growth in net operating income.
Based on the previously referenced review of chief executive officer
compensation for 1993 (latest data available), Mr. Smith's 1994 cash
compensation was positioned at about the 35th percentile of the 1993 survey
market.
In connection with long-term compensation, Mr. Smith was granted 5,800
shares of restricted stock in 1994 under terms previously described and valued
at 45% of his base salary at grant. This is the same percentage level he was
awarded in 1993. In addition, Mr. Smith was granted 8,350 restricted stock units
with a value approximating his 1993 cash bonus award. The combined value of his
restricted stock and restricted stock units grants was $1,149,659. Based on the
chief executive officer compensation data, Mr. Smith's 1994 long-term
compensation (excluding stock options) was at about the 60th percentile of the
1993 survey market. Mr. Smith was not granted any stock options during 1994.
Total compensation for Mr. Smith, which includes all elements of pay from
the Summary Compensation Table except stock options grants, was $3,293,065 in
1994. Based on the data from the comparison group, such compensation for Mr.
Smith was at about the 60th percentile of the 1993 survey market.
Lewis W. Bernard Richard E. Heckert R. J. Ventres
21
<PAGE>
COMPARISON OF CUMULATIVE TOTAL STOCKHOLDER RETURN
The following graph compares the Company's cumulative total stockholder
return on its common stock (assuming reinvestment of dividends) with the
cumulative total return on the published Standard & Poor's 500 Stock Index and
the cumulative total return on a Company-constructed composite industry index,
consisting of Alexander & Alexander Services Inc., Aon Corporation, Arthur J.
Gallagher & Co., Sedgwick Group PLC and Willis Corroon Group PLC, over the
five-year period from December 31, 1989 through December 31, 1994.
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
The Company $100 $104 $112 $129 $119 $120
S&P 500 $100 $ 97 $126 $136 $150 $152
Composite Industry Index $100 $ 94 $ 97 $100 $109 $101
</TABLE>
Assumes $100 invested on December 31, 1989 with dividends reinvested.
22
<PAGE>
PROPOSAL TO APPROVE THE DIRECTORS STOCK COMPENSATION PLAN
The Board of Directors of the Company has placed a proposal to approve the
Marsh & McLennan Companies Directors Stock Compensation Plan (the "Plan") on the
agenda for the Annual Meeting. The Plan was adopted by the Company's Board of
Directors at its meeting on March 16, 1995. As described earlier in this Proxy
Statement, the Board of Directors also approved the increase of the annual
retainer (the "Basic Fee") paid to those Directors (hereinafter called "Outside
Directors") who receive a fee for their services as directors from $35,000 to
$40,000.
The affirmative vote of a majority of the Company's shares of common stock
present or represented and entitled to vote at the Annual Meeting is required to
approve this proposal. Unless otherwise directed in the proxy, the persons named
in the proxy will vote for the proposal to approve the Plan, which is described
in greater detail below.
The purpose of the Plan is to provide an incentive to Outside Directors to
remain in the service of the Company and to encourage the Outside Directors to
acquire additional stock ownership in the Company.
Under the Plan, a maximum of 250,000 shares of the Company's common stock
may be distributed to Outside Directors. Only Outside Directors are eligible to
participate in the Plan. The Plan will be administered by the Compensation
Committee of the Board of Directors.
If the Plan is approved by stockholders, each Outside Director will
automatically receive on each June 1st (beginning on June 1, 1995) a number of
shares of common stock of the Company with a "fair market value" (as defined in
the Plan) on such date equal to one quarter ( 1/4) of his or her Basic Fee in
effect on such date. Such shares will be received in lieu of the equivalent cash
portion of such Basic Fee. In addition, each Outside Director may elect, upon
six months advance notice, that up to 100% of the remaining aggregate
compensation (including amounts payable with respect to service on a committee
or for attendance) payable to such director be paid in shares of common stock.
Shares issuable to an Outside Director pursuant to such election shall be
transferred to such director on February 28th, May 31st, August 31st and
November 30th of each year. The number of shares so transferred on each such
date shall be determined by dividing (x) the product of (1) the percentage
specified by the Outside Director and (2) the Outside Director's compensation
payable in the quarter ending on the 15th day of each such month, by (y) the
fair market value of a share of common stock of the Company on the 15th day of
each such month. All shares transferred under the Plan, including fractional
shares, shall be held in a book entry account with the Company's transfer agent
and registrar; provided, however, that an Outside Director may in the
alternative elect to receive a stock certificate representing the number of
whole shares acquired plus cash in lieu of fractional shares. "Fair market
value" under the Plan shall mean, on any given date, the average of the high and
low prices of the common stock on the New York Stock Exchange on the last
trading day preceding such date.
