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EXHIBIT
10.16
This document constitutes
part of a prospectus covering securities that have
been registered under the
Securities Act of 1933.
The date of this
prospectus is [Date].
MARSH & McLENNAN
COMPANIES, INC.
2000 SENIOR EXECUTIVE
INCENTIVE AND STOCK AWARD PLAN
AND
2000 EMPLOYEE INCENTIVE AND
STOCK AWARD PLAN
Terms and Conditions for
Award of Deferred Stock Units
to U.S. Award
Recipients
This award of deferred stock units has
been granted to you on [Grant Date] the (“ Grant Date
”) under the Marsh & McLennan Companies, Inc. 2000
Senior Executive Incentive and Stock Award Plan or the
Marsh & McLennan Companies, Inc. 2000 Employee Incentive
and Stock Award Plan (as applicable to you, the “ Plan
”). For purposes of these Terms and Conditions, “
MMC ” means Marsh & McLennan Companies, Inc.
and any successor thereto.
| I. |
GRANT, VESTING AND DISTRIBUTION OF AWARD; RESTRICTIVE
COVENANTS AGREEMENT |
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1. |
The enclosed letter from [MMC CEO], dated [Date], (the “
Grant Letter ”) specifies the number of deferred stock
units that comprises your individual award (the “
Award ”). You must execute a Restrictive Covenants
Agreement (as described in Section I.C.) by the date specified in
the Grant Letter to accept the Award. |
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1. |
General . A deferred stock unit (“ DSU
”) represents an unfunded and unsecured promise to deliver
(or cause to be delivered) to you, subject to these Terms and
Conditions and the terms and conditions of the Plan, one
(1) share of MMC common stock as soon as practicable after
vesting or as otherwise provided herein. |
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2. |
Vesting . Subject to your continued employment,
[Percentage] of the DSUs are scheduled to vest on each of the
[Vesting Dates] (each a “ DSU Scheduled Vesting Date
”). If your employment terminates prior to a DSU Scheduled
Vesting Date, your right to the DSUs will be determined in
accordance with Section III below. |
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3. |
Delivery of Shares . Shares of MMC common stock in
respect of the DSUs covered by the Award shall be distributed to
you as soon as practicable after vesting, and in no event later
than 60 days after vesting. The delivery of shares in respect of
your deferred stock units is conditioned on your (i) having
timely signed and returned a copy of the Restrictive Covenants
Agreement (defined below) to MMC as instructed and
(ii) satisfaction of any applicable tax withholding with
respect to the Award. |
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C. |
Restrictive Covenants Agreement |
As provided in these Terms
and Conditions, you must execute a restrictive covenants agreement
in a form determined by MMC (“ Restrictive Covenants
Agreement ”) to accept the Award and for your Award to
vest upon certain terminations of employment. The Restrictive
Covenants Agreement generally applies for a period of one year
commencing with your termination of employment. You may obtain a
copy of the Restrictive Covenants Agreement from MMC or an agent
appointed by MMC. You may wish to consider consulting an attorney
(at your own expense) before signing the Restrictive Covenants
Agreement. Please retain a copy of your signed Restrictive
Covenants Agreement for your records.
| II. |
RIGHTS OF DEFERRED STOCK UNITS |
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A. |
Unless and until both the vesting conditions of the Award have
been satisfied and shares of MMC common stock have been delivered
to you in accordance with the terms and conditions described
herein, you have only the rights of a general unsecured creditor
and you have none of the attributes of ownership to such shares of
stock (e.g., units cannot be used as payment for stock option
exercises; units may not be transferred or assigned; units have no
voting rights). |
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B. |
Dividend equivalents are payable on each DSU at or after the
time of distribution of any dividend paid by MMC in respect of a
share of its common stock (a “ Dividend Payment Date
”), the record date of which occurs on or after the Grant
Date. You shall be entitled to receive an amount (less applicable
withholding) equal to such dividend payment as would have been made
in respect of one (1) share of MMC common stock for each DSU
covered by the Award. Payment of a dividend equivalent shall be
made only with respect to DSUs that are outstanding on the Dividend
Payment Date. |
| III. |
TERMINATION OF EMPLOYMENT |
If your employment with MMC
or any of its subsidiaries or affiliates (the “
Company ”) terminates, the following shall
apply:
In the event your employment
is terminated because of your death, the DSUs will vest at such
termination of employment.
In the event your employment
is terminated due to total and permanent disability as determined
under MMC’s long-term disability program, the DSUs will vest
at such termination of employment provided that you satisfy the
condition to vesting described in Section III.G.
2
In the event you retire from
the Company on or after your Normal Retirement Date, the DSUs will
vest at such termination of employment provided that you satisfy
the condition to vesting described in Section III.G.
