EXHIBIT 10.1

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 of [Date] Annual Long-Term Incentive Award

to U.S. Award Recipients

This [Date] Annual Long Term Incentive Award has been granted to you on [Award
Date] (the “Award 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”)
as specified in the Award Letter (as defined below). For purposes of these Terms
and Conditions, “MMC” means Marsh & McLennan Companies, Inc. and any successor
thereto.

 

I. GRANT, VESTING, EXERCISABILITY AND DISTRIBUTION OF AWARD; RESTRICTIVE
COVENANTS AGREEMENT

 

  A. Grant of Award

 

  1. Your [Date] Annual Long Term Incentive Award consists of one or more of the
following types of equity-based awards: nonqualified stock options, performance
contingent nonqualified stock options, restricted stock units, and performance
based restricted stock units. The letter delivered to you from MMC’s Chief
Executive Officer, dated [Date], announcing the grant of your [Date] Annual Long
Term Incentive Award (the “Award Letter”) sets forth each type of equity-based
award and the number of shares of MMC common stock or cash value (as applicable)
covered by such equity-based award that comprises your individual award (the
“Award”). These Terms and Conditions describe the terms and conditions of all
four types of equity-based awards that may comprise a [Date] Annual Long Term
Incentive Award even though your Award may consist of fewer types of
equity-based awards, in which case, only the portions of these Terms and
Conditions that describe or relate to those types of equity-based awards shall
pertain to your Award. The description of a type of equity-based award in these
Terms and Conditions that is not a part of your Award does not give or imply any
right to such type of equity-based award. You must execute a Restrictive
Covenants Agreement (as described in Section I.E.) by the date specified in the
Award Letter to accept the Award.

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  B. Nonqualified Stock Option and Performance Contingent Nonqualified Stock
Option

 

  1. General. A stock option (“Option”) represents the right to purchase the
number of shares of MMC common stock specified in the Award Letter (the “Option
Shares”) at the exercise price specified in the Award Letter.

 

  2. Vesting. Subject to your continued employment, [Percentage] of the Option
Shares covered by the Option will vest [Date(s)]. If your employment terminates
prior to [Date], your right to the unvested portion of the Option will be
determined in accordance with Section IV below.

 

  3. Term. Subject to your continued employment, the Option will expire on the
day immediately preceding the tenth anniversary of the Award Date. If your
employment terminates prior to [Date], your right to exercise any vested Option
following your termination of employment will be determined in accordance with
Section IV below.

 

  4. Exercisability. The Award Letter specifies whether an Option is subject to
a Performance Contingency (as defined below).

 

  a. If the Option is not subject to a Performance Contingency (a “Nonqualified
Stock Option”), the Option Shares covered by the Option will become exercisable
when they vest.

 

  b. If the Option is subject to a Performance Contingency (a “Performance
Contingent Nonqualified Stock Option”), except as provided in Section V.B.2, it
will become exercisable with respect to vested Option Shares on the trading day
following the tenth consecutive trading day that the closing price of a share of
MMC common stock on the New York Stock Exchange exceeds the grant price of the
Performance Contingent Nonqualified Stock Option by fifteen percent (15%) or
more (the “Performance Contingency”) and will remain exercisable until the
expiration date of the grant unless such Performance Contingent Nonqualified
Stock Option is subject to an earlier expiration date or forfeited in accordance
with Section IV. The Performance Contingent Nonqualified Stock Option may not be
exercised with respect to Option Shares for which the Performance Contingency is
not satisfied following vesting.

 

  C. Restricted Stock Units

 

  1. General. A restricted stock unit (“RSU”) 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.

 

  2.

Vesting. As specified in the Award Letter, and subject to your continued
employment, [Percentage] of the RSUs are scheduled to vest on each of the first

 

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three anniversaries of the Award Date, or (ii) fifty percent (50%) of the RSUs
are scheduled to vest on [Date(s)]. Any date on which an RSU is scheduled to
vest is an “RSU Scheduled Vesting Date”. If your employment terminates prior to
an RSU Scheduled Vesting Date, your right to the RSUs will be determined in
accordance with Section IV below.

 

  3. Delivery of Shares. Shares of MMC common stock in respect of the RSUs
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 the RSUs is conditioned on your satisfaction of any
applicable tax withholding with respect to the Award.

 

  D. Performance Based Restricted Stock Units

 

  1. Conversion of Cash Value into PRUs. On [Date(s)] (each a “Conversion
Date”), [Percentage] of the cash value, in U.S. dollars, specified in the Award
Letter will be converted into performance based restricted stock units (“PRUs”)
based upon the average of the high and low selling prices of MMC common stock on
the New York Stock Exchange on the trading day immediately preceding the
applicable Conversion Date.

 

  2. General. A PRU 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, as soon as practicable after vesting or as
otherwise provided herein, up to [Number] shares of MMC common stock depending
on the actual achievement, as determined by the Compensation Committee of the
MMC Board of Directors (the “Committee”), of certain financial performance
objectives established by the Committee. In the event that actual achievement of
the established financial performance objectives does not meet a minimum level
determined by the Committee, the PRUs subject to such financial performance
objectives and any remaining cash value that has not been converted into PRUs
shall be forfeited promptly following such determination. Notwithstanding any
provision herein, in the Committee’s discretion, any cash value covered by the
Award that has not been converted into PRUs may be converted into another
equity-based award with a value equivalent to such cash value on the conversion
date. If your employment terminates prior to the PRU Scheduled Vesting Date
(defined below), the number of shares of MMC common stock deliverable in respect
of a PRU or cash value (as applicable) shall be determined as provided by
Section IV below.

