Exhibit
10.3
EMPLOYMENT
AGREEMENT
This
Employment Agreement (the “ Agreement ”) is made
and entered into effective as of November 21, 2007 by and
between Marsh & McLennan Companies, Inc. (together with
its successors and assigns, “ MMC ” or the
“ Company ”), a Delaware corporation, and Peter
J. Beshar (the “ Executive ”).
WHEREAS, the
Executive and the Company desire to embody in this Agreement the
terms and conditions of the Executive’s continued employment
by the Company;
NOW,
THEREFORE, in
consideration of the premises and mutual promises contained in this
Agreement, including the compensation paid to the Executive, the
parties hereby agree:
ARTICLE
1
Employment,
Duties and Responsibilities
1.1
Employment; Reporting . The Company shall continue to employ
the Executive as the Executive Vice President and General Counsel.
The Executive hereby accepts such employment, subject to the terms
and conditions of this Agreement. The Executive shall report
directly to the Chief Executive Officer of the Company (the “
Chief Executive Officer ”).
1.2 Duties
and Responsibilities .
(a) The
Executive shall have such duties and responsibilities and powers
and authority as those normally associated with the position of
Executive Vice President and General Counsel of the Company, as
well as any additional duties, responsibilities and/or powers and
authority assigned to him by the Chief Executive Officer which are
consistent with his position as Executive Vice President and
General Counsel of the Company.
The Executive
agrees to use his best efforts to promote the interests of MMC, and
agrees that he will devote his entire working time, care and
attention to his duties, responsibilities and obligations to the
Company throughout the Term (as defined in Section 2.1
hereof). The Executive may serve on the boards of other civic,
charitable and corporate entities with the prior written consent of
the Chief Executive Officer and manage his personal investments and
affairs, so long as such activities do not, either individually or
in the aggregate, interfere with the Executive’s duties and
responsibilities as Executive Vice President and General
Counsel.
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ARTICLE
2
Term
2.1
Employment Period . The initial term of the
Executive’s employment under this Agreement (the “
Initial Term ”) shall commence on November 21,
2007 (the “ Effective Date ”) and shall continue
through November 20, 2010. Thereafter, this Agreement shall
automatically renew for successive one (1) year terms (each, a
“ Renewal Term ”) unless either party sends a
notice of termination to the other party in accordance with
Section 6.2 hereof at least ninety (90) days prior to the
expiration of the Initial Term or Renewal Term, as the case may be.
The Initial Term, together with any and all Renewal Terms, if any,
are the “ Term .”
2.2 Payment
Due to Non-Renewal by the Company . If the Company sends a
notice of termination of the Term to the Executive as provided in
Section 2.1 hereof, and after the expiration of the Term the
Executive’s employment is terminated (A) by the Company
without Cause (as defined in Section 5.1 hereof) or due to
death or Disability (as defined in Section 5.4 hereof) or
(B) by the Executive for any reason, then the Company shall
pay to the Executive, in a lump sum within five (5) days of
the effective date of such termination of employment, a cash amount
equal to the Executive’s then-current annualized base salary
(but not less than his Base Salary as of the last day of the
Term).
ARTICLE
3
Compensation
As
compensation and consideration for the performance by the Executive
of his obligations under this Agreement, during the Term the
Executive shall be entitled to the compensation and benefits set
forth in this Article 3 (subject, in each case, to the provisions
of Article 5 hereof).
3.1 Base
Salary . The Executive shall receive an annual base salary
(“ Base Salary ”) of $875,000. The Base Salary
shall be reviewed at least annually by the Compensation Committee
(the “ Committee ”) of the Board of Directors of
MMC (the “ Board ”) and may be increased (but
not decreased) in the sole discretion of the Committee. If the
Executive’s Base Salary is increased, the increased amount
shall thereafter be the Base Salary. The Base Salary shall be
payable in installments, consistent with the Company’s
payroll procedures in effect from time to time.