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D. |
Termination Other Than For Cause |
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1. |
In the event your employment is terminated by the Company other
than for Cause (as defined below) prior to your Normal Retirement
Date, the Award will vest on a pro rata basis at such termination
of employment provided that you satisfy the condition to vesting
described in Section III.G. The portion of DSUs under the Award
that vest is equal to a fraction, the numerator of which is the
number of days from the Grant Date to the date of your termination
of employment, and the denominator of which is the number of days
from the Grant Date to the Scheduled Vesting Date. |
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2. |
For purposes of these Terms and Conditions, “
Cause ” shall mean: |
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i. |
willful failure to substantially perform the duties consistent
with your position which is not remedied within 30 days after
receipt of written notice from the Company specifying such
failure; |
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ii. |
willful violation of any written company policies including but
not limited to, the Company’s Code of Business
Conduct & Ethics; |
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iii. |
commission at any time of any act or omission that results in a
conviction, plea of no contest, plea of nolo contendere, or
imposition of unadjudicated probation for any felony or crime
involving moral turpitude; |
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iv. |
unlawful use (including being under the influence) or
possession of illegal drugs; |
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v. |
any gross negligence or willful misconduct 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; or |
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vi. |
any violation of any statutory or common law duty of loyalty to
the Company or any of its subsidiaries, including the commission at
any time of any act of fraud, embezzlement, or material breach of
fiduciary duty against the Company or any of its
subsidiaries. |
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E. |
Sale of Business Unit For Which You Work |
In the event of a sale or
similar transaction involving the business unit for which you work
(the “ Employing Company ”) as a result of which
the Employing Company ceases to be a subsidiary of MMC, the Award
will vest on a pro rata basis at such termination of employment
provided that you satisfy the condition to vesting described in
Section III.G.
3
The portion of DSUs under the
Award that vest is equal to a fraction, the numerator of which is
the number of days from the Grant Date to the date of your
termination of employment, and the denominator of which is the
number of days from the Grant Date to the Scheduled Vesting
Date.
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F. |
All Other Employment Terminations |
For all other terminations of
employment, all of your rights, title and interest in and to the
Award, whether vested or unvested, shall be forfeited on the date
of such termination of employment, except to the extent that the
Compensation Committee of the MMC Board of Directors (the “
Committee ”) may determine otherwise. For purposes of
these Terms and Conditions, your employment will be treated as
terminated when you are no longer employed by MMC or any affiliate
or subsidiary of MMC.
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G. |
Condition to Vesting of Award Upon Termination of
Employment |
In the event of your
termination of employment due to Permanent Disability, Normal
Retirement or Termination other than for Cause as described in
Section III.B, C or D, any unvested portion of the Award will vest
as provided in Section III.B, C or D; provided that you
reaffirm your Restrictive Covenants Agreement within 30 days
following your termination of employment. Failure to timely
reaffirm and comply with the Restrictive Covenants Agreement will
result in forfeiture of all of your rights, title and interest in
and to the Award, whether vested or unvested.
As used in these terms and
conditions, the term “ Normal Retirement Date ”
shall have the meaning given such term (or any comparable
substitute term or concept) set forth in MMC’s primary
retirement plan or program applicable to you upon your termination
of employment.
| IV. |
CHANGE IN CONTROL PROVISIONS |
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A. |
Change in Control if Award is Assumed by a
Successor |
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1. |
Upon the
occurrence of a “ Change in Control ” of MMC, as
defined in the Plan, if the Award is Assumed (as defined in Section
IV.A.2) by the entity effecting the Change in Control, the Award
will become fully vested upon the earlier of the next Scheduled
Vesting Date and your termination of employment without Cause or
for Good Reason (as defined in the next sentence) during the
24-month period following such Change in Control. For purposes of
these Terms and Conditions, “ Good Reason ”
includes any of the following without your written consent:
(i) a reduction in your base salary; (ii) a reduction in
your annual incentive opportunity (including a material adverse
change in the method of calculating your annual incentive);
(iii) a material diminution of your duties, responsibilities
or authority; or (iv) a relocation of more than 50 miles from
your office location in effect immediately prior to the
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4
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Change in Control;
provided that you provide MMC with written notice of your intent to
terminate your employment for Good Reason within 60 days of your
becoming aware of any circumstances set forth above (with such
notice indicating the specific termination provision above on which
you are relying and describing in reasonable detail the facts and
circumstances claimed to provide a basis for termination of your
employment under the indicated provision) and that you provide MMC
with at least 30 days following receipt of such notice to remedy
such circumstances.
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2. |
For purposes of these Terms and Conditions, an Award will be
considered assumed (“ Assumed ”) if the
following conditions are met: |
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i. |
The Award is converted into a replacement award (the “
Replacement Award ”) in a manner that is consistent
with the treatment of an equal number of shares of MMC stock
covered by the Award in connection with the Change in
Control. |
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ii. |
The Replacement Award contains provisions for scheduled vesting
and treatment on termination of employment (including the
definition of |
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