SEC Filing | Marsh & McLennan Companies, INC.

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================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarter ended June 30, 2004 Marsh & McLennan Companies, Inc. 1166 Avenue of the Americas New York, New York 10036 (212) 345-5000 Commission file number 1-5998 State of Incorporation: Delaware I.R.S. Employer Identification No. 36-2668272 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . NO___. As of July 31, 2004, there were outstanding 520,624,251 shares of common stock, par value $1.00 per share, of the registrant.

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS Marsh & McLennan Companies, Inc. and its subsidiaries ("MMC") and their representatives may from time to time make verbal or written statements (including certain statements contained in this report and other MMC filings with the Securities and Exchange Commission and in our reports to stockholders) relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, discussions concerning revenues, expenses, earnings, cash flow, capital structure, pension funding, and the adverse consequences arising from market-timing issues at Putnam, including fines and restitution, as well as market and industry conditions, premium rates, financial markets, interest rates, foreign exchange rates, contingencies, and matters relating to MMC's operations and income taxes. Such forward-looking statements are based on available current market and industry materials, experts' reports and opinions, and long-term trends, as well as management's expectations concerning future events impacting MMC. Forward-looking statements by their very nature involve risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by any forward-looking statements contained herein include, in the case of MMC's risk and insurance services business, changes in competitive conditions, movements in premium rate levels, the continuation of difficult conditions for the transfer of commercial risk and other changes in the global property and casualty insurance markets, natural catastrophes, mergers between client organizations, and insurance or reinsurance company insolvencies. Factors to be considered in the case of MMC's investment management business include changes in worldwide and national equity and fixed income markets, actual and relative investment performance, the level of sales and redemptions, and the ability to maintain investment management and administrative fees at historic levels; and with respect to all of MMC's activities, the ability to successfully integrate acquired businesses, changes in general worldwide and national economic conditions, the impact of terrorist attacks, changes in the value of investments made in individual companies and investment funds, fluctuations in foreign currencies, actions of competitors or regulators, changes in interest rates or in the ability to access financial markets, developments relating to claims, lawsuits and contingencies, prospective and retrospective changes in the tax or accounting treatment of MMC's operations, and the impact of tax and other legislation and regulation in the jurisdictions in which MMC operates. In addition, there are risks and uncertainties relating to MMC's ability to integrate Kroll's business successfully and realize expected synergies; the continued strength of Kroll's relationships with its employees, suppliers, and customers; and the accuracy of the basis for the forecasts relating to Kroll's business. Forward-looking statements speak only as of the date on which they are made, and MMC undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of unanticipated events. Please refer to Marsh & McLennan Companies' 2003 Annual Report on Form 10-K for "Information Concerning Forward-Looking Statements," its reports on Form 8-K, and quarterly reports on Form 10-Q. MMC is committed to providing timely and materially accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, MMC and its operating companies use their websites to convey meaningful information about their businesses, including the anticipated release of quarterly financial results and the posting of updates of assets under management at Putnam. Monthly updates of total assets under management at Putnam will be posted to the MMC website the first business day following the end of each month. Putnam posts mutual fund and performance data to its website regularly. Assets for most Putnam retail mutual funds are posted approximately two weeks after each month-end. Mutual fund net asset value (NAV) is posted daily. Historical performance and Lipper rankings are also provided. Investors can link to MMC and its operating company websites through www.mmc.com.

PART I, FINANCIAL INFORMATION MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - -------------------------------------------------------------------------------- Three Months Ended Six Months Ended June 30, June 30, - -------------------------------------------------------------------------------- (In millions, except per share figures) 2004 2003 2004 2003 - -------------------------------------------------------------------------------- Revenue: Service revenue $2,964 $2,840 $6,141 $5,681 Investment income (loss) 72 25 105 36 - -------------------------------------------------------------------------------- Operating revenue 3,036 2,865 6,246 5,717 - -------------------------------------------------------------------------------- Expense Compensation and benefits 1,596 1,475 3,231 2,853 Other operating expenses 808 791 1,610 1,548 - -------------------------------------------------------------------------------- Operating expenses 2,404 2,266 4,841 4,401 - -------------------------------------------------------------------------------- Operating income 632 599 1,405 1,316 Interest income 4 7 9 13 Interest expense (48) (46) (98) (89) - -------------------------------------------------------------------------------- Income before income taxes and minority interest 588 560 1,316 1,240 Income taxes 194 189 475 421 Minority interest, net of tax 5 6 6 11 - -------------------------------------------------------------------------------- Net income $ 389 $ 365 $ 835 $ 808 - -------------------------------------------------------------------------------- Basic net income per share $ .75 $ .68 $ 1.60 $ 1.51 - -------------------------------------------------------------------------------- Diluted net income per share $ .73 $ .66 $ 1.56 $ 1.47 - -------------------------------------------------------------------------------- Average number of shares outstanding-Basic 522 534 523 535 - -------------------------------------------------------------------------------- Average number of shares outstanding-Diluted 534 552 537 550 - -------------------------------------------------------------------------------- The accompanying notes are an integral part of these consolidated statements. 3

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - -------------------------------------------------------------------------------- (Unaudited) June 30, December 31, (In millions of dollars) 2004 2003 - -------------------------------------------------------------------------------- ASSETS Current assets: Cash and cash equivalents $ 399 $ 665 - -------------------------------------------------------------------------------- Receivables Commissions and fees 2,556 2,388 Advanced premiums and claims 81 89 Other 352 342 - -------------------------------------------------------------------------------- 2,989 2,819 Less-allowance for doubtful accounts and cancellations (122) (116) - -------------------------------------------------------------------------------- Net receivables 2,867 2,703 - -------------------------------------------------------------------------------- Prepaid dealer commissions - current portion 110 150 Other current assets 349 383 - -------------------------------------------------------------------------------- Total current assets 3,725 3,901 Goodwill and intangible assets 5,938 5,797 Fixed assets, net 1,355 1,389 (net of accumulated depreciation and amortization of $1,553 at June 30, 2004 and $1,448 at December 31, 2003) Long-term investments 557 648 Prepaid dealer commissions 57 114 Prepaid pension 1,265 1,199 Other assets 1,887 2,005 - -------------------------------------------------------------------------------- $14,784 $15,053 - -------------------------------------------------------------------------------- The accompanying notes are an integral part of these consolidated statements. 4

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - -------------------------------------------------------------------------------- (Unaudited) June 30, December 31, (In millions of dollars) 2004 2003 - -------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term debt $ 911 $ 447 Accounts payable and accrued liabilities 1,500 1,511 Accrued compensation and employee benefits 1,189 1,693 Accrued income taxes 394 272 Dividends payable 178 166 - -------------------------------------------------------------------------------- Total current liabilities 4,172 4,089 - -------------------------------------------------------------------------------- Fiduciary liabilities 4,493 4,228 Less - cash and investments held in a fiduciary capacity (4,493) (4,228) - -------------------------------------------------------------------------------- - - Long-term debt 2,299 2,910 - -------------------------------------------------------------------------------- Other liabilities 2,689 2,603 - -------------------------------------------------------------------------------- Commitments and contingencies - -------------------------------------------------------------------------------- Stockholders' equity: Preferred stock, $1 par value, authorized 6,000,000 shares, none issued - - Common stock, $1 par value, authorized 800,000,000 shares, issued 560,641,640 shares at June 30, 2004 and December 31, 2003 561 561 Additional paid-in capital 1,295 1,301 Retained earnings 5,882 5,386 Accumulated other comprehensive loss (315) (279) - -------------------------------------------------------------------------------- 7,423 6,969 Less - treasury shares, at cost, 40,093,346 shares at June 30, 2004 and 33,905,497 shares at December 31, 2003 (1,799) (1,518) - -------------------------------------------------------------------------------- Total stockholders' equity 5,624 5,451 - -------------------------------------------------------------------------------- $14,784 $15,053 - -------------------------------------------------------------------------------- The accompanying notes are an integral part of these consolidated statements. 5

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - -------------------------------------------------------------------------------- For the Six Months Ended June 30, 2004 2003 (In millions of dollars) - -------------------------------------------------------------------------------- Operating cash flows: Net income $ 835 $808 Adjustments to reconcile net income to cash generated from (used for) operations: Depreciation of fixed assets, capitalized software and other intangible assets 211 194 Provision for deferred income taxes 148 73 (Gains) losses on investments (105) (36) Changes in assets and liabilities: Net receivables (165) (189) Prepaid dealer commissions 97 127 Other current assets 6 36 Other assets 83 (105) Accounts payable and accrued liabilities 52 80 Accrued compensation and employee benefits (504) (297) Accrued income taxes 111 298 Other liabilities (9) 17 Effect of exchange rate changes 9 50 - -------------------------------------------------------------------------------- Net cash generated from operations 769 1,056 - -------------------------------------------------------------------------------- Financing cash flows: Net increase/(decrease) in commercial paper 402 (640) Proceeds from issuance of debt 66 502 Other repayments of debt (609) (44) Purchase of treasury shares (522) (492) Issuance of common stock 223 253 Dividends paid (325) (301) - -------------------------------------------------------------------------------- Net cash used for financing activities (765) (722) - -------------------------------------------------------------------------------- Investing cash flows: Capital expenditures (168) (240) Proceeds from sales related to fixed assets and capitalized software 5 9 Acquisitions (216) (101) Other, net 117 42 - -------------------------------------------------------------------------------- Net cash used for investing activities (262) (290) - -------------------------------------------------------------------------------- Effect of exchange rate changes on cash and cash equivalents (8) 28 - -------------------------------------------------------------------------------- (Decrease)/Increase in cash & cash equivalents (266) 72 Cash & cash equivalents at beginning of period 665 546 - -------------------------------------------------------------------------------- Cash & cash equivalents at end of period $ 399 $ 618 - -------------------------------------------------------------------------------- The accompanying notes are an integral part of these consolidated statements. 6

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Nature of Operations -------------------- MMC, a professional services firm, is organized based on the different services that it offers. Under this organization structure, MMC operates in three principal business segments: risk and insurance services, investment management and consulting. The risk and insurance services segment provides risk management and insurance broking, reinsurance broking and insurance program management services for businesses, public entities, insurance companies, associations, professional services organizations and private clients. It also provides services principally in connection with originating, structuring and managing insurance, financial services and other industry-focused investments. The investment management segment primarily provides securities investment advisory and management services and administrative services for a group of publicly held investment companies and institutional accounts. The consulting segment provides advice and services to the managements of organizations primarily in the areas of retirement services, human capital, health care and group benefit programs, management consulting, organizational change and organizational design, economic consulting and corporate identity. 2. Principles of Consolidation --------------------------- The consolidated financial statements included herein have been prepared by MMC pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been omitted pursuant to such rules and regulations, although MMC believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the financial statements and the notes thereto included in MMC's latest Annual Report on Form 10-K. The financial information contained herein reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the six-month periods ended June 30, 2004 and 2003. Certain reclassifications have been made to the prior year amounts to conform to the current year presentation. The caption "Investment income (loss)" in the consolidated statements of income comprises realized and unrealized gains and losses from investments recognized in current earnings. It includes other than temporary declines in the value of available for sale securities, the change in value of trading securities and the change in value of MMC's holdings in certain private equity funds. MMC's investments may include seed shares for funds, direct investments in insurance, consulting or investment management companies and investments in private equity funds. 7

