As filed with the Securities and Exchange Commission on May 30, 1997
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
---------------
MARSH & McLENNAN COMPANIES, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of
incorporation or organization)
---------------
6411
(Primary Standard Industrial
Classification Code Number)
36-2668272
(I.R.S. Employer Identification No.)
---------------
1166 Avenue of the Americas
New York, New York 10036-2774
(212) 345-5000
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
---------------
Gregory F. Van Gundy
General Counsel and Secretary
Marsh & McLennan Companies, Inc.
1166 Avenue of the Americas
New York, New York 10036-2774
(212) 345-5000
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agents for Service)
Copy to:
Scott Williams, Esq.
McDermott, Will & Emery
227 West Monroe
Chicago, Illinois 60606-5016
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this registration statement. If the only
securities being registered on this Form are being offered pursuant to dividend
or interest reinvestment plans, check the following box. |_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.|_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: |_|
(Cover continued on next page.)
---------------
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act or until the registration statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a), may
determine.
================================================================================
(Continued from previous page)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Proposed
Proposed Maximum
Title of Each Class of Securities Maximum Aggregate Aggregate Amount of
to be Registered Amount to be Registered Price Per Unit (1)(3) Offering Price (1) Registration Fee
====================================================================================================================================
<S> <C> <C> <C> <C>
Common Stock, $1.00 par value, of Marsh
& McLennan Companies, Inc., including
the Preferred Stock Purchase Rights
attached thereto (2)............... 471,625 shares(4) $129.8125 $61,222,820 $18,553
====================================================================================================================================
</TABLE>
(1) Estimated for the sole purpose of computing the registration fee.
(2) The Preferred Stock Purchase Rights initially are attached to and
trade with all the shares of Common Stock outstanding as of, and issued
subsequent to, September 27, 1987, pursuant to the terms of the Company's
Rights Agreement, dated as of September 17, 1987, as amended. Until the
occurrence of certain prescribed events, the Preferred Stock Purchase
Rights are not exercisable, are evidenced by the certificates for the
Common Stock and will be transferred only with the Common Stock. The value
attributable to such Preferred Stock Purchase Rights, if any, is reflected
in the market price of the Common Stock.
(3) Calculated pursuant to Rule 457(c) based on the average of the high
and low prices on the New York Stock Exchange on May 28, 1997.
(4) The number of shares offered pursuant to the Prospectus, which is a
part of this Registration Statement, gives effect to a two-for-one stock
split in the form of a stock distribution declared by the Board of
Directors of the Company on May 21, 1997 for stockholders of record on
June 6, 1997, with certificates to be issued on June 27, 1997.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to or qualification under the securities laws of any such State.
Prospectus
Subject To Completion, Dated May 30, 1997
MARSH & McLENNAN COMPANIES, INC.
943,250(1) Shares of Common Stock
This Prospectus relates to the offering from time to time of up to 943,250(1)
shares of Common Stock, par value $1.00 per share ("Common Stock"), of Marsh &
McLennan Companies, Inc., a Delaware corporation (the "Company"), by certain
stockholders of the Company (the "Selling Stockholders"). The Common Stock
offered hereby was issued as consideration to the Selling Stockholders in
connection with the acquisition by Seabury & Smith, Inc. ("Seabury"), a Delaware
corporation and a wholly-owned subsidiary of the Company, of Albert H. Wohlers &
Co., an Illinois company ("AHW"). See "Selling Stockholders." The Company will
not receive any proceeds from the sale of the Common Stock offered hereby.
The Selling Stockholders directly, or through agents, dealers or underwriters
designated from time to time, may sell the Common Stock offered hereby from time
to time on terms to be determined at the time of sale. To the extent required,
the number of shares of Common Stock to be sold, purchase price, public offering
price, the names of the Selling Stockholders, the names of any such agent,
dealer or underwriter, and any applicable commission or discount with respect to
a particular offering will be set forth in an accompanying Prospectus
Supplement. The aggregate proceeds to the Selling Stockholders from the sale of
the Common Stock offered hereby will be the purchase price thereof less the
aggregate agents' commissions and underwriters' discounts, if any, and other
expenses of distribution not borne by the Company. The Company has agreed to pay
certain expenses of the offering contemplated hereby. See "Plan of
Distribution."
The Selling Stockholders and any dealers, agents or underwriters that
participate with any Selling Stockholder in the distribution of Common Stock may
be deemed to be "underwriters" within the meaning of the Securities Act of 1933,
as amended (the "Securities Act"), and any commission received by them and any
profit from the resale of Common Stock purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. See "Plan of
Distribution" for a description of information regarding indemnification
arrangements.
The Common Stock is listed on the New York Stock Exchange ("NYSE"), the Chicago
Stock Exchange, the Pacific Stock Exchange and the London Stock Exchange under
the trading symbol "MMC."
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is __, 1997
- ----------
(1) The number of shares offered pursuant to this Prospectus gives effect to a
two-for-one stock split in the form of a stock distribution declared by the
Board of Directors of the Company on May 21, 1997, for stockholders of record on
June 6, 1997, with certificates to be issued on June 27, 1997.
<PAGE>
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, any accompanying
Prospectus Supplement or the documents incorporated or deemed incorporated by
reference herein, and any information or representations not contained herein or
therein may not be relied upon as having been authorized by the Company or by
any agent, dealer or underwriter. This Prospectus and any accompanying
Prospectus Supplement does not constitute an offer to sell or a solicitation of
an offer to buy the Common Stock in any circumstances in which such offer or
solicitation is unlawful. The delivery of this Prospectus or any Prospectus
Supplement at any time does not imply that the information herein is correct as
of any time subsequent to the date of such information.
No action has been or will be taken in any jurisdiction by the Company or any
Selling Stockholder that would permit a public offering of the Common Stock or
possession or distribution of this Prospectus or any accompanying Prospectus
Supplement in any jurisdiction where action for that purpose is required, other
than in the United States. Persons into whose possession this Prospectus or any
accompanying Prospectus Supplement comes are required by the Company and the
Selling Stockholders to inform themselves about and to observe any restrictions
as to the offering of the Common Stock and the distribution of this Prospectus
and any accompanying Prospectus Supplement.
Table of Contents
Page
Available Information ...................................................... 3
Incorporation of Certain Documents
by Reference ............................................................. 3
The Company ................................................................ 4
Use of Proceeds ............................................................ 4
Description of Capital Stock ............................................... 4
Selling Stockholders ....................................................... 7
Plan of Distribution ....................................................... 8
Legal Matters .............................................................. 10
Experts .................................................................... 10
2
<PAGE>
AVAILABLE INFORMATION
This Prospectus constitutes part of a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Company with the Securities and Exchange Commission
(the "Commission") under the Securities Act with respect to the Common Stock
offered hereby. This Prospectus does not contain all information set forth in
the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. Reference is made to the
Registration Statement and to the exhibits thereto for further information with
respect to the Company and the Common Stock offered hereby.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional
offices of the Commission located at 7 World Trade Center, 13th Floor, Suite
1300, New York, New York 10048 and Suite 1400, Citicorp Center, 14th Floor, 500
West Madison Street, Chicago, Illinois 60661. Copies of such material can also
be obtained at prescribed rates by writing to the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Such
information may also be accessed electronically by means of the Commission's
home page on the Internet (http://www.sec.gov.). In addition, such reports,
proxy statements and other information concerning the Company can be inspected
at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York,
New York 10005, the Chicago Stock Exchange, 440 South LaSalle Street, Chicago,
Illinois 60605, and the Pacific Stock Exchange, 301 Pine Street, San Francisco,
California 94104.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated into this Prospectus by reference:
(1) The Company's Annual Report on Form 10-K for the year ended December
31, 1996 (including pages 23 through 49 of the Company's 1996 Annual
Report to Stockholders);
(2) The Company's Quarterly Report on Form 10-Q for the three months
ended March 31, 1997;
(3) The Company's Current Reports on Form 8-K, filed with the Commission
on March 14, 1997 and April 7, 1997, relating to the business
combination with Johnson & Higgins;
(4) The Company's Registration Statement on Form 8-B, dated May 22,
1969, as amended by an Amendment on Form 8 dated February 3, 1987,
describing the Common Stock, including any amendment or reports
filed for the purpose of updating such description; and
(5) The Company's Registration Statement on Form 8-A, dated September
21, 1987, as amended by Amendments on Form 8, dated September 18,
1990 and February 19, 1991, describing the Preferred Stock Purchase
Rights attached to the Common Stock, including any further amendment
or reports filed for the purpose of updating such description.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the
termination of the offering of the Common Stock offered hereby shall be deemed
to be incorporated by reference into this Prospectus and to be a part of this
Prospectus from the date of filing of such document. Any statement contained
herein or in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this Prospectus
including the documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified from
time to time. Statements contained in this Prospectus as to the contents of any
contract or other document referred to herein do not purport to be complete, and
where reference is made to the particular provisions of such contract or other
document, such provisions are qualified in all
3
<PAGE>
respects by reference to all of the provisions of such contract or other
document. The Company will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference herein (other
than exhibits not specifically incorporated by reference into the texts of such
documents). Requests for such documents should be directed to: Corporate
Development, Marsh & McLennan Companies, Inc., 1166 Avenue of the Americas, New
York, New York 10036. Telephone requests may be directed to Corporate
Development at (212) 345-5475.
THE COMPANY
Marsh & McLennan Companies, Inc., a professional services organization with
origins dating from 1871 in the United States, is a holding company which,
through its subsidiaries and affiliates, provides clients with analysis, advice
and transactional capabilities in the fields of insurance and reinsurance
broking, investment management and consulting.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Common Stock
offered hereby, all of the net proceeds of which will be received by the Selling
Stockholders.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 406,000,000 shares of capital
stock, 400,000,000 of such shares being Common Stock, and 6,000,000 shares being
preferred stock, par value $1.00 per share ("Preferred Stock"). No shares of
Preferred Stock were issued or outstanding as of May 30, 1997.
Common Stock
Each holder of Common Stock is entitled to one vote for each share held on all
matters to be voted upon by the stockholders of the Company. The holders of
outstanding shares of Common Stock, subject to any preferences that may be
applicable to any outstanding series of Preferred Stock, are entitled to receive
ratably such dividends out of assets legally available therefor at such times
and in such amounts as the Board of Directors may from time to time determine.
Upon liquidation or dissolution of the Company, the holders of the Common Stock
will be entitled to share ratably in the assets of the Company legally available
for distribution to stockholders after payment of liabilities and subject to the
prior rights of any holders of any Preferred Stock then outstanding. Holders of
the Common Stock generally have no conversion, sinking fund, redemption,
preemptive or subscription rights. In addition, the Common Stock does not have
cumulative voting rights. Shares of the Common Stock are not subject to further
calls or assessments by the Company.
Preferred Stock
The Company is authorized to issue 6,000,000 shares of Preferred Stock, none of
which currently is issued or outstanding. The Board of Directors of the Company
has the authority, without further action by the stockholders, to issue shares
of Preferred Stock in one or more series and to fix the number of shares,
dividend rights, conversion rights, voting rights, redemption rights,
liquidation preferences, sinking funds, and any other rights, preferences,
privileges and restrictions applicable to each such series of Preferred Stock.
The holders of Preferred Stock will have the right to vote separately as a class
on any proposal involving fundamental changes in the rights of holders of such
Preferred Stock pursuant to the Delaware General Corporation Law (the "DGCL").
4
<PAGE>
In connection with the Company's Stockholder Rights Plan (the "Rights Plan"),
the Board of Directors has authorized the issuance of up to 2,000,000 shares of
Series A Junior Participating Preferred Stock ("Series A Preferred Stock") upon
exercise of preferred stock purchase rights issued under the Rights Plan.
Reference is hereby made to the Company's Registration Statement on Form 8-A,
dated September 21, 1987, as amended by Amendments on Form 8, dated September
18, 1990 and February 19, 1991, which is incorporated by reference herein, for a
description of the preferred stock purchase rights attached to the Common Stock
and for a copy of the form of the Certificate of Designation that sets forth the
rights and preferences of the Series A Preferred Stock.
Certain Provisions of the Company's Restated Certificate of Incorporation and
By-laws and the Delaware General Corporation Law
Classified Board of Directors. The Company's Restated Certificate of
Incorporation (the "Certificate of Incorporation") provides for a Board of
Directors divided into three classes, each class to consist as nearly as
possible of one-third of the directors. Each director serves for a term of three
years and until his or her successor is elected and qualified. Pursuant to the
Certificate of Incorporation, the number of directors of the Company will be
fixed from time to time by the Board of Directors.
Removal of Directors by Stockholders. The DGCL provides that members of a
classified board of directors may only be removed for cause by the affirmative
vote of the holders of a majority of the outstanding shares of capital stock of
the Company entitled to vote on the election of such directors.
Stockholder Nomination of Directors. The Company's Restated By-laws (the
"By-laws") provide that written notice must be given of any stockholder
nomination of a director not less than sixty nor more than ninety days prior to
the date of the meeting at which directors are to be elected; provided, that if
the date for such meeting is not the date set forth in the By-laws and less than
seventy five days' notice or prior public disclosure of the date for such
meeting is given to stockholders, then notice by a stockholder shall be timely
if received by the Company no later than fifteen days following the date such
public disclosure was made.
No Action by Written Consent. The Certificate of Incorporation provides that
stockholders of the Company may not act by written consent and may only act at
duly called meetings of such stockholders.
Interested Stockholder Provision. Article EIGHTH of the Certificate of
Incorporation provides for higher stockholder voting requirements for certain
transactions (such as business combinations) with or otherwise involving an
Interested Stockholder (as defined below). Such a transaction requires the
approval of the holders of a majority of the Company's outstanding voting power,
voting together as a single class (but excluding any voting stock owned by an
Interested Stockholder), unless such transaction is approved by a majority of
Disinterested Directors (as defined below), in which case the voting
requirements of the DGCL, the Certificate of Incorporation and the Company's
By-laws otherwise applicable govern. Article EIGHTH does not alter the
additional requirements regarding class votes available to holders of Preferred
Stock, if any, which arise under the DGCL and the Certificate of Incorporation.
Transactions covered by Article EIGHTH include mergers of the Company or any of
its subsidiaries with an Interested Stockholder, sales of all or any substantial
part of the assets of the Company and its subsidiaries to an Interested
Stockholder, the issuance or delivery of any securities of the Company or any of
its subsidiaries to an Interested Stockholder, any loan, advance or guarantee,
pledge or other financial assistance provided by the Company or any of its
subsidiaries to the Interested Stockholder, any voluntary dissolution or
liquidation of the Company or amendment to the Company's By-laws, a
reclassification of securities or recapitalization of the Company or other
transaction (if such reclassification, recapitalization or other transaction
results in the Interested Stockholder increasing its proportionate share of any
class of the Company's capital stock) or any agreement, contract, or other
arrangement to do any of the foregoing.
5
<PAGE>
An "Interested Stockholder" is defined in Article EIGHTH as any other
corporation, person, or entity which (i) beneficially owns or controls, directly
or indirectly, 10% or more of the voting stock of the Company (or has announced
a plan or intention to acquire such securities), and any affiliate or associate
of such corporation, person, or entity or (ii) is an affiliate or associate of
the Company and at any time within two-years prior to the date in question was
the beneficial owner of 10% or more of the voting stock of the Company.
Specifically excluded from the definition of Interested Stockholder are (i) the
Company and any of its subsidiaries, and (ii) any profit-sharing, employee stock
ownership or other employee benefit plan of the Company or any subsidiary, or
trustees or fiduciaries for such.
A "Disinterested Director" is defined in Article EIGHTH as a director who is not
an affiliate, associate, representative, agent or employee of an Interested
Stockholder, and who was a member of the Board of Directors prior to the time
that the Interested Stockholder involved in the transaction being considered
became an Interested Stockholder, and any successor to a Disinterested Director,
while such successor is a member of the Board of Directors, who is not an
affiliate, associate, representative, agent or employee of an Interested
Stockholder and who was nominated by a majority of the Disinterested Directors.