3.2 Annual
Bonus . In addition to Base Salary, the Executive shall be
eligible to participate throughout the Term in such annual bonus
plans and programs as may be in effect from time to time in
accordance with the Company’s compensation practices and the
terms and provisions of any such plans or programs. The
Executive’s target annual bonus opportunity will range
between one hundred fifty percent (150%) and two hundred fifty
percent (250%) of his Base
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Salary. The
actual bonus amounts will be determined by the Committee based on
the achievement of Company and individual performance goals. The
Annual Bonus shall be paid in the same time and manner as
corresponding awards to other senior executives of the Company
generally.
3.3
Long-Term and Equity Compensation .
The Executive
shall also be eligible to participate in MMC’s long-term
incentive compensation plans (including its equity-compensation
plans), applicable to MMC’s senior executive officers and as
determined by the Committee in a manner consistent with the
treatment of other senior executives. The specific awards under
these plans will be made by the Committee in its sole discretion,
commensurate with the Executive’s position as Executive Vice
President and General Counsel of the Company and consistent with
the treatment of other senior executives. Notwithstanding the
foregoing, the Committee shall each year grant to the Executive, no
later than it makes corresponding awards to other senior executives
of the Company generally, and on terms and conditions that are both
consistent with this Agreement and no less favorable to the
Executive than the terms and conditions that apply to corresponding
awards to other senior executive participants generally, long-term
incentive compensation with a combined grant-date target value
between two hundred percent (200%) and three hundred percent
(300%) of the Executive’s Base Salary, as determined by
the Committee; provided that the combined grant-date target value
for the Executive’s long-term incentive compensation to be
granted annually during the Term, the composition of which shall be
determined by the Committee, shall be no less than $1.75
million.
3.4 Benefit
Plans . The Executive and the Executive’s spouse and
eligible dependents, as the case may be, shall be eligible to
participate in employee benefit and fringe benefit plans and
programs provided by the Company, including but not limited to
retirement, life insurance, health, dental and disability plans and
programs, on terms and conditions generally applicable to
executives of the Company. Nothing herein shall limit the
Company’s ability to change, modify, cancel or amend any such
plans.
3.5
Executive Financial Services Program . Throughout the Term,
the Executive shall be eligible to participate in the MMC Financial
Services Program, as in effect from time to time.
3.6
Expenses . The Company will reimburse the Executive for
reasonable business-related expenses incurred by him in connection
with the performance of his duties hereunder during the Term,
subject, however, to its written policies relating to
business-related expenses as in effect, from time to time, during
the Term, a copy of which has previously been made available to the
Executive.
3.7
Vacation . The Executive shall be entitled to paid vacation
in accordance with the Company’s policy in effect from time
to time during the Term.
3.8
Indemnification . Executive shall be entitled to
indemnification in accordance with the Company’s by-laws as
in effect on the date hereof, subject to applicable law. Any
expenses (including damages, losses, judgments, fines,
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penalties,
settlements, costs, attorneys’ fees, and expenses of
establishing a right to indemnification), that are subject to such
indemnification and are or may be incurred in connection with a
proceeding shall be paid by the Company in advance within 30 days
of a request by Executive, which shall be accompanied by
documentation substantiating such expenses. Executive shall
promptly deliver to the Company an undertaking, in such form as the
Company shall specify, to reimburse the Company for expenses to
which Executive is adjudged not to be entitled to
indemnification.
ARTICLE
4
Noncompetition/Nonsolicitation/Confidentiality
4.1
Noncompetition and Nonsolicitation Periods
(a) During the
Executive’s employment with the Company or any subsidiary and
during the 12 month period following termination of the
Executive’s employment with the Company or any subsidiary for
any reason (other than a termination of employment by the Company
due to Disability (as defined in Section 5.4 hereof), the
Executive shall not, directly or indirectly:
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(i)
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engage in any
Competitive Activity or
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(ii)
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whether on
behalf of himself or any other person or entity (x) solicit
any customer or client of the Company or any subsidiary with
respect to a Competitive Activity or (y) solicit or employ any
employee of the Company or any subsidiary for the purpose of
causing such employee to terminate his or her employment with the
Company or such subsidiary.