 

  3. Vesting. Subject to your continued employment, the PRUs are scheduled to
vest on [Date] (the “PRU Scheduled Vesting Date”). If your employment terminates
prior to the PRU Scheduled Vesting Date, your right to the PRUs, and the number
of shares delivered in respect of each PRU, will be determined in accordance
with Section IV below.

 

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  4. Delivery of Shares. Shares of MMC common stock in respect of the PRUs
covered by the Award that vest on the PRU Scheduled Vesting Date shall be
distributed to you as soon as practicable after vesting, and in no event later
than 60 days after vesting. If your employment terminates prior to the PRU
Scheduled Vesting Date, shares of MMC common stock in respect of the PRUs
covered by the Award that vest on such termination of employment shall be
distributed to you as provided in Section IV.I. The delivery of shares in
respect of the PRUs are conditioned on your satisfaction of any applicable tax
withholding with respect to the Award. The aggregate number of shares of MMC
common stock delivered in respect of PRUs covered by the Award shall be rounded
up to the nearest whole share.

 

  E. 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 your Award and reaffirm the Restrictive Covenants
Agreement to exercise an Option 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.
A copy of the Restrictive Covenants Agreement is enclosed. 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. Failure to timely execute and comply with
the Restrictive Covenants Agreement by the date specified in the Award Letter
will result in forfeiture of all of your rights, title and interest in and to
the Award.

 

II. RIGHTS OF RESTRICTED STOCK UNITS AND PERFORMANCE BASED RESTRICTED STOCK
UNITS

 

  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).

 

  B. Dividend Equivalents on RSUs. Dividend equivalents are payable on each RSU
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 Award 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 RSU covered by the
Award. Payment of a dividend equivalent shall be made only with respect to RSUs
that are outstanding on the ex-dividend date.

 

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  C. Accumulation of Dividend Equivalents on PRUs. Dividend equivalents equal to
such dividend payment as would have been made in respect of one (1) share of MMC
common stock for each PRU covered by the Award will accrue on any Dividend
Payment Date, the record date of which occurs on or after the applicable
Conversion Date. Accumulated dividend equivalents (less applicable withholding)
will vest when the PRUs in respect of such dividend equivalents vest and will be
delivered to you when the shares of MMC common stock in respect of such vested
PRUs are delivered. Dividend equivalents will be accrued only with respect to
PRUs that are outstanding on an ex-dividend date. For the avoidance of doubt,
dividend equivalents will not accrue on any portion of the cash value that has
not been converted into PRUs and will not be paid on PRUs that do not vest or
are forfeited.

 

III. METHOD OF EXERCISE OF AN OPTION

 

  A. General Procedures

An Option may be exercised by written notice to MMC or an agent appointed by
MMC, in form and substance satisfactory to MMC, which must state the election to
exercise such Option, the number of Option Shares for which such Option is being
exercised and such other representations and agreements as may be required
pursuant to the provisions of these Terms and Conditions and the Plan (the
“Exercise Notice”). The Exercise Notice must be accompanied by (i) any required
income tax forms and (ii) a reaffirmation of the Restrictive Covenants
Agreement, unless the Option is being exercised after your death in accordance
with Section IV.A.1 or Section IV.A.2.

 

  B. Payment of Exercise Price

Payment of the aggregate exercise price may be made with U.S. dollars or by
tendering shares of MMC common stock (including shares acquired from a stock
option exercise or a stock award vesting) which you have owned for at least six
months prior to the exercise date having a value equal to or greater than the
aggregate exercise price.

 

  C. Satisfaction of Income and Social Security Tax Withholding Obligation

Applicable taxes (including payroll and FICA taxes) are required by law to be
withheld when an Option is exercised. A sufficient number of shares of MMC
common stock resulting from the Option exercise will be retained by MMC to
satisfy the tax-withholding obligation unless you elect in the Exercise Notice
to satisfy all applicable tax withholding by check.

 

  D. Registration and Distribution of Option Shares

 

  1. The shares from your Option exercise will be registered as specified in the
Exercise Notice, as of the date of exercise. The shares may be registered only
in (i) your name or (ii) your name and your spouse’s name as joint tenants with
rights of survivorship.

 

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  2. The shares from the Option exercise will be distributed as specified in the
Exercise Notice, after you have satisfied your tax withholding obligation.

 

  3. You will receive written confirmation of the Option exercise by mail at
your home address on file, generally within a week following the exercise date.

 

IV. TERMINATION OF EMPLOYMENT

If your employment with MMC or any of its subsidiaries or affiliates (the
“Company”) terminates, the following shall apply:

 

  A. Death

 

  1. Nonqualified Stock Option. In the event your employment is terminated
because of your death, the Nonqualified Stock Option will vest with respect to
any unvested Option Shares and will become exercisable at such termination of
employment. The person or persons to whom your rights under the Nonqualified
Stock Option shall pass by will or the laws of descent and distribution shall be
entitled to exercise such Nonqualified Stock Option with respect to vested
Option Shares (and any Option Shares that were vested at the time of your death)
within two years after the date of death, but in no event shall the Nonqualified
Stock Option be exercised beyond the expiration date of the Award.