3. Fiduciary Assets and Liabilities -------------------------------- In its capacity as an insurance broker or agent, MMC collects premiums from insureds and, after deducting its commissions, remits the premiums to the respective insurance underwriters. MMC also collects claims or refunds from underwriters on behalf of insureds. Unremitted insurance premiums and claims are held in a fiduciary capacity. Interest income on these fiduciary funds, included in service revenue, amounted to $59 million and $61 million for the six-month periods ended June 30, 2004 and 2003, respectively. Since fiduciary assets are not available for corporate use, they are shown in the balance sheet as an offset to fiduciary liabilities. Net uncollected premiums and claims and the related payables amounted to $11.3 billion at June 30, 2004 and $11.5 billion at December 31, 2003, respectively. MMC is not a principal to the contracts under which the right to receive premiums or the right to receive reimbursement of insured losses arises. Net uncollected premiums and claims and the related payables are, therefore, not assets and liabilities of MMC and are not included in the accompanying Consolidated Balance Sheets. 4. Per Share Data -------------- Basic net income per share is calculated by dividing net income by the weighted average number of shares of MMC's common stock outstanding. Diluted net income per share is calculated by reducing net income for the potential minority interest associated with unvested shares granted under the Putnam Equity Partnership Plan and adding back dividend equivalent expense related to common stock equivalents. This result is then divided by the weighted average common shares outstanding, which have been adjusted for the dilutive effect of potentially issuable common shares. The following reconciles net income to net income for diluted earnings per share and basic weighted average common shares outstanding to diluted weighted average common shares outstanding for the three- and six-month periods ended June 30, 2004 and 2003. - ---------------------------------------------------------------------------------------------------- Three Months Ended Six Months Ended (In millions) June 30, June 30, 2004 2003 2004 2003 - ---------------------------------------------------------------------------------------------------- Net income $389 $ 365 $835 $ 808 Increase for dividend equivalent expense related to common stock equivalents net of potential minority interest associated with the Putnam Class B Common Shares - - 1 - - ---------------------------------------------------------------------------------------------------- Net income for diluted earnings per share $389 $365 $836 $808 - ---------------------------------------------------------------------------------------------------- Basic weighted average common shares outstanding 522 534 523 535 Dilutive effect of potentially issuable common shares 12 18 14 15 - ---------------------------------------------------------------------------------------------------- Diluted weighted average common shares outstanding 534 552 537 550 - ---------------------------------------------------------------------------------------------------- Average stock price used to calculate common stock equivalents $44.54 $48.81 $46.09 $45.93 - ---------------------------------------------------------------------------------------------------- 8

5. Supplemental Disclosure to the Consolidated Statements of Cash Flows -------------------------------------------------------------------- The following schedule provides additional information concerning interest and income taxes paid for the six-month periods ended June 30, 2004 and 2003. - -------------------------------------------------------------------------------- (In millions of dollars) 2004 2003 - -------------------------------------------------------------------------------- Interest paid $100 $81 Income taxes paid $166 $41 6. Comprehensive Income -------------------- The components of comprehensive income for the six-month periods ended June 30, 2004 and 2003 are as follows: - -------------------------------------------------------------------------------- (In millions of dollars) 2004 2003 - -------------------------------------------------------------------------------- Foreign currency translation adjustments $ (6) $172 Unrealized investment holding gains, net of income taxes 7 26 Less: Reclassification adjustment for realized gains (36) (7) included in net income, net of income taxes Deferred loss on cash flow hedges, (1) (3) net of income taxes - -------------------------------------------------------------------------------- Other comprehensive (loss)/income (36) 188 Net income 835 808 - -------------------------------------------------------------------------------- Comprehensive income $799 $996 - -------------------------------------------------------------------------------- 7. Acquisitions ------------ In July 2004, MMC acquired Kroll Inc.("Kroll"), the world's leading risk mitigation services firm in an all-cash $1.9 billion transaction in which Kroll shareholders received $37 for each outstanding share of Kroll common stock owned. The acquisition of Kroll will broaden and deepen the capabilities of MMC's fast-growing risk consulting and advisory businesses by adding services which clients need to reduce the impact of an adverse event. It expands MMC's capacity in several important sectors that complement existing businesses, such as corporate restructuring, business intelligence and investigations, security services, employee screening, and electronic evidence and litigation support. The purchase price allocation for the Kroll acquisition is expected to be completed by the end of 2004. The information contained in this Form 10-Q reflects the business and operations of MMC, without giving effect to the Kroll acquisition. In January 2004, MMC acquired Synhrgy HR Technologies, a leading provider of human resource technology and outsourcing services to Fortune 1000 companies, for a total cost of $115 million. Substantially all former employees of Synhrgy are now employees of MMC. Approximately $7 million of the purchase consideration is subject to continued employment of the selling shareholders and is being recorded as compensation expense over three years. In addition, MMC acquired the Australia and New Zealand operations of Heath Lambert for $53 million in cash in March of 2004. The purchase consideration allocations resulted in acquired goodwill of $141 million in 2004. In April 2003, MMC acquired Oliver, Wyman & Company ("OWC") for $265 million comprising $159 million in cash, which will be paid over 4 years, and $106 million in MMC stock. Substantially all former employees of OWC are now employees of MMC. Approximately $35 million of the purchase consideration is subject to continued employment of the selling shareholders and is being recorded as compensation expense over four years. 9

8. Goodwill and Other Intangibles ------------------------------ Changes in the carrying amount of goodwill for the six-month period ended June 30, 2004, are as follows: -------------------------------------------------------------- (In millions of dollars) 2004 -------------------------------------------------------------- Balance as of January 1, $5,533 Goodwill acquired 141 Other adjustments (primarily foreign exchange) (19) -------------------------------------------------------------- Balance as of June 30, $5,655 -------------------------------------------------------------- The goodwill balance at June 30, 2004 and December 31, 2003 includes approximately $119 million and $121 million, respectively, of equity method goodwill. Amortized intangible assets consist of the cost of client lists, client relationships and trade names acquired, and the rights to future revenue streams from certain existing private equity funds. MMC has no intangible assets with indefinite lives. The gross cost and accumulated amortization by major intangible asset class is as follows: - ----------------------------------------------------------------------------------------------------------- June 30, 2004 December 31, 2003 ---------------------------------------------------------------------- Net Net Gross Accumulated Carrying Gross Accumulated Carrying (In millions of dollars) Cost Amortization Amount Cost Amortization Amount - ----------------------------------------------------------------------------------------------------------- Customer and marketing related $261 $ 86 $175 $222 $ 74 $148 Future revenue streams related to existing private equity funds 198 100 98 199 92 107 - ----------------------------------------------------------------------------------------------------------- Total amortized intangibles $459 $186 $273 $421 $166 $255 - ----------------------------------------------------------------------------------------------------------- Aggregate amortization expense for the six months ended June 30, 2004 and 2003 was $20 million and the estimated future aggregate amortization expense is as follows: - -------------------------------------------------------------------------------- For the Years Ending December 31, Estimated (In millions of dollars) Expense - -------------------------------------------------------------------------------- 2004 $42 2005 $41 2006 $38 2007 $35 2008 $33 - -------------------------------------------------------------------------------- 10

9. Stock Benefit Plans ------------------- MMC has stock-based benefit plans under which employees are awarded grants of restricted stock, stock options and other forms of awards. As provided under SFAS No. 123, "Accounting for Stock-Based Compensation," ("SFAS 123") MMC has elected to continue to account for stock-based compensation in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25") and has provided the required additional pro forma disclosures. Pro Forma Information: In accordance with the intrinsic value method allowed by APB 25, no compensation cost has been recognized in the Consolidated Statements of Income for MMC's stock option and stock purchase plans and the stock options awarded under the Putnam Investments Equity Partnership Plan. If compensation cost for MMC's stock-based compensation plans had been determined consistent with the fair value method prescribed by SFAS No. 123, MMC's net income and net income per share for the three- and six-month periods ended June 30, 2004 and 2003 would have been reduced to the pro forma amounts indicated in the table below. - ----------------------------------------------------------------------------------------------------------- (In millions of dollars, except per share figures) Three Months Ended June 30, Six Months Ended June 30, 2004 2003 2004 2003 - ----------------------------------------------------------------------------------------------------------- Net Income: As reported $389 $365 $835 $808 Adjustment for fair value method, net of tax (35) (41) (84) (88) - ----------------------------------------------------------------------------------------------------------- Pro forma net income $354 $324 $751 $720 - ----------------------------------------------------------------------------------------------------------- Net Income Per Share: Basic: As reported $ .75 $ .68 $1.60 $1.51 Pro forma $ .68 $ .61 $1.44 $1.35 Diluted: As reported $ .73 $ .66 $1.56 $1.47 Pro forma $ .66 $ .59 $1.40 $1.32 - ----------------------------------------------------------------------------------------------------------- The pro forma information reflected above includes stock options issued under MMC Incentive and Stock Award plans and the Putnam Investments Equity Partnership Plan and stock issued under MMC stock purchase plans. MMC stock purchase plans allow eligible employees to purchase MMC shares at prices not less than 85% of the lesser of the fair market value of the stock at the beginning or end of the offering period. The stock purchase plans represent approximately 20% of the adjustment from applying the fair value method in 2004 and 2003. The majority of option grants under the stock benefit plans are made in the first quarter of each year. MMC granted 9.1 million and 15.9 million options in the six months ended June 30, 2004 and 2003, respectively. A total of 17.2 million options were granted in the year ended December 31, 2003. The estimated fair value of options granted was calculated using the Black-Scholes option pricing valuation model. The weighted average assumptions used in the valuation models are evaluated and revised, as necessary, to reflect market conditions and experience. 11

10. Retirement Benefits ------------------- MMC maintains qualified and non-qualified defined benefit pension plans for its U.S. and non-U.S. eligible employees. MMC's policy for funding its tax qualified defined benefit retirement plans is to contribute amounts at least sufficient to meet the funding requirements set forth in the U.S. and international law. The components of the net periodic benefit cost (income) for defined benefit and other postretirement plans are as follows: Combined U.S. and significant non-U.S. Plans - -------------------------------------------------------------------------------- For the Three Months Ended June 30, Pension Benefits Postretirement Benefits ------------------------------------------ (In millions of dollars) 2004 2003 2004 2003 - -------------------------------------------------------------------------------- Service cost $ 59 $ 47 $ 2 $ 2 Interest cost 105 90 6 5 Expected return on plan assets (152) (136) - - Amortization of prior service credit (9) (9) - - Amortization of transition asset (1) (1) - - Recognized actuarial loss 25 6 1 1 - -------------------------------------------------------------------------------- Net Periodic Benefit Cost (Income) 27 (3) 9 8 - -------------------------------------------------------------------------------- Settlement loss - - - - Special termination benefits - 1 - - - -------------------------------------------------------------------------------- Total Expense (Income) $ 27 $ (2) $ 9 $ 8 - -------------------------------------------------------------------------------- Combined U.S. and significant non-U.S. Plans - -------------------------------------------------------------------------------- For the Six Months Ended June 30, Pension Benefits Postretirement Benefits ------------------------------------------- (In millions of dollars) 2004 2003 2004 2003 - -------------------------------------------------------------------------------- Service cost $116 $ 94 $ 6 $ 5 Interest cost 210 179 10 10 Expected return on plan assets (308) (270) - - Amortization of prior service credit (19) (19) (1) (1) Amortization of transition asset (2) (2) - - Recognized actuarial loss 45 13 3 2 - -------------------------------------------------------------------------------- Net Periodic Benefit Cost (Income) 42 (5) 18 16 - -------------------------------------------------------------------------------- Settlement loss 1 - - - Special termination benefits 1 2 - - - -------------------------------------------------------------------------------- Total Expense (Income) $ 44 $ (3) $18 $16 - -------------------------------------------------------------------------------- 12