Article EIGHTH may not be altered, amended, or repealed without the affirmative
vote of the holders of a majority of the Company's outstanding voting power,
voting together as a single class (but excluding any voting stock owned by an
Interested Stockholder), except if recommended by a majority of Disinterested
Directors, in which case the voting requirements of the DGCL, the Certificate of
Incorporation and the Company's By-laws otherwise applicable govern.
Delaware Business Combination Statute. The Company is subject to Section 203 of
the DGCL ("Section 203"), which restricts certain transactions and business
combinations between a corporation and an "interested stockholder" (which is
generally defined by Section 203 to be a person owning 15% or more of the
corporation's outstanding voting stock) for a period of three years from the
date the stockholder becomes an interested stockholder. Subject to certain
exceptions, unless the transaction is approved by the Board of Directors and the
holders of at least two-thirds of the outstanding voting stock of the
corporation (excluding shares held by the interested stockholder), Section 203
prohibits significant business transactions such as a merger with, disposition
of significant assets to or receipt of disproportionate financial benefits by
the interested stockholder, or any other transaction that would increase the
interested stockholder's proportionate ownership of any class or series of the
Company's capital stock. The statutory ban does not apply if: (i) prior to the
time that any stockholder became an interested stockholder, the Board of
Directors approved either the business combination or the transaction in which
such stockholder became an interested stockholder, or (b) upon consummation of
the transaction in which any stockholder becomes an interested stockholder, the
interested stockholder owns at least 85% of the outstanding voting stock of the
corporation (excluding shares held by persons who are both directors and
officers or by certain employee stock plans).
Directors' Liability
The Certificate of Incorporation provides that the Board of Directors may
eliminate in certain circumstances the liability of directors of the Company for
monetary damages for breach of their fiduciary duty of care as directors. This
provision does not abrogate the director's duty of care, nor does it eliminate
the liability of a director (i) for a breach of the director's duty of loyalty
to the Company or its stockholders, (ii) for acts or omissions by the director
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under section 174 of the DGCL (relating to the declaration of
dividends and purchase or redemption of shares in violation of the DGCL), and
(iv) for transactions from which the director derived an improper personal
benefit.
The Certificate of Incorporation also provides for indemnification of directors
and officers to the fullest extent authorized by Delaware law.
Transfer Agent and Registrar
Harris Trust Company of New York acts as transfer agent and registrar for the
Common Stock.
6
<PAGE>
SELLING STOCKHOLDERS
General
On May 1, 1997 Seabury, a wholly-owned subsidiary of the Company, acquired all
the outstanding shares of capital stock (the "Transaction") of AHW. In
connection with the Transaction, the Company issued and delivered approximately
471,625 shares of Common Stock to the Selling Stockholders as payment for the
sale by the Selling Stockholders of their shares of common stock of AHW to
Seabury, in each case upon the terms set forth in the Stock Acquisition
Agreement and Plan of Reorganization, dated as of May 1, 1997 among Seabury, AHW
and the Selling Stockholders. The 471,625 shares issued to the Selling
Stockholders in connection with the Transaction will increase to 943,250 shares
following the completion of the Common Stock distribution effecting the
Company's two-for-one stock split. The Company entered into a Registration
Rights Agreement, dated as of May 1, 1997 , with the Selling Stockholders (the
"Registration Rights Agreement"), for their own benefit and the benefit of
holders from time to time of the Common Stock originally issued to the Selling
Stockholders in connection with the Transaction (the "RRA Common Stock").
Selling Stockholders
The following table sets forth the name of each Selling Stockholder, the number
of shares of RRA Common Stock being offered hereby and the number of shares of
Common Stock beneficially owned by each Selling Stockholder. The number of
shares of Common Stock beneficially owned and offered hereby by each Selling
Stockholder constitutes less than 1% of the issued and outstanding Common Stock
of the Company. Except as otherwise indicated, to the knowledge of the Company,
the persons identified below have sole voting power and sole investment power
with respect to the shares they beneficially own. Assuming that no Selling
Stockholder acquires shares of Common Stock after the date hereof and each
Selling Stockholder sells all shares of Common Stock offered hereby, the Selling
Stockholders will own no shares of Common Stock.
<TABLE>
<CAPTION>
Shares of Common Stock RRA Common Stock
Name of Selling Stockholder Owned Before the Offering (2)(3) Offered hereby(3)
--------------------------- -------------------------------- -----------------
<S> <C> <C>
Albert H. Wohlers, Trustee of the Albert H.
Wohlers Trust, Dated August 26, 1981 377,296 320,700
Jane L. Wohlers, Trustee of the Jane L.
Wohlers Trust, Dated August 26, 1981 377,296 56,596
Frank J. Cella, Loving Trust 87,816 87,816
Barry M. Stagl 19,526 19,526
Kenneth B. Lock, as Trustee of the
Kenneth B. Lock Revocable Trust u/a/d 3/12/79 58,576 58,576
James R. Malik 208,176 78,006
Nancy W. Malik, Cust
Molly Jane Pearson UGMA IL. 11,320 11,320
Terence B. Bernier 39,050 39,050
Nancy W. Malik 208,176 66,500
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Shares of Common Stock RRA Common Stock
Name of Selling Stockholder Owned Before the Offering (2)(3) Offered hereby(3)
--------------------------- -------------------------------- -----------------
<S> <C> <C>
Nancy W Malik, Trustee of the Nancy W. Malik 52,350 52,350
exemption trust created under the terms of the
Albert H. Wohlers 1991 Trust Exemption Trust
Susan W. Pearson 152,810 66,500
Susan W. Pearson, Trustee of the Susan
W. Pearson exemption trust created under
the terms of the Albert H. Wohlers 1991
Trust Exemption Trust. 52,350 52,350
Susan Wohlers Pearson Cust for Andrew James
Malik UGMA IL 11,320 11,320
Susan Wohlers Pearson Cust for Daniel James
Malik UGMA IL
11,320 11,320
Susan Wohlers Pearson Cust for Natalie Jane
Malik UGMA IL 11,320 11,320
</TABLE>
(2) Includes the number of shares of Common Stock that are held indirectly for
the benefit of such individuals or jointly, or directly or indirectly, for
certain members of such individuals' families, with respect to which beneficial
ownership in certain cases may be disclaimed.
(3) Numbers of shares adjusted to reflect a two-for-one stock split in the form
of a stock distribution declared by the Company's Board of Directors on May 21,
1997 for shareholders of record on June 6, 1997.
The Registration Rights Agreement
Shelf Registration. The Company has agreed in the Registration Rights Agreement
to file the registration statement of which this Prospectus forms a part, to use
its commercially reasonable efforts to cause such registration statement to be
declared effective under the Securities Act as soon as possible after its
initial filing date and to keep it continuously effective in order to permit
this Prospectus to be usable at all times during the period ending on the second
anniversary of the date on which such registration statement becomes effective
or such shorter period that will terminate when the RRA Common Stock is publicly
sold (the "Effectiveness Period").
PLAN OF DISTRIBUTION
The Selling Stockholders may sell the Common Stock being offered hereby directly
to other purchasers, or to or through underwriters, dealers or agents. To the
extent required, a Prospectus Supplement with respect to the Common Stock will
set forth the terms of the offering of the Common Stock, including the name(s)
of any underwriters, dealers or agents, the name(s) of the Selling Stockholders,
the number of shares of Common Stock to be sold, the price of the offered Common
Stock, any underwriting discounts or other items constituting underwriters'
compensation and any discounts or concessions allowed or reallowed or paid to
dealers.
8
<PAGE>
The Common Stock offered hereby may be sold from time to time directly by the
Selling Stockholders or, alternatively, through underwriters, broker-dealers or
agents. Such Common Stock may be sold in one or more transactions at fixed
prices, at prevailing market prices at the time of sale, at varying prices
determined at the time of sale or at negotiated prices. Such sales may be
effected in transactions (which may involve crosses or block transactions) (i)
on any national securities exchange or quotation service on which the Common
Stock may be listed or quoted at the time of sale, (ii) in the over-the-counter
market, (iii) in transactions otherwise than on such exchanges or services or in
the over-the-counter market or (iv) through the writing of options. In
connection with sales of the Common Stock offered hereby or otherwise, the
Selling Stockholders may enter into hedging transactions with broker-dealers,
which may in turn engage in short sales of such Common Stock in the course of
hedging the positions they assume. The Selling Stockholders may also sell the
Common Stock offered hereby short and deliver such Common Stock to close out
such short positions, or loan or pledge such Common Stock to broker-dealers that
in turn may sell such securities. The Common Stock offered hereby also may be
sold pursuant to Rule 144 under the Securities Act.
Any Selling Stockholder and any such underwriters, brokers, dealers or agents,
upon effecting the sale of the Common Stock, may be deemed "underwriters" as
that term is defined by the Securities Act.
The underwriter or underwriters with respect to a particular underwritten
offering of Common Stock will be named in the Prospectus Supplement relating to
such offering, and if an underwriting syndicate is used, the managing
underwriter or underwriters will be set forth on the cover of such Prospectus
Supplement. Unless otherwise set forth in the Prospectus Supplement, the
obligations of the underwriters to purchase the Common Stock will be subject to
certain conditions precedent and the underwriters will be obligated to purchase
all the Common Stock if any is purchased. Any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
If a dealer is utilized in the sale of any Common Stock in respect of which this
Prospectus is delivered, the Selling Stockholders may sell such Common Stock to
the dealer, as principal. The dealer may then resell such Common Stock to the
public at varying prices to be determined by such dealer at the time of resale.
To the extent required, the name of the dealer and the terms of the transaction
will be set forth in the Prospectus Supplement relating thereto.
In connection with the sale of the Common Stock offered hereby, underwriters or
agents may receive compensation from the Company, the Selling Stockholders or
from purchasers of such Common Stock for whom they may act as agents in the form
of discounts, concessions, or commissions. Underwriters, agents, and dealers
participating in the distribution of the Common Stock may be deemed to be
underwriters, and any such compensation received by them and any profit on the
resale of Common Stock by them may be deemed to be underwriting discounts or
commissions under the Securities Act.
The Common Stock is listed on the NYSE, the Pacific Stock Exchange, the Chicago
Stock Exchange and the London Stock Exchange. Any underwriters to whom Common
Stock is sold by the Selling Stockholders for public offering and sale may make
a market in such Common Stock, but such underwriters will not be obligated to do
so and may discontinue any market making at any time without notice. No
assurance can be given as to the liquidity of the trading market for any Common
Stock.
The Selling Stockholders, agents, dealers, and underwriters may be entitled
under the Registration Rights Agreement or other agreements entered into with
the Company to indemnification by the Company against certain civil liabilities,
including liabilities under the Securities Act, or to contribution with respect
to payments that the Selling Stockholders, agents, dealers, or underwriters may
be required to make with respect thereto. Underwriters, dealers, or agents and
their associates may be customers of, engage in transactions with and perform
services for, the Company in the ordinary course of business.
The Company has agreed to pay certain expenses in connection with the offering
contemplated hereby, including (i) registration and filing fees, (ii) fees and
expenses of providing certain information to the Sellers, (iii) fees and
expenses of compliance with securities or blue sky laws and (iv) fees and
expenses of preparing and delivering certificates representing the Common Stock.
Any Selling Stockholder may agree to indemnify any agent, dealer or
broker-dealer that participates in transactions involving sales of the Common
Stock against certain liabilities, including liabilities arising under the
Securities Act. The Company and the Selling Stockholders have agreed to
indemnify each other and certain other persons against certain liabilities in
connection with the offering of the Common Stock including liabilities arising
under the Securities Act.
9
<PAGE>
LEGAL MATTERS
The validity of the Common Stock being offered hereby is being passed upon for
the Company by Gregory Van Gundy, Marsh & McLennan Companies, Inc., 1166 Avenue
of the Americas, New York, New York 10036-2774. Mr. Van Gundy, General Counsel
and Secretary of the Company, beneficially owns, or has rights to acquire under
the Company's employee benefit plans, an aggregate of less than 1% of the
Company's Common Stock.
EXPERTS
The consolidated financial statements and supplemental notes of the Company and
its subsidiaries as of December 31, 1996 and 1995 and for each of the years in
the three year period ended December 31, 1996, included and incorporated by
reference in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996 and incorporated by reference into this Prospectus, have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports, which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
The consolidated financial statements of Johnson & Higgins and its subsidiaries
as of and for the year ended December 31, 1996, included in the Company's
Current Report on Form 8-K filed with the Commission on April 7, 1997, and
incorporated by reference into this Prospectus, have been audited by Arthur
Andersen LLP, independent public accounts, as indicated in their report with
respect thereto, and incorporated herein in reliance upon the authority of said
firm as experts in accounting and auditing.
10
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the expenses to be borne by the Company in
connection with the offering described in this Registration Statement. All such
expenses other than the Securities and Exchange Commission registration fee are
estimates.
Securities and Exchange Commission Registration Fee............$18,553
Legal Fees and Expenses........................................ 5,000
Miscellaneous ................................................. 6,447
-------
Total..............................................$30,000
Item 15. Indemnification of Directors and Officers
As authorized by Section 145 of the General Corporation Law of the State of
Delaware, each director and officer of the Company may be indemnified by the
Company against expenses (including attorney's fees, judgments, fines and
amounts paid in settlement) actually and reasonably incurred in connection with
the defense or settlement of any threatened, pending or completed legal
proceedings in which he is involved by reason of the fact that he is or was a
director or officer of the Company if he acted in good faith and in a manner
that he reasonably believed to be in or not opposed to the best interests of the
Company and, with respect to any criminal action or proceeding, if he had no
reasonable cause to believe that his conduct was unlawful. If the legal
proceeding, however, is by or in the right of the Company, the director or
officer may not be indemnified in respect of any claim, issue or matter as to
which he shall have been adjudged to be liable for negligence or misconduct in
the performance of his duty to the Company unless a court determines otherwise.
In addition, the Company maintains directors' and officers' liability insurance
policies.
Article Sixth of the Restated Certificate of Incorporation of the Company and
Article VI of the Restated By-laws of the Company provide that, to the fullest
extent authorized by law, directors of the Company will not be liable for
monetary damages to the Company or its stockholders for breaches of their
fiduciary duties.
Item 16. Exhibits
The following is a list of all exhibits filed as a part of this Registration
Statement on Form S-3, including those incorporated herein by reference.
II-1
<PAGE>
Exhibit
Number Description of Exhibits
- ------ -----------------------
2(a) Stock Acquisition Agreement and Plan of Reorganization by and among
Seabury, AHW and the stockholders of AHW identified in Schedule 1
thereto, dated as of May 1, 1997
4(a) Rights Agreement, dated as of September 17, 1987, as amended
(incorporated by reference to the Company's Registration Statement
on Form 8-A, dated September 21, 1987, as amended by Amendments on
Form 8, dated September 18, 1990 and February 19, 1991).
5 Opinion of Gregory F. Van Gundy, Esq., with respect to the validity
of the securities being registered.
23(a) Consent of Deloitte & Touche LLP, Independent Accountants.
23(b) Consent of Arthur Andersen LLP, Independent Accountants.
23(c) Consent of Gregory F. Van Gundy, Esq. (included in his opinion filed
as Exhibit 5).
24(a) Powers of Attorney of certain directors of the Company (incorporated
by reference to the Company's Annual Report on Form 10-K for the
year ended December 31, 1996).
24(b) Powers of Attorney of certain directors of the Company (Messrs.
Olsen, Nielsen and Barham).
Item 17. Undertakings
The undersigned registrant (the "Registrant") hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement: (i) To include
any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; (iii) To include any material
information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement; provided, however, that, since
this registration statement is on Form S-3, paragraphs (1)(i) and 1(ii) do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in this registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
The Registrant hereby undertakes that, for purposes of determining any liability
under the Securities Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the
II-2
<PAGE>
Registrant pursuant to the provisions set forth in Item 15, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, in the State of New York, on
May 30, 1997.