 

  2. Performance Contingent Nonqualified Stock Option. In the event your
employment is terminated because of your death, the Performance Contingent
Nonqualified Stock Option will vest with respect to any unvested Option Shares
at such termination of employment and will become exercisable upon the
satisfaction of the Performance Contingency. The person or persons to whom your
rights under the Performance Contingent Nonqualified Stock Option shall pass by
will or the laws of descent and distribution shall be entitled to exercise such
Performance Contingent Nonqualified Stock Option with respect to vested Option
Shares (and any Option Shares that were vested at the time of your death and for
which the Performance Contingency is satisfied) within two years after the date
of death, but in no event shall the Performance Contingent Nonqualified Stock
Option be exercised beyond the expiration date of the Award.

 

  3. Restricted Stock Units. In the event your employment is terminated because
of your death, the RSUs will vest at such termination of employment and will be
distributed as described in Section I.C.3.

 

  4. Performance Based Restricted Stock Units. In the event your employment is
terminated because of your death, the PRUs, and any remaining cash value that
has not been converted into PRUs, will vest at such termination of employment
and will be distributed as described in Section IV.I.1.

 

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  B. Permanent Disability

 

  1. Nonqualified Stock Option. In the event your employment is terminated due
to total and permanent disability as determined under MMC’s long-term disability
program, the Nonqualified Stock Option will vest with respect to any unvested
Option Shares and will become exercisable at such termination of employment
provided that you satisfy the condition to vesting described in Section IV.G.
Such vested Option Shares (and any Option Shares that were vested at the time of
your termination of employment) shall be exercisable for two years following
your termination of employment, but in no event shall the Nonqualified Stock
Option be exercised beyond the expiration date of the Award.

 

  2. Performance Contingent Nonqualified Stock Option. In the event your
employment is terminated due to total and permanent disability as determined
under MMC’s long-term disability program, the Performance Contingent
Nonqualified Stock Option will vest with respect to any unvested Option Shares
at such termination of employment provided that you satisfy the condition to
vesting described in Section IV.G and will become exercisable upon the
satisfaction of the Performance Contingency. Such vested Option Shares (and any
Option Shares that were vested at the time of your termination of employment and
for which the Performance Contingency is satisfied) shall be exercisable for two
years following your termination of employment, but in no event shall the
Performance Contingent Nonqualified Stock Option be exercised beyond the
expiration date of the Award.

 

  3. Restricted Stock Units. In the event your employment is terminated due to
total and permanent disability as determined under MMC’s long-term disability
program, the RSUs will vest at such termination of employment provided that you
satisfy the condition to vesting described in Section IV.G and will be
distributed as described in Section I.C.3.

 

  4. Performance Based Restricted Stock Units. In the event your employment is
terminated due to total and permanent disability as determined under MMC’s
long-term disability program, the PRUs, and any remaining cash value that has
not been converted into PRUs, will vest at such termination of employment
provided that you satisfy the condition to vesting described in Section IV.G and
will be distributed as described in Section IV.I.1.

 

  C. Normal Retirement

 

  1. Nonqualified Stock Option. In the event you retire from the Company on or
after your Normal Retirement Date, the Nonqualified Stock Option will vest with
respect to any unvested Option Shares and will become exercisable at such
termination of employment provided that you satisfy the condition to vesting
described in Section IV.G. Such vested Option Shares (and any Option Shares that
were vested at the time of your termination of employment) shall be exercisable
until the earlier of the fifth anniversary of your termination of employment and
the expiration date of the Award.

 

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  2. Performance Contingent Nonqualified Stock Option. In the event you retire
from the Company on or after your Normal Retirement Date, the Performance
Contingent Nonqualified Stock Option will vest with respect to any unvested
Option Shares at such termination of employment provided that you satisfy the
condition to vesting described in Section IV.G and will become exercisable upon
the satisfaction of the Performance Contingency. Such vested Option Shares (and
any Option Shares that were vested at the time of your termination of employment
and for which the Performance Contingency is satisfied) shall be exercisable
until the earlier of the fifth anniversary of your termination of employment and
the expiration date of the Award.

 

  3. Restricted Stock Units. In the event you retire from the Company on or
after your Normal Retirement Date, the RSUs will vest at such termination of
employment provided that you satisfy the condition to vesting described in
Section IV.G and will be distributed as described in Section I.C.3.

 

  4. Performance Based Restricted Stock Units. In the event you retire from the
Company on or after your Normal Retirement Date, the PRUs, and any remaining
cash value that has not been converted into PRUs, will vest at such termination
of employment provided that you satisfy the condition to vesting described in
Section IV.G and will be distributed as described in Section IV.I.1.

 

  D. Early Retirement

 

  1. Nonqualified Stock Option. In the event you retire from the Company on or
after your Early Retirement Date and before your Normal Retirement Date, the
Nonqualified Stock Option will vest as provided in the first sentence of Section
I.B.2 and will become exercisable as provided in Section I.B.4.(a), without
regard to such termination of employment provided that you satisfy the condition
to vesting described in Section IV.G. Such vested Option Shares (and any Option
Shares that were vested at the time of your termination of employment) shall be
exercisable until the earlier of the fifth anniversary of your termination of
employment and the expiration date of the Award.