U.S. Plans only - -------------------------------------------------------------------------------- For the Three Months Ended June 30, Pension Benefits Postretirement Benefits ------------------------------------------ (In millions of dollars) 2004 2003 2004 2003 - -------------------------------------------------------------------------------- Service cost $ 21 $ 16 $ 2 $ 2 Interest cost 42 38 5 4 Expected return on plan assets (57) (57) - - Amortization of prior service credit (9) (9) - - Amortization of transition asset (1) (1) - - Recognized actuarial loss 14 4 1 1 - -------------------------------------------------------------------------------- Net Periodic Benefit Cost (Income) $ 10 $ (9) $ 8 $ 7 - -------------------------------------------------------------------------------- U.S. Plans only - -------------------------------------------------------------------------------- For the Six Months Ended June 30, Pension Benefits Postretirement Benefits ------------------------------------------ (In millions of dollars) 2004 2003 2004 2003 - -------------------------------------------------------------------------------- Service cost $ 39 $ 33 $ 5 $ 4 Interest cost 82 76 9 9 Expected return on plan assets (115) (114) - - Amortization of prior service credit (19) (19) (1) (1) Amortization of transition asset (2) (2) - - Recognized actuarial loss 23 9 3 2 - -------------------------------------------------------------------------------- Net Periodic Benefit Cost (Income) $ 8 $ (17) $ 16 $ 14 - -------------------------------------------------------------------------------- In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 ("Act") became law. As MMC has not yet concluded whether the benefits provided by its plans are actuarially equivalent to Medicare Part D under the act, the measures of the Accumulated Postretirement Benefit Obligation and net periodic benefit cost do not reflect any amount associated with the subsidy. MMC expects to complete its assessment of this issue and reflect any changes in the third quarter of 2004. The issued guidance under FAS 106-2 could require MMC to change previously reported information. 13

Significant non-U.S. Plans only - -------------------------------------------------------------------------------- For the Three Months Ended June 30, Pension Benefits Postretirement Benefits ------------------------------------------- (In millions of dollars) 2004 2003 2004 2003 - -------------------------------------------------------------------------------- Service cost $ 38 $ 31 $ - $ - Interest cost 63 52 1 1 Expected return on plan assets (95) (79) - - Recognized actuarial loss 11 2 - - - -------------------------------------------------------------------------------- Net periodic benefit cost $ 17 $ 6 $ 1 $ 1 - -------------------------------------------------------------------------------- Settlement loss - - - - Special termination benefits - 1 - - - -------------------------------------------------------------------------------- Total Expense $ 17 $ 7 $ 1 $ 1 - -------------------------------------------------------------------------------- Significant non-U.S. Plans only - -------------------------------------------------------------------------------- For the Six Months Ended June 30, Pension Benefits Postretirement Benefits ------------------------------------------- (In millions of dollars) 2004 2003 2004 2003 - -------------------------------------------------------------------------------- Service cost $ 77 $ 61 $ 1 $ 1 Interest cost 128 103 1 1 Expected return on plan assets (193) (156) - - Recognized actuarial loss 22 4 - - - -------------------------------------------------------------------------------- Net periodic benefit cost $ 34 $ 12 $ 2 $ 2 - -------------------------------------------------------------------------------- Settlement loss 1 - - - Special termination benefits 1 2 - - - -------------------------------------------------------------------------------- Total Expense $ 36 $ 14 $ 2 $ 2 - -------------------------------------------------------------------------------- The weighted average actuarial assumptions utilized to calculate the net periodic benefit costs for the U.S. and significant non-U.S. defined benefit plans are as follows: Combined U.S. and significant non-U.S. Plans - -------------------------------------------------------------------------------- Pension Benefits Postretirement Benefits ------------------------------------------ 2004 2003 2004 2003 - -------------------------------------------------------------------------------- Weighted average assumptions: Expected return on plan assets 8.5% 8.5% - - Discount rate 5.8% 6.1% 6.3% 6.6% Rate of compensation increase 3.7% 3.8% - - - -------------------------------------------------------------------------------- 14

11. Long-term Debt -------------- MMC repaid $600 million of long-term debt that matured in June, 2004 by issuing commercial paper. In June 2004, MMC renegotiated a $1.4 billion revolving credit facility that expired that month. Under the terms of the renegotiated agreement the facility was split into two tranches; $700 million which expires in June 2005 and $700 million which expires in June 2009. In addition, MMC maintains a $1.0 billion revolving credit facility established in June 2002 which expires in June 2007. These facilities support MMC's commercial paper borrowings. In July 2004 MMC purchased Kroll, Inc. in an all-cash transaction totaling approximately $1.9 billion. The purchase was initially funded with commercial paper borrowings. To support these borrowings, MMC negotiated a new $1.5 billion, one-year revolving credit facility. Following the acquisition, MMC issued $650 million of 5.375% Senior Notes due 2014 and $500 million of Floating Rate Notes due 2007. The proceeds from these notes were used to repay a portion of the commercial paper borrowings that had funded the Kroll purchase. Under the terms of the agreement of the above-mentioned credit facility, the amount of the facility was reduced by the proceeds from the issuance of the Senior Notes and Floating Rate Notes of approximately $1.15 billion. The new revolving credit facility now totals $355 million. No amounts were outstanding under any of the facilities as of June 30, 2004. In July 2003, MMC issued $300 million of 5.875% Senior Notes due in 2033. In February 2003, MMC issued $250 million of 3.625% Senior Notes due in 2008 and $250 million of 4.85% Senior Notes due in 2013 (the "2003 Notes"). The net proceeds from the 2003 Notes were used to pay down commercial paper borrowings. 12. Common Stock ------------ During the second quarter of 2004, MMC repurchased shares of its common stock for treasury as well as to meet requirements for issuance of shares for its various stock, compensation and benefit programs. During the second quarter of 2004, MMC repurchased 4 million shares for total consideration of $180 million and repurchased 11 million shares for $510 million for the six months ended June 30, 2004. Share repurchases are recorded on a trade date basis. MMC repurchases shares subject to market conditions, including from time to time pursuant to the terms of a 10b5-1 plan. A 10b5-1 plan allows a company to purchase shares during a blackout period, provided the company communicates its share purchase instructions to the broker prior to the blackout period, pursuant to a written plan that may not be changed. Approximately 1.3 million of the shares repurchased in 2004 were made under the 10b5-1 plan. Share purchases are expected to be limited for the remainder of 2004. 15

13. Claims, Lawsuits and Other Contingencies ---------------------------------------- Putnam Matters -------------- Regulatory Matters. - -------------------- On October 28, 2003, the Securities and Exchange Commission ("SEC") commenced a civil administrative and cease and desist proceeding against Putnam under the Investment Advisors Act of 1940 and the Investment Company Act of 1940. On November 13, 2003, pursuant to an agreement with Putnam, the SEC entered an order that made findings of certain facts, which Putnam neither admitted nor denied, and concluded that Putnam violated the Investment Advisors Act of 1940 and the Investment Company Act of 1940. The order imposed partial relief, including final censure, remedial undertakings, and a cease and desist order. The SEC's order found that since 1998 at least six Putnam investment management professionals engaged in excessive short-term trading of Putnam mutual funds in their personal accounts. The order also found that four of these employees engaged in trading in funds over which they had investment decision making responsibilities and access to non-public information regarding their funds' portfolios. The SEC further found that Putnam failed to disclose this potentially self-dealing securities trading to the boards or shareholders of the mutual funds it manages, failed to take adequate steps to detect and deter such trading activity through internal controls and failed in its supervision of these investment management professionals. Under the terms of the order, Putnam has agreed to a number of remedial actions, including new employee trading restrictions, enhanced employee trading compliance, determination by an independent assessment consultant of the amount of restitution to be made by Putnam for losses attributable to excessive short-term trading and market timing trading activity by Putnam employees, the retention of an independent compliance consultant, the undertaking of periodic compliance reviews, and certification of compliance with the SEC. On April 8, 2004, Putnam entered into a final settlement of those charges under which Putnam is required to pay $5 million in disgorgement plus a civil monetary penalty of $50 million, with any excess amount of restitution required to be set off against the civil monetary penalty (up to an additional $5 million). These amounts are to be distributed in accordance with the process established under the November 13, 2003 and April 8, 2004 SEC orders. In the event that the independent assessment consultant determines that the amount of restitution required by the November 13, 2003 order is more than $10 million, Putnam will also be responsible for paying any such excess amount. On October 28, 2003, the Massachusetts Secretary of the Commonwealth ("Massachusetts Securities Division") commenced a civil administrative proceeding against Putnam and two of its employees alleging violations of the state's securities law anti-fraud provisions. On April 8, 2004, simultaneously and in conjunction with the settlement of the above-referenced SEC proceeding, the Massachusetts Securities Division entered a Consent Order in final settlement of those charges. That Consent Order included a cease and desist order, and requires Putnam to pay $5 million in restitution and an administrative fine of $50 million, with any excess amount of restitution required to be set off against the administrative fine (up to an additional $10 million, with Putnam responsible for paying any further excess amount). The restitution called for by the Consent Order will be determined and distributed by the same independent assessment consultant appointed pursuant to the November 13, 2003 and April 8, 2004 SEC orders. The Trustees may separately seek additional amounts to assure that full restitution is made to Putnam fund shareholders. In a separate action, the SEC is seeking an injunction against two of the six investment management employees. All six are no longer employed by Putnam. 16

Additionally, Putnam has received document subpoenas and/or requests for information from the United States Attorney in Boston, the Florida Department of Financial Services, the Office of the Attorney General for the State of New York, Offices of the Secretary of State and the State Auditor for the State of West Virginia, the Vermont Securities Division, the NASD and the Boston office of the U.S. Department of Labor inquiring into, among other things, matters that are the subject of the SEC and Massachusetts actions. Putnam has also received document subpoenas from the Massachusetts Securities Division, the Office of the Attorney General for the State of New York, and the SEC relating to plan expense reimbursement agreements between Putnam and certain multiemployer deferred compensation plans which are Putnam clients, and also relating to Putnam's relationships with consultants retained by multiemployer deferred compensation plans. The Massachusetts Securities Division has taken testimony from a number of Putnam employees relating to the same matters. Putnam has also received subpoenas from the SEC's Philadelphia office, seeking documents and information relating to Putnam's directed brokerage practices and trading practices and the SEC has interviewed, and taken testimony from, a number of Putnam employees relating to revenue sharing practices and trading practices. In addition, Putnam has received a request for information from the SEC's Chicago office and the NASD regarding revenue sharing arrangements. Putnam has also received requests for information from the SEC's Boston office, the Massachusetts Securities Division and the Department of Labor relating to the administration of certain 401(K) plans by Putnam Fiduciary Trust Company. The first matter involved the correction of operational errors with respect to a 401(K) client's investment in certain Putnam Funds. The second matter involved the payment of certain Putnam corporate expenses for consulting services. Putnam is fully cooperating with the regulatory authorities. "Market-Timing" Securities Litigation. - --------------------------------------- As of July 20, 2004, MMC and Putnam have received complaints in over 70 civil actions based on allegations of "market-timing" activities. These actions have been filed in courts in New York, Massachusetts, California, Illinois, Connecticut, Delaware, Vermont, Kansas, and North Carolina. Most of the actions have been transferred, along with others against other mutual fund complexes, to the United States District Court for the District of Maryland for coordinated or consolidated pretrial proceedings. In most of the federal cases, either by agreement of the parties or order of the court, MMC and Putnam are not required to respond to the complaints until after plaintiffs have filed amended complaints in the consolidated actions. 17

