Exhibit 10.29
EMPLOYMENT
AGREEMENT
This Employment Agreement (the
“ Agreement ”) is made and entered into January
1, 2006 (the “Effective Date”), by and between Putnam
Investments LLC (together with its successors and assigns, “
Putnam ” or the “ Company
”), a Delaware limited liability company, and Charles E.
Haldeman (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 to be 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 its President and Chief Executive Officer. 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 (the “ MMC CEO
”) of Marsh & McLennan Companies, Inc. (“
MMC ”).
1.2
Duties and Responsibilities .
(a) The
Executive shall have such duties and responsibilities and power and
authority as those normally associated with the position of
President and Chief Executive Officer of the Company, as well as
any additional duties, responsibilities and/or powers and authority
assigned to him by the MMC CEO which are consistent with his
position as President and Chief Executive Officer of the
Company.
(b) The
Executive agrees to continue to use his best efforts to promote the
interests of the Company and MMC, and agrees that he will devote
his entire working time, care and attention to his duties,
responsibilities and obligations to the Company and MMC 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 MMC CEO so long as
such activity does not interfere with the Executive’s duties
and responsibilities as President and Chief Executive Officer of
the Company. Notwithstanding the foregoing, the Executive may
continue to serve on the boards of Dartmouth College and the
Investment Company Institute and on the Partners Healthcare
Investment Committee.
ARTICLE 2
Term
2.1
Employment Period . The term of the Executive’s
employment under this Agreement (except as may be shortened in
accordance with Article 5 hereof, the “ Term
”) shall commence on the Effective Date and shall
continue through December 31, 2009.
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 ”) of $900,000. 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 an annual
bonus program (“ Annual Bonus Program ”), under
which the Executive’s annual bonus will be calculated using
the methodology set forth in Exhibit B. The calculations will begin
with a starting annual target bonus of $5,000,000. The annual bonus
shall be paid at the same time and in the same manner as annual
bonuses of similarly situated executives of either MMC or the
Company, as determined by the Committee.
3.3
Long-Term and Equity Compensation.
(a) The
Executive shall also be eligible to participate throughout the Term
in the Putnam Investments Trust Equity Partnership Plan, or any
successor long-term incentive compensation plans applicable to the
Company’s senior executive officers (the “Putnam Equity
Partnership Plan”). The Executive’s annual long term
award will be calculated using the methodology set forth in Exhibit
B. The calculations will begin with a starting grant-date target
value of $5,000,000. The terms and conditions of awards made
pursuant to this Section 3.3 shall be determined by the Committee
and contained in grant documents; provided, that, subject to
Section 5.6(b) hereof, the terms and conditions shall be consistent
with those applicable to corresponding awards to other senior
executives of the Company generally.
(b) Immediately
following the end of the Term, the Executive will qualify for
retirement status under the Company’s retirement plan.
Accordingly, the Company agrees that the Executive's termination of
employment after the end of the Term will be treated as a
"Retirement" termination for purposes of Putnam's Equity
Partnership Plan, subject to the terms and conditions of the Putnam
Equity Partnership Plan. The Executive understands that as a
condition for treatment of his termination as a "retirement" for
purposes of the Putnam Equity Partnership Plan, the Executive may
not engage in any behavior that would constitute Competitive
Activity (as defined in Section 4.1(a) hereof) for two (2)
years following the Executive’s termination of employment. In
the event the Executive, directly or indirectly, engages in any
behavior that would constitute Competitive Activity during the two
(2) year period following the Executive’s termination of
employment, Putnam shall be allowed to treat the termination of
employment for all purposes under the Putnam Equity Partnership
Plan as if it had been an involuntary termination of employment not
"for Cause" as of the date that such Competitive Activity
commences, subject to the following special provisions:
(i) Any investment the Executive may
make in a business in competition with the business of Putnam shall
not be considered to give rise to a violation of this covenant if
the following three conditions are met: (1) the stock of such
business is publicly traded, (2) the Executive’s equity
interest in such business does not exceed five percent (5%) of the
aggregate outstanding equity interests of such business and (3) the
Executive does not otherwise participate in the management or
operational affairs of such business.
(ii) These covenants shall not be
considered violated by the Executive’s management of funds
(whether personally or as an employee or partner of a business
formed for this purpose) solely on behalf of himself or himself and
one or more of his family members or other relatives.
3.4
Initial Retention Award . Within two (2) weeks of the
Effective Date, the Executive shall be granted an initial retention
award under the Putnam Equity Partnership Plan (the “
Initial Retention Award ”) comprised of (i)
restricted stock with a grant-date value equal to $9,000,000 and
(ii) stock options with a grant-date value equal to $3,000,000 (the
value of such options shall be determined using the Black Scholes
valuation method). The terms and conditions of awards made pursuant
to this Section 3.4 shall be determined by the Committee and
contained in grant documents; provided, that, subject to Section
5.6(b) hereof, the terms and conditions shall be consistent with
those applicable to corresponding awards made to other senior
executives of the Company in September 2005 pursuant to the
Company’s special equity grant program.
3.5
Benefit Plans . Throughout the Term, 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 or MMC’s ability to change, modify,
cancel or amend any such plans.
3.6
Perquisites . Throughout the Term, the Executive shall be
eligible for all approved Putnam perquisites currently made
available to him or to other senior executives of the Company,
which may be changed by the Company at any 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 been made available 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.
ARTICLE 4
Noncompetition/Nonsolicitation/Confidentiality
4.1
Noncompetition and Nonsolicitation Periods
(a) During
the Executive’s employment with the Company and during the
applicable noncompetition/nonsolicitation period following
termination of the Executive’s employment with the Company
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
affiliate with respect to a Competitive Activity or (y) solicit or
employ any employee of the Company or any affiliate for the purpose
of causing such employee to terminate his or her employment with
the Company or such affiliate.
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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 affiliate conducted by the Company
or such affiliate 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
affiliate but as to which such
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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
affiliate, not in material competition with the Company or any
affiliate.
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Except in the case of termination of
employment after the Term without renewal of this Agreement, the
noncompetition/nonsolicitation period shall be twenty-four (24)
months from the date of termination of employment. In the event
that the Executive’s employment with the Company terminates
after the Term, and provided that the Executive has worked for the
Company through the end of the Term, the Company may elect to
enforce the foregoing noncompetition/nonsolicitation covenant for
up to twelve (12) months, provided the Company pays the Executive
$10,000,000 in cash in installments over the 12 month period (or a
pro-rata amount for such shorter period), during which the
Executive is bound by such covenant. The installments shall be paid
consistent with the Company’s payroll procedures in effect
from time to time.
(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 affiliate, including such trade secret or
proprietary or confidential information of any customer or client
or other entity to which the Company or any affiliate owes an
obligation not to disclose such information, which the Executive
acquires during the Executive’s employment with the Company
or any affiliate, 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 affiliate;
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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 affiliate 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 (each an “ Exempt
Person ”), provided, howeve r , that any
disclosure or use of any trade secret or proprietary or
confidential information of the Company or any affiliate 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 affiliates. 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 or by MMC . The Company or MMC
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 or MMC 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 MMC or any of its affiliates,
or material damage to the reputation of the Company or MMC or any
of its affiliates;
(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 affiliates.
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 and MMC 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 or MMC 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 or MMC to comply with the provisions of
Article 3 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 the Company’s current
headquarters.
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) &n