MARSH & McLENNAN COMPANIES, INC.
By /s/ A. J. C. Smith
-----------------------------------------
Name: A. J. C. Smith
Title: Chairman & Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ A.J.C. Smith Chairman & Chief Executive May 30, 1997
- ------------------------------ Officer (Principal Executive
A.J.C. Smith Officer)
/s/ Frank J. Borelli Senior Vice President & May 30, 1997
- ------------------------------ Chief Financial Officer (Principal
Frank J. Borelli Financial Officer)
/s/Douglas C. Davis Vice President and Controller May 30, 1997
- ------------------------------ (Principal Accounting Officer)
Douglas C. Davis
* Director May 30, 1997
- ------------------------------
Norman Barham
* Director May 30, 1997
- ------------------------------
Lewis W. Bernard
* Director May 30, 1997
- ------------------------------
Richard H. Blum
* Director May 30, 1997
- ------------------------------
Robert Clements
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Director May 30, 1997
- ------------------------------
Peter Coster
* Director May 30, 1997
- ------------------------------
Robert F. Erburu
* Director May 30, 1997
- ------------------------------
Jeffrey W. Greenberg
* Director May 30, 1997
- ------------------------------
Ray J. Groves
* Director May 30, 1997
- ------------------------------
Richard S. Hickok
* Director May 30, 1997
- ------------------------------
David D. Holbrook
* Director May 30, 1997
- ------------------------------
Lawrence J. Lasser
* Director May 30, 1997
- ------------------------------
Richard M. Morrow
* Director May 30, 1997
- ------------------------------
Richard A. Nielsen
* Director May 30, 1997
- ------------------------------
David A. Olsen
* Director May 30, 1997
- ------------------------------
George Putnam
* Director May 30, 1997
- ------------------------------
Adele Smith Simmons
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Director May 30, 1997
- ------------------------------
John T. Sinnott
* Director May 30, 1997
- ------------------------------
Frank J. Tasco
</TABLE>
* By: /s/ Gregory F. Van Gundy
-------------------------
Gregory F. Van Gundy
Attorney-in-fact
II-6
<PAGE>
EXHIBIT INDEX
Exhibit
Page Number Description of Exhibits
- ---- ------ -----------------------
2(a) Stock Acquisition Agreement and Plan of Reorganization, dated
as of May 1, 1997, by and among Seabury, AHW and the
stockholders of AHW identified on Schedule 1 thereto.
4(a) Rights Agreement, dated as of September 17, 1987, as amended
(incorporated by reference to the Company's Registration
Statement on Form 8-A, dated September 21, 1987, as amended by
Amendments on Form 8, dated September 18, 1990 and February
19, 1991). 5 Opinion of Gregory F. Van Gundy, Esq., with
respect to the validity of the securities being registered.
5 Opinion of Gregory F. Van Gundy, Esq., with respect to the
validity of the securities being registered.
23(a) Consent of Deloitte & Touche LLP, Independent Accountants.
23(b) Consent of Arthur Andersen LLP, Independent Accountants.
23(c) Consent of Gregory F. Van Gundy, Esq. (included in his opinion
filed as Exhibit 5).
24(a) Powers of Attorney of certain directors of the Company
(incorporated by reference to the Company's Annual Report on
Form 10-K for the year ended December 31, 1996).
24(b) Powers of Attorney of certain directors of the Company
(Messrs. Olsen, Nielsen and Barham).
II-7
STOCK ACQUISITION AGREEMENT
AND PLAN OF REORGANIZATION
This Stock Purchase Agreement ("Agreement") dated as of May 1, 1997 among
SEABURY & SMITH, INC., a Delaware corporation ("Seabury") and a direct
wholly-owned subsidiary of MARSH & McLENNAN COMPANIES, INC., a Delaware
corporation ("MMC"), ALBERT H. WOHLERS & CO. an Illinois corporation
("Wohlers"), and the individuals identified on Schedule 1 attached hereto (each
a "Seller", collectively, the "Sellers").
W I T N E S S E T H:
WHEREAS, the Sellers collectively own of record and beneficially 10,000
shares, being all of the issued and outstanding shares of Wohlers common stock,
no par value ("Wohlers Stock");
WHEREAS, the Sellers desire to transfer, and Seabury desires to acquire,
all the issued and outstanding shares of Wohlers Stock on the terms and
conditions set forth in this Agreement; and
WHEREAS, the parties desire to effectuate the acquisition of the shares of
Wohlers Stock solely in exchange for stock of MMC so as to qualify as a tax-free
reorganization under Section 368(a)(1)(b) of the Internal Revenue Code of 1986,
as amended (the "Code"); however, each of the parties hereto recognizes and
acknowledges that no representations, warranties or agreements are being made to
such effect by any of the parties hereto and that the failure of such exchange
so to qualify shall not give any party rights against any other party except if
such failure results from a breach of any provision herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, the parties hereby agree as follows:
1. Transfer of Shares. At the Closing (as defined in Section 5), Seabury
shall acquire from each Seller, and each Seller shall transfer and assign to
Seabury, the number of shares of Wohlers Stock set forth opposite each such
Seller's name on Schedule 1 hereto, free and clear of all security interests,
liens, encumbrances, mortgages, pledges or charges of any kind whatsoever
("Liens").
<PAGE>
2. Consideration. Each Seller shall receive only shares of the common
stock, $1.00 par value, of MMC (the "MMC Stock") as set forth in Sections 3 and
4 hereof.
3. Exchange of Shares.
(a) On the Closing Date (as defined in Section 5 ), each share of
Wohlers Stock issued and outstanding immediately prior to the Closing shall be
exchanged for such number of shares of MMC Stock calculated pursuant to Section
3(b) hereof. On the Closing Date, each of Sellers shall surrender to Seabury
certificates evidencing the shares of Wohlers Stock set forth opposite each such
Seller's name on Schedule 1, duly endorsed in blank or accompanied by an
appropriate instrument of transfer reasonably satisfactory in form and substance
to counsel for Seabury. Subject to the terms and conditions hereof, upon such
surrender, each such Seller shall have the right to receive stock certificates
evidencing the number of shares of MMC Stock to which such Seller is entitled,
and registered in the name of such Seller, determined by multiplying the number
of such Shares of Wohlers Stock so surrendered by the Exchange Rate (as defined
below), rounding up to the nearest whole number of shares of MMC Stock.
(b) Each share of Wohlers Stock shall be exchanged for the number of
shares of MMC Stock obtained by dividing $55 million by the product of: (i) the
aggregate number of shares of Wohlers Stock issued and outstanding immediately
before the Closing; and (ii) $116.62.
(c) The total number of shares of MMC Stock to be conveyed hereunder
(the "Original Shares") shall be appropriately adjusted if MMC, subsequent to
the date of this Agreement and prior to the Closing Date:
(i) declares a dividend payable in shares of its common
stock;
(ii) splits or combines the shares of its common stock then
outstanding;
(iii) declares a distribution (other than its regular
quarterly non-liquidating cash dividend) on shares of
its common stock;
(iv) merges or consolidates with any corporation in which the
other corporation is the surviving entity; or
(v) reorganizes, recapitalizes or reclassifies any of the
shares of its common stock.
2
<PAGE>
4. Delivery Into Escrow.
(a) At the Closing Seabury, each Seller, Albert H. Wohlers, acting
in his capacity as representative of the Sellers ("Sellers' Representative") and
the Escrow Agent (as defined in the Pledge and Escrow Agreement), shall execute
the Pledge and Escrow Agreement, substantially in the form of Exhibit A hereto
(the "Pledge and Escrow Agreement"), and on the Closing Date ten percent (10%)
of the full shares of MMC Stock to which each Seller immediately prior to the
Closing Date is entitled pursuant to Section 3 hereof on a fully diluted basis,
or if such 10% results in a fractional share, a number of shares of MMC Stock
equal to the next highest whole number of such shares, shall instead be
registered in the name of the Sellers' Representative and delivered, on behalf
of each Seller, to the Escrow Agent. The shares so delivered shall be referred
to herein as (the "Escrow Shares").
(b) All of the shares of MMC Stock held in escrow, if any, on the
first anniversary of the Closing Date (the "Escrow Period") which are not
subject to any claim shall be released to the Sellers, in proportion to their
equity interest in Wohlers at Closing as shown in Schedule 1, no later than ten
(10) business days after the expiration of the Escrow Period.
5. Closing. The closing of the transactions contemplated by this Agreement
("Closing") shall take place at the offices of Seabury, 1166 Avenue of the
Americas, New York, New York, on or before May 1, 1997 at 9:00 A.M., local time
(the "Closing Date").
6. Representations and Warranties of the Sellers. The Sellers severally
represent and warrant to Seabury as follows:
(a) Ownership of Wohlers Stock. Each Seller owns, free and clear of
any Lien, the shares of Wohlers Stock set forth opposite such Seller's name on
Schedule 1 , and such Seller has the sole right to dispose of such shares.
Immediately prior to Closing each Seller will have good and valid title to such
shares of Wohlers Stock to be sold by such Seller hereunder, free and clear of
all Liens, and upon delivery of such shares by such Seller and payment therefor
by Seabury at the Closing pursuant hereto, good and valid title to such Seller's
shares, free and clear of all Liens will pass to Seabury
(b) Power and Authority. Each Seller has the full power and
authority to enter into this Agreement, the Pledge and Escrow Agreement, the
Registration Rights Agreement, and
3
<PAGE>
any other agreement, including any employment or consulting agreement, document,
certificate or instrument to be executed by such Seller in connection with the
transactions contemplated by this Agreement (collectively, the "Operative
Documents"), and to carry out and consummate the transactions contemplated
hereby and thereby. This Agreement and each of the Operative Documents to which
such Seller is a party constitute or, upon execution by such Seller, will
constitute, the legal, valid and binding obligation of such Seller enforceable
against such Seller in accordance with their respective terms except that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization and similar laws of general application relating to or affecting
the rights and remedies of creditors and general principles of equity, whether
considered in a proceeding in equity or at law.
(c) No Violation. With respect to each Seller, neither the
execution, delivery and performance of this Agreement or any of the Operative
Documents, nor the consummation of the transactions contemplated hereby or
thereby, does or will (with the giving of notice, passage of time or both): (i)
conflict with or result in a breach or violation of, or constitute a default
under, or result in, or create in any party the right to cause, the acceleration
of any performance or any increase in any payment required by or the
termination, suspension or impairment of, or result in the loss, revocation,
impairment, suspension or forfeiture of any rights or privileges under: (A) any
contract to which such Seller is a party or by which he/she or it is or may be
bound or affected, or to which any of such Seller's shares of Wohlers Stock are
or may be subject, or otherwise material to the transactions contemplated hereby
or by any of the Operative Documents; (B) the Articles of Incorporation or
By-Laws of Wohlers; (C) any judgment to or by which any of such Seller or such
Seller's shares of Wohlers Stock is or may be subject, bound or attached; or (D)
any applicable law; or (ii) result in the creation of any Lien upon any of such
Seller's shares of Wohlers Stock.
(d) Consents. Each of the Sellers has obtained or will obtain prior
to the Closing, the approval or consent of all persons (including without
limitation, governmental authorities, courts, creditors of Wohlers or any such
Seller and parties to any other instrument or agreement to which any such Seller
is a party or by which any of them is bound or to which any of such Seller's
shares of Wohlers Stock are or may be subject) which approval or consent, or
with whom the filing
4
<PAGE>
of any certificate, notice, application, report or other document, is legally or
contractually required or otherwise is necessary to be obtained or made by or on
behalf of any such Seller in connection with the execution, delivery or
performance of, or the consummation of the transactions contemplated by, this
Agreement or any of the Operative Documents.
(e) Acquisition for Investment. (i) Each Seller (A) is an
"accredited investor" within the meaning of Rule 501 promulgated under the
Securities Act of 1933 as amended from time to time (the "Securities Act") or
(B) by reason of such Seller's business and financial experience and the
business and financial experience of those persons retained by such Seller to
advise such Seller with respect to such Seller's investment in MMC Stock, such
Seller, together with such advisors, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of such Seller's prospective investment in MMC Common Stock
and is able to bear the economic risk of such investment.
(ii) Each Seller is acquiring the MMC Stock not with a view
toward or for resale in connection with any distribution thereof, or with any
intention of distributing or selling MMC Stock in violation of the Securities
Act, and each such Seller will not sell or offer to sell or otherwise transfer
MMC Stock in violation of the Securities Act.
(iii) Each Seller acknowledges that representatives of the
Sellers have been, on behalf of all Sellers, provided an opportunity to examine
all documents and ask questions of, and has received answers thereto from, MMC
and its representatives regarding the business, management, and financial
affairs of MMC and its subsidiaries, and such representatives have obtained all
traditional information requested by them of MMC and its subsidiaries and their
respective representatives to verify the accuracy of all information furnished
to them regarding the acquisition of MMC Stock.
(iv) Each Seller understands that (A) the MMC Stock has not
been registered under the Securities Act, by reason of its issuance in a
transaction exempt from the registration requirements of the Securities Act
pursuant to Section 4(2) thereof, (B) the MMC Stock must be held indefinitely
unless a subsequent disposition thereof is registered under the Securities
5
<PAGE>
Act or is exempt from such registration, (C) the certificates representing
shares of MMC Stock shall bear a legend to such effect (as set forth in Section
6 of the Registration Rights Agreement) and (D) MMC will make a notation on its
transfer books to such effect.
(v) Each Seller will provide any information reasonably
requested by Seabury to enable MMC to file a Registration Statement on Form S-3
with the Securities and Exchange Commission ("SEC") under the Securities Act.
7. Representations and Warranties of the Sellers and Wohlers. Each of the
Sellers severally and Wohlers represents and warrants to Seabury as follows:
(a) Organization and Good Standing. Wohlers is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Illinois and is entitled to own or lease its properties and to carry on its
business as and in the places where such properties are now owned, leased or
operated or such business is now conducted. Wohlers is duly qualified to do
business, and is in good standing, in each jurisdiction in which the conduct of
its business or the ownership of its properties requires it to be so qualified.
The copies of the Articles of Incorporation, By-laws, minute books and stock
transfer records of Wohlers previously delivered or made available to Seabury
constitute true, correct and complete copies of Wohlers' Articles of
Incorporation, By-laws, minute books and stock transfer records and reflect all
amendments of Wohlers' Articles of Incorporation and By-laws and all minutes of
meetings of the stockholders and directors of Wohlers and all committees thereby
held through and including the date hereof.
(b) Capitalization. The authorized capital stock of Wohlers consists
of 10,000 shares of Common Stock, no par value, of which 10,000 shares are
issued and outstanding on the date hereof, all of which are owned by Sellers.
All such outstanding shares have been validly issued and are fully paid and
non-assessable and none of such shares was issued in violation of the preemptive
rights of any present or past shareholder.
(c) Subsidiaries; Other Affiliates. Wohlers does not, directly or
indirectly, own any shares of, control or participate as a partner or joint
venture in, any corporation, partnership, association or business organization.
(d) Authority. Wohlers has the corporate power to enter into this
Agreement and any Operative Document to which it is a party and to carry out its
obligations hereunder and
6
<PAGE>
thereunder. Wohlers has taken all required corporate action to approve the
execution, delivery and performance of this Agreement and any Operative Document
to which it is a party, including but not limited to, receipt of the approval of
the board of directors of Wohlers and the consent of the holders of all shares
of Wohlers Stock. This Agreement and any Operative Document to which it is a
party is, or upon execution by Wohlers will be, a legal, valid and binding
agreement of Wohlers, enforceable against Wohlers in accordance with their
respective terms except that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization and similar laws of general
application relating to or affecting the rights and remedies of creditors and
the general principles of equity whether considered in a proceeding in equity or
at law. The resolutions of the board of directors of Wohlers certified by the
secretary of Wohlers and delivered to Seabury simultaneously with the execution
of this Agreement are true, complete and correct.