The civil actions include: o Purported securities class actions (the "MMC Class Action Complaints") have been filed in United States District Court for the Southern District of New York on behalf of a class of purchasers of MMC stock during the period from January 2000 to November 2003. The MMC Class Action Complaints allege, among other things, that MMC failed to disclose certain market-timing activities at Putnam which, when disclosed, resulted in a drop in the market price of MMC's shares. The MMC Class Action Complaints also name as defendants certain current or former officers and directors of MMC. The MMC Class Action Complaints assert claims under Sections 10(b) and 20(a) of the Exchange Act. o Purported shareholder derivative actions have been filed against members of MMC's Board of Directors, and MMC as a nominal defendant in courts in state and federal courts in New York City. In these actions, the plaintiffs purport to state common law claims based on, among other things, the Board's alleged failure to prevent the alleged market timing from occurring. o MMC and/or Putnam have been named in over fifty additional actions brought by investors in Putnam funds claiming damages to themselves or the Putnam funds as a result of various market-timing activities. These actions have been brought either individually (the "Individual Complaints"), derivatively (the "Putnam Derivative Complaints"), or on behalf of a putative class (the "Putnam Class Action Complaints"). The Individual Complaints, the Putnam Class Action Complaints (which also name as defendants certain Putnam funds and certain Putnam employees) and the Putnam Derivative Action Complaints (which also name as defendants certain Putnam officers and employees and certain trustees of the Putnam funds), allege violations of the federal securities and investment advisory laws and state law. At this time, several of these cases are pending in various state courts. Putnam has also been named as a defendant in one suit in its capacity as a sub-advisor to a non-Putnam fund. o MMC, Putnam, and various of their officers, directors and employees have been named as defendants in three purported class actions asserting claims under ERISA (the "ERISA Actions"). The ERISA Actions, which have been brought by participants in MMC's Stock Investment Plan and Putnam's Profit Sharing Retirement Plan (collectively, the "Plans"), allege, among other things, that, in view of the market-timing trading activity that was allegedly allowed to occur at Putnam, the defendants knew or should have known that the investment of the Plans' funds in MMC's stock and Putnam's mutual fund shares was imprudent and that the defendants breached their fiduciary duties to the Plans' participants in making these investments. The three ERISA Actions were filed in federal court for the Southern District of New York. Putnam has agreed to indemnify the Putnam funds for any liabilities arising from market-timing activities, including those that could arise in the securities litigations, and MMC has agreed to guarantee Putnam's obligations in that regard. 18

Other Putnam Litigation. - ------------------------- Putnam Investment Management, LLC and Putnam Retail Management Limited Partnership have been sued in the United States District Court for the District of Massachusetts for alleged violations of Section 36(b) of the Investment Company Act of 1940 through the receipt of purportedly excessive advisory and distribution fees paid by the mutual funds in which plaintiffs purportedly owned shares. Plaintiffs seek, among other things, to recover the compensation paid to defendants by the funds for one year prior to the filing of the complaint, rescission of the management and distribution agreements between defendants and the funds, and a prospective reduction in fees. The complaints in the above-referenced Putnam matters seek monetary damages and other forms of relief. At the present time, MMC's management is unable to estimate the impact that the outcome of the foregoing proceedings may have on MMC's consolidated results of operations or financial position or cash flows. Employment Dispute - ------------------ On June 9, 2004, MMC reached a final settlement of the previously disclosed arbitration proceeding with Lawrence J. Lasser, former president and chief executive officer of Putnam. The settlement represents approximately $25 million less than the company had accrued for Mr. Lasser in prior years. Pursuant to the agreement, Mr. Lasser received a cash payment in full settlement of all outstanding issues related to his employment, compensation, and departure from the company. This cash payment represents the release of fully vested amounts previously awarded to Mr. Lasser over the past decade ($55 million) and a portion (approximately $23 million) of amounts previously awarded but not fully vested. Other Matters - ------------- MMC and its subsidiaries are subject to various other claims, lawsuits and proceedings consisting principally of alleged errors and omissions in connection with the placement of insurance or reinsurance and in rendering investment and consulting services. Some of these matters seek damages, including punitive damages, in amounts that could, if assessed, be significant. Insurance coverage applicable to such matters includes elements of both risk retention and risk transfer. As part of the combination with Sedgwick, MMC acquired several insurance underwriting businesses that were already in run-off, including River Thames Insurance Company Limited ("River Thames"), which was sold in 2001. Sedgwick guaranteed payment of claims on certain policies underwritten through the Institute of London Underwriters by River Thames ("ILU Guarantee"). The policies covered by the ILU Guarantee are reinsured up to 40 million British Pounds by a related party of River Thames. Payment of claims under the reinsurance agreement is collateralized by segregated assets held in a trust. As of June 30, 2004, the reinsurance coverage exceeded the best estimate of the projected liability of the policies covered by the ILU Guarantee. To the extent River Thames or the reinsurer is unable to meet their obligations under those policies, a claimant may seek to recover from MMC under the guarantee. Although the ultimate outcome of these other matters cannot be ascertained and liabilities in indeterminate amounts may be imposed on MMC and its subsidiaries, on the basis of present information, it is the opinion of MMC's management that the disposition or ultimate determination of these claims, lawsuits or proceedings should not have a material adverse effect on MMC's consolidated financial position or cash flows, but may be material to MMC's operating results in any particular period. Other Industry Inquiries - ------------------------ The New York Attorney General has issued subpoenas to numerous insurance brokers related to an inquiry into market service agreements and other similar agreements which compensate brokers for distribution and other services provided to insurance carriers. The Company has received such a subpoena and is cooperating fully in the investigation. The SEC is examining the practices, compensation arrangements and disclosures of consultants that provide services to sponsors of pension plans or other market participants, including among other things, practices with respect to advice regarding the selection of investment advisors to manage plan assets. Mercer Investment Consulting, Inc. has received requests for information from the SEC in connection with this examination and is fully cooperating. 19

14. Variable Interest Entities - ------------------------------- MMC through Putnam, manages $3.7 billion in the form of Collateralized Debt Obligations ("CDO") and Collateralized Bond Obligations ("CBO"). Separate limited liability companies were established to issue the notes and to hold the underlying collateral, which consists of high-yield bonds and other securities. Putnam serves as the collateral manager for the CDOs and CBOs. The maximum loss exposure related to the CDOs and CBOs is limited to Putnam's investment totaling $7.7 million, reflected in Long-term investments in the Consolidated Balance Sheets at June 30, 2004. MMC has concluded it is not the primary beneficiary of these structures under FIN 46 "Consolidation of Variable Interest Entities." 15. Segment Information ------------------- MMC operates in three principal business segments based on the services provided. Segment performance is evaluated based on operating income, which is after deductions for directly related expenses and minority interest but before corporate expenses, charges, credits or insurance recoveries related to September 11, 2001, and charges or credits related to integration and restructuring reserves. The accounting policies of the segments are the same as those used for the consolidated financial statements. Selected information about MMC's operating segments for the six-month periods ended June 30, 2004 and 2003 follow: - -------------------------------------------------------------------------------- Segment Operating (In millions of dollars) Revenue Income - -------------------------------------------------------------------------------- 2004 Risk and Insurance Services $3,811(a) $1,092 Investment Management 907 69 Consulting 1,528 202 - -------------------------------------------------------------------------------- $6,246 $1,363 - -------------------------------------------------------------------------------- 2003 Risk and Insurance Services $3,453(a) $ 963 Investment Management 940 228 Consulting 1,324 182 - -------------------------------------------------------------------------------- $5,717 $1,373 - -------------------------------------------------------------------------------- (a) Includes interest income on fiduciary funds ($59 million in 2004 and $61 million in 2003). 20

A reconciliation of the total segment operating income to income before income taxes and minority interest in the consolidated financial statements is as follows: - -------------------------------------------------------------------------------- (In millions of dollars) 2004 2003 - -------------------------------------------------------------------------------- Total segment operating income $1,363 $1,373 Corporate income/(expense) 36 (68) Reclassification of minority interest 6 11 - -------------------------------------------------------------------------------- Operating income 1,405 1,316 Interest income 9 13 Interest expense (98) (89) - -------------------------------------------------------------------------------- Total income before income taxes and minority interest $1,316 $1,240 - -------------------------------------------------------------------------------- During the first quarter of 2004, MMC reached final settlement for insured losses totaling $278 million related to the World Trade Center. The replacement value of assets exceeded the book value by $105 million, which was recorded as a reduction of Corporate operating expenses. Operating segment revenue by product for the six-month periods ended June 30, 2004 and 2003 is as follows: - -------------------------------------------------------------------------------- (In millions of dollars) 2004 2003 - -------------------------------------------------------------------------------- Risk & Insurance Services Risk Management and Insurance Broking $2,849 $2,589 Reinsurance Broking and Services 482 437 Related Insurance Services 480 427 - -------------------------------------------------------------------------------- Total Risk & Insurance Services 3,811 3,453 - -------------------------------------------------------------------------------- Investment Management 907 940 - -------------------------------------------------------------------------------- Consulting Retirement Services 689 606 Management and Organizational Change 275 198 Health Care & Group Benefits 211 201 Human Capital 197 181 Economic 81 71 - -------------------------------------------------------------------------------- 1,453 1,257 Reimbursed Expenses 75 67 - -------------------------------------------------------------------------------- Total Consulting 1,528 1,324 - -------------------------------------------------------------------------------- Total $6,246 $5,717 - -------------------------------------------------------------------------------- 21

Marsh & McLennan Companies, Inc. and Subsidiaries Management's Discussion and Analysis of Financial Condition and Results of Operations Second Quarter and Six Months Ended June 30, 2004 General Marsh & McLennan Companies, Inc. and Subsidiaries ("MMC") is a professional services firm. MMC subsidiaries include Marsh Inc. ("Marsh"), the world's largest risk and insurance services firm; Putnam Investments ("Putnam"), one of the largest investment management companies in the United States; and Mercer Inc. ("Mercer"), a major global provider of consulting services. Approximately 60,000 employees worldwide provide analysis, advice and transactional capabilities to clients in over 100 countries. MMC operates in three principal business segments based on the services provided. Segment performance is evaluated based on operating income, which is after deductions for directly related expenses and minority interest but before corporate expenses, charges, credits or insurance recoveries related to September 11, 2001, and charges or credits related to integration and restructuring reserves. For a description of critical accounting policies, including those which involve significant management judgment, see Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 1 to the consolidated financial statements in MMC's Annual Report on Form 10-K ("2003 10-K") for the year ended December 31, 2003. This Management's Discussion and Analysis of Financial Condition and Results of Operations contains certain statements relating to future results which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. See "Information Concerning Forward-Looking Statements" on page two of this filing. This Form 10-Q should be read in conjunction with the 2003 10-K. The consolidated results of operations follow: - -------------------------------------------------------------------------------- Second Quarter Six Months (In millions of dollars) 2004 2003 2004 2003 - -------------------------------------------------------------------------------- Revenue: Service Revenue $2,964 $2,840 $6,141 $5,681 Investment Income (Loss) 72 25 105 36 - -------------------------------------------------------------------------------- Operating Revenue 3,036 2,865 6,246 5,717 - -------------------------------------------------------------------------------- Expense: Compensation and Benefits 1,596 1,475 3,231 2,853 Other Operating Expenses 808 791 1,610 1,548 - -------------------------------------------------------------------------------- Operating Expenses 2,404 2,266 4,841 4,401 - -------------------------------------------------------------------------------- Operating Income $ 632 $ 599 $1,405 $1,316 - -------------------------------------------------------------------------------- Operating Income Margin 20.8% 20.9% 22.5% 23.0% - -------------------------------------------------------------------------------- Diluted Earnings per Share $ .73 $ .66 $ 1.56 $ 1.47 - -------------------------------------------------------------------------------- 22

