As filed with the Securities and Exchange Commission on June 19, 1997
Registration No.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
MARSH & McLENNAN COMPANIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 36-2668272
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) 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)
J&H Marsh & McLennan, Inc.
Employee Award Agreements
(Full Title of the Plan)
Gregory F. Van Gundy, Esq.
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 Agent for Service)
Copy to:
David J. Friedman, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
(212) 735-3000
-----------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===================================================================================================
Proposed
Proposed Maximum
Amount Maximum Aggregate Amount
Title of Securities to be Offering Price Offering of
to be Registered Registered Per Share(1) Price(1) Registration Fee
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $1.00 par
value, of Marsh & 5,471,800 $68.94 $ 377,225,892 $ 114,311
McLennan Companies,
Inc., including the
Preferred Stock Purchase
Rights attached
thereto(2)
===================================================================================================
</TABLE>
(1) Estimated for the sole purpose of computing the registration fee.
Calculated pursuant to Rule 457(c) based on the average of the high
and low prices on the New York Stock Exchange on June 12, 1997 and
adjusted for the 2-for-1 stock split to be effected as a 100% stock
dividend at the close of business on June 27, 1997.
(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.
PART I - INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I of
Form S-8 have been or will be sent or given to employees as specified by
Rule 428(b)(1) under the Securities Act.
PART II - INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996 (including pages 23 through 49 of the Company's
1996 Annual Report to Stockholders), the Company's Current Reports on Form
8-K filed with the Commission on March 14, 1997 and April 7, 1997, the
Company's Quarterly Report on Form 10-Q dated May 14, 1997, 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 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, which have been filed
by the Company under the Exchange Act, are incorporated by reference
herein.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or
which deregisters all securities then remaining unsold, shall be deemed to
be incorporated by reference herein and to be a part hereof from the date
of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration
Statement 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 Registration Statement.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
The legality of the securities being offered under the Plan has
been passed upon by Gregory Van Gundy, General Counsel of the Company.
Item 6. Indemnification of Directors and Officers.
Subsection (a) of Section 145 of the DGCL empowers a corporation
to indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an
action by or in the right of the corporation) by reason of the fact that he
is or was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, or suit by or in the right of the
corporation to procure a judgement in its favor by reason of the fact that
such person acted in any of the capacities set forth above, against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, except that no
indemnification may be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 145 further provides that to the extent a director or
officer of a corporation has been successful on the merits or otherwise in
the defense of any action, suit or proceeding referred to in subsections
(a) and (b) of Section 145, or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith; that
indemnification provided for by Section 145 shall be deemed exclusive of
any other rights to which the indemnified party may be entitled; that
indemnification provided for by Section 145 shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of such person's heirs, executors and administrators; and empowers
the corporation to purchase and maintain insurance on behalf of a director
or officer of the corporation against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as
such, whether or not the corporation would have the power to indemnify him
against such liabilities under Section 145. Section 1 of Article VI of the
Company's Restated Certificate of Incorporation provides that the Company
shall indemnify its directors and officers to the fullest extent authorized
by the DGCL.
The Company also provides liability insurance for its directors
and officers which provides for coverage against loss from claims made
against directors and officers in their capacity as such, including
liabilities under the Securities Act of 1933, as amended. In certain
employment agreements, the company or its subsidiaries have also agreed to
indemnify certain officers against loss from claims made against such
officers in connection with the performance of their duties under their
employment agreements. Such indemnification is generally to the same extent
as provided in the Company's By-laws.
Section 102(b) (7) of the DGCL provides that a certificate of
incorporation may contain a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such
provision shall not eliminate or limit the liability of a director: (i) for
any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section
174 of the DGCL, or (iv) for any transaction from which the director
derived an improper personal benefit. Article SIXTH of the Company's
Certificate of Incorporation limits the liability of directors to the
fullest extent authorized by the DGCL.
Item 7. Exemption from Registration.
Not Applicable.
Item 8. Exhibits.
