EXHIBIT 10.1
EMPLOYMENT
AGREEMENT
This Employment Agreement (the
“ Agreement ”) is made and entered into
effective as of March 1, 2006, by and between Marsh &
McLennan Companies, Inc. (together with its successors and assigns,
“ MMC ” or the “ Company ”),
a Delaware corporation, and M. Michele Burns (the “
Executive ”).
WHEREAS, the Executive and the
Company desire to embody in this Agreement the terms and conditions
of the Executive’s 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 employ the
Executive (i) as Executive Vice President and (ii) effective no
later than March 31, 2006, as its Chief Financial Officer. 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 ”).
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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
Executive Vice President of the Company. In addition, upon assuming
the position of Chief Financial Officer of the Company, the
Executive shall have such duties and responsibilities and power and
authority as those normally associated with the position of Chief
Financial Officer of the Company, as well as any additional duties,
responsibilities and/or powers and authority assigned to her by the
Chief Executive Officer which are consistent with her position as
Executive Vice President and Chief Financial Officer of the
Company.
The Executive agrees to use her best
efforts to promote the interests of the Company, and agrees that
she will devote her entire working time, care and attention to her
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 her 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 Chief Financial Officer of the
Company. The Executive currently serves and may continue
to serve on the boards of directors
of the following companies without further consent, so long as such
activities do not, either individually or in the aggregate,
materially interfere with the Executive’s duties and
responsibilities as Executive Vice President and Chief Financial
Officer of the Company: Cisco Systems, Inc., Wal-Mart Stores, Inc.,
and Elton John AIDS Foundation.
ARTICLE 2
Term
2.1
Employment Period . The initial term of the
Executive’s employment under this Agreement (the “
Initial Term ”) shall commence on March 1, 2006
(the “ Effective Date ”) and shall continue
through March 31, 2009. 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, prior to the
Executive’s sixty-second (62nd) birthday, 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 thirty (30) 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). If the
Executive’s employment with the Company continues after the
expiration of the Term for any reason, the Executive’s rights
in connection with any subsequent termination of employment shall
be limited to this Section 2.2.
ARTICLE 3
Compensation
As compensation and consideration
for the performance by the Executive of her 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 ”) of $750,000. 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. References herein to the Executive’s Base Salary
shall mean $750,000 or such greater amount to which the
Base
Salary was most recently increased.
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
target annual bonus opportunity will range between one hundred
percent (100%) and two hundred percent (200%) of her Base Salary.
The actual bonus amounts will be determined by the Compensation
Committee of the Board (the “ Committee ”) based
on the achievement of Company-wide 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 provided, however, that the Executive's
bonus for 2006 performance shall be no less than $750,000 (the
"2006 Minimum Bonus"). 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 throughout the Term 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 Executive Vice President and
Chief Financial Officer of the Company. 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 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 three-times 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 in 2006, the composition of
which shall be determined by the Committee, shall be no less than
$2.625 million.
3.4
Temporary Living Expense Reimbursement and Relocation
Expenses . For a period of up to 18 months after the Effective
Date, the Company shall reimburse the Executive for: (a) the
Executive’s temporary housing expenses up to $8,000 per month
(plus reasonable brokerage expenses incurred to secure such
housing) and (b) one round trip airfare and related ground
transfers for the Executive between Atlanta, Georgia and the New
York area per week. At the conclusion of this period, the Executive
will be entitled to relocation assistance pursuant to the
Company’s Relocation Policy limited to home sale assistance,
home purchase assistance, shipment of household goods and
transportation of family members. In addition, amounts taxable
under this article 3.4 shall be grossed up for income taxes
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3.5
Offset Payment . The Company will also grant the Executive
cash award(s) intended to offset any: “emergence bonus”
award and/or “key employee retention plan” award (not
to exceed $1.8 million in total) that she forfeits at her previous
employer. The offset
payment(s) are contingent upon
satisfactory confirmation of the forfeiture(s) of such previous
awards (including, in the case of the “emergence bonus”
award, the emergence from bankruptcy of her previous employer), and
will be paid to the Executive within thirty days following receipt
of satisfactory supporting documentation confirming the
forfeiture(s).
3.6
Benefit Plans . Throughout the Term, the Executive and the
Executive’s domestic partner 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 subject to the Plan’s terms and conditions, as they
may be in effect from time to time. Nothing herein shall limit the
Company’s ability to change, modify, cancel or amend any such
plans.
3.7
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.
3.8
Expenses . The Company will reimburse the Executive for
reasonable business-related expenses incurred by her in connection
with the performance of her duties hereunder during the Term,
subject, however, to the Company’s 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.
3.9
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.
3.10
Indemnification . The Executive shall be entitled to
indemnification in accordance with the Company’s by-laws as
in effect from time to time.
3.11
Legal Fees . The Company shall reimburse the Executive for
reasonable legal fees actually incurred in connection with the
negotiation and drafting of this Agreement (including the
negotiation and preparation of any term sheet relating thereto) up
to a maximum of $25,000; provided that the Executive provides the
Company with appropriate written documentation with respect to such
legal fees within two weeks after the Effective Date.
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), 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 herself 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,
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 domestic partner 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 (each an “Exempt
Person”); provided, however, that any 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 her experience and capabilities are such that the provisions
of Sections 4.1(a) and (b) hereof will not prevent her
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 her 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 her
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 not