An analysis of MMC's operating revenue by segment, and the impact of foreign currency translation, acquisitions and dispositions is as follows: - ------------------------------------------------------------------------------------------------------------------- Components of Revenue Change -------------------------------------- Three Months Ended % Change Acquisitions/ June 30, GAAP Underlying Dispositions Currency (In millions, except percentage figures) 2004 2003 Revenue Revenue (a) Impact Impact - ------------------------------------------------------------------------------------------------------------------- Risk and Insurance Services Risk Management and Insurance Broking $1,363 $1,269 7% 3% 1% 3% Reinsurance Broking and Services 207 194 7% 4% - 3% Related Insurance Services (b) 247 217 13% 13% - - - ------------------------------------------------------------------------------------------------------------------- Total Risk and Insurance Services (c) 1,817 1,680 8% 5% - 3% - ------------------------------------------------------------------------------------------------------------------- Investment Management 446 495 (10)% (10)% - - - ------------------------------------------------------------------------------------------------------------------- Consulting Retirement Services (c) 339 309 10% - 5% 5% Management and Organizational Change 141 117 21% 15% 2% 4% Health Care and Group Benefits (c) 111 103 7% 7% - - Human Capital 103 92 11% 4% - 7% Economic 39 34 16% 14% - 2% - ------------------------------------------------------------------------------------------------------------------- 733 655 12% 5% 3% 4% Reimbursed Expenses 40 35 - ------------------------------------------------------------------------------------------------------------------- Total Consulting 773 690 12% 5% 3% 4% - ------------------------------------------------------------------------------------------------------------------- Total Revenue $3,036 $2,865 6% 2% 1% 3% - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- Components of Revenue Change -------------------------------------- Six Months Ended % Change Acquisitions/ June 30, GAAP Underlying Dispositions Currency (In millions, except percentage figures) 2004 2003 Revenue Revenue (a) Impact Impact - ------------------------------------------------------------------------------------------------------------------- Risk and Insurance Services Risk Management and Insurance Broking $2,849 $2,589 10% 5% 1% 4% Reinsurance Broking and Services 482 437 10% 7% - 3% Related Insurance Services (b) 480 427 12% 12% - - - ------------------------------------------------------------------------------------------------------------------- Total Risk and Insurance Services (c) 3,811 3,453 10% 6% - 4% - ------------------------------------------------------------------------------------------------------------------- Investment Management 907 940 (3)% (3)% - - - ------------------------------------------------------------------------------------------------------------------- Consulting Retirement Services (c) 689 606 14% - 6% 8% Management and Organizational Change 275 198 39% 10% 24% 5% Health Care and Group Benefits (c) 211 201 5% 2% - 3% Human Capital 197 181 9% 2% - 7% Economic 81 71 14% 11% - 3% - ------------------------------------------------------------------------------------------------------------------- 1,453 1,257 15% 3% 6% 6% Reimbursed Expenses 75 67 - ------------------------------------------------------------------------------------------------------------------- Total Consulting 1,528 1,324 15% 3% 6% 6% - ------------------------------------------------------------------------------------------------------------------- Total Revenue $6,246 $5,717 9% 4% 1% 4% - ------------------------------------------------------------------------------------------------------------------- (a) Underlying basis measures the change in revenue before the impact of acquisitions and dispositions using constant currency exchange rates. (b) Includes U.S. affinity, claims management, wholesale broking, underwriting management and MMC Capital businesses. (c) Certain reclassifications have been made to prior year amounts to conform with current presentation. 23

Revenue, derived mainly from commissions and fees, increased 6% from the second quarter of 2003. The increase in revenue was due to underlying revenue growth in the risk and insurance and consulting segments, partially offset by a decline in investment management, and the impact of foreign exchange and acquisitions. Revenue increased 2% on an underlying basis, which measures the change in revenue before the impact of acquisitions and dispositions and using constant currency exchange rates. Revenue growth on an underlying basis in the risk and insurance services segment was 5% in the second quarter of 2004, reflecting growth in insurance broking, reinsurance broking and related insurance services. The performance reflects a softening insurance market, with declines in commercial insurance rates. Consulting revenue on an underlying basis grew 5%. Higher demand for management advice generated an increase in management and organizational change consulting. Acquisitions contributed 3% to the revenue growth of consulting largely reflecting the acquisition of Synhrgy HR Technologies. Revenue decreased 10% in the investment management segment due to a decline in the amount of assets under management on which fees are earned, partially offset by higher investment income. Average assets under management declined 17% in the second quarter compared with 2003. Revenue in the first six months of 2004 increased 9% from the same period last year, 4% on an underlying basis. Underlying revenue grew 6% in the risk and insurance services segment during the first six months of the year, due to continued growth in insurance broking, reinsurance broking and related insurance services. Consulting revenue grew 3% on an underlying basis and acquisitions increased revenue by 6%. Revenue decreased 3% in the investment management segment due to lower fees resulting from the decline in assets under management, partially offset by higher investment income related to the sale of Putnam's interest in its Italian joint venture and related securities. Operating expenses increased 6% in the second quarter of 2004, 2% on an underlying basis. The increase in expenses results from an 8% increase in compensation and benefits costs, as benefit costs increased 22%, reflecting higher pension costs. All other expenses increased 2%. Severance costs related to streamlining management and repositioning Putnam were offset by a credit to compensation expense related to the settlement with Putnam's former chief executive officer (see Note 13 of the Consolidated Financial Statements). Operating expenses increased 10% in the first six months of 2004, 4% on an underlying basis. The increase in underlying expenses reflects higher compensation and benefits costs which includes severance and increased pension costs, higher facility expenses, and costs related to regulatory issues. These increases were partially offset by a decrease in amortization expense for prepaid dealer commissions and a credit to compensation expense related to the settlement with Putnam's former chief executive officer. Expenses in 2004 also include regulatory fines of $100 million related to Putnam's settlement agreements with the Securities and Exchange Commission ("SEC") and the Office of the Secretary of the Commonwealth of Massachusetts, and a credit of $105 million from the final settlement with insurers for claims related to the September 11, 2001 attack on the World Trade Center ("WTC"). Based on the most recent estimates, pension expense is expected to increase by approximately $90 million for the full year, half of which has been included in the six months results. 24

Risk and Insurance Services - -------------------------------------------------------------------------------- Second Quarter Six Months - -------------------------------------------------------------------------------- (In millions of dollars) 2004 2003 2004 2003 - -------------------------------------------------------------------------------- Revenue $1,817 $1,680 $3,811 $ 3,453 Expense 1,362 1,277 2,719 2,490 - -------------------------------------------------------------------------------- Operating Income $ 455 $ 403 $1,092 $ 963 - -------------------------------------------------------------------------------- Operating Income Margin 25.0% 24.0% 28.7% 27.9% - -------------------------------------------------------------------------------- Revenue - ------- Revenue for the risk and insurance services segment grew 8% over the second quarter of 2003, 5% on an underlying basis. In the second quarter, underlying revenue grew 3% in risk management and insurance broking, primarily due to growth in Europe and other international geographies. Business activity in the United States was stronger for middle market than risk management. Acquisitions, including the Australia and New Zealand operations of Heath Lambert and Brady & Company, Inc. contributed 1% to revenue growth. Reinsurance broking and services grew 4% on an underlying basis primarily resulting from higher new business. Related insurance services revenue grew 13%, primarily due to increases in the claims management business and MMC Capital. Revenue for the first six months of 2004 grew 10% over the same period of 2003, 6% on an underlying basis, reflecting a higher volume of business. Underlying revenues grew 5% in risk management and insurance broking, driven by growth in Europe and other international geographies. Reinsurance broking and services grew 7% on an underlying basis primarily resulting from new business, and related insurance services grew 12% primarily due to growth in claims management and MMC Capital. Expense - ------- Risk and insurance services expenses increased 7% over the second quarter of 2003, 3% on an underlying basis. The increase in underlying expense is primarily due to higher benefits costs, including pension expense. For the six months, operating expenses increased 9% over 2003, 4% on an underlying basis. The increase in underlying expenses is due to higher compensation and benefits costs. Acquisition - ----------- In July 2004, MMC acquired Kroll, Inc., the world's leading provider of risk mitigation services. The combination of Marsh and Kroll expands MMC's capabilities to assist clients in managing the total cost of risk. The total cost of the acquisition was $1.9 billion and the impact on EPS is expected to be neutral for the remainder of 2004. Investment Management - -------------------------------------------------------------------------------- Second Quarter Six Months - ------------------------------------------------------------------------------- (In millions of dollars) 2004 2003 2004 2003 - -------------------------------------------------------------------------------- Revenue $446 $495 $907 $940 Expense 351 370 838 712 - -------------------------------------------------------------------------------- Operating Income $ 95 $125 $ 69 $228 - -------------------------------------------------------------------------------- Operating Income Margin 21.3% 25.3% 7.6% 24.3% - -------------------------------------------------------------------------------- 25

Revenue - ------- Putnam's revenue decreased 10% in the second quarter of 2004 reflecting a decrease in fees due to a decline in assets under management. This decrease was partially offset by a $38 million investment gain from the sale of Putnam's interest in its Italian joint venture and related securities. Assets under management averaged $216 billion in the second quarter of 2004, a 17% decline from the $260 billion managed in the second quarter of 2003. Assets under management aggregated $213 billion at June 30, 2004 compared with $267 billion at June 30, 2003 and $240 billion at December 31, 2003. The change from December 31, 2003 results primarily from net redemptions of $30 billion, partially offset by an increase in equity market levels. Putnam's revenue declined 3% in the first six months of 2004 compared to the same period in 2003. The decrease is primarily driven by lower fees due to a decline in assets under management, partially offset by higher investment gains. At the end of the second quarter, assets held in equity securities represented 70% of assets under management, compared with 74% at June 30, 2003, while investments in fixed income products represented 30%, compared with 26% at June 30, 2003. Quarter-end and average assets under management are presented below: - -------------------------------------------------------------------------------- (In billions of dollars) 2004 2003 - -------------------------------------------------------------------------------- Mutual Funds: Growth Equity $ 41 $ 48 Value Equity 41 42 Blend Equity 28 35 Fixed Income 38 46 - -------------------------------------------------------------------------------- 148 171 - -------------------------------------------------------------------------------- Institutional: Equity 39 72 Fixed Income 26 24 - -------------------------------------------------------------------------------- 65 96 - -------------------------------------------------------------------------------- Quarter-end Assets $213 $267 - -------------------------------------------------------------------------------- Assets from Non-US Investors $ 36 $ 37 - -------------------------------------------------------------------------------- Average Assets $216 $260 - -------------------------------------------------------------------------------- Components of quarter-to-date change in ending assets under management - -------------------------------------------------------------------------------- New Sales/(Redemptions)including Dividends Reinvested $(12.2) $(3.0) - -------------------------------------------------------------------------------- Impact of Market/Performance ( 1.4) 29.1 - -------------------------------------------------------------------------------- The categories of mutual fund assets reflect style designations aligned with each fund's prospectus. All prior year amounts have been reclassified to conform with the current investment mandate for each product. 26