 

  2. Performance Contingent Nonqualified Stock Option. In the event you retire
from the Company on or after your Early Retirement Date and before your Normal
Retirement Date, the Performance Contingent Nonqualified Stock Option will vest
as provided in the first sentence of Section I.B.2, without regard to such
termination of employment provided that you satisfy the condition to vesting
described in Section IV.G and will become exercisable upon the satisfaction of
the Performance Contingency. Such vested Option Shares (and any Option Shares
that were vested at the time of your termination of employment and for which the
Performance Contingency is satisfied) shall be exercisable until the earlier of
the fifth anniversary of your termination of employment and the expiration date
of the Award.

 

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  3. Restricted Stock Units. In the event you retire from the Company on or
after your Early Retirement Date and before your Normal Retirement Date, RSUs
scheduled to vest as specified in clause (i) or (iii) of the first sentence of
Section I.C.2 will vest at such termination of employment on a pro rata basis as
described in Section IV.H.1 provided that you satisfy the condition to vesting
described in Section IV.G and will be distributed as described in Section I.C.3,
and RSUs scheduled to vest as specified in clause (ii) of the first sentence of
Section I.C.2 shall be forfeited on the date of such termination of employment.

 

  4. Performance Based Restricted Stock Units. In the event you retire from the
Company on or after your Early Retirement Date and before your Normal Retirement
Date, the PRUs will vest at such termination of employment on a pro rata basis
as described in Section IV.H.2 provided that you satisfy the condition to
vesting described in Section IV.G and will be distributed as described in
Section IV.I.2, and any remaining cash value that has not been converted into
PRUs shall be forfeited.

 

  E. By the Company Other Than For Cause

 

  1. Termination Other Than For Cause

 

  a. Nonqualified Stock Option. In the event your employment is terminated by
the Company other than for Cause (as defined below), all of your rights, title
and interest in and to any unvested Option Shares will be forfeited upon such
termination of employment. Any Option Shares that were vested at the time of
your termination of employment shall be exercisable until the earlier of ninety
(90) days following your termination of employment and the expiration date of
the Award.

 

  b. Performance Contingent Nonqualified Stock Option. In the event your
employment is terminated by the Company other than for Cause (as defined below),
all of your rights, title and interest in and to any unvested Option Shares will
be forfeited upon such termination of employment. Any Option Shares that were
vested at the time of your termination of employment and for which the
Performance Contingency is satisfied shall be exercisable until the earlier of
ninety (90) days following your termination of employment and the expiration
date of the Award.

 

  c. Restricted Stock Units. In the event your employment is terminated by the
Company other than for Cause, the RSUs will vest at such termination of
employment on a pro rata basis as described in Section IV.H.1 provided that you
satisfy the condition to vesting described in Section IV.G and will be
distributed as described in Section I.C.3.

 

  d. Performance Based Restricted Stock Units. In the event your employment is
terminated by the Company other than for Cause, the PRUs will vest at such
termination of employment on a pro rata basis as described in Section IV.H.2
provided that you satisfy the condition to vesting described in Section IV.G and
will be distributed as described in Section IV.I.2, and any remaining cash value
that has not been converted into PRUs shall be forfeited.

 

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  2. For purposes of these Terms and Conditions, “Cause” shall mean:

 

  a. 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;

 

  b. willful violation of any written company policies including but not limited
to, the Company’s Code of Business Conduct & Ethics;

 

  c. 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;

 

  d. unlawful use (including being under the influence) or possession of illegal
drugs;

 

  e. any gross negligence or willful misconduct resulting in a material loss to
the Company, or material damage to the reputation of the Company; or

 

  f. any violation of any statutory or common law duty of loyalty to the
Company, including the commission at any time of any act of fraud, embezzlement,
or material breach of fiduciary duty against the Company.

 

  3. For the avoidance of doubt, in the event of a sale or similar transaction
involving the business unit for which you work (“Employing Company”) as a result
of which the Employing Company ceases to be a subsidiary of MMC, your employment
will be deemed terminated by the Company other than for Cause, even if your
employment with the Employing Company continues after the sale.

 

  F. All Other Employment Terminations

 

  1. 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
Committee may determine otherwise.

 

  2. 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.

 

  G. Condition to Vesting of Award Upon Termination of Employment

In the event of your termination of employment due to total and permanent
disability, Normal Retirement, Early Retirement, or your termination of
employment other than for Cause as described in Sections IV.B. through E, any
unvested portion of the Award will vest as provided in the applicable portion of
Section IV; provided that you execute and

 

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return to MMC (or an agent appointed by MMC) a Restrictive Covenants Agreement
within 30 days following your termination of employment. Failure to timely
execute 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.

 

  H. Determination of Pro Rata Vesting Upon Termination of Employment

 

  1. The number of RSUs that vest at such termination of employment on a pro
rata basis depends on the vesting schedule applicable to the RSUs.

 

  a. If the RSUs are scheduled to vest as specified in clause (i) or (ii) of the
first sentence of Section I.C.2, the number of RSUs that vest at such
termination of employment on a pro rata basis is equal to the sum of the “Pro
Rata RSUs” for each RSU Scheduled Vesting Date following your termination of
employment. The “Pro Rata RSUs” with respect to any such RSU Scheduled Vesting
Date is the product of the number of RSUs covered by the Award that would vest
on the RSU Scheduled Vesting Date and a fraction, the numerator of which is the
number of days from the Award Date to the date of your termination of
employment, and the denominator of which is the number of days from the Award
Date to such RSU Scheduled Vesting Date.