(e) No Violation. Neither the execution, delivery and performance of
this Agreement or any of the Operative Documents, nor the consummation of the
transactions contemplated hereby or thereby, does or will (with the giving of
notice, passage of time or both): (i) conflict with or result in, or create in
any party the right to cause, the acceleration of any performance or any
increase in any payment required by or the termination, suspension or impairment
of, or result in the loss, revocation, impairment, suspension or forfeiture of
any rights or privileges under: (A) any contract to which Wohlers is a party or
by which it is or may be bound or affected, or otherwise material to the
transactions contemplated hereby or by any of the Operative Documents; (B) its
Articles of Incorporation or By-laws; (C) any judgment to or by which Wohlers or
any of its assets is or may be subject, bound or affected; or (D) any law, rule,
regulation, judgment, order or decree governing or affecting the operation of
the business of Wohlers; or (ii) result in the creation of any Lien on Wohlers
or upon any of its assets.
(f) Consents. Except as and to the extent listed on Schedule 7(f),
Wohlers has obtained, or will obtain prior to the Closing, approval or consent
of all persons (including, without limitation, governmental authorities, courts,
creditors of Wohlers and parties to any other instrument or agreement to which
Wohlers is a party or by which it or any of its assets is bound) whose approval
or consent, or with whom the filing of any certificate, notice, application,
report or other document, is legally or contractually required or otherwise is
necessary to be obtained or made by or on behalf of Wohlers in connection with
the execution, delivery or performance of, or the
7
<PAGE>
consummation of the transactions contemplated by, this Agreement or any of the
Operative Documents. Except as and to the extent listed on Schedule 7(f), other
than in connection or in compliance with the provisions of the Hart-Scott-Rodino
Antitrust Improvement Act of 1976, as amended (the "HSR Act"), no authorization,
consent or approval of or filing with or notice to any public body or authority,
including without limitation any federal, state or local governmental authority,
agency or department, is necessary for the consummation by Sellers or Wohlers of
the transactions contemplated by this Agreement or any of the Operative
Agreements, except for any such authorizations, consents, approvals or filings,
where the failure to obtain or make the same would not have a material adverse
effect on the business, properties, assets, liabilities, results of operations
or financial condition of Wohlers taken as a whole ("Material Adverse Effect")
or a material adverse effect on the ability of Wohlers or any of the Sellers to
consummate the transactions contemplated hereby or under any of the Operative
Documents.
(g) Options or Warrants. Except as and to the extent disclosed in
Schedule 7(g), there are no outstanding subscriptions, options, warrants, calls,
commitments or agreements to acquire shares of the capital stock of Wohlers from
any Seller or Wohlers, including without limitation, any right of conversion or
exchange under any outstanding security or other instrument, nor are there
outstanding any rights or privileges, preemptive or contractual, to acquire such
shares. There are no agreements or commitments or understandings relating to the
voting of the Wohlers Stock and no shares of capital stock of Wohlers have been
reserved for any purpose. Wohlers has not issued since December 31, 1996, and
will not issue through the Closing, options or rights to purchase any shares of
Wohlers Stock.
(h) Year End Statements. The audited financial statements of Wohlers
as of February 28, 1993, February 28, 1994, February 28, 1995, December 31, 1995
and December 31, 1996 and for the period then ended (the statements for Wohlers
as of December 31, 1996 and for the year then ended included in such financial
statements and the notes thereto are hereinafter referred to as the "Year-End
Statement"), together with the notes to such financial statements, and the
unaudited statement of Wohlers as of March 31, 1997 ( the statement for Wohlers
as at the three month period ended March 31, 1997 and the notes thereto are
hereinafter referred to as the "Interim Statement) are attached as Schedule
7(h)(1) (collectively, the "Financial Statements"). Such Financial Statements
have been prepared in accordance with generally accepted accounting
8
<PAGE>
principles consistently applied, and present fairly, in all materials respects,
the financial position of Wohlers as of the respective dates thereof and results
of operations and cash flows of Wohlers for the respective periods then ended,
(subject, in the case of unaudited statements, to the notes and normal year-end
audit adjustments that will not be material in amount or effect) and except as
and to the extent disclosed in the notes thereto, do not include any unusual or
nonrecurring items required to be identified as such, in accordance with GAAP
or, in the case of the Interim Statement, other than as set forth in Schedule
7(h) hereto. Except as disclosed herein or expressly required hereby, since the
date of the Interim Statement, there have been no material adverse changes in
the business, properties, assets, liabilities, results of operations or
financial condition of Wohlers, whether or not such adverse changes were covered
by insurance.
(i) Absence of Undisclosed Liabilities. Except to the extent
reflected or reserved against in the Interim Statement, or Schedule 7(i) hereof,
as of the date of the Interim Statement Wohlers did not have any material
liabilities or obligations of any nature, whether known or unknown, absolute,
accrued, contingent or otherwise and whether due or to become due, asserted or
unasserted, matured or unmatured, including, without limitation, liabilities for
unfunded pension liabilities, Taxes, as defined below, with interest and
penalties thereon, lawsuits and claims, which are required to be recorded on
financial statements prepared in accordance with generally accepted accounting
principles and on the basis of accrual accounting.
(j) Taxes. The amounts recorded as liabilities for Taxes (as defined
below) on the Interim Statement are sufficient for the payment of all accrued
and unpaid Taxes of Wohlers, whether or not disputed, for the period ended on
the date of such Statement and for all fiscal periods prior thereto or existing
on or prior to the date of such Statement. Wohlers has duly and timely filed all
returns and reports (including elections, declarations, disclosures, schedules,
estimates and information returns) ("Returns") required to be filed to the
relevant governmental authority in respect of Taxes through the date hereof and
such Returns were correct and complete when filed, taking into account
applicable reserves, and to the extent its liabilities for Taxes have not been
fully discharged, adequate reserves have been established on the books and
records of Wohlers. Wohlers paid, in a timely fashion, all Taxes shown as due or
payable on any Return. There are no outstanding assessments against Wohlers and
there are no Liens with respect to Taxes (except for statutory liens for Taxes
not yet due or delinquent) upon any of the assets of Wohlers. There are no
9
<PAGE>
agreements, waivers or other arrangements providing for the extension of time
with respect to the filing of any Return or the payment of any Tax and there are
no proceedings or actions pending against Wohlers for the assessment or
collection of additional Taxes. Wohlers has not received any notice that any
examination of or proceeding with respect to any Return is currently in progress
and, to the knowledge of Wohlers and the Sellers, no such examination is
threatened. There has been no audit by the Internal Revenue Service or any
state, local or foreign tax authority of any Return with respect to Taxes
resulting in a proposed, asserted or assessed deficiency and there is no audit
that is not closed. Wohlers has not waived any statute of limitations with
respect to Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency. The income Tax Returns of Wohlers for the taxable
periods ended before December 31, 1993 have been examined by the appropriate
governmental authority (or the applicable state of limitations for the
assessment of Taxes for such periods has expired) and a list of all audits,
examinations or investigations commenced or completed with respect to Wohlers
with respect to taxable periods beginning after December 31, 1993 is set forth
on Schedule 7(j). Wohlers is not a party to, is not bound by, and does not have
obligation under, any Tax sharing agreement, Tax indemnification agreement or
similar contract or arrangement, and none of MMC or any of its subsidiaries has
any potential liability or obligation to any person as a result of, or pursuant
to, any such agreement, contract or arrangement. Wohlers is not a party to any
to any agreement, plan, contract or arrangement (whether oral or in writing)
that would result, separately or in the aggregate, in the payment of any "excess
parachute payments" within the meaning of Section 280G of the Code. Other than
any income Tax Returns which have not yet been required to be filed, Wohlers has
made available to Seabury true and correct copies of its income Tax Returns
filed with any jurisdiction as filed by Wohlers for each of the taxable years
ended December 31, 1996, December 31, 1995, February 28, 1994, February 28,
1993, February 28, 1992, and February 28, 1991. Wohlers has previously delivered
or made available to Seabury complete and accurate copies of each of (i) all
audit reports, letter rulings, technical advice memoranda, and similar documents
issued by a governmental authority relating to the United States federal, state,
local or foreign Taxes due from or with respect to Wohlers and (ii) any closing
agreements entered into by Wohlers with any Tax authority in each case existing
on the date hereof. Wohlers will deliver to Seabury all materials with respect
to the foregoing for all matters arising after the date hereof. The term "Tax"
(including, with correlative
10
<PAGE>
meaning, the terms "Taxes" and "Taxable") includes all federal, state, local and
foreign taxes, including without limitation, income, windfall, profits, gains,
franchise, gross receipts, transfer, capital stock, stamp, payroll, sales,
employment, unemployment, disability, use, property, withholding, excise,
production, value added, occupancy and other taxes, duties or assessments of any
nature whatsoever, together with all interest, penalties and additions imposed
with respect to such amounts and any interest in respect of such penalties and
additions, and the term "Tax Return" includes all returns and reports (including
elections, declarations, disclosures, schedules, estimates and information
returns) required to be supplied to a Tax authority relating to Taxes.
(k) Compensation Due Employees. Schedule 7(k) is a true and complete
list showing the names of all persons employed by Wohlers, their respective
dates of hire, current aggregate annual base salary or hourly rate (including
the value of non-cash compensation received) for each such person and the date
and amount of such person's last raise, bonuses, incentive compensation and
distribution paid or payable with respect to the fiscal year ended December 31,
1996. On the Closing Date, Wohlers will have no outstanding liability for
payment of wages, vacation pay, salaries, bonus, reimbursable employee business
expenses, pensions, contributions under any employee benefit plan or any other
compensation, current or deferred, under any contracts, whether oral or written,
based upon or accruing with respect to those services of any employee performed
or to be performed prior to the Closing Date, except for liabilities accrued on
the Interim Statement, liabilities accrued since that date in the ordinary
course of business consistent with past practices, or except as otherwise shown
and to the extent disclosed on Schedule 7(k). Wohlers has not, because of past
practices or previous commitments with respect to its employees, established any
rights on the part of such employees to receive additional compensation with
respect to any period before or after the date hereof including any period after
the Closing Date, except as shown and to the extent disclosed on Schedule 7(k).
Except as shown and to the extent disclosed on Schedule 7(k), Wohlers has not
maintained, contributed to or sponsored any "employee benefit plan" as such term
is defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (hereinafter called "ERISA") or other plan, program, practice,
agreement or arrangement of employee compensation, deferred compensation,
severance pay, retiree benefit or fringe benefit which was or is available to
employees of Wohlers generally or was or is subject to
11
<PAGE>
the provisions of ERISA. Wohlers is in compliance with all provisions, including
all reporting and disclosure requirements of ERISA and of the Code relating to
employee benefit plans.
(l) Union Agreements and Employment Agreements. Except as shown and
to the extent disclosed on Schedule 7(k) attached hereto, Wohlers is not a party
to any collective bargaining agreement or union agreement or has any agreement
with any of its employees providing for the employment of such employee which is
not terminable at will upon reasonable and customary notice by Wohlers.
(m) Contracts and Agreements. Except as shown and to the extent
disclosed on Schedule 7(m) attached hereto, Wohlers is not a party to any
written or oral contract, license, lease or other agreement which involves
amounts in excess of $50,000, in the aggregate, or is otherwise material to the
business and operation of Wohlers including, but not limited to, any
non-competition covenants, any agency contracts for sales representations, any
contracts and commitments for rebates or sharing of commissions, any
co-brokerage and sub-brokerage agreements, any contracts to perform consulting
or other services or any other contracts or commitments. Seabury has received
from Wohlers true, correct and complete copies of each such written contract,
license, lease or other agreement so listed in Schedule 7(m), and each is a
legal, valid and binding contract enforceable against Wohlers and, to the
knowledge of Sellers and Wohlers, the other parties thereto, in accordance with
its respective terms. Neither Wohlers nor any Seller has received a notice of
default which has not been cured, nor to any Sellers' knowledge is Wohlers in
default, nor does any condition exist which with notice or lapse of time, or
both, would render Wohlers in default under any contract, license, lease or
other agreement whether or not shown on Schedule 7(m). Neither Wohlers nor any
Seller has received notice or has knowledge that any party to any such contract,
license, lease or other agreement intends to cancel or terminate any such
agreement or to exercise any options under any such agreement. None of such
contracts, licenses, leases or other agreements has been renegotiated (other
than in cooperation with Seabury) in anticipation of the acquisition of Wohlers
Stock hereunder.
(n) Real Property. Wohlers owns no real property. Schedule 7(n)
attached hereto contains a complete and accurate description and specifies the
location and lessor of all real
12
<PAGE>
property leased by Wohlers. Seabury has received from Wohlers true, correct and
complete copies of each lease of real property to which Wohlers is a party. Each
such lease is legal, valid, binding, enforceable, and in full force and effect
and, subject to any requirement for the consent of any lessor thereunder, will
continue to be valid, binding, enforceable and in full force and effect on
identical terms following the consummation of the transactions contemplated
hereby. Neither Wohlers nor, to the knowledge of Wohlers and the Sellers, the
lessor under any such lease is in breach or default, and no event has occurred
which, with notice or lapse of time or both, would constitute a breach or
default on the part of Wohlers or permit termination, modification, or
acceleration by the lessor thereunder. No party to any such lease has repudiated
any provision thereof.
(o) Title to Assets. Except for items used and disposed of in the
ordinary course of business, Wohlers: (i) owns outright, free and clear of any
Liens, all material equipment, furniture and fixtures in the offices reflected
in the Interim Statement; and (ii) owns outright, free and clear of any Lien,
all of the right, title and interest in and to all other assets and properties
reflected on the Interim Statement or acquired after the date thereof.
(p) Banks. Schedule 7(p) attached hereto is a true and complete list
showing the name of each bank in which Wohlers has a line of credit, account,
savings account, certificate of deposit or safe deposit box.
(q) Insurance. Schedule 7(q) attached hereto lists and describes all
insurance policies (including policy numbers and names of insurers) now in force
pursuant to which Wohlers is the insured. Seabury has received from Wohlers
true, complete and current copies of all such insurance policies. All errors and
omissions claims asserted against Wohlers in the past three years or which are
unresolved as of the date hereof regardless of the date of assertion, are
described in Schedule 7(q) and, except as otherwise disclosed on such Schedule,
all such claims have been settled by payment against receipt of a release, or
have been reported to Wohlers' errors and omissions carrier, and Wohlers has not
been notified, nor does Wohlers or any Seller have knowledge that such carrier
will deny coverage. Wohlers has not been refused any insurance coverage by any
insurance carrier to which it has applied for insurance during the past three
years.
(r) Licenses, Permits and Consents. As of the date hereof, the
licenses and permits shown on Schedule 7(r) attached hereto are the only
licenses and permits currently required by Wohlers or any of its employees for
the operation of its business, the lack of which would have a
13
<PAGE>
Material Adverse Effect, and all of such licenses and permits are in effect as
of the date hereof and will continue to be in effect on the Closing Date.
Wohlers has not received notice, nor does it or any of the Sellers have
knowledge that any appropriate authority intends to cancel or terminate or not
renew any of such licenses or permits or that valid grounds for such
cancellation or termination or non-renewal currently exist. Neither Wohlers nor
to the knowledge of Sellers and Wohlers any of its employees has been barred
from or ordered to cease and desist from any activities of any type whatsoever
in connection with the business of the type now engaged in by Wohlers. Neither
Wohlers' nor, to the knowledge of Sellers and Wohlers, any of its employees'
licenses or qualifications to conduct, participate or be involved in any
business of the type now engaged in by Wohlers, in any jurisdiction, has been
denied without having been subsequently issued, revoked, restricted or suspended
nor has Wohlers, or to the knowledge of Sellers and Wohlers, any of its
employees been involved in any proceeding to deny, revoke, restrict or suspend
any such license or qualification or bar or cease any activities connected with
the business of the type now engaged in by Wohlers except where such denial,
revocation, restriction or suspension would not have a Material Adverse Effect.