23
<PAGE>
Under the Plan, Outside Directors may also elect to defer receipt of the
shares until the year immediately following either (i) the year in which the
Outside Director ceases to be a director, or (ii) the earlier of the year in
which the Outside Director ceases to be a director or a date designated by the
Outside Director. Distribution of shares deferred under the Plan may be made in
a lump sum or in substantially equal annual installments (not to exceed 10) at
the election of the Outside Director. Shares that are deferred under the Plan
shall be credited with an amount equal to the dividends which would have been
paid on an equal number of outstanding shares of common stock. The amount so
credited shall then be converted into an additional number of deferred shares
and thereafter treated in the same manner as any other deferred shares under the
Plan.
The Plan provides that in the event of a change in control of the Company
all shares that have been deferred under the Plan shall be paid immediately in
cash. For the purposes of the Plan, a "change in control" shall be deemed to
have occurred if (i) any "person" (as defined in the Plan), other than the
Company, a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or certain affiliates of the Company, is or becomes
the beneficial owner, directly or indirectly, of fifty percent (50%) or more of
the combined voting power of the Company's then outstanding voting securities;
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board and any new director whose
election by the Board or nomination for election by the Company's stockholders
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute at least a majority thereof; (iii) the stockholders approve
a merger or consolidation of the Company with any other corporation, other than
certain designated transactions; or (iv) the stockholders approve a complete
plan of liquidation of the Company or an agreement for the sale of all or
substantially all of the assets of the Company.
The Board of Directors may at any time alter, amend, suspend or terminate
the Plan without the consent of stockholders; provided that no amendment which
requires stockholder approval in order for certain exemptions to be available
under the rules of the Securities and Exchange Commission shall be effective
unless the same is approved by stockholders. The Plan shall become effective on
June 1, 1995 if approved at the Annual Meeting.
If the Plan is approved by stockholders, each Outside Director will receive
shares equal to one-quarter of the Basic Fee of $40,000 in effect on June 1,
1995. Assuming a fair market value of $80 a share, each such Director would
receive 125 shares of Company common stock. The outstanding deferral accounts of
the six directors who have deferred fees under the Company's existing deferral
arrangement will be automatically rolled into and be governed by the terms of
the Plan. Based on a February 15, 1995 valuation date, such directors had an
aggregate of 12,252.30 phantom shares (which will become deferred shares under
the Plan) worth $992,436.30.
24
<PAGE>
TRANSACTIONS WITH MANAGEMENT AND OTHERS; OTHER INFORMATION
During 1994, subsidiaries of the Company employed in the ordinary course of
business individuals related to executive officers and directors of the Company.
In addition, corporations and other entities with which directors are or were
associated had insurance or other transactions with the Company and certain of
its subsidiaries and affiliates in the ordinary course of business, all of which
transactions were on substantially the same terms as those prevailing at the
time for comparable transactions with others. None of such insurance or other
transactions involved during 1994, or is expected to involve in 1995, payments
to the Company and its subsidiaries and affiliates for property or services in
excess of 5% of the Company's consolidated gross revenue during 1994.
Mr. Husson has a consulting agreement with Marsh & McLennan, Incorporated, a
subsidiary of the Company, which provides for Mr. Husson to act as a consultant
to and managing director of Marsh & McLennan, Incorporated for compensation in
addition to that as Chairman of Faugere & Jutheau S.A., a subsidiary of the
Company, of at least $100,000 per year. In 1994, Mr. Husson resigned as a
managing director of Marsh & McLennan, Incorporated. The agreement also provides
Mr. Husson with certain indemnity payments if he is dismissed prior to age 62.