 

  b. If the RSUs are scheduled to vest as specified in clause (iii) of the first
sentence of Section I.C.2, the number of RSUs that vest at such termination of
employment on a pro rata basis is equal to the product of the number of RSUs
covered by the Award and a fraction, the numerator of which is the number of
days from the Award Date to the date of your termination of employment, and the
denominator of which is the number of days from the Award Date to the RSU
Scheduled Vesting Date.

 

  2. The number of PRUs that vest at such termination of employment on a pro
rata basis is equal to the product of the number of PRUs covered by the Award
and a fraction, the numerator of which is the lesser of the number of days from
the Conversion Date applicable to such PRUs to the date of your termination of
employment and 365, and the denominator of which is 365.

 

  I. Distribution in Respect of Performance Based Restricted Stock Units that
Vest Upon Termination of Employment

 

  1. Termination of Employment Because of Death, Total and Permanent Disability
or Normal Retirement

In the event of your termination of employment due to your death, total and
permanent disability or Normal Retirement as described in Section IV.A, B or C,

 

  a. for any PRU covered by the Award for which a determination under Section
I.D.2 has been made, promptly following such termination of employment, you will
receive the number of shares of MMC common stock determined under Section I.D.2
in respect of any PRU covered by the Award for which such determination has been
made; and

 

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  b. for any PRU covered by the Award for which a determination under Section
I.D.2 has not been made, promptly following the next Conversion Date (but in no
event later than 60 days following such date), you will receive the number of
shares of MMC common stock determined under Section I.D.2 in respect of any such
PRU covered by the Award; and

 

  c. you will receive any remaining cash value that has not been converted into
PRUs promptly following such termination of employment.

 

  2. Termination of Employment Due to Early Retirement or Termination Other Than
For Cause

In the event of your termination of employment due to Early Retirement or your
termination of employment other than for Cause, as described in Section IV.D or
E,

 

  a. for any PRU covered by the Award for which a determination under Section
I.D.2 has been made, promptly following such termination of employment, you will
receive the number of shares of MMC common stock determined under Section I.D.2
in respect of any PRU covered by the Award for which such determination has been
made; and

 

  b. for any PRU covered by the Award for which a determination under Section
I.D.2 has not been made, promptly following the next Conversion Date (but in no
event later than 60 days following such date), you will receive the number of
shares of MMC common stock determined under Section I.D.2 in respect of the
number of vested PRUs determined under Section IV.H.2.

 

  J. Definitions

As used in these terms and conditions, the terms “Normal Retirement Date” and
“Early Retirement Date” shall have the respective meanings given such terms (or
any comparable substitute terms or concepts) set forth in MMC’s primary
retirement plan applicable to you upon your termination of employment.

 

V. CHANGE IN CONTROL PROVISIONS

 

  A. Change in Control if Award is Assumed by a Successor

 

  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 V.A.2) by the entity effecting the
Change in Control, the Award will vest as provided in Section I or , if earlier,
will become fully vested upon your termination of employment by the Company
without

 

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Cause or for Good Reason (as defined in the next sentence) during the 24-month
period following such Change in Control, and any Option Shares that were vested
at the time of such termination of employment shall be exercisable until the
earlier of ninety (90) days following your termination of employment and the
expiration date of the Award. For purposes of these Terms and Conditions, “Good
Reason” includes any of the following without your written consent: (i) a
material reduction in your base salary; (ii) a material 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 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.

 

  2. For purposes of these Terms and Conditions, an Award will be considered
assumed (“Assumed”) if the following conditions are met:

 

  a. Options are converted into a replacement award in a manner that complies
with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

 

  b. RSUs are converted into a replacement award covering a number of shares of
the entity effecting the Change in Control (or a successor or parent
corporation), as determined in a manner substantially similar to the treatment
of an equal number of shares of MMC stock covered by the Award; provided that to
the extent that any portion of the consideration received by holders of MMC
common stock in the Change Control transaction is not in the form of the common
stock of such entity (or a successor or parent corporation), the number of
shares covered by the replacement award shall be based on the average of the
high and low selling prices of the common stock of such entity (or a successor
or parent corporation) on the established stock exchange on the trading day
immediately preceding the date of the Change in Control.

 

  c. The replacement award contains provisions for scheduled vesting and
treatment on termination of employment (including the definition of Cause) that
are no less favorable to you than the Award, and all other terms of the
replacement award (other than the security and number of shares represented by
the replacement award) are substantially similar to the Award.

 

  d. The security represented by the replacement award is of a class that is
publicly held and widely traded on an established stock exchange.

 

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  3. Additional special rules apply to performance contingent nonqualified stock
options and performance restricted units:

 

  a. For a Performance Contingent Nonqualified Stock Option, the Performance
Contingency will be deemed satisfied upon the consummation of the Change in
Control (and will not be a feature of any replacement award).

 

  b. PRUs (and any remaining cash value) shall be converted to the number of
RSUs determined below and be treated in the same manner as other RSUs (as
described above).

 

  (i) The number of RSUs equal to the number of shares of MMC common stock
determined under Section I.D.2 in respect of any PRU covered by the Award for
which such determination has been made.

 

  (ii) One RSU for any PRU covered by the Award for which a determination under
Section I.D.2 has not been made.