(s) Litigation. Except as shown and to the extent disclosed on
Schedule 7(s) attached hereto there are no actions, suits, proceedings or
investigations (whether or not purportedly on behalf of Wohlers) pending or, to
the knowledge of Wohlers or any of the Sellers, threatened against or materially
affecting Wohlers nor, to the knowledge of Wohlers or any of the Sellers, are
there any disputes which could reasonably be expected to result in a claim being
asserted against Wohlers in arbitration, at law or in equity before or by any
federal, state, local or other governmental department, commission, board,
agency or instrumentality, domestic or foreign, nor has any such action, suit,
proceeding or investigation been pending during the 12-month period preceding
the date of this Agreement. Wohlers is not operating under or subject to, or in
default with respect to, any order, writ, injunction or decree of any court or
federal, state, local or governmental department, commission, board, agency or
instrumentality, domestic or foreign or pursuant to any settlement or other
agreement entered into in connection with the foregoing.
(t) Compliance with Laws. Wohlers and to the knowledge of Wohlers
and Sellers each of Wohlers' employees has complied with all laws, rules,
regulations and orders applicable to Wohlers' business, including but not
limited to requirements and restrictions with
14
<PAGE>
respect to the use, investment, application and allocation of funds, and
proceeds from the investment of such funds, held in trust by Wohlers from time
to time, and the present use by Wohlers of its properties does not violate any
such laws, rules, regulations or orders. Neither Wohlers nor, to the knowledge
of Wohlers or Sellers, any of its employees has received a written notice of a
violation of any law, regulation or order applicable to its business which has
not been cured. No provision of the law of the State of Illinois, including but
not limited to laws or regulations relating to the insurance agency and
brokerage business, will be violated by the execution or consummation of this
Agreement or any of the Operative Documents by Wohlers or precludes or will
preclude the execution or consummation of this Agreement or any of the Operative
Documents by Wohlers.
(u) Copyrights, Trademarks, Trade Names, etc. Except as set forth on
Schedule 7(u), neither Wohlers nor any of the Sellers owns any trademarks,
trademark applications or registrations, trade names, service marks and
copyrights other than the sole and exclusive right to the use of the corporate
name ALBERT H. WOHLERS & CO., in Illinois and where Wohlers is qualified to do
business. No person has asserted or, to the knowledge of Wohlers or the Sellers,
threatened to assert any claim or made any demand to the right to such name or
the right to use the same, and no proceeding has been instituted, or is pending,
or to the knowledge of Wohlers or the Sellers, threatened, which challenges the
right of Wohlers thereto. To the knowledge of Wohlers and the Sellers, from and
after the Closing Date, Seabury may use the corporate name "Albert H. Wohlers &
Co.", without the consent of any party in conducting the business of Wohlers as
and where currently conducted. Wohlers has not, and prior to the Closing will
not have conducted its business so as to create a conflict with or infringement
upon valid patents, license, copyrights, trademarks or trade names of others
which is likely to have a Material Adverse Effect.
(v) Conduct of Business Since Date of the Year End Statement. Except
as shown and to the extent disclosed on Schedule 7(v) attached hereto, since
March 31, 1997 and prior to the Closing Date, Wohlers and each of the Sellers
which are officers or employees of Wohlers have conducted and will conduct the
operations of Wohlers in the ordinary and usual course and have used
commercially reasonable efforts to and will continue to use commercially
reasonable efforts to preserve intact Wohlers' business organization, to keep
available the services of its officers and employees and to maintain
satisfactory relationships with its clients and others having business
relationships with Wohlers. Without limiting the generality of the foregoing,
and except as
15
<PAGE>
and to the extent disclosed in Schedule 7(v) hereof, Wohlers and the Sellers who
are officers, directors or employees of Wohlers have not since March 31, 1997
and will not, without the prior written consent of Seabury:
(i) issue any stocks, bonds, notes, options, warrants or
other corporate securities;
(ii) amend its Articles of Incorporation or By-laws;
(iii) intentionally incur any obligations or liabilities
(absolute or contingent), except for obligations herein
and except current liabilities incurred, and obligations
under contracts entered into, in the ordinary course of
business consistent with past practice;
(iv) make any capital expenditures exceeding $20,000 for a
single item or $100,000 in the aggregate;
(v) declare or make any payment or distribution to
shareholders of or on its capital stock (such as a
dividend) or purchase or redeem any shares of capital
stock other than Wohlers' retained earnings as of the
date immediately prior to the Closing Date, including
the amount reflected in Wohlers' "accumulated
adjustments account" as of the date immediately prior to
the Closing Date, as that term is defined in Section
1368(e)(l) of the Code provided that after giving effect
to any such payment or distribution or purchase or
redemption, as of the date immediately prior to the
Closing Date the retained earnings of Wohlers (with
income for the period from January 1, 1997 to the date
immediately preceding the Closing Date determined in
accordance with the accounting principles and practices
employed in the preparation of the Interim Statement)
shall be no less than zero after recording all
liabilities for royalties, sub-brokerage, administrative
fees, real estate taxes and escalation costs related to
periods prior to the Closing Date;
(vi) mortgage, pledge or subject to a Lien, any assets or
properties, tangible or intangible;
16
<PAGE>
(vii) sell or transfer any tangible assets or cancel any debts
or claims, except in each case in the ordinary course of
business consistent with past practice;
(viii) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any
corporation, partnership, association or other business
organization or division thereof or otherwise acquire or
agree to acquire any assets which are material,
individually or in the aggregate, to Wohlers;
(ix) sell, assign or transfer any trademarks, trade names,
service marks, copyrights or other intangible assets;
(x) waive any rights of substantial value;
(xi) change accounting methods or practices;
(xii) enter into any transaction other than in the ordinary
course of business consistent with past practice;
(xiii) make any loan to any person or entity, including, but
not limited to, any officer, director or employee;
(xiv) increase the compensation payable, or to become payable,
to any employees, including but not limited to, any
bonus payment, stock options or deferred compensation;
(xv) increase any benefits to employees under pension,
insurance or other employee benefit programs;
(xvi) make any elections or settle or compromise any dispute
with respect to Taxes;
(xvii) enter into an agreement to do any of the things
described in clauses (i) through (xvi) above; or
(xviii) take any action that would result in any of the
representations and warranties of Wohlers set forth in
this Agreement or in any of the Schedules or Exhibits
hereto becoming untrue in any material respect or in any
of the obligations of Wohlers not being satisfied.
17
<PAGE>
(w) No Liabilities as Guarantor. Except as and to the extent
reflected or reserved against in the Interim Statement, Wohlers is not directly
or indirectly liable upon or with respect to or obligated in any other way to
provide funds in respect of or to guarantee or assume any debt, dividend or
other obligation of any person, corporation, association, partnership or other
entity, except endorsements made in the ordinary course of business consistent
with past practice, in connection with the deposit of items of collection.
(x) Interest in Clients, Suppliers and Competitors; Transactions
with Interested Parties. Except as shown and to the extent disclosed on Schedule
7(x) attached hereto, neither Wohlers nor any of the Sellers nor any of Wohlers'
employees has any direct or indirect interest in: (i) any competitor, client or
customer (whether present or potential) of Wohlers; (ii) any person from whom or
to whom Wohlers leases any real or personal property; or (iii) any person
engaged in the insurance agency, brokerage or underwriting business, nor does
any such person hold positions as an officer or director of a person described
in (i), (ii) or (iii) hereof. Except as shown and to the extent disclosed on
Schedule 7(x), there are no contracts, agreements or arrangements to which
Wohlers is a party involving any director, officer or employee of Wohlers, or
any Seller, or any member of any such Seller's immediate family.
(y) Employee Benefits. Wohlers is not a party to any pension
profit-sharing, bonus or other employee benefit plan, except as shown and to the
extent disclosed on Schedule 7(y).
(z) ERISA. (i) Wohlers has heretofore delivered to Seabury correct
and complete copies of: (A) all employee benefit plans, as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974 ("ERISA"), and
related trust agreements and other funding documentation under which Wohlers has
or may have any present or future obligation or liability or under which any
employee has or may have any present or future rights to benefits (the "Benefit
Plans"); (B) the most recent Internal Revenue Service determination letter
relating to each Benefit Plan which is an "employee pension benefit plan", as
such term is defined in Section 3(2) of ERISA, for which a letter of
determination was obtained; (C) to the extent required to be filed, the most
recent Annual Report (Form 5500 Series) and accompanying Schedules of each
Benefit Plan, as filed with the Internal Revenue Service; (D) the most recent
summary plan description for each
18
<PAGE>
Benefit Plan; and (E) if available, the most recent certified financial
statement or statements of each Benefit Plan.
(ii) Each Benefit Plan which is intended to be qualified under
Section 401(a) of the Code is so qualified, except as and to the extent
disclosed in Schedule 7(z), attached hereto, and a favorable determination
letter has been issued by the Internal Revenue Service with respect to each such
qualified Plan and nothing has occurred that would be reasonably likely to cause
the revocation of any such determination letter or the loss of such
qualification. Each Benefit Plan is in compliance with and has been administered
in accordance with the requirements of ERISA in all material respects and, where
applicable, Section 401(a) of the Code and all applicable provisions of the
Code.
(iii) Wohlers does not participate in or have or may have any
present or future obligations or liabilities under any "Multi-employer plan" as
that term is defined under ERISA. Wohlers does not maintain or contribute to (or
has ever maintained or contributed to) a Benefit Plan which is a defined benefit
plan.
(iv) All contributions or payments required to be made or
accrued before the Closing Date with respect to the Benefit Plans will have been
made or accrued by Wohlers. Wohlers does not maintain any severance pay plans or
policies or have any commitments therefor except as and to the extent disclosed
in Schedule 7(k), copies of which have previously been delivered to the extent
such plans, policies or commitments are in writing.
(v) There have been no "prohibited transactions" (as such term
is defined in Section 4975 of the Code or Title I of ERISA) or transactions that
could be reasonably likely to result in any tax or penalty being imposed under
Section 4975, 4976, or 4980B of the Code or Section 409 or 502(i) of ERISA with
respect to any Benefit Plan and neither Wohlers, nor any of its employees,
directors, officers nor any fiduciary or administrator of any such Plan has
engaged in a prohibited transaction.
(vi) There are no pending, or to the knowledge of Wohlers or
any of the Sellers threatened, claims by or on behalf of such Benefit Plans by
any employee or beneficiary covered under such Benefit Plans, or otherwise
involving such Benefit Plans, which allege a breach
19
<PAGE>
of fiduciary duties or violations of other applicable state or federal law which
could result in liability on the part of Wohlers or any Benefit Plan under ERISA
or any other law.
(aa) Environmental Matters. Except for such matters that, alone or
in the aggregate, are not reasonably likely to have a Material Adverse Effect,
Wohlers: (i) is in compliance with applicable Environmental Laws; (ii) has not
received any written notices alleging the violation of any applicable
Environmental Law; (iii) is not the subject of any order, injunction or decree
arising under any Environmental Law; and (iv) has not generated, stored, used,
emitted, discharged or disposed of any Hazardous Substance in violation of
applicable Environmental Laws. "Environmental Law" means any law, regulation,
code, license, permit, order, decree or injunction relating to the protection of
the environment (including air, water, soil and natural resources) or the use,
storage, handling, release or disposal of any hazardous or toxic substance.
"Hazardous Substance" means any substance listed, defined, designated or
classified as hazardous, toxic or radioactive under any applicable Environmental
Law, including petroleum and any derivative or by-products thereof.
(bb) Terminations by Employees or Clients. Except as shown and to
the extent disclosed on Schedule 7(bb) attached hereto: (i) none of the
employees listed on Schedule 7(k) has terminated or threatened to terminate his
or her relationship with Wohlers either as a result of the transactions
contemplated by this Agreement or otherwise; and (ii) no client(s) listed on
Schedule 7(bb) hereof, nor non-listed clients which accounted for more than
$100,000, in the aggregate, of revenue of Wohlers during fiscal 1996, has
terminated or to the knowledge of Wohlers and the Sellers threatened to
terminate, in whole or in part, its relationship with Wohlers, either as a
result of the transactions contemplated by this Agreement or otherwise.
(cc) Customer List. Schedule 7(cc) attached hereto contains a true
and complete list of all clients, customers and accounts of Wohlers as to which
more than $500,000 of premium was attributable during calendar year 1996, or
which accounted for more than $50,000 of revenue of Wohlers during fiscal 1996.
Wohlers has not paid or promised to pay or to refund to any client, customer or
account any money or other valuable consideration as an inducement for the
purchase or renewal of a policy of insurance. Except in the ordinary course of
business consistent with past practice, information as to customers,
expirations, renewals, group insurance, policy anniversaries and other similar
items indicating the source of income of Wohlers has not been divulged or
20
<PAGE>
otherwise been made available to any person or firm other than the parties to
this Agreement and in connection with the transactions contemplated hereby.
(dd) Certain Agreement with Clients. Except as shown and to the
extent disclosed on Schedule 7(dd) attached hereto, Wohlers is not a party to:
(i) any agreement which provides that when client losses exceed a specified
amount, Wohlers is obligated to assume, directly or indirectly, or to reimburse
any other person for, any portion of said losses; or (ii) any agreement under
which any portion of any fees, commissions or other payments are earned by or
otherwise paid to any other person except for sub-brokerage or co-brokerage
contracts or arrangements entered into in the ordinary course of business
consistent with past practice and except for set-offs of brokerage commissions
against fees for services to the extent permitted by law and reflected in a
written agreement signed by the client.
(ee) Insurance Placement. Schedule 7(ee) attached hereto lists all
insurance companies with which Wohlers has placed material amounts of insurance
for the year 1996 and the names of all intermediaries, wholesalers and managing
general agents through which Wohlers has placed material amounts of insurance
during such period.
(ff) Acquisition Negotiations. Wohlers and the Sellers represent
that as of the date of the Letter of Intent dated March 5, 1997, it has ceased
any and all negotiations with any other party conducted heretofore with respect
to a merger, tender offer, sale of material assets, sale of shares of capital
stock or similar transaction involving Wohlers or Wohlers Stock.
(gg) Information in Registration Statement. None of the information
supplied or to be supplied by any of the Sellers or Wohlers, in writing,
expressly for the purpose of inclusion or incorporation by reference in any
registration statement to be filed with the Securities and Exchange Commission
("SEC") by MMC in respect of registration of MMC Stock to be issued in
connection with the transactions contemplated by the Agreement or the
Registration Rights Agreement (the "Registration Statement") will, at the time
it is filed with the SEC and at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein to make the statements therein,
in light of the circumstances under which they were made, not misleading;
provided that the Sellers and Wohlers makes no representation and warranty with
respect to any information related to periods commencing on or after the
Closing.
21
<PAGE>
(hh) Disclosure. No representation, warranty or statement by any of
the Sellers or Wohlers contained in this Agreement or in any of the Schedules or
Exhibits attached hereto, and no statement contained in any certificate or other
instrument furnished or to be furnished to Seabury pursuant hereto, or in
connection with the transactions contemplated hereby, including any of the
Operative Documents to which Wohlers or any Seller is a party, contains or will
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein to make the statements therein, in light of
the circumstance under which they were made, not misleading.
8. Representations and Warranties of Seabury. Seabury hereby represents
and warrants to Wohlers and each of the Sellers as follows:
(a) Organization and Good Standing of Seabury. Seabury is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and is duly qualified to do business in the State of
Illinois.
(b) Corporate Authority of Seabury. Seabury has the corporate power
to enter into this Agreement and any Operative Document to which it is a party
and to carry out its obligations hereunder and thereunder. The board of
directors of Seabury has duly approved the execution, delivery and performance
of this Agreement and each of the Operative Documents to which it is a party.