The Company also has an equity interest in, and correspondent relationship with,
certain insurance broking firms in Africa in which the Husson family has an
equity interest, and Faugere & Jutheau maintains an exclusive correspondent
relationship with an insurance broker in Monaco controlled by the Husson family.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of
common stock, to file with the Securities and Exchange Commission ("SEC") and
the New York Stock Exchange initial reports of beneficial ownership and reports
of changes in beneficial ownership of common stock of the Company. Such persons
are also required by SEC regulation to furnish the Company with copies of all
Section 16(a) forms they file. To the Company's knowledge, based solely on a
review of the copies of such reports furnished to the Company and written
representations that no other reports were required, during 1994 all Section
16(a) filing requirements applicable to such individuals were complied with
except for a report covering one exempt transaction filed late by Mr. Wroughton.
RATIFICATION OF SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon the recommendation of the Audit Committee, has
selected the firm of Deloitte & Touche LLP, independent public accountants, to
audit the financial statements of the
25
<PAGE>
Company for the fiscal year ending December 31, 1995. Deloitte & Touche LLP
acted as the Company's independent public accountants for the fiscal year ended
December 31, 1994. Representatives of Deloitte & Touche LLP will attend the
Annual Meeting, will have an opportunity to make a statement if desiring to do
so and will be available to answer any pertinent questions.
SOLICITATION OF PROXIES
The Board of Directors of the Company hereby solicits proxies for use at the
1995 Annual Meeting and at any adjournment thereof. Stockholders who execute a
proxy may still attend the Annual Meeting and vote in person. A proxy may be
revoked at any time before it is voted by giving to the Secretary of the
Company, at the Company's principal executive offices indicated above, written
notice bearing a later date than the proxy, by submission of a later dated proxy
or by voting in person at the Annual Meeting. Executors, administrators,
trustees, guardians, attorneys and other representatives should indicate the
capacity in which they are signing and corporations should sign by an authorized
officer whose title should be indicated. Mere attendance at the Annual Meeting
will not revoke a proxy which was previously submitted to the Company.
The cost of this proxy solicitation is borne directly by the Company.
Georgeson & Company Inc. has been retained to assist in the proxy solicitation
at a fee of approximately $10,000, plus expenses. In addition to solicitation of
proxies by mail, proxies may be solicited personally, by telephone and by
facsimile by the Company's directors, officers and other employees. Such persons
will receive no additional compensation for such services. The Company will also
request brokers and other nominees to forward soliciting material to the
beneficial owners of shares which are held of record by them, and will pay the
necessary expenses.
STOCKHOLDER AND OTHER PROPOSALS
Stockholders who wish to present a proposal at the 1996 Annual Meeting of
Stockholders of the Company must submit such proposal in writing to the Company
in care of the Secretary of the Company on or before December 1, 1995 to be
considered for inclusion in the proxy materials for that meeting. In addition,
the By-laws of the Company contain requirements relating to the timing and
content of the notice which stockholders must provide to the Secretary for any
nomination or matter to be properly presented at a stockholders meeting.
By order of the Board of Directors,
[sig]
Gregory Van Gundy
Secretary
26
<PAGE>
Marsh & McLennan Companies, Inc.
1166 Avenue of the Americas
New York, New York 10036-2774
<PAGE>
ATTACHMENT 1
MARSH & MCLENNAN COMPANIES, INC.
DIRECTORS STOCK COMPENSATION PLAN
1. PURPOSE.
The Marsh & McLennan Companies, Inc. Directors Stock Compensation Plan (the
"Plan") is intended to provide an incentive to members of the board of directors
of Marsh & McLennan Companies, Inc., a Delaware corporation (the "Company"), who
receive fees for their services, to remain in the service of the Company and to
encourage such Directors to acquire additional stock ownership interests in the
Company.
2. DEFINITIONS.
(a) "Accounting Date" means June 1st of each Plan Year.
(b) "Basic Fee" means the annual retainer payable to a Director during
each Plan Year (at the annual rate in effect on the Accounting Date of such
Plan Year) for such Director's services on the Board (exclusive of any
amounts payable with respect to service on a committee of the Board or other
committee of Directors or for attendance at Board or committee meetings).
(c) "Board" means the Board of Directors of the Company.
(d) "Committee" means the Compensation Committee of the Board.
(e) "Common Stock" means the common stock, par value $1.00 per share,
of the Company.
(f) "Compensation" means the aggregate amount payable to a Director for
such Director's services on the Board (including any amounts payable with
respect to service on a committee of the Board or other committee of
Directors or for attendance at Board or committee meetings, but excluding
the portion of the Basic Fee with respect to which shares of Common Stock
are issuable pursuant to Section 5(a) hereof).