 

  (iii) Any remaining cash value that has not been converted into PRUs shall be
converted into RSUs based on the average of the high and low selling prices of
MMC common stock on the New York Stock Exchange on the trading day immediately
preceding the date of the Change in Control.

 

  B. Change in Control if Award is not Assumed by a Successor

 

  1. Upon the occurrence of a Change in Control of MMC, if the Award is not
Assumed by the entity effecting the Change in Control, the Award will become
fully vested on the date of the Change in Control and any restrictions contained
in the terms and conditions of the Award shall lapse.

 

  2. Options. For each Option Share covered by the Award, you will receive a
payment equal to the excess, if any, of the consideration (consisting of cash or
other property (including securities of a successor or parent corporation))
which holders of MMC common stock received in the Change in Control transaction
over the exercise price specified in the Award Letter. Such payment shall be
made in the same form as such consideration.

 

  3. Restricted Stock Units. As soon as practicable following the date of the
Change of Control but in no event later than 60 days following such date, you
will receive the consideration (consisting of cash or other property (including
securities of a successor or parent corporation)) which you would have received
in the Change in Control transaction had you been, immediately prior to such
transaction, a holder of that number of shares of MMC common stock equal to the
number RSUs covered by the Award.

 

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  4. Performance Based Restricted Stock Units. For PRUs covered by the Award,
you will receive the consideration (consisting of cash or other property
(including securities of a successor or parent corporation)) which you would
have received in the Change in Control transaction had you been, immediately
prior to such transaction, a holder of that number of shares of MMC common stock
determined as follows:

 

  a. the number of shares of MMC common stock determined under Section I.D.2 in
respect of any PRU covered by the Award for which such determination has been
made; and

 

  b. one share of MMC common stock for any PRU covered by the Award for which a
determination under Section I.D.2 has not been made.

Such consideration, and any remaining cash value that has not been converted
into PRUs, shall be distributed to you as soon as practicable following the date
of the Change of Control but in no event later than 60 days following such date.

 

  C. Additional Payment for Grantees Subject to U.S. Income Tax

 

  1. The value of the accelerated vesting of the Award because of a Change in
Control (the “Accelerated Award”) may be subject to a 20% federal excise tax
under Section 4999 of the Code (the “Excise Tax”). The Excise Tax is imposed on
a select group of highly-compensated employees when the value, as determined by
applicable regulations, of payments in the nature of compensation contingent on
a Change in Control (including an amount reflecting the value of the accelerated
vesting of the Award) equals or exceeds three times the average of your last
five years’ W-2 earnings

 

  2. If a Change in Control occurs and the vesting of the Award is accelerated,
MMC will determine if the Excise Tax is payable by you. If the Excise Tax is
payable by you, MMC will pay to you, within five business days of making the
determination, an amount of money (the “Additional Payment”) such that after
payment of applicable federal, state and local income taxes (other than any
taxes arising under Section 409A of the Code), employment taxes and any Excise
Tax imposed upon the Additional Payment, you will retain an amount of the
Additional Payment equal to the Excise Tax imposed in respect of the
Acceleration Value. If the Additional Payment, after payment of such taxes, is
later determined to be less than the amount necessary to reimburse you for the
Excise Tax you owe in respect of the Acceleration Value, a further payment will
be made to you. If the Additional Payment, after payment of applicable taxes, is
later determined to be more than the amount necessary to reimburse you for the
Excise Tax you owe in respect of the Acceleration Value, you will be required to
reimburse MMC for such excess.

 

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VI. ADDITIONAL PROVISIONS APPLICABLE TO COVERED EMPLOYEES

Notwithstanding any other provision herein, for any employee determined by the
Committee to be likely to be a covered employee within the meaning of
Section 162(m)(3) of the Code in the year the Award vests, delivery of shares in
respect of the Award shall be postponed until the earliest date at which the
Committee reasonably anticipates that the deduction of the payment of such Award
will not be limited or eliminated by application of Section 162(m) of the Code.
According to current Internal Revenue Service regulations, “covered employees”
include (1) the chief executive officer of MMC as of the last day of the year
and (2) the three highest-paid executive officers of the Company, other than the
chief executive officer of MMC, who are employed on the last day of the year.

 

VII. OTHER PROVISIONS

 

  A. No Right to Continued Employment. The granting of an Award or any exercise
thereof does not give you any right to continue to be employed by the Company
for any specific duration, or restrict, in any way, your right or the right of
your employer to terminate your employment at any time for any reason, with or
without cause or prior notice.

 

  B. During your lifetime, an Option shall be exercisable only by you, and no
right hereunder related to an Award shall be transferable except by will or the
laws of descent and distribution. Any shares that may be deliverable to you
following your death shall be delivered to the person or persons to whom your
rights pass by will or the law of descent and distribution, and such delivery
shall completely discharge the Company’s obligations under the Award.

 

  C. Neither you nor any person entitled to exercise your rights in the event of
your death shall have any of the rights of a stockholder with respect to the
shares of MMC common stock subject to an Award, unless, and until, you (or such
person) have received the shares in respect of such Award.

 

  D. The Company is not liable for the non-issuance or non-transfer, nor for any
delay in the issuance or transfer, of any shares of MMC common stock subject to
an Option, Unit or otherwise pursuant to the Plan due to you which results from
the inability of the Company to obtain, or in any delay in obtaining, from each
regulatory body having jurisdiction, all requisite authority to issue or
transfer shares of MMC common stock, if counsel for the Company deems such
authority necessary for the lawful issuance or transfer of any such shares.