Exhibit
Number Description
5.1 Opinion of Gregory F. Van Gundy with respect to the
legality of the securities being registered
23.1 Consent of Gregory F. Van Gundy (included in his opinion
filed as Exhibit 5.1)
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Arthur Andersen LLP
24.1 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)
24.2 Powers of Attorney of certain directors of the Company
(Messrs. Barham, Nielsen and Olsen) (incorporated by
reference to the Company's Registration Statement on Form
S-3, Registration No. 333-28201)
99.1 Form of Employee Award Agreement
Item 9. Undertakings.
A. The undersigned 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 and 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 20 percent 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 paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and 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 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, as amended, 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.
B. The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, as
amended, each filing of the Registrant's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to 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 therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors, officers
and controlling persons of the registrant pursuant to the foregoing
provisions, 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 of whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, Marsh & McLennan Companies, Inc. certifies that it has reasonable
grounds to believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York, on the 19th day of June, 1997.
MARSH & McLENNAN COMPANIES, INC.
By /s/A.J.C. Smith
A.J.C. Smith
Chairman of the Board and Chief
Executive Officer
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, this registration statement has been signed by the following
persons in the capacities indicated on this 19th day of June, 1997.
/s/A.J.C. Smith Director, Chairman of the Board
__________________________ and Chief Executive Officer (Principal
A.J.C. Smith Executive Officer)
/s/Frank J. Borelli Senior Vice President and
__________________________ Chief Financial Officer, Director
Frank J. Borelli (Principal Financial Officer)
/s/Douglas C. Davis Vice President and Controller
___________________________ (Chief Accounting Officer)
Douglas C. Davis
* Director
___________________________
Norman Barham
* Director
___________________________
Lewis W. Bernard
* Director
___________________________
Richard H. Blum
* Director
___________________________
Robert Clements
* Director
___________________________
Peter Coster
* Director
___________________________
Robert F. Erburu
* Director
____________________________
Jeffrey W. Greenberg
* Director
____________________________
Ray J. Groves
* Director
____________________________
Richard S. Hickok
* Director
____________________________
David D. Holbrook
* Director
____________________________
Lawrence J. Lasser
* Director
____________________________
Richard M. Morrow
* Director
____________________________
Richard A. Nielsen
* Director
____________________________
David A. Olsen
* Director
____________________________
George Putman
* Director
_____________________________
Adele Smith Simmons
* Director
_____________________________
John T. Sinnot
* Director
_____________________________
Frank J. Tasco
* By: /s/Gregory F. Van Gundy
___________________________
Gregory F. Van Gundy
Attorney-in-fact
EXHIBIT INDEX
Exhibit
Number Description of Exhibits Page
5.1 Opinion of Gregory F. Van Gundy with respect to
the legality of the securities being registered
23.1 Consent of Gregory F. Van Gundy (included in
his opinion filed as Exhibit 5.1)
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Arthur Andersen LLP
24.1 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)
24.2 Powers of Attorney of certain directors of the Company
(Messrs. Barham, Nielsen and Olsen) (incorporated by
reference to the Company's Registration Statement on Form
S-3, Registration No. 333-28201)
99.1 Form of Employee Award Agreement
EXHIBIT 5.1
June 19, 1997
Marsh & McLennan Companies, Inc.
1166 Avenue of the Americas
New York, New York 10036-2774
Ladies and Gentlemen:
I am General Counsel and Secretary of Marsh & McLennan
Companies, Inc., a Delaware corporation (the "Company"). I have acted as
counsel to the Company in connection with the preparation and filing of a
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended, for the registration of 5,471,800
shares of common stock, par value $1.00 per share, including preferred
stock purchase rights (the "Shares"), of the Company relating to the J&H
Marsh & McLennan, Inc. Employee Award Agreements (the "Agreements").
In connection with the foregoing, I, or attorneys under my
supervision, have examined the minute books and stock records of the
Company, the Certificate of Incorporation and By-Laws of the Company, the
Registration Statement, the Agreements and resolutions duly adopted by the
Board of Directors of the Company relating to the Agreements. In addition,
I, or attorneys under my supervision, have reviewed such other documents
and instruments and have conferred with various officers and directors of
the Company and have ascertained or verified to my satisfaction such
additional facts as I have deemed necessary or appropriate for the purposes
of this opinion. 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 me as certified, photostatic or
facsimile copies and authenticity of the originals of such latter
documents.
