Exhibit 10.1
EMPLOYMENT
AGREEMENT
This Employment Agreement (the
“ Agreement ”) is made and entered into
effective as of November 1, 2005 (the “ Effective Date
”), by and between Marsh & McLennan Companies, Inc.
(together with its successors and assigns, “ MMC
” or the “ Company ”), a Delaware
corporation, and Mathis Cabiallavetta (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 Vice Chairman of the Company, Office of the Chief
Executive Officer (the “Vice Chairman”). The Executive
hereby accepts such continued 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”). The Executive’s principal place of
employment shall be in Zurich, Switzerland, but he shall travel to
and work from the Company’s headquarters in New York City as
requested by the Chief Executive Officer.
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1.2
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Duties and
Responsibilities .
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(a) The
Executive shall have such duties and responsibilities and power and
authority as those normally associated with the position of Vice
Chairman, 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 Vice Chairman.
The Executive agrees to use his best
efforts to promote the interests of the Company, 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
Vice Chairman.
ARTICLE 2
Term
2.1
Employment Period . The initial term of the
Executive’s employment under this Agreement (the “
Initial Term ”) shall commence on the Effective
Date and shall continue through October 31, 2008. 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
.” After the expiration of the Term for any reason the
Executive will become an “at-will” employee of the
Company.
2.2
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
solely for purposes of determining the Executive’s
eligibility and severance amount under the MMC Special Severance
Pay Plan, the Executive shall be deemed to have twenty-five (25)
years of service as of the date of termination. For the avoidance
of doubt, and notwithstanding anything contained herein to the
contrary, the giving of such notice of termination of the Term by
the Company shall not constitute a “Good Reason” (as
defined in Section 5.2 hereof).
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
(collectively, “ Compensation ”) (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 ”) divided into two
parts based on expected worktime in the United States. The two
parts are $360,000 and 810,000 Swiss Francs (CHF) (with adjustment
for actual days worked in the US). The Base Salary shall be
reviewed at least annually by the Compensation Committee (the
“ Committee ”) of the Board of Directors of the
Company (the “ Board ”) and may be increased
(but not decreased) in the sole discretion of the Committee.
If the Executive’s Base Salary is increased, the increased
amount shall thereafter be the Base Salary. The Base Salary shall
be payable in installments, consistent with the Company’s
payroll procedures in effect from time to time.
3.2
Annual Bonus . In addition to Base Salary, the Executive
shall be eligible to participate throughout the Term in such annual
bonus plans and programs (“ Annual Bonus
Programs ”), as may be in effect from time to time
in accordance with the Company’s compensation practices and
the terms and provisions of any such plans or programs. The
Executive’s annual target bonus opportunity will range
between one hundred percent (100%) and two hundred percent
(200%) of his Base Salary. The actual bonus amounts will be
determined by the Committee based on the achievement of entity and
individual performance goals, with bonuses in the upper portion of
the annual bonus opportunity range being earned only for superior
achievement of such performance goals. Except as provided in the
following sentence, the annual bonus shall be paid in the same time
and manner as corresponding awards to other senior executives of
the Company generally. Subject to review and adjustment by the
Committee, the annual bonus shall be paid in U.S. dollars ($) and
in Swiss Francs (CHF), consistent with the methodology used to pay
Base Salary.
3.3
Long-Term and Equity Compensation . The Executive shall also
be eligible to participate in the Company’s long-term
incentive compensation plans (including its equity-compensation
plans) applicable to MMC’s senior executive officers.
The specific awards under these plans will be made by the Committee
in its sole discretion, commensurate with the Executive’s
position as Vice Chairman. 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 executives of the Company generally,
long-term incentive compensation with a combined grant-date target
value between one-time and two-times the Executive’s Base
Salary, as determined by the Committee.
3.4
Retention Award . Within two weeks after the execution of
this Agreement by both parties, the Executive shall be granted a
retention award under the Company’s 2000 Senior Executive
Incentive and Stock Award Plan (the “Retention
Award”) of 21,200 restricted stock units. The award will
vest at the expiration of the Initial Term. Additional terms and
conditions of the awards shall be determined by the Committee and
contained in the grant agreements, provided that no such term or
condition shall be inconsistent with any provision of this
Agreement.
3.5
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 pension, life insurance, health, dental and disability
plans and programs, on terms and conditions generally applicable to
executives of the Company. The Executive shall be eligible to
participate in the Company’s retiree medical program as may
be in effect from time to time, subject to satisfaction of
applicable eligibility requirements. Nothing herein shall limit the
Company’s ability to change, modify, cancel or amend any such
plans.
3.6
Executive Financial Services Program . The Executive shall
be eligible to participate in the MMC Financial Services Program as
in effect from time to time.
3.7
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 provided to the
Executive.
3.8
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.
3.9
Indemnification . The Executive shall be entitled to
indemnification in accordance with the Company’s by-laws as
in effect from time to time, including for the avoidance of doubt,
advancement of expenses (including attorney’s
fees).
ARTICLE 4
Noncompetition/Nonsolicitation/Confidentiality
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4.1
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Noncompetition and
Nonsolicitation Periods
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(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) or a
non-renewal of the Term by the Company on or after the
Executive’s sixty-second (62nd) birthday), 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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(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 personal tax and financial advisors as reasonably
necessary or appropriate to advance the Executive’s tax,
financial and other personal planning (“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.
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
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”
provided, that the Executive must give the Company at least 30
days’ prior written notice of any termination by the
Executive without Good Reason in accordance with Section 6.2
hereof. 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,
during the 60-day period preceding a termination by the Executive
(provided that an isolated, insubstantial or inadvertent action not
taken in bad faith or a failure not occurring 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) the assignment to the Executive of any duties materially
inconsistent in any respect with the Executive’s position
(including status, offices, titles and
reporting requirements), authority,
duties or responsibilities as contemplated by this Agreement;
(B) any removal of the Executive from any of the positions he
holds as of the date of this Agreement; (C) any failure by the
Company to comply with the provisions of Article 3 hereof; or
(D) a failure by the Company to comply with any other material
provision of this Employment Agreement.
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