Assets under management and revenue levels are particularly affected by fluctuations in domestic and international stock and bond market prices, the composition of assets under management and by the level of investments and withdrawals for current and new fund shareholders and clients. Items affecting revenue also include, but are not limited to, actual and relative investment performance, service to clients, the development and marketing of new investment products, the relative attractiveness of the investment style under prevailing market conditions, changes in the investment patterns of clients and the ability to maintain investment management and administrative fees at historic levels. Future revenue may be adversely affected by continued net redemptions and by limits on fund expense ratios and front end sales charges. Revenue levels are sensitive to all of the factors above, but in particular, to significant changes in stock and bond market valuations and net flows into or out of Putnam's funds. Expense - ------- Putnam's expenses decreased 5% in the second quarter of 2004 from the same period of 2003. The decrease was primarily due to a decline in amortization expense for prepaid dealer commissions along with lower compensation costs. Other notable items impacting the quarter were: a credit of $25 million associated with the settlement with Putnam's former chief executive officer (see Employment Dispute, Note 13 of the Consolidated Financial Statements); offset by $27 million of incremental severance costs, and $34 million of costs related to regulatory issues and repositioning Putnam, including legal, audit and communications expenses. Expenses for the six months ended June 30, 2004 increased 18% from the same period in 2003. Expenses in 2004 include a $100 million charge for Putnam's regulatory settlements with the SEC and the Secretary of the Commonwealth of the State of Massachusetts. Other significant items recorded in 2004 were severance of $52 million and incremental costs related to regulatory issues and repositioning Putnam, including legal and audit costs of $28 million, communications costs of $16 million and $5 million of other costs. These increases were partially offset by a decrease in amortization expense for prepaid dealer commissions and a $25 million credit to compensation expense associated with the settlement with Putnam's former chief executive officer. Acquisition - ----------- In July 2004, Putnam acquired an additional 30% of Pan Agora Asset Management, bringing its total interest to an 80% voting majority. Pan Agora offers enhanced index and structured products. This transaction will increase Putnam's assets under management by approximately $8 billion. Consulting - -------------------------------------------------------------------------------- Second Quarter Six Months - -------------------------------------------------------------------------------- (In millions of dollars) 2004 2003 2004 2003 - -------------------------------------------------------------------------------- Revenue $773 $ 690 $1,528 $1,324 Expense 660 591 1,326 1,142 - -------------------------------------------------------------------------------- Operating Income $113 $ 99 $ 202 $ 182 - -------------------------------------------------------------------------------- Operating Income Margin 14.6% 14.3% 13.2% 13.7% - -------------------------------------------------------------------------------- 27

Revenue - ------- Consulting revenue in the second quarter of 2004 increased 12% over the same period in 2003 with strong growth in human resource practices in Europe and Asia and in management and economic consulting. Underlying revenue increased 5% due to the higher demand for consulting services resulting from improving economic conditions, with acquisitions adding another 3%. On an underlying basis, management and organization change grew 15%, economic consulting grew 14%, health care and group benefits grew 7%. Underlying revenue in retirement services was flat. Consulting revenue for the first six months of 2004 increased 15% over the same period in 2003. Acquisitions, which accounted for 6% of the revenue growth in 2004, include Oliver, Wyman & Company which closed on April 1, 2003 and Synhrgy HR Technologies which closed in January, 2004. On an underlying basis, revenue increased 3%. Underlying revenue grew 11% in economic consulting, 10% in management and organizational change, and 2% in both the health care & group benefits and human capital practices. Underlying revenue in retirement services was flat. Expense - ------- Consulting expenses increased 12% in the second quarter of 2004 compared to 2003 primarily due to the impact of foreign exchange and acquisitions. On an underlying basis, expenses increased 4% due to increased benefits costs, primarily pension costs. For the six months, expenses increased 16% over 2003, 3% on an underlying basis. Corporate Expenses Corporate expenses grew 2% in the second quarter of 2004 compared to the same period last year. Corporate expenses for the six months ended June 30, 2004 include the impact of the final settlement for insured losses related to the WTC. The replacement value of the assets exceeded their book value by $105 million which was recorded in the first quarter as a reduction of other operating expenses. Interest Interest income earned on corporate funds amounted to $4 million in the second quarter of 2004, a decrease of $3 million from the second quarter of 2003. Interest expense of $48 million in 2004 increased from $46 million in the second quarter of 2003 due to an increase in the average outstanding debt. Interest income on corporate funds amounted to $9 million in the first six months of 2004, a $4 million decrease from the same period in 2003. Interest expense of $98 million increased from $89 million in the same period of 2003 due to an increase in the average outstanding debt and the average interest rates on outstanding debt in 2004. The increase in average interest rates results from the conversion of $800 million of the company's debt from floating to fixed rates in 2003. Income Taxes MMC's consolidated effective tax rate was 33% of income before income taxes and minority interest in the second quarter of 2004 compared with 34% in the second quarter of 2003. The effective tax rate of 36.1% for the six months of 2004 includes the impact of Putnam's non-deductible settlement payments of $100 million and a 40% tax rate on the WTC settlement gain of $105 million. The effective tax rate applicable to ongoing operating income was 33%, which is expected to increase by approximately one half of one percent after the acquisition of Kroll. Liquidity and Capital Resources MMC anticipates that funds generated from operations will be sufficient to meet its foreseeable recurring operating cash requirements as well as to fund dividends and capital expenditures. MMC's ability to generate cash flow from operations is subject to the business risks inherent in each operating segment. Cash and cash equivalents reported in the Consolidated Balance Sheets include amounts held to satisfy global working capital, capital adequacy and regulatory requirements. MMC continually monitors its expected and actual cash flows to determine the most advantageous use of its near term cash flows among alternatives including dividends, investments, acquisitions, funding alternatives for its pension plans and share repurchases. 28

Operating Cash Flows - -------------------- MMC generated $769 million of cash from operations for the period ended June 30, 2004 compared with $1.1 billion for the same period in 2003. These amounts reflect the net income earned by MMC during those periods adjusted for non-cash charges and changes in working capital which relate, primarily, to the timing of payments or receipts of accrued liabilities assets or receipts of assets. The decrease in cash generated from operations compared with the prior year results primarily from higher tax payments in 2004, a higher amount of investment gains, which are included in investing cash flows, as well as normal fluctuations in the timing of payments and receipts of various working capital items. The increase in 2004 of cash outflows related to deferred compensation plans was largely offset by cash generated from the liquidation of assets related to these plans included in the change in other assets in the consolidated statements of cash flows. Financing Cash Flows - -------------------- Net cash used for financing activities was $765 million for this period compared to a use of $722 million in the same period last year. Cash used for financing activities includes an increase in commercial paper borrowing offset by the repayment in June 2004 of $600 million of maturing long term debt. MMC periodically repurchases shares of its common stock for treasury as well as to meet requirements for issuance of shares for its various stock compensation and benefit programs. During the second quarter of 2004, MMC repurchased 4 million shares of its common stock at a cost of $180 million and repurchased 11 million shares for $510 million for the six months ended June 30, 2004. Share repurchases are recorded on a trade date basis, but are reflected on a settlement date basis in the Consolidated Statements of Cash Flows. Proceeds from common stock issued pursuant to stock compensation and benefit plans was $223 million in 2004, compared with $253 million in 2003. Currently, management expects to use a significant portion of cash flows over the next six months to pay down borrowings related to the Kroll acquisition. Share repurchases are expected to be limited through the end of the year. MMC paid dividends in the amount of approximately $162 million ($0.31 per share) in the second quarter of 2004. Year to date, MMC has paid dividends of approximately $325 million ($.62 per share) and raised its quarterly dividend 10%, to $0.34 per share, effective in the third quarter. In June 2004, MMC renegotiated a $1.4 billion revolving credit facility that was due to expire in that month. Under the terms of the renegotiated agreement, the facility was split into two tranches, $700 million which expires in June 2005 and $700 million which expires in June 2009. In addition, MMC maintains a $1.0 billion revolving credit facility established in June 2002 which expires in June 2007. The facilities support MMC's commercial paper borrowings. No amounts were outstanding under the facilities during the six months ended June 30, 2004. In July 2004 MMC purchased Kroll, Inc. in an all-cash transaction totaling approximately $1.9 billion. The purchase was initially funded with commercial paper borrowings. To support these borrowings, MMC negotiated a new $1.5 billion, one-year revolving credit facility. Following the acquisition, MMC issued $650 million of 5.375% Senior Notes due 2014 and $500 million of Floating Rate Notes due 2007. The proceeds from these notes were used to repay the commercial paper borrowings. Under the terms of the above-mentioned credit facility, the amount of the facility was reduced by the proceeds from the notes issued. That facility now totals $355 million. The financing activities used to fund the purchase of Kroll did not affect cash flows for the six months ended June 30, 2004. 29

In July 2003, MMC issued $300 million of 5.875% Senior Notes due in 2033. In February 2003, MMC issued $250 million of 3.625% Senior Notes due in 2008 and $250 million of 4.85% Senior Notes due in 2013 (the "2003 Notes"). The net proceeds from the 2003 Notes were used to pay down commercial paper borrowings. Investing Cash Flows - -------------------- Cash used for investing activities amounted to $262 million in the first six months of 2004 and $290 million for the same period in the prior year. The primary use of cash in the first six months was for the acquisition of Synhrgy HR Technologies and the Australia and New Zealand operations of Heath Lambert, and payments of approximately $57 million for acquisitions completed in prior years. Remaining cash payments of approximately $67 million related to acquisitions completed in 2004 and 2003 are recorded in Other liabilities in the Consolidated Balance Sheets at June 30, 2004. MMC's additions to fixed assets and capitalized software, which amounted to $168 million in the first six months of 2004 and $240 million in the first six months last year, primarily relate to computer equipment purchases and the refurbishing and modernizing of office facilities and software development costs. The sale of Putnam's interest in its Italian joint venture and related securities along with sales of securities by MMC Capital, generated $113 million during the first six months of 2004. Securities sales during the same period last year generated $59 million. These sales are included in Other, net in the Consolidated Statements of Cash Flows. MMC has committed to potential future investments of approximately $696 million in connection with various MMC Capital funds and other MMC investments. Commitments of approximately $280 million relate to Trident III, a newly formed private equity fund managed by MMC Capital. Approximately $29 million was invested in the first six months of 2004. MMC expects to fund future commitments, in part, with sales proceeds from existing investments. Market Risk Certain of MMC's revenues, expenses, assets and liabilities are exposed to the impact of interest rate changes and fluctuations in foreign currency exchange rates and equity markets. Interest Rate Risk MMC manages its net exposure to interest rate changes by utilizing a mixture of variable and fixed rate borrowings to finance MMC's asset base. Interest rate swaps are used on a limited basis to manage MMC's exposure to interest rate movements on its cash and investments, as well as interest expense on borrowings, and are only executed with counterparties of high creditworthiness. Foreign Currency Risk The translated values of revenue and expense from MMC's international risk and insurance services and consulting operations are subject to fluctuations due to changes in currency exchange rates. Forward contracts and options are periodically utilized by MMC to limit foreign currency exchange rate exposure on net income and cash flows for specific, clearly defined transactions arising in the ordinary course of its business. 30

Equity Price Risk MMC holds investments in both public and private companies as well as certain private equity funds managed by MMC Capital, including Trident II. Publicly traded investments of $401 million are classified as available for sale under SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities". Non-publicly traded investments of $78 million and $330 million are accounted for under APB Opinion No. 18, "The Equity Method of Accounting for Investments in Common Stock", using the cost method and the equity method, respectively. Changes in value of trading securities are recognized in income when they occur. The investments that are classified as available for sale or that are not publicly traded are subject to risk of changes in market value, which if determined to be other than temporary, could result in realized impairment losses. MMC periodically reviews the carrying value of such investments to determine if any valuation adjustments are appropriate under the applicable accounting pronouncements. Other On June 9, 2004, MMC reached a final settlement of the previously disclosed arbitration proceeding with Lawrence J. Lasser, former president and chief executive officer of Putnam. The settlement represents approximately $25 million less than the company had accrued for compensation expense for Mr. Lasser in prior years. In addition, as further discussed in Note 13 to the Consolidated Financial Statements, administrative proceedings and a number of lawsuits have commenced against Putnam and MMC. The insurance coverage for potential liability resulting from alleged errors and omissions in the professional services provided by MMC, includes elements of both risk retention and risk transfer. MMC believes it has adequately reserved for the self-insurance portion of the contingencies. Payments related to the respective self-insured layers are made as legal fees are incurred and claims are resolved and generally extend over a considerable number of years. The amounts paid in that regard vary in relation to the severity of the claims and the number of claims active in any particular year. The long-term portion of this liability is included in Other liabilities in the Consolidated Balance Sheets. 31