 

  E.

The Award is subject to all of these Terms and Conditions and to the terms and
conditions of the Plan and to the terms and conditions of any employment
agreement or offer letter between you and the Company regarding the treatment of
equity-based awards upon certain terminations of employment (“Contractual
Provisions”), and your acceptance of the Award shall constitute your agreement
to the terms and conditions of the Plan and the administrative regulations of
the Committee. In the event of any inconsistency between these Terms and
Conditions, the Contractual Provisions and the provisions of the Plan, the

 

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provisions of the Plan shall prevail. In the event of any inconsistency between
these Terms and Conditions and any Contractual Provisions, the Contractual
Provisions shall prevail. Your acceptance of the Award constitutes your
agreement that the shares of MMC common stock acquired hereunder, if any, will
not be sold or otherwise disposed of by you in violation of any applicable
securities laws or regulations.

 

  F. The Award shall be subject to such additional administrative regulations as
the Committee may, from time to time, adopt. All decisions of the Committee upon
any questions arising under these Terms and Conditions or the Plan shall be
conclusive and binding. The Committee may delegate to any other individual or
entity the authority to perform any or all of the functions of the Committee
under the Award, and references to the Committee shall be deemed to include any
such delegate.

 

  G. The Committee may, in its sole discretion, amend the terms of the Award;
provided, however, that if the Committee concludes that such amendment is likely
to materially impair your rights with respect to the Award, such amendment shall
not be implemented with respect to your Award without your consent.

 

  H. The Committee has full discretion and authority to control and manage the
operation and administration of the Awards and the Plan. The Committee is
comprised of at least two members of the MMC Board of Directors.

 

  I. The Plan, and the granting of Awards and exercising of Options thereunder,
and the obligations of the Company and employees under the Plan, shall be
subject to all applicable governmental laws, rules and regulations, and to such
approvals by any regulatory or governmental agency as may be required,
including, but not limited to, tax and securities regulations.

 

  J. The MMC Board of Directors may amend, alter, suspend, discontinue or
terminate the Plan or the Committee’s authority to grant awards under the Plan;
except that, without the consent of an affected participant, no such action may
materially adversely affect the rights of such participant under any award
theretofore granted to him or her. Following the occurrence of a Change in
Control (as defined in the Plan), the MMC Board of Directors may not terminate
the Plan or amend the Plan with respect to awards that have already been granted
in any manner adverse to employees.

 

  K. Awards relating to not more than eighty million (80,000,000) shares of MMC
common stock (par value $1.00 per share), plus such number of shares authorized
and reserved for awards pursuant to certain preexisting share resolutions
adopted by the MMC Board of Directors, may be made over the life of the Marsh &
McLennan Companies, Inc. 2000 Employee Incentive and Stock Award Plan. Awards
relating to not more than eight million (8,000,000) shares of MMC common stock
(par value $1.00 per share), plus such number of shares remaining unused under
preexisting stock plans approved by MMC’s stockholders, may be issued under the
Marsh & McLennan Companies, Inc. 2000 Senior Executive Incentive and Stock Award
Plan. Employees of the Company will be eligible for awards under the Plan. MMC
common stock is traded on the New York Stock Exchange under the symbol “MMC” and
is subject to market price fluctuation. Shares of MMC common stock delivered in
respect of the Award may be obtained through open market purchases, treasury
stock or newly issued shares.

 

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  L. The Plan is not qualified under Section 401(a) of the Code and is not
subject to the provisions of the Employee Retirement Income Security Act of
1974. Your right to payment of your Award is the same as the right of an
unsecured general creditor of the Company.

 

  M. There are no investment fees associated with your Award, and MMC pays all
administrative expenses associated with your Award, although you will be
responsible for any fees associated with the sale of any shares of MMC common
stock delivered in respect of the Award.

Please retain this document in your permanent records. If you have any questions
regarding the Plan or your Award or would like an account statement detailing
each type of equity-based award and the number of shares or cash value (as
applicable) covered by such equity-based award that comprises your Award, and
the exercise price, vesting date(s) and expiration date of such equity-based
awards that comprise your Award, or any other information please contact:

MMC Global Compensation

Marsh & McLennan Companies, Inc.

1166 Avenue of the Americas

New York, New York l0036-2774

Telephone Number: (212) 345-5000

Facsimile Number: [Number]

VIII. FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of the United States Federal income tax consequences
of the equity-based awards that may comprise your Award. This discussion does
not address all aspects of the U.S. Federal income tax consequences that may be
relevant to you in light of your personal investment or tax circumstances and
does not discuss any state or local tax consequences of your Award. This section
is based on the Internal Revenue Code of 1986, as amended, its legislative
history, existing and proposed regulations under the Code, and published rulings
and court decisions, all as currently in effect. These laws are subject to
change, possibly on a retroactive basis. Please consult your own tax advisor
concerning the application of the U.S. Federal income tax laws to your
particular situation, as well as the applicability and effect of any state or
local tax laws before taking any actions with respect to your Award.