Based upon the foregoing I am of the opinion that the Shares to
be issued under the Agreements have been duly authorized and, when issued
and delivered in accordance with the terms of the Agreements, will be
legally issued, fully paid and nonassessable.
My opinion is limited to matters governed by the laws of the
State of New York and the General Corporation Law of the State of Delaware.
I hereby consent to the filing of this opinion as an exhibit to
the Registration Statement. In giving this consent, I do not thereby admit
that I come within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder.
This opinion is solely for your benefit in connection with the
Company's offer and sale of the Shares, and is not to be used, circulated,
relied on, quoted or otherwise referred to for any other purpose without my
express written permission.
Very truly yours,
/s/Gregory F. Van Gundy
Gregory F. Van Gundy
General Counsel
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Marsh & McLennan Companies, Inc. on Form S-8 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.
/s/Deloitte & Touche LLP
Deloitte & Touche LLP
New York, New York
June 18, 1997
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Form S-8 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
June 18, 1997
New York, New York
EXHIBIT 99.1
JOHNSON & HIGGINS
125 BROAD STREET
NEW YORK, NEW YORK 10004
PERSONAL AND STRICTLY CONFIDENTIAL
June 20, 1997
[Name of Employee]
[Address of Employee]
Re: Employee Award
Dear [Name of Employee]:
This letter is to inform you that in accordance with the Stock
Purchase Agreement among Johnson & Higgins, the stockholders of Johnson &
Higgins and Marsh & McLennan Companies, Inc. (the "Company"), you (the
"Employee") have been awarded [ ] shares of common stock, par value $1.00
per share, of the Company (the "Stock Award") and payment of $[ ] in cash
(the "Cash Award," and together with the Stock Award, the "Award"), upon
the terms and conditions described in Annex A hereto. The number of shares
referred to above has been adjusted to reflect the stock split recently
announced by the Company.
The Award is subject to you countersigning one copy of this
letter (and providing your Social Security Number) and the Stock Power
enclosed as Annex B hereto, and returning them so that they are received by
Johnson & Higgins (125 Broad Street, New York, New York 10004, Attn: George
Kadri) within 30 days of the above date of this letter. However, to qualify
to receive the next dividend to be paid on the Common Stock, you must
properly sign and return this letter and the enclosed Stock Power to the
address specified above so that it is received no later than July 7, 1997.
The Stock Power, which should be signed by you but should
otherwise be left blank, will be used by the Company only in the event that
a portion of your Stock Award is forfeited under the terms of Annex A, in
order to transfer the forfeited portion to the Company or its designee.
A copy of a Prospectus (the "Prospectus") with respect to the
shares of Common Stock subject to the Stock Award, as well as a copy of the
Company's 1996 Annual Report to Shareholders (the "Annual Report"), is
being delivered to you simultaneously herewith.
Also enclosed as Annex C is a Beneficiary Designation Form,
which may be used by you to designate beneficiaries to receive the Award in
the event of your death. Use of the Beneficiary Designation Form is
voluntary and you may return it to the Company at any time.
A second copy of this letter is enclosed for your records and
may be retained by you.
Please confirm your receipt of this letter and your
acknowledgment of the Award and the terms and conditions set forth in Annex
A and receipt by you of a copy of the Prospectus and the Annual Report, by
countersigning one copy of this letter (and providing your Social Security
Number) and the Stock Power and returning them to Johnson & Higgins in the
enclosed envelope. When these documents have been properly signed and
received by Johnson & Higgins, this letter, together with Annex A, will
constitute a binding agreement between you and Johnson & Higgins.
Please note that the recent stock split referred to above is a
"two-for-one" split. Until June 30th, the market price of the Company's
stock will continue to be quoted on a pre-split basis, that is, as double
the price of the split shares.
Please remember that the executed copies must be received by
Johnson & Higgins within 30 days as provided above for you to be entitled
to your Award upon the terms and conditions set forth in Annex A, and must
be received no later than July 7, 1997 for you to receive the next dividend
to be paid on the Common Stock.
JOHNSON & HIGGINS
By:_________________________
Name: Norman Barham
Title: President
Accepted and Agreed by:
EMPLOYEE
__________________________
Name:
Date:
__________________________
Social Security Number
Annex A
Terms and Conditions of Award1
Capitalized terms used herein and not otherwise defined shall
have the meaning ascribed to them in the letter to which this Annex A is
attached (the "Agreement").