(g) "Director" means a member of the Board who receives fees for his or
her services.
(h) "Effective Date" means June 1, 1995.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(j) "Fair Market Value" on any given date means, except as otherwise
provided in Section 5(f) hereof, the average of the high and low prices of
the Common Stock on the New York Stock Exchange on the last trading day
preceding such date.
A-1
<PAGE>
(k) "Plan Year" means the twelve-month period commencing June 1st and
ending on the following May 31st.
3. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by the Committee. The Committee shall adopt
such rules as it may deem appropriate in order to carry out the purpose of the
Plan. All questions of interpretation, administration, and application of the
Plan shall be determined by a majority of the members of the Committee, except
that the Committee may authorize any one or more of its members, or any officer
of the Company, to execute and deliver documents on behalf of the Committee. The
determination of such majority shall be final and binding in all matters
relating to the Plan. No member of the Committee shall be liable for any act
done or omitted to be done by such member or by any other member of the
Committee in connection with the Plan, except for such member's own willful
misconduct or as expressly provided by statute.
4. COMMON STOCK RESERVED FOR THE PLAN.
The number of shares of Common Stock authorized for issuance under the Plan
is 250,000, including Deferred Shares (as defined in Section 5(c) hereof),
whether distributed as such or paid in cash, subject to adjustment pursuant to
Section 6 hereof. Shares of Common Stock delivered hereunder may be either
authorized but unissued shares or previously issued shares reacquired and held
by the Company.
5. TERMS AND CONDITIONS OF GRANTS.
(a) MANDATORY PORTION. On each Accounting Date commencing with the
Effective Date, each Director shall automatically receive a number of shares
of Common Stock with a Fair Market Value on such Accounting Date equal to
one-quarter (1/4) of his or her Basic Fee payable during the Plan Year which
commences on such Accounting Date. Such shares of Common Stock (including
fractional shares) shall be received in lieu of the payment of cash in
respect of one-quarter (1/4) of such Basic Fee and shall be transferred on
such Accounting Date in accordance with Section 5(e) hereof, except to the
extent that a Deferral Election (as defined in Section 5(c) hereof) shall be
in effect with respect to such shares or to the extent that Section 5(f)
hereof applies.
(b) ELECTIVE PORTION. Each Director may elect that a specified
percentage (in increments of 10%) of his or her future Compensation be paid
in shares of Common Stock. Such shares of Common Stock (including fractional
shares) shall be received in lieu of the payment of cash in respect of the
specified percentage of future Compensation payable for services rendered in
the quarters ended August 15th, November 15th, February 15th and May 15th,
as the case may be. Such shares of Common Stock shall be transferred in
accordance with Section 5(e) hereof, except to the extent that a Deferral
Election (as defined in Section 5(c) hereof) shall be in effect with
A-2
<PAGE>
respect to such shares or to the extent that Section 5(f) hereof applies. An
election hereunder shall be in the form of a document executed and filed
with the Secretary of the Company and shall remain in effect until the
effectiveness of any modification or revocation.
(c) DEFERRAL ELECTION. With respect to (1) the portion of the Basic
Fee payable in Common Stock under Section 5(a) and (2) the specified
percentage of Compensation payable in Common Stock under Section 5(b)
hereof, each Director may elect to defer the receipt (a "Deferral Election")
of all or any portion of the shares of Common Stock otherwise transferable
pursuant to Section 5(e). In such event, there shall be credited to an
account maintained on behalf of such Director, as of the date on which
shares would otherwise be transferred hereunder, a number of Shares
("Deferred Shares") equal to the number of shares otherwise transferable. A
Deferral Election or revocation hereunder shall be in the form of a document
executed by the Director and filed with the Secretary of the Company prior
to the time that the Basic Fee or other Compensation to which such election
relates has been earned. Any such election may be modified or revoked at any
time with respect to the Basic Fee or other Compensation not yet earned, but
will remain in effect until modified or revoked.
Effective as of the Effective Date, all units representing phantom stock
which have been credited to an account maintained by the Company for the benefit
of a Director, pursuant to a deferral agreement or arrangement with such
Director, shall be converted into an equal number of Deferred Shares pursuant to
this Plan and shall thereafter be treated in accordance with the terms hereof.