Part I - Item 4. Controls & Procedures - --------------------------------------- a. Evaluation of Disclosure Controls and Procedures Based on their evaluation, as of a date within 90 days of the filing of this Form 10-Q, the Company's Chief Executive Officer and Chief Financial Officer have concluded the Company's disclosure controls and procedures (as defined in Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934) are effective in timely alerting them to material information relating to the Company required to be included in our reports filed under the Exchange Act. b. Changes in Internal Controls There have been no significant changes in internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. 32

PART II. OTHER INFORMATION -------------------------- MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES INFORMATION REQUIRED FOR FORM 10-Q QUARTERLY REPORT June 30, 2004 Item 1. Legal Proceedings. Putnam Matters -------------- Regulatory Matters. -------------------- On October 28, 2003, the SEC commenced a civil administrative and cease and desist proceeding against Putnam under the Investment Advisors Act of 1940 and the Investment Company Act of 1940. On November 13, 2003, pursuant to an agreement with Putnam, the SEC entered an order that made findings of certain facts, which Putnam neither admitted nor denied, and concluded that Putnam violated the Investment Advisors Act of 1940 and the Investment Company Act of 1940. The order imposed partial relief, including final censure, remedial undertakings, and a cease and desist order. The SEC's order found that since 1998 at least six Putnam investment management professionals engaged in excessive short-term trading of Putnam mutual funds in their personal accounts. The order also found that four of these employees engaged in trading in funds over which they had investment decision making responsibilities and access to non-public information regarding their funds' portfolios. The SEC further found that Putnam failed to disclose this potentially self-dealing securities trading to the boards or shareholders of the mutual funds it manages, failed to take adequate steps to detect and deter such trading activity through internal controls and failed in its supervision of these investment management professionals. Under the terms of the order, Putnam has agreed to a number of remedial actions, including new employee trading restrictions, enhanced employee trading compliance, determination by an independent assessment consultant of the amount of restitution to be made by Putnam for losses attributable to excessive short-term trading and market timing trading activity by Putnam employees, the retention of an independent compliance consultant, the undertaking of periodic compliance reviews, and certification of compliance with the SEC. On April 8, 2004, Putnam entered into a final settlement of those charges under which Putnam is required to pay $5 million in disgorgement plus a civil monetary penalty of $50 million, with any excess amount of restitution required to be set off against the civil monetary penalty (up to an additional $5 million). These amounts are to be distributed in accordance with the process established under the November 13, 2003 and April 8, 2004 SEC orders. In the event that the independent assessment consultant determines that the amount of restitution required by the November 13, 2003 order is more than $10 million, Putnam will also be responsible for paying any such excess amount. On October 28, 2003, the Massachusetts Secretary of the Commonwealth ("Massachusetts Securities Division") commenced a civil administrative proceeding against Putnam and two of its employees alleging violations of the state's securities law anti-fraud provisions. On April 8, 2004, simultaneously and in conjunction with the settlement of the above-referenced SEC proceeding, the Massachusetts Securities Division entered a Consent Order in final settlement of those charges. That Consent Order included a cease and desist order, and requires Putnam to pay $5 million in restitution and an administrative fine of $50 million, with any excess amount of restitution required to be set off against the administrative fine (up to an additional $10 million, with Putnam responsible for paying any further excess amount). The restitution called for by the Consent Order will be determined and distributed by the same independent assessment consultant appointed pursuant to the November 13, 2003 and April 8, 2004 SEC orders. The Trustees may separately seek additional amounts to assure that full restitution is made to Putnam fund shareholders. 33

In a separate action, the SEC is seeking an injunction against two of the six investment management employees. All six are no longer employed by Putnam. Additionally, Putnam has received document subpoenas and/or requests for information from the United States Attorney in Boston, the Florida Department of Financial Services, the Office of the Attorney General for the State of New York, Offices of the Secretary of State and the State Auditor for the State of West Virginia, the Vermont Securities Division, the NASD and the Boston office of the U.S. Department of Labor inquiring into, among other things, matters that are the subject of the SEC and Massachusetts actions. Putnam has also received document subpoenas from the Massachusetts Securities Division, the Office of the Attorney General for the State of New York, and the SEC relating to plan expense reimbursement agreements between Putnam and certain multiemployer deferred compensation plans which are Putnam clients, and also relating to Putnam's relationships with consultants retained by multiemployer deferred compensation plans. The Massachusetts Securities Division has taken testimony from a number of Putnam employees relating to the same matters. Putnam has also received subpoenas from the SEC's Philadelphia office, seeking documents and information relating to Putnam's directed brokerage practices and trading practices and the SEC has interviewed, and taken testimony from, a number of Putnam employees relating to revenue sharing practices and trading practices. In addition, Putnam has received a request for information from the SEC's Chicago office and the NASD regarding revenue sharing arrangements. Putnam has also received requests for information from the SEC's Boston Office,the Massachusetts Securities Division and the Department of Labor relating to the administration of certain 401(k) plans by Putnam Fiduciary Trust Company. The first matter involved the correction of operational errors with respect to a 401(k) client's investment in certain Putnam Funds. The second matter involved the payment of certain Putnam corporate expenses for consulting services. Putnam is fully cooperating with the regulatory authorities. "Market-Timing" Securities Litigation. ---------------------------------------- As of July 20, 2004, MMC and Putnam have received complaints in over 70 civil actions based on allegations of "market-timing" activities. These actions have been filed in courts in New York, Massachusetts, California, Illinois, Connecticut, Delaware, Vermont, Kansas, and North Carolina. Most of the actions have been transferred, along with others against other mutual fund complexes, to the United States District Court for the District of Maryland for coordinated or consolidated pretrial proceedings. In the federal cases, MMC and Putnam are not required to respond to the complaints until after plaintiffs have filed amended complaints in the consolidated actions. 34

Other Putnam Litigation. -------------------------- Putnam Investment Management, LLC and Putnam Retail Management Limited Partnership have been sued in the United States District Court for the District of Massachusetts for alleged violations of Section 36(b) of the Investment Company Act of 1940 through the receipt of purportedly excessive advisory and distribution fees paid by the mutual funds in which plaintiffs purportedly owned shares. Plaintiffs seek, among other things, to recover the compensation paid to defendants by the funds for one year prior to the filing of the complaint, rescission of the management and distribution agreements between defendants and the funds, and a prospective reduction in fees. The complaints in the above-referenced Putnam matters seek monetary damages and other forms of relief. At the present time, MMC's management is unable to estimate the impact that the outcome of the foregoing proceedings may have on MMC's consolidated results of operations or financial position or cash flows. Employment Dispute ------------------ On June 9, 2004, MMC reached a final settlement of the previously disclosed arbitration proceeding with Lawrence J. Lasser, former president and chief executive officer of Putnam. The settlement represents approximately $25 million less than the company had accrued for compensation expense for Mr. Lasser in prior years. Pursuant to the agreement, Mr. Lasser received a cash payment in full settlement of all outstanding issues related to his employment, compensation, and departure from the company. This cash payment represents the release of fully vested amounts previously awarded to Mr. Lasser over the past decade ($55 million) and a portion (approximately $23 million) of amounts previously awarded but not fully vested. Other Matters ------------- MMC and its subsidiaries are subject to various other claims, lawsuits and proceedings consisting principally of alleged errors and omissions in connection with the placement of insurance or reinsurance and in rendering investment and consulting services. Some of these matters seek damages, including punitive damages, in amounts that could, if assessed, be significant. Insurance coverage applicable to such matters includes elements of both risk retention and risk transfer. Although the ultimate outcome of these other matters cannot be ascertained and liabilities in indeterminate amounts may be imposed on MMC and its subsidiaries, on the basis of present information, it is the opinion of MMC's management that the disposition or ultimate determination of these claims, lawsuits or proceedings should not have a material adverse effect on MMC's consolidated financial position or cash flows, but may be material to MMC's operating results in any particular period. Other Industry Inquiries ------------------------ The New York Attorney General has issued subpoenas to numerous insurance brokers related to an inquiry into market service agreements and other similar agreements which compensate brokers for distribution and other services provided to insurance carriers. The Company has received such a subpoena and is cooperating fully in the investigation. The SEC is examining the practices, compensation arrangements and disclosures of consultants that provide services to sponsors of pension plans or other market participants, including among other things, practices with respect to advice regarding the selection of investment advisors to manage plan assets. Mercer Investment Consulting, Inc. has received requests for information from the SEC in connection with this examination and is fully cooperating. 36

Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities (e) The following table sets forth information regarding MMC's purchases of its common stock on a monthly basis during the second quarter of 2004. Share repurchases are recorded on a trade date basis. Issuer Repurchases of Equity Securities - ------------------------------------------------------------------------------------------------------- (a) (b) (c) (d) Total Number of Maximum Number of Total Number of Average Price Paid Shares Purchased as Shares that May Yet Shares Purchased per Share Part of Publicly Be Purchased Under Announced Plans or the Plans or Period Programs (1) Programs - ------------------------------------------------------------------------------------------------------- April 1, 2004 - 901,800 $ 45.35 901,800 53,473,236 April 30, 2004 - ------------------------------------------------------------------------------------------------------- May 1, 2004 - 2,208,400 $ 43.86 2,208,400 51,264,836 May 31, 2004 - ------------------------------------------------------------------------------------------------------- June 1, 2004 - 955,200 $ 43.80 955,200 50,309,636 June 30, 2004 - ------------------------------------------------------------------------------------------------------- Total 4,065,400 $ 44.18 4,065,400 50,309,636 - ------------------------------------------------------------------------------------------------------- (1) As set forth in its public filings, MMC has engaged in an ongoing share repurchase program. On March 18, 1999, MMC's board of directors authorized the repurchase of up to 40 million shares of MMC's common stock and on May 18, 2000 the board further authorized the repurchase of up to an additional 88 million shares. There is no expiration date specified under either of these authorizations and MMC intends to repurchase its shares under each of these authorizations in the future. MMC periodically purchases shares of its common stock, in the open market or otherwise, subject to market conditions, for treasury as well as to meet requirements for issuance of shares for its various stock compensation and benefit programs. 37

Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 4.1 Indenture, dated as of July 14, 2004, between MMC and The Bank of New York, as Trustee. 4.2 First Supplemental Indenture, dated as of July 14, 2004, between MMC and The Bank of New York, as Trustee. 10.1 Renewal of Consulting Agreement between A.J.C. Smith and MMC dated as of June 21, 2004. 12.1 Statement Re: Computation of Ratio of Earnings to Fixed Charges. 31. Rule 13a-14(a)/15d-14(a) Certifications. 32. Section 1350 Certifications. (b) Reports on Form 8-K The following reports on Form 8-K were filed by MMC in the fiscal quarter ended June 30, 2004: o Current Report on Form 8-K dated April 8, 2004, reporting the issuance of a press release by MMC's Putnam Investments subsidiary confirming it had reached settlement agreements with the Securities and Exchange Commission and the Office of the Secretary of the Commonwealth of Massachusetts. o Current Report on Form 8-K dated April 21, 2004, reporting MMC's issuance of a press release announcing its unaudited first quarter financial results. o Two Current Reports on Form 8-K dated May 18, 2004, reporting the issuance of a press release announcing MMC's acquisition of Kroll Inc. and filing related agreements, a presentation to certain investors and the transcript of a teleconference and audio webcast discussing the announcement. o Current Report on Form 8-K dated June 9, 2004, reporting the final settlement of an arbitration proceeding with the former president and chief executive officer of MMC's Putnam Investments subsidiary. 38

