8-K/ALeadership ChangesMaterial AgreementsExhibits & Filings

MARSH & MCLENNAN COMPANIES, INC. 8-K/A Report, Material Agreement (Oct 28, 2004)

Filed October 28, 2004For Securities:MRSHMMC

Summary

This 8-K filing from Marsh & McLennan Companies (MMC) serves as an amendment to a previous filing, providing further details on the employment agreement of their newly appointed President and CEO, Michael G. Cherkasky. The agreement, effective July 7, 2004, outlines a four-year term with a base salary of at least $750,000 and significant bonus potential, ranging from 100% to 160% of his base salary. This filing is important for investors to understand the compensation structure and retention incentives for key leadership during a period of significant corporate change, including the recent acquisition of Kroll Inc. The agreement also details specific compensation tied to the Kroll acquisition, including a substantial cash bonus of $6,390,000 in exchange for releasing previous claims and continued employment through the merger. Additionally, Mr. Cherkasky received a $3,000,000 retention award in MMC stock, vesting over four years, with provisions for accelerated vesting under certain termination scenarios. The filing also touches upon non-competition and non-solicitation clauses, which are critical for understanding potential future business operations and talent retention.

Key Highlights

  • 1Michael G. Cherkasky appointed President, CEO, and Director of Marsh & McLennan Companies (MMC).
  • 2Employment agreement effective July 7, 2004, with a four-year term.
  • 3Annual base salary of at least $750,000.
  • 4Annual target bonus potential of 100% to 160% of base salary (minimum 160% for 2004-2005).
  • 5Significant cash bonus of $6,390,000 related to the Kroll Inc. acquisition and release of claims.
  • 6$3,000,000 retention award in MMC stock with a four-year vesting period.
  • 7Provisions for accelerated vesting of stock awards and severance pay under specific termination conditions (e.g., termination without cause, resignation for good reason).

Frequently Asked Questions

Mr. Cherkasky's compensation package includes an annual base salary of at least $750,000, an annual bonus targeting 100%-160% of his base salary, a $6,390,000 cash bonus tied to the Kroll acquisition, and a $3,000,000 stock retention award vesting over four years. He is also eligible for other long-term equity incentive plans.

The $3,000,000 retention award is in MMC stock and vests over four years. If Mr. Cherkasky's employment is terminated other than for cause, or if he resigns for 'good reason', the stock award will immediately vest. He is also entitled to previously earned salary and bonus, plus an amount equal to his annual base salary in such circumstances.

Under certain conditions, if Mr. Cherkasky's employment ends before the four-year period, or in specific circumstances after the four-year period, he will be subject to non-competition and non-solicitation restrictions. These are designed to protect MMC's business interests.

This filing is an amendment to a previous 8-K report filed on October 25, 2004. It serves to provide more detailed information specifically about the employment agreement of Michael G. Cherkasky, as referenced in Item 1.01, and amends Item 5.02 of the prior filing to include these details regarding the appointment of the principal officer.