The Director shall elect (a) that Deferred Shares be distributed (in whole
shares of Common Stock and cash in lieu of any fractional shares) in a lump sum
or in substantially equal annual installments (not exceeding 10), and (b) that
the lump sum or first installment be distributed on the tenth day of the
calendar year immediately following either (i) the year in which the Director
ceases to be a Director of the Company or (ii) the earlier of the year in which
the Director ceases to be a Director of the Company or a date designated by the
Director; provided, however, that any such election shall be subject to Section
5(f) hereof. Installments subsequent to the first installment shall be
distributed on the tenth day of each succeeding calendar year until all of the
Director's Deferred Shares shall have been distributed. Notwithstanding anything
else this Plan, the Committee may, in its sole discretion, accelerate the
distribution of Deferred Shares in cases of extreme emergency or hardship.
In the event the Director should die before all of the Director's Deferred
Shares have been distributed, the balance of the Deferred Shares shall be
distributed in a lump sum to the beneficiary or beneficiaries designated in
writing by the Director, or if no designation has been made, to the estate of
the Director.
(d) DIVIDEND EQUIVALENTS. Deferred Shares shall be credited with an
amount equal to the dividends which would have been paid on an equal number
of outstanding shares of Common
A-3
<PAGE>
Stock ("Dividend Equivalents"). Dividend Equivalents shall be credited (i)
as of the payment date of such dividends, and (ii) only with respect to
Deferred Shares credited to such Director prior to the record date of the
dividend. Deferred Shares held pending distribution shall continue to be
credited with Dividend Equivalents.
Dividend Equivalents so credited shall be converted into an additional
number of Deferred Shares as of the payment date of the dividend (based on the
Fair Market Value on such payment date). Such Deferred Shares shall thereafter
be treated in the same manner as any other Deferred Shares under the Plan.
(e) TRANSFER OF SHARES. Shares of Common Stock issuable to a Director
under Section 5(a) hereof shall be transferred to such Director as of each
Accounting Date. The total number of shares of Common Stock to be so
transferred shall be determined by dividing (a) one-quarter (1/4) of such
Director's Basic Fee payable during the Plan Year commencing on such
Accounting Date by (b) the Fair Market Value of a share of Common Stock on
such Accounting Date. Shares of Common Stock issuable to a Director under
Section 5(b) hereof shall be transferred to such Director on August 31st,
November 30th, February 28th and May 31st of each Plan Year. The total
number of shares of Common Stock to be so transferred on each such date
shall be determined by dividing (x) the product of (1) the percentage
specified by the Director pursuant to Section 5(b) hereof and (2) the
Director's Compensation payable for services rendered in the quarter ending
on August 15th, November 15th, February 15th or May 15th of such Plan Year,
as the case may be, by (y) the Fair Market Value of a share of Common Stock
on such date. Notwithstanding the two preceding sentences, no election under
Section 5(b) (and no modification or revocation thereof) shall be executed
prior to six months from the date such election (or modification or
revocation) is properly filed pursuant to Section 5(b) hereof (i.e., the
Fair Market Value of the shares of Common Stock issuable pursuant to an
election or modification shall be determined on the August 15th, November
15th, February 15th or May 15th next following the expiration of six months
from the date such election or modification is filed, and such shares shall
be transferred on the August 31st, November 30th, February 28th, or May 31st
next following the date used for determining Fair Market Value). The
registrar for the Company will make an entry on its books and records
evidencing that such shares (including any fractional shares) have been duly
issued as of such dates; provided, however, that a Director may in the
alternative elect in writing prior thereto to receive a stock certificate
representing the number of whole such shares acquired plus cash in lieu of
any fractional shares.
(f) CHANGE IN CONTROL. Upon a Change in Control, all Deferred Shares,
to the extent credited prior to the Change in Control, shall be paid
immediately in cash. For purposes of this Section 5(f), with respect to
determining the cash equivalent value of a Deferred Share, the Fair Market
Value of such a Deferred Share shall be deemed to equal the greater of (i)
the highest Fair Market Value per share at any time during the 60-day period
preceding a Change in Control and
A-4
<PAGE>
(ii) the price of a share of Common Stock which is paid or offered to be
paid, by any person or entity, in connection with any transaction which
constitutes a Change in Control pursuant to this Section 5(f).