This Agreement and any Operative Document to which it is a party is, or upon
execution by Seabury will be, a legal, valid and binding obligation of Seabury,
enforceable against Seabury in accordance with their respective terms except
that the enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws of general application relating to or affecting
the rights and remedies of creditors and the general principles of equity,
whether considered in a proceeding in equity or at law. The resolutions of the
board of directors of Seabury, certified by the secretary of Seabury and
delivered to Sellers' Representatives simultaneously with the execution of this
Agreement, are true, complete and correct copies thereof.
(c) No Violation. Neither the execution, delivery and performance of
this Agreement or any of the Operative Documents to which Seabury is a party nor
the consummation of the transactions contemplated hereby or thereby does or will
(with the giving of notice, passage of time or both): (i) conflict with or
result in, or create in any party the right to cause, the acceleration of any
performance or any increase in any payment required by or the termination,
suspension or impairment of, or result in the loss, revocation, impairment,
suspension or forfeiture of any rights or
22
<PAGE>
privileges under: (A) any contract to which Seabury is a party or by which it is
or may be bound or affected or otherwise material to the transactions
contemplated hereby or by any of the Operative Documents; (B) its Certificate of
Incorporation or By-laws; (C) any judgment to or by which Seabury or any of its
asset is or may be subject, bound or affected; or (D) any law, rule, regulation,
judgment, order or decree governing or affecting the operation of the business
of Seabury; or (ii) result in the creation of any lien on Seabury or upon any of
its assets.
(d) Consents. Seabury has obtained, or will obtain prior to the
Closing, approval or consents of all persons (including, without limitation,
governmental authorities, creditors of Seabury and parties to any other
instrument or agreement to which Seabury is a party or by which it or any of its
assets is bound) whose approval or consent, or with whom the filing of any
certificate, notice, application, report or other document, is legally or
contractually required or otherwise is necessary to be obtained or made by or on
behalf of Seabury in connection with the execution, delivery or performance of,
or the consummation of the transactions contemplated by this Agreement or any of
the Operative Documents.
(e) Organization and Standing of MMC. MMC is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
(f) Corporate Authority of MMC. This Agreement, the Registration
Rights Agreement and all transactions contemplated hereby will not result in a
violation of the Certificate of Incorporation or By-Laws of MMC or any material
agreement to which MMC is a party or by which it is bound, or any law, rule,
license, regulation, judgment, order or decree governing or affecting the
business of MMC in any material respect.
(g) MMC Stock. The MMC Stock to be delivered upon the consummation
of the transactions contemplated hereby has been duly authorized and will, when
so delivered, be validly issued and outstanding, fully paid and non-assessable.
(h) MMC Information. Seabury has delivered or otherwise made
available to the Sellers each report, proxy statement and information statement
prepared by MMC since December 31, 1995, including without limitation, the
Annual Report to Stockholders for the fiscal year ended December 31, 1996, the
Annual Report on Form 10K for the fiscal year ended December 31, 1996 and the
Proxy Statement, dated March 31, 1997, for the 1997 Annual Meeting of
Stockholders, each in the form (including exhibits and any amendments thereto)
filed with the SEC (each such report,
23
<PAGE>
proxy statement or information statement an "MMC Report"). As of their
respective dates, the MMC Reports did not, and any MMC Reports filed with the
SEC subsequent to the date hereof will not, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances in
which they were made, not misleading. Each of the consolidated balance sheets
included in or incorporated by reference into the MMC Reports (including the
related notes and schedules) fairly presents, or will fairly present, in all
material respects, the consolidated financial position of MMC and its
Subsidiaries as of its date and each of the consolidated statements of income
and cash flows included in or incorporated by reference into the MMC Reports
(including any related notes and schedules) fairly presents, or will fairly
present, in all material respects, the results of operations, retained earnings
and cash flows, as the case may be, of MMC and its subsidiaries for the periods
set forth therein (subject, in the case of unaudited statements, to the notes
and normal year-end audit adjustments that will not be material in amount or
effect), in each case in accordance with U.S. generally accepted accounting
principles consistently applied during the periods involved, except as may be
noted therein.
(i) MMC Approval. The board of directors of MMC has duly approved
the issuance of the shares of MMC Stock to be issued pursuant to Section 2
hereof and MMC, as the sole stockholder of Seabury, has duly approved the
execution, delivery and performance of this Agreement by Seabury.
(j) Disclosure. No representation or warranty by Seabury contained
in this Agreement or in any Schedule or Exhibit attached hereto, and no
statement contained in any certificate or other instrument furnished or to be
furnished by Seabury pursuant hereto, or in connection with the transactions
contemplated hereby, including any Operative Document to which Seabury is a
party, contains or will contain any untrue statement of a material fact or omits
to state any material fact required to be stated therein to make the statements
therein, in light of the circumstance under which they were made, not
misleading.
(k) Tax Representations. Seabury has no present plan or intention
to, following the Closing: (i) cause Wohlers to issue additional shares of
Wohlers stock that would result in Seabury losing control of Wohlers within the
meaning of Section 368(c) of the Code; or (ii) liquidate Wohlers, merge Wohlers
into another corporation, sell or otherwise dispose of the stock of
24
<PAGE>
Wohlers, or sell or otherwise dispose of any of the assets of Wohlers. It is
Seabury's present plan or intention, following the Closing, to cause Wohlers to
continue its historic business or use a significant portion of Wohlers' historic
business assets in a business.
(l) Material Adverse Change. Since December 31, 1996, there have
been no material adverse changes in the business, properties, assets,
liabilities, results of operations or financial condition of MMC, taken as a
whole.
9. Covenants.
(a) Access to Information. From and after the date hereof, Wohlers
shall continue to afford to the officers, employees and authorized
representatives of Seabury reasonable access during normal business hours to the
records of Wohlers in order that Seabury may have reasonable opportunity to make
such investigation as it shall desire of the affairs of Wohlers. If this
Agreement is terminated pursuant to Section 14 hereof, Seabury's obligations
with respect to such information will be governed by the terms of that certain
Confidentiality Agreement dated October 31, 1996 ("Confidentiality Agreement")
by and between Seabury and Wohlers. All requests for information shall be
directed to Albert H. Wohlers or the officers of Wohlers, and Seabury shall not
contact any other employee or any supplier, customer or person having a
relationship with Wohlers without the prior consent of Albert H. Wohlers.
(b) Actions of Sellers and Wohlers. Between the date hereof and the
Closing Date, neither the Sellers nor Wohlers shall take or knowingly permit to
be taken any action, or do or knowingly permit to be done anything in the
conduct of the business of Wohlers, or otherwise, which would be contrary to or
in breach of any of the terms, conditions or provisions of this Agreement, or
which would cause any of the representations herein to be untrue. Except as
otherwise permitted in writing by Seabury and except as otherwise permitted or
provided herein, Sellers and Wohlers will use their commercially reasonable
efforts to preserve the business of Wohlers, to keep the services of its present
officers and employees available and to preserve the goodwill of the clients and
others having business relations with Wohlers. Wohlers shall not, without the
prior consent of Seabury, enter into any contracts or assume any liabilities
which are not in the ordinary course of business.
(c) Acquisition Proposals. Each of Wohlers and Sellers shall not,
directly or indirectly, solicit, encourage, initiate or conduct discussions or
negotiations with, any corporation,
25
<PAGE>
partnership, person or other entity or group concerning any merger, tender
offer, sale of any material assets, sale of shares of capital stock or similar
transaction involving Wohlers. Wohlers and Sellers will promptly communicate to
Seabury if any of them receives any proposals or inquiries from a third party
with respect to the acquisition of Wohlers or any shares of Wohlers Stock or
requests for information.
(d) Maintenance of Insurance. Wohlers shall continue to carry its
existing insurance through the Closing Date, subject to variations in amounts
required by the ordinary operations of its business. Wohlers shall, prior to the
Closing Date, arrange with its insurance carriers for an extension of the
discovery period under its existing errors and ommisions policy for a period of
two years after the Closing Date with respect to errors and omissions committed
or suffered prior to the Closing Date or the expiration of such policies,
whichever shall later occur, and the cost of such extension shall be borne
equally by Seabury and Wohlers.
(e) Regulatory Filings. Each of the parties hereto shall promptly
take all actions necessary to make each filing it is required to make with any
governmental agency or authority as a condition to the consummation of the
transactions contemplated hereby and shall comply and cooperate with each other
in complying with all applicable requirements of the HSR Act, including, without
limitation, the filing of a Notification and Report Form with the Federal Trade
Commission ("FTC") and the United States Department of Justice (`USDOJ") in
accordance with such Act and the rules and regulations thereunder.
(f) Compliance with Conditions Precedent. Seabury, Wohlers and each
of the Sellers shall exert their respective commercially reasonable efforts, in
good faith, to cause the Closing conditions set forth in Sections 11 and 12 to
be met on or before the Closing Date (including, without limitation, executing
the Operative Documents, as applicable, at the time and in the form contemplated
by this Agreement).
(g) Employee Benefit Plans. No later than July 1, 1997, employees of
Wohlers immediately prior to the Closing Date shall participate in all employee
benefit plans of Seabury as of the Closing Date which are made generally
available to employees of Seabury generally, subject to the eligibility,
enrollment and other requirements of such plans; provided, that the provisions
of this Section shall not entitle any employee of Wohlers to employment with
Seabury or any affiliate thereof from and after the Closing Date. The plans so
available as of the date hereof are those
26
<PAGE>
described in the summary plan description dated February, 1997 issued by MMC. In
the case of the MMC Retirement Plan, the former employees of Wohlers will be
credited for purposes of eligibility and vesting, but not benefit accumulation,
with their respective prior years of service with Wohlers. In the case of MMC's
vacation, severance and sick pay policies, the former employees of Wohlers will
be credited for purposes of eligibility and benefit accrual with their
respective prior years of service with Wohlers.
(h) MMC Stock. Seabury shall cause MMC to issue such number of whole
shares of MMC Stock as may be required by Section 3 hereof.
(i) Covenant Not to Compete. For a period of three years from and
after the Closing Date, and except as contemplated by the applicable Employment
Agreement or Consulting Agreement or as expressly permitted in writing by
Seabury, none of the Sellers will, directly or indirectly, own, manage, operate,
control, lend money to, guarantee the lending of money to, arrange for or
promote the lending of money to, endorse the obligations of, participate in or
be connected as an officer, stockholder, employee, partner, director, consultant
or advisor with, any firm, organization or business engaged in any business that
Wohlers conducts as of the Closing Date in any geographic area in which Wohlers
conducts such business as of the Closing Date (the "Covered Business"),
provided, however that none of the Sellers shall be prohibited from owning less
than 1% of the outstanding stock of any publicly traded corporation engaged,
directly or indirectly, in the Covered Business. In addition, Albert H. Wohlers
shall refrain from using the corporate name "Albert H. Wohlers & Co." or any
derivation thereof in conducting any insurance business. If the final judgment
of a court of competent jurisdiction determines that any restrictive covenants
set forth in this Section 9(i), or any portion thereof, is invalid, illegal or
unenforceable, those covenants shall be considered divisible and the remainder
of the covenant shall, to the extent enforceable under applicable law, not
thereby be affected and shall be given full effect, without regard to the
portions which have been declared invalid, illegal or unenforceable and, if any
of the covenants in this Section 9(i), or any portion thereof, is determined to
be so invalid, illegal or unenforceable because of the duration or geographic
scope of such provision, it is the intention of the parties that such court
should have the power to modify any such provision, to the extent necessary to
render the provision enforceable, and such provision, as modified, should be
enforced. The parties to this Agreement agree and acknowledge that they are
familiar with the Covered
27
<PAGE>
Business and believe that the restrictive covenants set forth in this Section
9(i) are reasonable with respect to their subject matter, duration and
geographical application.
(j) Press Release. Except as required by law or in connection with
the applications, consents and approvals required in connection with the
transactions contemplated hereby, no public announcement regarding the
transactions contemplated hereby, and no disclosure of the terms of this
Agreement (except to each parties' respective affiliates, auditors, attorneys
and other consultants or advisors) shall be made without the consent of Seabury
and the Sellers' Representative. Each of Seabury and the Sellers' Representative
agree to make a mutually acceptable press release announcing the completion of
the transactions contemplated hereby promptly after the Closing.
(k) Further Action. Each of the parties hereto shall, at any time,
and from time to time, after the Closing Date, upon the request of the
appropriate party, do, execute, acknowledge and deliver, or will cause to be
done, executed, acknowledged and delivered all such further reasonable acts,
deeds, assignments, transfers, conveyances, powers of attorney and assurances as
may be required to complete the transactions as contemplated by this Agreement
and any of the Operative Documents.
(l) Additional Information. Between the date hereof and the Closing
Date, the parties will promptly notify each other in writing of any changes
which will have to be made to any of the representations and warranties made by
the Sellers, Wohlers, or Seabury in this Agreement (including, but not limited
to, the Schedules and Exhibits annexed hereto) so that the certificates called
for by Sections 11(c) and 12(c) hereof may be delivered. If Seabury, in its sole
discretion, deems the information required to be delivered pursuant to the
foregoing sentence to be material information for MMC as a whole, it may
withhold delivering such notice until such information has been publicly
disclosed, in which event it shall disclose to the Sellers' Representative that
such notice is being withheld, and the Closing hereunder shall be deferred until
such notice is given, subject to the termination right of Seller's
Representative set forth in Section 14(b) hereof.
(m) Tax Treatment. The parties shall treat the transactions
contemplated by this Agreement as a tax-free reorganization within the meaning
of Section 368(a)(1)(b) of the Code and shall report it as such on all
applicable Tax returns except to the extent required by any taxing authority as
a result of an audit, assessment or the like.
28
<PAGE>
(n) Income Tax Return. On a timely basis, Sellers shall cause to be
prepared, in a timely fashion, the federal and state S corporation income tax
returns of Wohlers for the taxable period ending on or before the Closing (the
"Final Tax Returns"). Sellers will confer with Seabury concerning the
preparation of such Final Tax Returns and the income or loss reported thereon.
The Final Tax Returns shall, in accordance with Internal Revenue Code Section
1362 (e) (6), reflect the income of Wohlers for the period beginning January 1,
1997 and ending on the date immediately prior to the Closing Date and shall
otherwise be prepared on a basis consistent with Wohlers' historical practices.
The Final Tax Returns shall be filed by Wohlers no later than the due dates for
such returns (including extensions, if authorized by the Sellers). To the extent
that the amounts payable on such returns exceed the amounts recorded as
liabilities for Taxes on the Interim Statement, the Sellers shall make payment
to Seabury no later than five days prior to the due date (including extensions)
of the particular Return. Any disagreement between Sellers and Seabury as to the
reporting of any item on the Final Tax Returns which the parties are unable to
resolve after good faith discussion shall be referred to a nationally recognized
firm of independent accounts reasonably acceptable to Seabury and Sellers for a
binding determination.
(o) Tax Adjustments. Seabury shall:
(i) not, without the prior written consent of Sellers'
Representative, which consent shall not be unreasonably withheld, amend any
income tax return of Wohlers for any taxable period of Wohlers ending on or
prior to the Closing Date ("Pre-Closing Tax Period").
(ii) promptly notify the Sellers in writing upon receipt by
MMC, Seabury or Wohlers of notice of any pending or threatened tax audits of, or
assessments against, Wohlers for any Pre-Closing Tax Period. Sellers shall have
the right to control, or to represent Wohlers in, any tax audit or
administrative or court proceedings relating to any Pre-Closing Tax Period and
to employ counsel of their choice at their expense. Seabury and Wohlers shall
have the right to participate in any such proceeding and Sellers agree that they
will cooperate with Seabury and Wohlers and their counsel in any material aspect
of any such proceeding. In that regard, Sellers shall not, without the consent
of Seabury (which shall not be unreasonably withheld), agree to any settlement
which adversely affects Seabury or Wohlers or which creates an adjustment of a
timing nature which results unfavorably in the form of increased taxable income
or increased tax liability to
29
<PAGE>
MMC, Seabury or Wohlers in both instances for any taxable period of Wohlers
commencing after the Closing Date.