1. Upon receipt by Johnson & Higgins from the Employee of a
copy of the Agreement countersigned by the Employee (and providing his or
her Social Security Number) and an executed Stock Power as provided in the
Agreement, the Company will issue the shares of Common Stock subject to the
Stock Award registered in the name of the Employee. The Stock Award will be
held by the Company until such time as it may be distributed to the
Employee in accordance with the terms of the Award set forth in the
Agreement and its Annexes. However, as more fully described below,
dividends declared on the Common Stock (other than dividends payable in
additional shares of Common Stock pursuant to a stock split, which shall be
delivered to the Employee upon delivery of the shares in respect of which
such dividend shares are issued) and having a record date on or after the
date of issuance for the Stock Award will be paid directly to the Employee
in respect of all shares subject to the Stock Award. (For all purposes of
the Agreement, the issue date for the Stock Award shares will be deemed to
be July 7, 1997 if Johnson & Higgins receives the documents referred to
above on or prior to July 7, 1997. For documents received after such date,
the issue date for the Stock Award shares will be deemed to be the date of
receipt of documents by Johnson & Higgins referred to above.)
2. In accordance with the terms of the Award, the Company will
deliver to the Employee on each of the first [four]2 anniversaries of April
1, 1997 (each an "Anniversary Date"): (i) certificates representing the
number of shares equal to [25%]3 of the total number of shares of Common
Stock subject to the Stock Award rounded to the nearest whole number of
shares and (ii) a check representing an amount in cash equal to [25%]2 of
the total amount of cash subject to the Cash Award, plus interest at the
rate of 5% per annum on the amount of the Cash Award (less any portion
thereof previously paid) from April 1, 1997 to, but not including, the
respective date of payment (less any portion of such interest previously
paid) except as provided below. Interest accrued on any overdue amount of
the Cash Award will be paid when such overdue amount is paid.
3. (a) If, prior to the applicable Anniversary Date, the
Employee's employment with the Company and its subsidiaries terminates
for any reason (other than (i) because of the Employee's death or
Disability (as defined below), (ii) by the Employee for any reason after
such time as the Employee reaches age 65 or (iii) by the Company or any
subsidiary other than for Cause (as defined below)), the portion of the
Award not then payable or deliverable will be immediately forfeited. In
such event, certificates representing the shares of Common Stock subject to
the Stock Award which have been forfeited will be cancelled by the Company
and neither Johnson & Higgins nor the Company nor any of their subsidiaries
shall have any further obligation to release to the Employee any
forfeited shares under the Stock Award or make any forfeited payments to
the Employee under the Cash Award.
(b) If the Employee's employment with the Company and its
subsidiaries terminates by reason of the Employee's death or Disability,
if the Employee's employment is terminated by the Employee for any reason
on or after such time as the Employee reaches age 65, or if the Employee's
employment is terminated by the Company or any subsidiary other than for
Cause, (i) all shares of Common Stock remaining in the possession of the
Company which are subject to the Stock Award will be released to the
Employee (or the Employee's beneficiary in the case of the Employee's
death) and (ii) all amounts of cash subject to the Cash Award which were
not previously paid will be paid to the Employee (or the Employee's
beneficiary in the case of the Employee's death), together with interest at
the rate described above through the date of termination.
- --------
1 The terms of Awards to certain retirees will be modified to
the extent appropriate to accelerate receipt of Awards.
2 [Three] in the case of Awards of $500,000 or less.
3 [One-third] in the case of Awards of $500,000 or less.
(c) For purposes hereof, Disability will have the meaning set
forth in the Company's Long-Term Disability Plan, as in effect on the date
hereof. For purposes hereof, termination for "Cause" shall mean termination
of employment following: (i) the Employee's conviction for the commission
of an act or acts constituting a felony or similar offense, (ii) the
Employee's intentional engagement in conduct which is demonstrably and
materially injurious to the Company or its subsidiaries, monetarily or
otherwise, or (iii) the Employee's willful and continued failure to
substantially perform the Employee's duties to the Company (other than any
such failure resulting from the Employee's incapacity due to physical or
mental illness) after written notice to the Employee from the Company.