For purposes of the Plan, a "Change in Control" shall have occurred if:
(i) any "person," as such term is used in Sections 13(d) and 14(d) of
the Exchange Act (other than the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of Common
Stock of the Company), is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing 50% or more of the combined voting power of the
Company's then outstanding voting securities;
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board, and any new director (other
than a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in clause (i), (iii), or
(iv) of this Section 5(f)) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute at
least a majority thereof;
(iii) the stockholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than (A) a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity (or any parent of the
Company or such surviving entity) outstanding immediately after such merger
or consolidation or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no
"person" (as hereinabove defined) acquired more than 50% of the combined
voting power of the Company's then outstanding securities; or
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or substantially all of the Company's assets (or any
transaction having a similar effect).
A-5
<PAGE>
6. EFFECT OF CERTAIN CHANGES IN CAPITALIZATION.
In the event of any recapitalization, stock split, reverse stock split,
stock dividend, reorganization, merger, consolidation, spin-off, combination,
repurchase, or share exchange, or other similar corporate transaction or event
affecting the Common Stock, the maximum number or class of shares available
under the Plan, and the number or class of shares of Common Stock to be
delivered hereunder shall be adjusted by the Committee to reflect any such
change in the number or class of issued shares of Common Stock.
7. TERM OF PLAN.
This Plan shall become effective as of the Effective Date, provided that the
Plan shall have been approved by the stockholders of the Company at the 1995
annual meeting of stockholders. This Plan shall remain in effect until all
authorized shares have been issued, unless sooner terminated by the Board. No
transfer of shares of Common Stock may be made to any Director under the Plan
unless stockholder approval of the Plan has previously been obtained pursuant to
this Section 7.
8. AMENDMENT; TERMINATION.
The Board may at any time and from time to time alter, amend, suspend, or
terminate the Plan in whole or in part; PROVIDED, HOWEVER, that no amendment
which requires stockholder approval in order for the exemptions available under
Rule 16b-3 of the Exchange Act, as amended from time to time ("Rule 16b-3"), to
be applicable to the Plan and the Directors shall be effective unless the same
shall be approved by the stockholders of the Company entitled to vote thereon;
and, PROVIDED FURTHER, that the provisions of Section 5(a) hereof shall not be
amended more than once every six months, other than to conform with changes in
the Internal Revenue Code of 1986, as amended, the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder.
9. RIGHTS OF DIRECTORS.
Nothing contained in the Plan or with respect to any grant shall interfere
with or limit in any way the right of the stockholders of the Company to remove
any Director from the Board, nor confer upon any Director any right to continue
in the service of the Company as a Director.
10. GENERAL RESTRICTIONS.
(a) INVESTMENT REPRESENTATIONS. The Company may require any Director
to whom Common Stock is issued, as a condition of receiving such Common
Stock, to give written assurances in substance and form satisfactory to the
Company and its counsel to the effect that such person is acquiring the
Common Stock for his own account for investment and not with any present
intention of selling or otherwise distributing the same, and to such other
effects as the Company deems necessary or appropriate in order to comply
with Federal and applicable state securities laws.
A-6
<PAGE>
(b) COMPLIANCE WITH SECURITIES LAWS. Each issuance shall be subject to
the requirement that, if at any time counsel to the Company shall determine
that the listing, registration or qualification of the shares upon any
securities exchange or under any state or Federal law, or the consent or
approval of any governmental or regulatory body, is necessary as a condition
of, or in connection with, the issuance of shares hereunder, such issuance
may not be accepted or exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained on conditions acceptable to the Committee. Nothing herein shall be
deemed to require the Company to apply for or to obtain such listing,
registration or qualification.
(c) NONTRANSFERABILITY. Awards under this Plan shall not be
transferable by a Director other than by the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined
in the Internal Revenue Code of 1986, as amended, or Title I of the Employee
Retirement Income Security Act of 1974, as amended, or the rules thereunder.
11. WITHHOLDING.
The Company may defer making payments under the Plan until satisfactory
arrangements have been made for the payment of any Federal, state or local
income taxes required to be withheld with respect to such payment or delivery.
12. GOVERNING LAW.
This Plan and all rights hereunder shall be construed in accordance with and
governed by the laws of the State of Delaware.
13. PLAN INTERPRETATION.
The Plan is intended to comply with applicable provisions of Rule 16b-3, as
amended from time to time, and shall be construed to so comply.