(iii) permit, and shall cause Wohlers to permit, the Sellers
and their counsel to have reasonable access to Wohlers' books and records and to
consult with Wohlers' auditors and employees, without charge, to the extent such
access and consultation are necessary or helpful to prosecute or defend any
pending or threatened tax audits, or assessments against, Wohlers for any
Pre-Closing Tax Period.
(p) Loan to Pay Dividends. Seabury acknowledges and agrees that
Wohlers may borrow funds, consistent with its past practice, to pay dividends to
its shareholders and incentive plan benefits as permitted hereunder. Seabury
further agrees that this loan will be repaid only out of the assets and earnings
of Wohlers and that, following the Closing, Seabury will not directly repay all
or any portion of the loan or otherwise contribute funds to Wohlers if the
purpose of such contribution is to facilitate the repayment of the loan by
Wohlers; provided, however, that if, in the reasonable determination of Seabury,
and after 30 days notice to the Sellers' Representative, Wohlers is unable to
make a payment required under the loan at a time when a payment is otherwise
due, Seabury may provide Wohlers with such funds as are necessary to make the
required payment.
(q) Wohlers Art. Seabury acknowledges that Albert H. Wohlers is the
owner of the art listed in Schedule 9(q) hereof and he may take possession of
the same at his sole discretion.
(r) Registration Rights. MMC will execute and deliver to the
Sellers' Representative, for the benefit of each Sellers, the Registration
Rights Agreement in the form of Exhibit 11(n) providing for registration under
the Securities Act of all MMC Stock to be received by such Sellers pursuant to
this Agreement, all as provided in such agreement.
(s) Resale Restrictions. Each Seller hereby agrees to be bound by
the resale restrictions applicable to his or her shares of MMC Stock under the
Registration Rights Agreement, as provided therein. Each Seller acknowledges
that the certificates representing the shares of MMC Stock shall bear a legend
reflecting such restrictions, as well as any restrictions imposed under the
Securities Act, and all in accordance with the Registration Rights Agreement.
10. Brokerage. Seabury, the Sellers and Wohlers represent and warrant to
each other that no person is entitled to any broker's, finder's or financial
advisor's fee in connection with or on account of this Agreement or any
transaction herein contemplated.
30
<PAGE>
11. Conditions Precedent of Seabury. Seabury need not consummate the
transactions contemplated by this Agreement unless the following conditions
shall be fulfilled or waived by Seabury, by giving written notice to Sellers'
Representative to that effect, on or prior to the Closing Date:
(a) Representations and Warranties True at Closing. The
representations and warranties of the Sellers and Wohlers contained in this
Agreement, any Schedule or Exhibit attached hereto, or in any certificate or
document delivered pursuant to the provisions hereof, including any Operative
Document, or in connection with the transactions contemplated hereby or thereby,
shall be materially true on and as of the Closing Date as though such
representations and warranties were made at and as of such date, except as
otherwise specified herein, without regard to certificates delivered under
11(c).
(b) Compliance with Agreements. The Sellers and Wohlers shall have
performed and complied in all material respects with all agreements and
conditions required by this Agreement to be performed or complied with prior to
or at the Closing.
(c) Resolutions and Sellers' Certificate. Sellers' Representative
shall have delivered to Seabury certificates of the secretary of Wohlers, dated
the Closing Date, certifying that the resolutions of the board of directors and
stockholders of Wohlers authorizing the transactions contemplated herein have
not been revoked, superseded or amended and Sellers' Representative shall have
delivered to Seabury a certificate in such detail as Seabury may reasonably
request, certifying as to the fulfillment of or exceptions to the conditions
specified in Sections 11(a) and (b).
(d) Approval of Proceedings. All actions, proceedings, instruments
and documents required to carry out this Agreement, or incidental thereto, and
all other related legal matters shall have been approved by counsel for Seabury.
(e) Opinion of Counsel for Wohlers. Seabury shall have received an
opinion of McDermott, Will & Emery, counsel for the Sellers and Wohlers, dated
the Closing Date, to the effect and in the form set forth in Exhibit 11(e)
attached hereto.
(f) Injunction. On the Closing Date, there shall be no effective
injunction, writ or preliminary restraining order or any order of any nature
issued by a court or governmental agency of competent jurisdiction directing
that the transactions provided for herein or any of them not be consummated as
herein provided.
31
<PAGE>
(g) Adverse Development. There shall have been no developments since
December 31, 1996 in the business of Wohlers which, individually or in the
aggregate, would have a Material Adverse Effect.
(h) Resignations and Releases. There shall have been delivered to
Seabury resignations of all members of Wohlers' board of directors, dated as of
the Closing Date and releases by such directors of all claims against Wohlers
including for compensation and expenses payable to such directors up to the
Closing Date for the then current pay period.
(i) Consents. Seabury shall have received all necessary consents and
approvals of other persons or governmental authorities, to the issuance of MMC
Stock.
(j) Consents and Licenses. Wohlers shall have obtained all necessary
consents and approvals as are required to consummate the transactions
contemplated hereby.
(k) Pledge and Escrow Agreement. The Sellers shall have entered into
the Pledge and Escrow Agreement.
(l) Repayment by Sellers and Employees; Life Insurance. The Sellers
and employees of Wohlers shall have paid to Albert H. Wohlers the personal
indebtedness, if any, of such persons and their families to Albert H. Wohlers,
and Wohlers shall have terminated all policies of life insurance maintained by
Wohlers on any of the Sellers other than life insurance benefits generally
available to employees.
(m) Employment Agreements. Each Messrs. Frank Cella, James Malik,
Ken Lock, Terence Bernier and Barry Stagl shall have entered into the respective
Employment Agreement Amendments attached hereto as Exhibits 11(m)1-11(m)5.
(n) Registration Rights Agreement. Each of the Sellers shall have
entered into the Registration Rights Agreement, substantially in the form of
Exhibit 11(n) (the "Registration Rights Agreement").
(o) HSR Act Waiting Period. All waiting periods applicable to this
Agreement and for transactions contemplated hereby under the HSR Act shall have
expired or terminated without objection by the FTC or the USDOJ.
(p) Employees. Since the date of this Agreement, no employees shall
have terminated or threatened to terminate their respective relationships with
Wohlers other than
32
<PAGE>
employees whose departure, in the aggregate, cannot reasonably be expected to
have a Material Adverse Effect.
(q) Waiver. The Sellers shall have delivered to Seabury a written
waiver of George H. Bon Salle, Chairman and CEO of Bon Salle & Co., Inc., of the
provision of that certain consulting agreement dated May 6, 1996, permitting
termination in the event of a change in control of Wohlers.
(r) FIRPTA Affidavit. Each Seller shall have delivered or caused to
be delivered to Seabury an affidavit, in a form satisfactory to Seabury, stating
under penalties of perjury such Seller's taxpayer identification number and that
such Seller is not a foreign person within the meaning of Section 1445(b) of the
Code (each, a "FIRPTA Affidavit"), provided, however, that, if any such Seller
shall fail to deliver a FIRPTA Affidavit, Seabury shall withhold and pay over to
the appropriate Tax authority the amount required to be withheld under Section
1445 of the Code as determined by Seabury.
(s) Deliveries at Closing. The Sellers shall have delivered to
Seabury on or before the Closing, all agreements, instruments and documents
required to be delivered pursuant to this Agreement.
12. Conditions Precedent of the Sellers and Wohlers. The Sellers need not
consummate the transactions contemplated by this Agreement unless the following
conditions shall be fulfilled or waived by Sellers' Representative, by giving
written notice to Seabury to that effect, on or prior to the Closing Date.
(a) Representations and Warranties True at Closing. The
representations and warranties of Seabury contained in this Agreement, any
Schedule or Exhibit attached hereto or in any certificate or document delivered
pursuant to the provisions hereof including any Operative Document, or in
connection with the transactions contemplated hereby or thereby, shall be
materially true on and as of the Closing Date as though such representations and
warranties were made at and as of such date, except as otherwise specified
herein.
(b) Compliance with Agreement. Seabury shall have performed and
complied in all material respects with all agreements and conditions required by
this Agreement to be performed and complied with prior to or at the Closing.
33
<PAGE>
(c) Resolutions and Officer's Certificate. Seabury shall have
delivered to Sellers' Representative a certificate of officers of MMC and
Seabury, dated the Closing Date, certifying that the resolutions of the Board of
Directors of MMC and Seabury authorizing the transactions contemplated herein
have not been revoked, superseded or amended and Seabury shall have delivered to
Sellers' Representative a certificate of an officer of Seabury, dated the
Closing Date, in such detail as Wohlers may reasonably request, certifying as to
the fulfillment of or exceptions to the conditions specified in Sections 12 (a)
and (b).
(d) Approval of Proceedings. All actions, proceedings, instruments
and documents required to carry out this Agreement, or incidental thereto, and
all other related legal matters shall have been approved by counsel for Seller's
Representative.
(e) Opinion of Counsel for MMC. The Sellers shall have received an
opinion of Leonard F. DiNapoli, Jr., Vice President and Associate General
Counsel of MMC, dated the Closing Date, to the effect and in the form set forth
in Exhibit 12(e) attached hereto.
(f) Tax Opinion. Sellers shall have received an opinion of
McDermott, Will & Emery substantially in the form of Exhibit 12(f) to the effect
that the transactions contemplated hereby qualify as a reorganization under
Section 368(a)1(b) of the Code.
(g) Injunction. On the Closing Date, there shall be no effective
injunction, writ or preliminary restraining order or any order of any nature
issued by a court or governmental agency of competent jurisdiction directing
that the transactions provided for herein or any of them not be consummated as
herein provided.
(h) Pledge and Escrow Agreement. Seabury shall have entered into the
Pledge and Escrow Agreement.
(i) Employment Agreements. Seabury shall have entered into
Employment and Consulting Agreements each substantially in the form of Exhibits
11(m)(1)-11(m)(6) respectively.
(j) Registration Rights Agreement. MMC shall have entered into the
Registration Rights Agreement.
(k) HSR Act Waiting Period. All waiting periods applicable to this
Agreement and the transactions contemplated hereby under the HSR Act shall have
expired or terminated without objection by the FTC or the USDOJ.
34
<PAGE>
(l) Deliveries at Closing. Seabury shall have delivered to Sellers'
Representative, on or before the Closing, all agreements, instruments and
documents required to be delivered by Seabury hereunder.
13. Recovery against Sellers and Waiver of Claims.
(a) Indemnity against Claims. Sellers shall severally indemnify,
defend and hold harmless Seabury and its affiliates from and against the
following:
(i) any and all damages resulting from any misrepresentation,
breach of any warranty, or non-fulfillment of any agreement or covenant on the
part of the Sellers or Wohlers, whether contained in this Agreement, any Exhibit
or Schedule hereto, any of the Operative Documents, or any statement or
certificate furnished or to be furnished to Seabury pursuant hereto or in
connection with the transactions contemplated hereby; and
(ii) any and all actions, suits, proceedings, claims, demands,
assessments, damages, judgments, losses, costs and expenses arising from or
based upon any of the foregoing, including but not limited to reasonable
attorneys' fees.
Notwithstanding the foregoing, Sellers shall have no
obligation to indemnify Seabury and its affiliates under this Paragraph 13
(except with respect to fraudulent or knowing, intentional misrepresentations of
Seller contained herein, for which there shall be no minimum dollar threshold)
until such time, if any, that the aggregate amounts of the liabilities, losses,
damages, claims, costs and expenses in respect of which Seabury and its
affiliates is otherwise entitled to indemnification hereunder, exceeds $250,000,
in which event Sellers shall reimburse Seabury and its affiliates for the full
amount of such liabilities, losses, damages, claims, costs and expenses in
excess of $250,000, provided, however, that no individual liability, loss,
damage, claim, cost or expense shall be taken into account unless amounting to
more than $5,000, except that no more than $50,000 shall be so disregarded, and
further provided that the aggregate liability of Sellers shall not exceed the
market value of the Available Shares (as hereinafter defined) at the time of an
indemnification payment hereunder. For purposes hereof, the Available Shares
shall initially be equal to the number of Original Shares and shall be reduced
upon each indemnification payment hereunder by the number of shares of MMC Stock
which have a market value at the time of such payment equal to the amount of
such payment.
35
<PAGE>
(b) Notice of Claim and Assumption of Defense. Seabury shall
promptly give notice to the Sellers' Representative after Seabury has knowledge
of any claim against Seabury or its affiliates as to which recovery may be
sought against the Sellers because of the indemnity set forth in Section 13(a)
hereof, or of the commencement of any legal proceedings against Seabury or any
of its affiliates as to such claim after Seabury or its affiliates has or have
knowledge of such proceedings, whichever shall first occur. With respect to any
legal proceeding, Seabury shall permit the Sellers' Representative to assume the
defense of any such claim or any litigation resulting from such claim. Failure
by the Sellers' Representative to notify Seabury of his election to defend such
action within 10 days after notice thereof shall have been given to the Sellers'
Representative shall be deemed a waiver by the Sellers' Representative of his
right to defend such action. If the Sellers' Representative assumes the defense
of any such claim or litigation resulting therefrom, the Sellers' Representative
shall not, in the defense of such claim or any litigation resulting therefrom,
consent to entry of any judgment, except with the consent of Seabury, which
consent shall not be unreasonably withheld, or enter into any settlement, except
with the consent of Seabury, which consent shall not be unreasonably withheld.
(c) Settlement of Claim by Seabury. If the Sellers' Representative
shall not assume the defense of any such claim or litigation resulting
therefrom, Seabury may defend against such claim or litigation in such manner as
it may deem appropriate. If Seabury shall consent to the entry of any judgment
or enter into any settlement agreement with respect to such claim or litigation
without seeking consent of the Sellers' Representative, which consent shall not
be unreasonably withheld, Seabury's rights to indemnification hereunder shall be
waived. If no settlement of such claim or litigation is made, the Sellers'
Representative shall promptly cause reimbursement of Seabury for the amount of
any judgment rendered with respect to such claim or litigation and for all
expenses, legal or otherwise, incurred by Seabury in the defense against such
claim or litigation, to the extent the same are subject to the indemnification
obligations of this Agreement.
(d) Notice of Claim and Threatened Claim. For as long as the
representations, warranties hereunder survive under the terms hereof, any Seller
who receives notice of any claim or threatened claim against, or dispute
involving, Seabury, its affiliates or Wohlers which any such Seller has reason
to expect may involve a claim, threatened claim or dispute which may result in a
36
<PAGE>
recovery being sought against the Sellers because of a breach of a
representation or warrenty hereunder, shall promptly give notice to Seabury.
(e) General Provisions Relating to Remedies and Indemnification.
(i) Seabury and its affiliates shall obtain recovery for any
claim for indemnification against Sellers first from the Escrowed Shares which
are not subject to any other claim as provided in the Pledge and Escrow
Agreement.
(ii) None of Seabury or its affiliates shall bring a claim or
be entitled to indemnification with respect to any facts or circumstances
resulting in a breach of any representation, warranty, covenant or agreement of
which Seabury or its affiliates had knowledge on or before the Closing Date. All
matters disclosed on any schedule attached hereto or the certificate delivered
pursuant to Section 11(c) shall be deemed disclosed on all other schedules
hereto. Disclosure of items not required to be disclosed shall not create any
inference of materiality.
(iii) Sellers' indemnification obligations shall be reduced by
any insurance proceeds from policies of insurance maintained by Wohlers
immediately prior to the Closing Date which are recovered by Seabury at the time
indemnification from Sellers is due hereunder, as well as tax benefits and
deductions which may be claimed by Seabury in connection with the matter which
is the basis for indemnification. Any insurance proceeds received by Seabury
thereafter shall be paid to the Sellers' Representative.