4. The Company shall withhold from any payment or issuance made
in connection with the Employee's Award, amounts of withholding and other
taxes due in respect thereof, and to take such other action as the Company
may deem advisable to enable the Company to satisfy any and all tax
obligations. The Company, at its discretion, may withhold from the amounts
payable under the Cash Award prior to withholding from amounts payable
under the Stock Award.
5. In the event the Company is required, under any rule of or
listing agreement with the New York Stock Exchange, to obtain shareholder
approval of the transactions contemplated by the Agreement and the other,
similar agreements referred to in the Stock Purchase Agreement, and the
Company is unable to obtain such approval in a manner that does not
materially burden or delay consummation of such transactions, the Company
may meet its payment obligations under the Agreement by postponing the
issuance (but not the delivery to the Employee on the first Anniversary
Date) of shares of Common Stock until the first Anniversary Date (or, if
earlier, the receipt of shareholder approval) (without adversely affecting
the right to receive dividends or dividend equivalents) and/or by paying
cash to the extent necessary to comply with such shareholder approval
requirement, or in any other manner that the Sellers' Committee (as defined
in the Stock Purchase Agreement) may approve in writing. In no event,
however, shall the Company be entitled to delay or avoid the performance of
its obligations under the Agreement, including delivery of the Award (as
modified by the Company to implement the matters referred to in the
preceding sentence), by reason of such shareholder approval requirement.
6. The Award shall not constitute an employment agreement and
neither the Award nor anything contained in the Agreement and its Annexes
will confer on the Employee any rights to remain in the employ of the
Company or any of its subsidiaries.
Awards will not be treated as compensation for purposes of
calculating any benefits that may be payable to Employees under any
existing or future pension plans in which they may participate.
7. Upon issuance of the shares of Common Stock subject to the
Stock Award, the Employee will have rights as a shareholder of the Company,
including, without limitation, voting and dividend rights, in respect of
the shares of Common Stock subject to the Stock Award except for any shares
of Common Stock that have been forfeited by the Employee.
8. Neither the Award nor any rights with respect thereto will
be assignable by the Employee or subject to any encumbrance, pledge or
charge of any nature (except to the extent the Award has become payable or
deliverable). Any action taken in violation of the preceding sentence shall
be null and void. However, the Employee shall be entitled to designate a
beneficiary to receive the unpaid or undelivered portions of the Award in
the event of the Employee's death. A beneficiary designation form, when
completed, will continue in full force and effect unless and until the
Company receives a later dated beneficiary designation form or a letter of
revocation executed by the Employee.
9.* For a period of one (1) year following the termination of
the Employee's employment with the Company or its subsidiaries (other than
by the Company without Cause), the Employee shall not engage in any of the
following acts:
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* Paragraph 9 to be deleted in Agreements with Managing Principals.
(a) solicit, accept or service business (i) from any clients or
prospects of the Company or its affiliates who were solicited directly by
the Employee or where the Employee supervised, directly or indirectly, in
whole or in part, the solicitation activities related to such clients or
prospects or (ii) from any former client who was such within two (2) years
prior to such termination and who was solicited directly by the Employee or
where the Employee supervised, directly or indirectly, in whole or in part,
the solicitation activities related to such former client; or
(b) solicit any employee of the Company or its affiliates to
terminate his employment.
10.** The Awards granted to you hereunder are being granted, in
part, in full satisfaction of any and all obligations of Johnson & Higgins
to you under the Johnson & Higgins Principal's Compensation Plan,which has
been terminated as of March 31, 1997. Notwithstanding the foregoing
release, Johnson & Higgins expects to make a one-time payment to Principals
equal to $42.25 per unit held under such plan as of March 31, 1997, in
respect of the first quarter of 1997. Accordingly, except for this $42.25
payment per unit, no one will be entitled to receive any further payments
or benefits under such compensation plan.
11. The Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted
assigns. Johnson & Higgins shall cause the Company to comply with the
Agreement as contemplated hereby.
12. The Agreement will be governed by and construed in
accordance with New York law.
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* Paragraph 10 to be deleted in Agreements with employees who
are not Principals or Managing Principals