 

  A. Options

You will not be subject to tax upon the grant of an Option. Upon exercise of an
Option, an amount equal to the excess of the fair market value of the shares of
common stock acquired on the date of exercise over the exercise price paid is
taxable to you as ordinary income. This amount of income will be subject to
income and employment tax

 

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withholding. Your basis in the shares of common stock received will equal the
fair market value of the shares of common stock on the date of exercise, and
your holding period in such shares will begin on the day following the date of
exercise. Upon the subsequent disposition of shares of common stock acquired
upon the exercise of an Option, you will recognize capital gain or loss based
upon the difference between the amount realized on such disposition and your
basis in such shares, and such amount will be long-term capital gain or loss if
such shares were held for more than 12 months. In the taxable year in which you
recognize ordinary income upon the exercise of an Option, the Company generally
will be entitled to a deduction equal to the amount of income recognized by you.

 

  B. Restricted Stock Units and Performance Based Restricted Stock Units

You will not be subject to tax upon the grant of a restricted stock unit or a
performance based restricted stock unit. Upon vesting of restricted stock units
or a performance based restricted stock units, the fair market value of the
shares of common stock covered by the Award on the vesting date will be subject
to FICA employment tax withholding. Upon distribution of the shares of common
stock (or, in the event Section V.B. is applicable, cash or other property)
underlying the restricted stock units or performance based restricted stock
units, you will recognize as ordinary income an amount equal to the fair market
value on the date of distribution of the shares of common stock (and/or cash or
other property) received. This amount of income will be subject to income tax
withholding on the date of distribution. Your basis in any shares of common
stock received will be equal to the fair market value of the shares of common
stock on the date of distribution, and your holding period in such shares will
begin on the day following the date of distribution. If any dividend equivalents
are paid to you, they will be includible in your income as additional
compensation (and not as dividend income) and will be subject to income and
employment tax withholding. In the taxable year in which you recognize ordinary
income on account of shares of common stock awarded to you, the Company
generally will be entitled to a deduction equal to the amount of income
recognized by you.

 

  C. Section 409A

Notwithstanding any other provision herein, your Award may be subject to
additional restrictions to ensure compliance with the requirements of
Section 409A of the Code (regarding nonqualified deferred compensation) and
regulations thereunder. The Committee intends to administer the Awards in
accordance with Section 409A of the Code and reserves the right to make changes
in the terms or operations of the Awards (including changes that may have
retroactive effect) deemed necessary or desirable to comply with Section 409A of
the Code. This means, for example, that the timing of distributions may be
different from those described in this document or in other materials relating
to the Award or the Plan that do not yet reflect Section 409A of the Code and
the regulations thereunder. If your Award is not in compliance with Section 409A
of the Code, you may be subject to immediate taxation of all vested but unpaid
awards under the Plan that are subject to Section 409A of the Code, plus
interest at the underpayment rate plus 1%, plus a 20% penalty.

 

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Notwithstanding any provision herein, if at the time of the termination of your
employment you are a “specified employee” (as defined in Section 409A of the
Code) no portion of your Award that is determined to be nonqualified deferred
compensation subject to Section 409A of the Code shall be distributed until the
first day of the seventh month after the termination of employment and any such
distributions to which you would otherwise be entitled during the first six
months following your termination of employment will be accumulated and paid
without interest on the first day of the seventh month after the termination of
employment. The provisions of this subparagraph will only apply if and to the
extent required to avoid any “additional tax” under Section 409A of the Code.
This subparagraph does not guarantee that your Award will not be subject to
“additional tax” or other adverse tax consequences under Section 409A of the
Code.

 

IX. RESALE RESTRICTIONS

 

  A. If you are an “affiliate” of MMC at the time you exercise an option and/or
receive shares of MMC common stock in respect of the Award, your ability to
resell those shares may be restricted. In order to resell such shares, you will
be required either to observe the resale limitations of Rule 144 of the
Securities Act of 1933, as amended (the “Securities Act”), or offer your shares
for resale in compliance with another applicable exemption from the registration
requirements of the Securities Act.

 

  B. An “affiliate” is defined, for purposes of the Securities Act, as a person
who directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, MMC. A “person” is defined to
include any relative or spouse of the person and any relative of the person’s
spouse who has the same home as the person, any trust, estate, corporation or
other organization in which the person or any of the foregoing persons has
collectively more than 10% beneficial interest, and any trust or estate for
which the person or any of the foregoing persons serves as trustee, executor or
in any similar capacity. A person “controls, is controlled by or is under common
control” with MMC when that person directly or indirectly possesses the power to
direct or cause the direction of the management and policies of MMC whether
through the ownership of voting securities, by contract or otherwise.

 

X. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

 

  A. The Annual Report on Form 10-K of MMC for its last fiscal year, MMC’s
Registration Statement on Form 8 dated February 3, 1987, describing MMC common
stock, including any amendment or reports filed for the purpose of updating such
description, and MMC’s Registration Statement on Form 8-A/A dated January 26,
2000, describing the Preferred Stock Purchase Rights attached to the common
stock, including any further amendment or reports filed for the purpose of
updating such description, which have been filed by MMC under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), are incorporated by
reference herein.

 

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  B. All documents subsequently filed by MMC pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act, subsequent to the end of MMC’s last fiscal
year and prior to the filing of a post-effective amendment which indicates that
all securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of filing of such documents.

 

  C. The Annual Report can be viewed on MMC’s website at
http://www.mmc.com/investors/current.php. Participants may receive without
charge, upon written or oral request, a copy of any of the documents
incorporated herein by reference and any other documents that constitute part of
this Prospectus by contacting MMC Global Compensation as indicated above.

 

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