14. HEADINGS.
The headings of sections and subsections herein are included solely for
convenience of reference and shall not affect the meaning of any of the
provisions of the Plan.
A-7
<PAGE>
MARSH & McLENNAN COMPANIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE 1995 ANNUAL MEETING
The undersigned hereby appoints A.J.C. Smith and Gregory Van Gundy proxies
(each with power to act alone and with the power of substitution) of the
undersigned to vote as directed on the reverse side all shares which the
undersigned would be entitled to vote at the Annual Meeting of Stockholders of
Marsh & McLennan Companies, Inc. to be held on Tuesday, May 16, 1995 at 10:00
a.m. (New York City time) in the Auditorium, 2nd Floor, 1221 Avenue of the
Americas, New York, New York and at any adjournment thereof.
IMPORTANT - This Proxy must be signed and dated on the reverse side.
<PAGE>
MARSH & McLENNAN COMPANIES, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK
<TABLE>
1995
<C> <C> <S> <C> <C> <C>
1. Election of Directors Nominees: For / / Withheld / / For all Except Nominee(s)
P Lewis W. Bernard, Richard H. Blum, Written Below
Frank J. Borelli, Ray J. Groves,
R Richard E. Heckert, Robert M.G. Husson, -------------------------
George Putnam
O
2. Approval of Directors Stock Compensation For / / Against / / Abstain / /
X Plan
Y 3. Ratification of Deloitte & Touche LLP as For / / Against / / Abstain / /
auditors for 1995
Sign here as name(s) appears on reverse side of card
Dated _______ , 1995
(x)
-------------------------------------
(x)
-------------------------------------
</TABLE>
<TABLE>
<S> <C>
The signer hereby revokes all proxies heretofore given
by the signer to vote at said meeting or any adjournments
thereof. If signing for a corporation or partnership or
as agent, attorney or fiduciary, indicate capacity in which
you are signing.
</TABLE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR ITEMS 1, 2 AND 3.
PLEASE RETURN THIS PROXY CARD PROMPTLY USING THE ACCOMPANYING ENVELOPE
<PAGE>
CONFIDENTIAL VOTING INSTRUCTIONS
MARSH & McLENNAN COMPANIES STOCK INVESTMENT PLAN
MARSH & McLENNAN COMPANIES, INC.
ANNUAL MEETING OF STOCKHOLDERS, MAY 16, 1995
By signing and returning this card, the undersigned directs Bankers Trust
Company, Trustee under the Marsh & McLennan Companies Stock Investment Plan, to
vote in person or by proxy all shares of stock of Marsh & McLennan Companies,
Inc. (the "Company") allocated to the undersigned under said Plan upon all
matters at the Annual Meeting of Stockholders of the Company on May 16, 1995 and
at any adjournment thereof.
Provided this card is received by May 11, 1995, voting rights will be
exercised by the Trustee as directed or, if not specifically directed, FOR the
items stated herein. Under the Plan, the Trustee shall vote all other shares in
the same proportion as those shares for which it has received a signed
instruction card.
<PAGE>
MARSH & McLENNAN COMPANIES, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK
<TABLE>
1995
<C> <S> <C> <C> <C>
1. Election of Directors Nominees: For / / Withheld / / For all Except Nominee(s)
Lewis W. Bernard, Richard H. Blum, Written Below
Frank J. Borelli, Ray J. Groves,
Richard E. Heckert, Robert M.G. Husson, -------------------------
George Putnam
2. Approval of Directors Stock Compensation For / / Against / / Abstain / /
Plan
3. Ratification of Deloitte & Touche LLP as For / / Against / / Abstain / /
auditors for 1995
Sign here as name(s) appears on reverse side of card
Dated _______ , 1995
(x)
-------------------------------------
(x)
-------------------------------------
</TABLE>
<TABLE>
<S> <C>
The signer hereby revokes all proxies heretofore given
by the signer to vote at said meeting or any adjournments
thereof. If signing for a corporation or partnership or
as agent, attorney or fiduciary, indicate capacity in which
you are signing.
</TABLE>
THE ALLOCATED SHARES WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED. IF NO DIRECTIONS ARE MADE, THEY WILL BE VOTED FOR
ITEMS 1, 2 AND 3.
PLEASE RETURN THIS CARD PROMPTLY USING THE ACCOMPANYING ENVELOPE