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For
purposes of this Agreement, “Competitive Activity”
shall mean the Executive’s engaging in an activity –
whether as an employee, consultant, principal, member, agent,
officer, director, partner or shareholder (except as a less than 1%
shareholder of a publicly traded company) – that is
competitive with any business of the Company or any subsidiary
conducted by the Company or such subsidiary as of the date of the
termination of the Executive’s employment; provided, however,
that the Executive may be employed by or otherwise associated
with:
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(i)
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a business of
which a subsidiary, division, segment, unit, etc. is in competition
with the Company or any subsidiary but as to which such subsidiary,
division, segment, unit, etc., the Executive has absolutely no
direct or indirect responsibilities or involvement, or
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(ii)
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a company where
the Competitive Activity is:
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(x)
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from the
perspective of such company, de minimis with respect to the
business of such company and its affiliates, and
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(y)
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from the
perspective of the Company or any subsidiary, not in material
competition with the Company or any subsidiary.
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(iii)
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it is
specifically agreed and understood that the practice of law in any
capacity by Executive, including in the context of a law firm,
business entity (as general counsel or like position) governmental
agency, academia, or public interest advocacy, following
termination of Executive’s employment with the Company is not
a “Competitive Activity.”
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(b) At all
times prior to and following the Executive’s termination of
employment, the Executive shall not disclose to anyone or make use
of any trade secret or proprietary or confidential information of
the Company or any subsidiary, including such trade secret or
proprietary or confidential information of any customer or client
or other entity to which the Company or any subsidiary owes an
obligation not to disclose such information, which the Executive
acquires during the Executive’s employment with the Company
or any subsidiary, including but not limited to records kept in the
ordinary course of business except:
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(i)
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As such
disclosure or use may be required or appropriate in connection with
the Executive’s work as an employee of the Company or any
subsidiary;
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(ii)
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When required
to do so by a court of law, by any governmental agency having
supervisory authority over the business of the Company or any
subsidiary or by any administrative or legislative body (including
a committee thereof) with apparent jurisdiction to order the
Executive to divulge, disclose or make accessible such
information;
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(iii)
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As to such
confidential information that becomes generally known to the public
or trade without the Executive’s violation of this
Section 4.1(b); or
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(iv)
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To the
Executive’s spouse and/or the Executive’s personal tax
and financial advisors as reasonably necessary or appropriate to
advance the Executive’s tax, financial and other personal
planning (each an “Exempt Person”); provided,
however , that any improper disclosure or use of any trade
secret or proprietary or confidential information of the Company or
any subsidiary by an Exempt Person shall be deemed to be a breach
of this Section 4.1(b) by the Executive.
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(c) The
Executive acknowledges and agrees that the covenants contained in
Sections 4.1(a) and (b) hereof are reasonable and necessary to
protect the confidential information and goodwill of the Company
and its subsidiaries. The Executive further represents that his
experience and capabilities are such that the provisions of
Sections 4.1(a) and (b) hereof will not prevent him from
earning a livelihood.
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ARTICLE
5
Termination;
Change of Control
5.1
Termination by the Company . The Company shall have the
right, subject to the terms of this Agreement, to terminate the
Executive’s employment at any time, with or without
“Cause.” The Company shall give the Executive written
notice of a termination for Cause (the “ Cause Notice
”) in accordance with Section 6.2 hereof. The Cause
Notice shall state the particular action(s) or inaction(s) giving
rise to the termination for Cause. No action(s) or inaction(s) will
constitute Cause unless (1) a resolution finding that Cause
exists has been approved by a majority of all of the members of the
Board at a meeting at which the Executive is allowed to appear with
his legal counsel and (2) where remedial action is feasible,
the Executive fails to remedy the action(s) or inaction(s) within
ten (10) days after receiving the Cause Notice. If the
Executive so effects a cure to the satisfaction of the Board, the
Cause Notice shall be deemed rescinded and of no force or effect.