(iv) To the extent that the Sellers discharge any claim for
indemnification hereunder, the Sellers shall be subrogated to all rights of
Seabury, MMC or their affiliates against third parties.
(v) After the Closing, the indemnification rights provided
pursuant to this Article 13 shall be the exclusive remedy of the parties with
respect to any dispute arising out of or related to this Agreement and the
transactions contemplated hereby.
(vi) ARTICLES 6 AND 7 CONTAIN THE ONLY REPRESENTATIONS AND
WARRANTIES BEING MADE BY WOHLERS AND THE SELLERS IN THIS TRANSACTION. ALL OTHER
WARRANTIES EXPRESSED OR IMPLIED ARE HEREBY DISCLAIMED.
(vii) For purposes of this Agreement, the phrases "to the
knowledge or best knowledge of Wohlers or Seller's," "known to Wohlers or
Sellers" and phrases with similar
37
<PAGE>
language or effect shall mean what is actually known by any of Messrs. Albert H.
Wohlers, Frank J. Cella, James R. Malik, Kenneth B. Lock, Terence B. Bernier or
Barry M. Stagl.
(viii) Wohlers and Sellers shall have no obligation to
indemnify Seabury, MMC or their affiliates or otherwise have liability to
Seabury, MMC or their affiliates for consequential damages, special damages,
incidental damages, indirect damages, lost profits or similar items except to
the extent the same are payable in connection with third party claims which are
indemnifiable hereunder.
14. Termination and Abandonment. In addition to the rights of any of the
parties to terminate this Agreement under any other provision hereof, this
Agreement may be terminated prior to the Closing Date as follows:
(a) By the mutual consent of Seabury and Sellers' Representative on
behalf of Sellers;
(b) By Seabury or Seller's Representative if the Closing Date has
not occurred through no fault of the terminating party on or before June 30,
1997; provided, however, that such date may be extended to any subsequent date
or dates approved by Seabury and Sellers' Representative.
(c) By Seabury if any of the conditions provided for in Section 11
of this Agreement have not been met and have not been waived.
(d) By the Seller's Representative on behalf of Sellers if any of
the other conditions provided for in Section 12 of this Agreement have not been
met and have not been waived.
In the event of the termination of this Agreement and the
abandonment of the Transaction pursuant to (b), (c), or (d) above, notice shall
forthwith be given by the terminating party to the other parties to this
Agreement. If this Agreement is terminated as aforesaid, Seabury shall continue
to be bound by the terms of the Confidentiality Agreement. The termination of
this Agreement shall not effect any claim for any breach of its terms, which
claim shall survive.
15. Survival. The representations, warranties and agreements contained or
referred to herein shall survive the Closing hereunder, provided that no claims
may be initiated by or on behalf of any party hereto against any other party on
the basis of such representations, warranties and agreements after 12 months
from the Closing Date, unless based upon fraud or an intentional
38
<PAGE>
misrepresentation or a breach of or failure to comply with an agreement which is
to be performed or complied with in whole or in part after 12 months from the
Closing Date.
16. Notices. Any notice, or other communication required or permitted to
be sent hereunder shall be duly given if delivered personally or mailed by
registered or certified mail, return receipt requested, as follows:
(a) To the Sellers, Wohlers or Sellers' Representative:
Albert H. Wohlers & Co.
1440 North N.W. Highway
Park Ridge, Illinois 60068
Attention: Albert H. Wohlers
With a copy to:
Albert H. Wohlers
710 North Prospect Avenue
Park Ridge, Illinois 60068
and a copy to:
McDermott, Will & Emery
227 West Monroe Street
Chicago, Illinois 60606
Attention: James M. Roche
(b) To Seabury:
Seabury & Smith, Inc.
1166 Avenue of the Americas
New York, New York 10036
Attention: CEO
With a copy to:
Marsh & McLennan Companies, Inc.
1166 Avenue of the Americas
New York, New York 10036
Attention: Legal Department
or to such other addresses as such parties shall have last designated by notice
to the other parties.
39
<PAGE>
17. Entire Agreement. This Agreement constitutes the entire agreement
among the parties regarding the subject matter hereof and shall not be amended
or terminated except by an instrument in writing signed by or on behalf of the
parties hereto.
18. Law to Govern; Consent to Jurisdiction. a) This Agreement shall be
governed by and construed in accordance with the laws of the State of Illinois,
without regard to principles of conflicts of laws.
b) Any judicial proceeding brought with respect to this Agreement
must be brought in any federal court of competent jurisdiction in the City of
Chicago and State of Illinois, and, by execution and delivery of this Agreement,
each party: (i) accepts, generally and unconditionally, the exclusive
jurisdiction of such court and related appellate court, and irrevocably agrees
to be bound by any judgment rendered thereby in connection with this Agreement;
and (ii) irrevocably waives any objection that he, she or it may now or
hereafter have as to the venue of any such suit, action or proceeding brought in
such a court or that such court is an inconvenient forum.
19. Binding Effect; No Assignment. This Agreement shall not be assignable
by any party hereto. Nothing in this Agreement is intended to confer upon any
person, other than the parties hereto and their successors, any rights or
remedies under or by reason of this Agreement.
20. No Third Party Rights. Nothing in this Agreement, express or implied,
shall be construed to confer upon any person, other than the parties hereto,
their successors and permitted assigns, any legal or equitable rights, remedies,
claims, obligations or liabilities under or by reason of this Agreement.
21. Expenses. The parties shall bear their respective expenses of the
transactions herein contemplated, including, but not limited to, any fees and
expenses of their respective counsel and financial advisors, and none of the
fees and expenses incurred by a Seller in connection herewith have been or will
be charged directly or indirectly to Wohlers except that Seabury acknowledges
that Wohlers shall be liable for such fees and expenses of the Sellers but only
to the extent that the aggregate fees and expenses incurred by Wohlers in
connection herewith and the transactions contemplated hereby on its behalf and
on behalf of the Sellers shall not exceed $100,000, and Sellers shall be jointly
and severally liable for the excess.
22. Exhibits. Each of the Exhibits and Schedule annexed hereto is
incorporated herein as if fully set forth.
40
<PAGE>
23. Waiver. No waiver by any party hereto, whether express or implied, of
its rights under any provision of this Agreement shall constitute a waiver of
such party's rights under such provision at any other time or a waiver of such
party's rights under any other provision of this Agreement. No failure by any
party hereto to take any action with respect to any breach of this Agreement or
default by another party hereto shall constitute a waiver of the former party's
right to enforce any provision of this Agreement or to take action with respect
to such breach or default or any subsequent breach or default by such other
party.
24. Severability. Any provision of this Agreement which may be determined
by any court of competent jurisdiction to be invalid or unenforceable in such
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without invalidating or rendering
unenforceable any remaining terms and provisions hereof, and any such invalidity
or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction. The parties shall
negotiate in good faith to replace such provision with an appropriate, legal
provision.
41
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
SEABURY & SMITH, INC.
By:
--------------------------------------
ALBERT H. WOHLERS & CO.
By:
--------------------------------------
-----------------------------------------
Albert H. Wohlers, as Trustee
of the Albert H. Wohlers Trust
-----------------------------------------
Jane L. Wohlers, as Trustee
of the Jane L. Wohlers Trust
-----------------------------------------
Susan W. Pearson
-----------------------------------------
Susan Wohlers Pearson
-----------------------------------------
Susan W. Pearson, as Trustee
of the Susan W. Pearson Exemption Trust
-----------------------------------------
Nancy W. Malik
-----------------------------------------
Nancy Wohlers Malik
-----------------------------------------
Nancy W. Malik, as Trustee of the
Nancy W. Malik Exemption Trust
42
<PAGE>
-----------------------------------------
Susan Wohlers Pearson, as
Custodian for Natalie Jane Malik
-----------------------------------------
Susan Wohlers Pearson, as
Custodian for Andrew James Malik
-----------------------------------------
Nancy W. Malik, as
Custodian for Molly Jane Pearson
-----------------------------------------
Susan Wohlers Pearson, as
Custodian for Daniel James Malik
-----------------------------------------
Frank J. Cella, as Trustee of the
Frank J. Cella Living Trust
-----------------------------------------
James R. Malik
-----------------------------------------
Kenneth B. Lock, as Trustee of the
Kenneth B. Lock Revocable Trust
-----------------------------------------
Terence B. Bernier
-----------------------------------------
Barry M. Stagl
43
Exhibit 5
Gregory F. Van Gundy, Esq.
Marsh & McLennan Companies, Inc.
1166 Avenue of the Americas
New York, New York 10036
May 30, 1997
Marsh & McLennan Companies, Inc.
1166 Avenue of the Americas
New York, New York 10036-2774
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
I am the General Counsel of Marsh & McLennan Companies, Inc., a Delaware
corporation (the "Company"), and am providing this opinion in connection with
the public offering by certain stockholders of the Company (the "Selling
Stockholders") of up to 943,250 shares (the "Shares") of the Company's Common
Stock, par value $1.00 per share (the "Common Stock"), after giving effect to
the two-for-one stock split in the form of a Common Stock distribution declared
by the Company's Board of Directors on May 21, 1997 for shareholders of record
on June 6, 1997.
This opinion is being furnished in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended
(the "Act").
In connection with this opinion, I or a lawyer acting under my general
supervision have examined originals or copies, certified or otherwise identified
to my satisfaction, of (i) the Company's Registration Statement (the
"Registration Statement") on Form S-3 to be filed with the Securities and
Exchange Commission (the "Commission") on May 30, 1997 under the Act, in
accordance with the procedures of the Commission permitting a delayed or
continuous offering of the Shares pursuant to such Registration Statement; (ii)
the Stock Acquisition Agreement and Plan of Reorganization pursuant to which the
Shares were issued; (iii) the certificates evidencing the Shares; (iv) the
Restated Certificate of Incorporation of the Company, as presently in effect;
(v) the Restated By-laws of the Company, as presently in effect; and (vi)
certain resolutions of the Board of Directors of the Company. I, or a lawyer
acting under my general supervision, have also examined originals or copies,
certified or otherwise identified to our satisfaction, of such records of the
Company and such agreements, certificates of public officials, certificates of
officers or other representatives of the Company and others, and such other
documents, certificates and records as I have deemed necessary or appropriate as
a basis for the opinions set forth herein.
In my examination, I have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. In making my examination
of documents executed or to be executed by parties other than the Company, I
have assumed that such parties had or will have the power, corporate or other,
to enter into and perform all obligations thereunder and have also assumed the
due authorization by all requisite action, corporate or other, and execution and
delivery by such parties of such documents and the validity and binding effect
thereof. As to any facts material to the opinions expressed herein which I have
not independently established or verified, I have relied upon statements and
representations of officers and other representatives of the Company and others.
<PAGE>
I am admitted to the bar in the State of New York, and I do not express
any opinion as to the laws of any jurisdiction, except the General Corporation
Law of the State of Delaware.
Based upon and subject to the foregoing, I am of the opinion that the
Shares have been duly authorized and validly issued and are fully paid and
nonassessable.
I hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement. I also consent to the reference to me
under the caption "Legal Matters" in the Registration Statement. In giving this
consent, I do not thereby admit that I am included in the category of persons
whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission.
Very truly yours,
/s/ Gregory F. Van Gundy, Esq.
General Counsel
2
Exhibit 23(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Marsh & McLennan Companies, Inc. on Form S-3 of our reports dated February 26,
1997 (March 12, 1997 as to the last paragraph of Note 3), appearing in and
incorporated by reference in the Annual Report on Form 10-K of Marsh & McLennan
Companies, Inc. for the year ended December 31, 1996 and to the reference to us
under the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
New York, New York
May 30, 1997
Exhibit 23(b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-3 registration statement of our report to the Board of
Directors of Johnson & Higgins dated March 11, 1997 included in Marsh &
McLennan's Form 8-K filed with the Commission on April 7, 1997 and to all
references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
May 30, 1997
New York, New York
POWER OF ATTORNEY
The undersigned, a Director of Marsh & McLennan Companies, Inc., a
Delaware corporation (the "Company"), does hereby constitute and appoint any one
of A. J. C. Smith, Frank J. Borelli and Gregory F. Van Gundy to be the
undersigned's agent and attorney-in-fact, each with the power to act fully
hereunder without the other and with full power of substitution to act in the
name and on behalf of the undersigned:
To sign or to transmit electronically in the name and on behalf of the
undersigned, as a Director of the Company, and file with the Securities
and Exchange Commission on behalf of the Company any registration
statements for the registration of the Company's common stock and related
interests to be issued pursuant to the Company's duly adopted employee
benefit, compensation and stock plans, any registration statements for the
registration of the Company's common stock for issuance in connection with
future acquisitions or for resale by the holders thereof who acquired or
will acquire such stock in connection with past or future acquisitions,
and any amendments or supplements to such registration statements; and
To execute and deliver, either through a paper filing or electronically,
any agreements, instruments, certificates or other documents which they
shall deem necessary or proper in connection with registration statements
and prospectuses and amendments or supplements thereto and generally to
act for and in the name of the undersigned with respect to such filings as
fully as could the undersigned if then personally present and acting.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
effective the 21st day of May, 1997.
/s/ Richard A. Nielsen
---------------------------------
Richard A. Nielsen
<PAGE>
POWER OF ATTORNEY
The undersigned, a Director of Marsh & McLennan Companies, Inc., a
Delaware corporation (the "Company"), does hereby constitute and appoint any one
of A. J. C. Smith, Frank J. Borelli and Gregory F. Van Gundy to be the
undersigned's agent and attorney-in-fact, each with the power to act fully
hereunder without the other and with full power of substitution to act in the
name and on behalf of the undersigned:
To sign or to transmit electronically in the name and on behalf of the
undersigned, as a Director of the Company, and file with the Securities
and Exchange Commission on behalf of the Company any registration
statements for the registration of the Company's common stock and related
interests to be issued pursuant to the Company's duly adopted employee
benefit, compensation and stock plans, any registration statements for the
registration of the Company's common stock for issuance in connection with
future acquisitions or for resale by the holders thereof who acquired or
will acquire such stock in connection with past or future acquisitions,
and any amendments or supplements to such registration statements; and
To execute and deliver, either through a paper filing or electronically,
any agreements, instruments, certificates or other documents which they
shall deem necessary or proper in connection with registration statements
and prospectuses and amendments or supplements thereto and generally to
act for and in the name of the undersigned with respect to such filings as
fully as could the undersigned if then personally present and acting.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
effective the 21st day of May, 1997.
/s/ David A. Olsen
---------------------------------
David A. Olsen
<PAGE>
POWER OF ATTORNEY
The undersigned, a Director of Marsh & McLennan Companies, Inc., a
Delaware corporation (the "Company"), does hereby constitute and appoint any one
of A. J. C. Smith, Frank J. Borelli and Gregory F. Van Gundy to be the
undersigned's agent and attorney-in-fact, each with the power to act fully
hereunder without the other and with full power of substitution to act in the
name and on behalf of the undersigned:
To sign or to transmit electronically in the name and on behalf of the
undersigned, as a Director of the Company, and file with the Securities
and Exchange Commission on behalf of the Company any registration
statements for the registration of the Company's common stock and related
interests to be issued pursuant to the Company's duly adopted employee
benefit, compensation and stock plans, any registration statements for the
registration of the Company's common stock for issuance in connection with
future acquisitions or for resale by the holders thereof who acquired or
will acquire such stock in connection with past or future acquisitions,
and any amendments or supplements to such registration statements; and
To execute and deliver, either through a paper filing or electronically,
any agreements, instruments, certificates or other documents which they
shall deem necessary or proper in connection with registration statements
and prospectuses and amendments or supplements thereto and generally to
act for and in the name of the undersigned with respect to such filings as
fully as could the undersigned if then personally present and acting.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
effective the 21st day of May, 1997.
/s/ Norman Barham
---------------------------------
Norman Barham