For purposes of this Agreement, “ Cause ” shall
mean only:
(a) any
willful refusal by the Executive to follow lawful directives of the
Chief Executive Officer or the Board which are consistent with the
scope and nature of the Executive’s duties and
responsibilities as set forth herein;
(b) the
Executive’s conviction of, or plea of guilty or nolo
contendere to, a felony or of any crime involving moral
turpitude, fraud or embezzlement;
(c) any gross
negligence or willful misconduct of the Executive resulting in a
material loss to the Company or any of its subsidiaries, or
material damage to the reputation of the Company or any of its
subsidiaries;
(d) any
material breach by the Executive of any one or more of the
covenants referred to in Article 4 hereof; or
(e) any
violation of any statutory or common law duty of loyalty to the
Company or any of its subsidiaries.
5.2
Termination by the Executive . The Executive shall have the
right, subject to the terms of this Agreement, to terminate his
employment at any time with or without “Good Reason.”
For purposes of this Agreement, “Good Reason,” shall
mean the occurrence of any of the following during the Term,
without the Executive’s prior written consent (provided that
an isolated, insubstantial or inadvertent action not taken in bad
faith which is remedied by the Company promptly after receipt of
notice thereof given by the Executive shall not constitute Good
Reason): (A) a material diminution in the Executive’s
position (including status, offices, titles, reporting lines or
reporting requirements), authority, duties, or responsibilities as
contemplated by this Agreement; (B) any removal of the
Executive from his position as Executive Vice President and General
Counsel of the Company; (C) any failure by the Company to
comply with the provisions of Article 3
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hereof;
(D) a failure by the Company to comply with any other material
provision of this Employment Agreement; or (E) a change in the
Executive’s principal work location to more than 50 miles
from his current work location. The Executive must give the company
written notice in accordance with Section 6.2 hereof of Good
Reason termination of employment within 60 days of the first
occurrence (as determined without regard to any prior occurrence
that was subsequently remedied by the Company) of the applicable
circumstance set forth above. Such notice must specify which of the
circumstances set forth above the Executive is relying on, and the
particular action(s) or inaction(s) giving rise to such
circumstance. The Good Reason termination must be effective no
earlier than 30 days and no later than 60 days after the
Executive’s delivery of the written notice; provided,
however, that the Company may remedy such circumstances within 30
days after receipt of the written notice.
5.3
Death . In the event the Executive dies during the Term, the
Executive’s employment shall automatically terminate, such
termination to be effective on the date of the Executive’s
death.
5.4
Disability . In the event that the Executive shall suffer a
disability during the Term which shall have prevented him from
performing satisfactorily his obligations hereunder for a period of
at least ninety (90) consecutive days or one hundred eighty
(180) non-consecutive days within any three hundred sixty-five
(365) day period (“ Disability ”), the
Company shall have the right to terminate the Executive’s
employment, such termination to be effective upon the giving of
notice thereof to the Executive in accordance with Section 6.2
hereof.
5.5 Effect
of Termination .
(a) In the
event of termination of the Executive’s employment for any
reason during the Term, the Term shall end as of the date of
termination and the Company shall provide to the Executive (or his
beneficiary, heirs or estate in the event of his death), as
provided in Section 5.7 hereof, (i) any Base Salary to
the extent not theretofore paid, (ii) any reimbursable
business expenses that have not yet been reimbursed, and
(iii) if not yet paid, the earned annual bonus for the
calendar year that preceded the time of the termination
(collectively, the “ Accrued Obligations ”),
within fifteen (15) days of Executive’s
termination.
(b) In the
event of termination of the Executive’s employment during the
Term (i) by the Company for Cause or (ii) by the
Executive other than for Good Reason, neither the Executive nor any
beneficiary, heir or estate of the Executive shall be entitled to
any further compensation other than the Accrued Obligations. In
such event, all of the Executive’s outstanding unvested
equity-based awards shall be immediately forfeited, except to the
extent otherwise provided in the terms and conditions for such
awards or in any applicable Company Plan.
(c) In the
event of termination of the Executive’s employment during the
Term (i) by the Company based on the Disability of the
Executive as defined in Section 5.4 hereof, or (ii) due
to the Executive’s death, the Compa