MARSH & McLENNAN COMPANIES, INC. AND SUBSIDIARIES SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, MMC has duly caused this report to be signed this 3rd day of August, 2004 on its behalf by the undersigned, thereunto duly authorized and in the capacity indicated. MARSH & McLENNAN COMPANIES, INC. /s/ Sandra S. Wijnberg --------------------------- Senior Vice President and Chief Financial Officer 39

Exhibit 4.1 ================================================================================ MARSH & McLENNAN COMPANIES INC., Issuer AND THE BANK OF NEW YORK, Trustee ------------------------------------ INDENTURE Dated as of July 14, 2004 ------------------------------------ Senior Debt Securities ================================================================================

CROSS-REFERENCE TABLE* Section of Trust Indenture Act Section of of 1939, as amended Indenture - ---------------------- ---------------- 310(a)........................................................ 7.09 310(b)........................................................ 7.08 7.10 310(c)........................................................ Inapplicable 311(a)........................................................ 713(a) 311(b)........................................................ 713(b) 311(c)........................................................ Inapplicable 312(a)........................................................ 5.01 5.02(a) 312(b)........................................................ 5.02(b) 312(c)........................................................ 5.02(c) 313(a)........................................................ 5.04(a) 313(b)........................................................ 5.04(b) 313(c)........................................................ 5.04(a) 5.04(b) 313(d)........................................................ 5.04(c) 314(a)........................................................ 5.03 314(b)........................................................ Inapplicable 314(c)........................................................ 13.06 314(d)........................................................ Inapplicable 314(e)........................................................ 13.06 314(f)........................................................ Inapplicable 315(a)........................................................ 7.01(a) 7.02 315(b)........................................................ 6.07 315(c)........................................................ 7.01 315(d)........................................................ 7.01(b) 7.01(c) 315(e)........................................................ 6.07 316(a)........................................................ 6.06 8.04 316(b)........................................................ 6.04 316(c)........................................................ 8.01 317(a)........................................................ 6.02 317(b)........................................................ 4.03 318(a)........................................................ 13.08 __________________________________ * This Cross-Reference Table does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions.

TABLE OF CONTENTS Page ---- ARTICLE I. DEFINITIONS SECTION 1.01 Definition of Terms....................................1 Affiliate..............................................1 Authenticating Agent...................................2 Bankruptcy Law.........................................2 Board of Directors.....................................2 Board Resolution.......................................2 Business Day...........................................2 Company ...............................................2 Corporate Trust Office.................................2 Custodian..............................................2 Default................................................2 Depositary.............................................2 Event of Default.......................................2 Global Security........................................3 Governmental Obligations...............................3 "herein", "hereof" and "hereunder".....................3 Indebtedness...........................................3 Indenture..............................................4 Interest Payment Date..................................4 Officers' Certificate..................................4 Opinion of Counsel.....................................4 Outstanding............................................4 Person.................................................4 Predecessor Security...................................4 Responsible Officer....................................5 Securities.............................................5 Securityholder.........................................5 Significant Subsidiary.................................5 Subsidiary.............................................5 Trustee................................................5 Trust Indenture........................................5 Voting Stock...........................................5 i

ARTICLE II. ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES SECTION 2.01 Designation and Terms of Securities....................6 SECTION 2.02 Form of Securities and Trustee's Certificate...........8 SECTION 2.03 Denominations: Provisions for Payment.................8 SECTION 2.04 Execution and Authentications..........................9 SECTION 2.05 Registration of Transfer and Exchange.................11 SECTION 2.06 Temporary Securities..................................12 SECTION 2.07 Mutilated, Destroyed, Lost or Stolen Securities.......12 SECTION 2.08 Cancellation..........................................13 SECTION 2.09 Benefits of Indenture.................................13 SECTION 2.10 Authenticating Agent..................................13 SECTION 2.11 Global Securities.....................................14 SECTION 2.12 Cusip Numbers.........................................15 ARTICLE III. REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS SECTION 3.01 Redemption............................................16 SECTION 3.02 Notice of Redemption..................................16 SECTION 3.03 Payment Upon Redemption...............................17 SECTION 3.04 Sinking Fund..........................................17 SECTION 3.05 Satisfaction of Sinking Fund Payments with Securities.........................................17 SECTION 3.06 Redemption of Securities for Sinking Fund.............18 ARTICLE IV. CERTAIN COVENANTS SECTION 4.01 Payment of Principal, Premium and Interest............18 SECTION 4.02 Maintenance of Office or Agency.......................18 SECTION 4.03 Paying Agents.........................................19 SECTION 4.04 Appointment to Fill Vacancy in Office of Trustee......20 SECTION 4.05 Compliance with Consolidation Provisions..............20 SECTION 4.06. Limitation on Liens on Stock of Significant Subsidiaries.......................................20 SECTION 4.07 Trustee's Obligations with Respect to the Covenants..........................................20 SECTION 4.08 Compliance Certificate................................21 ii

ARTICLE V. SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE SECTION 5.01 Company to Furnish Trustee Names and Addresses of Securityholders....................................21 SECTION 5.02 Preservation of Information; Communications with Securityholders....................................21 SECTION 5.03 Reports by the Company................................21 SECTION 5.04 Reports by the Trustee................................22 ARTICLE VI. REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT SECTION 6.01 Events of Default.....................................23 SECTION 6.02 Collection of Indebtedness and Suits for Enforcement by Trustee.............................25 SECTION 6.03 Application of Moneys Collected.......................26 SECTION 6.04 Limitation on Suits...................................26 SECTION 6.05 Rights and Remedies Cumulative; Delay or Omission Not Waiver.........................................27 SECTION 6.06 Control by Securityholders............................28 SECTION 6.07 Undertaking to Pay Costs..............................28 ARTICLE VII. CONCERNING THE TRUSTEE SECTION 7.01 Certain Duties and Responsibilities of Trustee........29 SECTION 7.02 Certain Rights of Trustee.............................30 SECTION 7.03 Trustee Not Responsible for Recitals or Issuance or Securities......................................31 SECTION 7.04 May Hold Securities...................................32 SECTION 7.05 Moneys Held in Trust..................................32 SECTION 7.06 Compensation and Reimbursement........................32 SECTION 7.07 Reliance on Officers' Certificate.....................33 SECTION 7.08 Disqualification; Conflicting Interests...............33 SECTION 7.09 Corporate Trustee Required; Eligibility...............33 SECTION 7.10 Resignation and Removal; Appointment of Successor ....33 SECTION 7.11 Acceptance of Appointment By Successor................35 SECTION 7.12 Merger, Conversion, Consolidation or Succession to Business .......................................36 iii

SECTION 7.13 Preferential Collection of Claims Against the Company............................................36 ARTICLE VIII. CONCERNING THE SECURITYHOLDERS SECTION 8.01 Evidence of Action by Securityholders.................37 SECTION 8.02 Proof of Execution by Securityholders.................37 SECTION 8.03 Who May be Deemed Owners..............................38 SECTION 8.04 Certain Securities Owned by Company Disregarded.......38 SECTION 8.05 Actions Binding on Future Securityholders.............38 ARTICLE IX. SUPPLEMENTAL INDENTURES SECTION 9.01 Supplemental Indentures Without the Consent of Securityholders....................................39 SECTION 9.02 Supplemental Indentures With Consent of Securityholders....................................40 SECTION 9.03 Effect of Supplemental Indentures.....................40 SECTION 9.04 Securities Affected by Supplemental Indentures........40 SECTION 9.05 Execution of Supplemental Indentures .................41 SECTION 9.06 Conformity with Trust Indenture Act...................41 ARTICLE X. SUCCESSOR CORPORATION SECTION 10.01 Company May Consolidate, Etc., Only on Certain Terms..............................................41 SECTION 10.02 Successor Substitute..................................42 ARTICLE XI. SATISFACTION AND DISCHARGE SECTION 11.01 Satisfaction and Discharge of Indenture...............42 SECTION 11.02 Discharge of Obligations..............................43 SECTION 11.03 Deposited Moneys to be Held in Trust..................43 SECTION 11.04 Payment of Moneys Held by Paying Agents...............43 SECTION 11.05 Repayment to Company..................................44 iv

ARTICLE XII. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS SECTION 12.01 No Recourse...........................................44 ARTICLE XIII. MISCELLANEOUS PROVISIONS SECTION 13.01 Effect on Successors and Assigns......................45 SECTION 13.02 Actions by Successor..................................45 SECTION 13.03 Surrender of Company Powers...........................45 SECTION 13.04 Notices...............................................45 SECTION 13.05 Governing Law.........................................45 SECTION 13.06 Treatment of Securities as Debt.......................45 SECTION 13 07 Compliance Certificates and Opinions..................46 SECTION 13.08 Payments on Business Days.............................46 SECTION 13 09 Conflict with Trust Indenture Act.....................46 SECTION 13.10 Counterparts..........................................46 SECTION 13.11 Separability..........................................47 SECTION 13.12 Assignment............................................47 v

INDENTURE, dated as of July 14, 2004, between Marsh & McLennan Companies, Inc., a Delaware corporation (the "Company"), and The Bank of New York, a New York banking corporation, as trustee (the "Trustee"): WHEREAS, for its lawful corporate purposes, the Company has duly authorized the execution and delivery of this Indenture to provide for the issuance of unsecured debt securities (hereinafter referred to as the "Securities"), in an unlimited aggregate principal amount to be issued from time to time in one or more series as in this Indenture provided, as registered Securities without coupons, to be authenticated by the certificate of the Trustee; WHEREAS, to provide the terms and conditions upon which the Securities are to be authenticated, issued and delivered, the Company has duly authorized the execution of this Indenture; and WHEREAS, all things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done. NOW, THEREFORE, in consideration of the premises and the purchase of the Securities by the holders thereof, it is mutually covenanted and agreed as follows for the equal and ratable benefit of the holders of Securities: ARTICLE I. DEFINITIONS SECTION 1.01 Definitions of Terms. -------------------- The terms defined in this Section (except as in this Indenture otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section and shall include the plural as well as the singular. All other terms used in this Indenture that are defined in the Trust Indenture Act of 1939, as amended, or that are by reference in such Act defined in the Securities Act of 1933, as amended (except as herein otherwise expressly provided or unless the context otherwise requires), shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of the execution of this instrument. "Affiliate" means, with respect to a specified Person, (a) any Person directly or indirectly owning, controlling or holding with power to vote 10% or more of the outstanding voting securities or other ownership interests of the specified Person, (b) any Person 10% or more of whose outstanding voting securities or other ownership interests are directly or indirectly owned, controlled or held with power to vote by the specified Person, (c) any Person directly or indirectly controlling, controlled by, or under common control with the specified Person, (d) a partnership in which the specified Person is a general partner, (e) any officer or director of the specified

Person, and (f) if the specified Person is an individual, any entity of which the specified Person is an officer, director or general partner. "Authenticating Agent" means an authenticating agent with respect to all or any of the series of Securities appointed with respect to all or any series of the Securities by the Trustee pursuant to Section 2.10. "Bankruptcy Law" means Title 11, U.S. Code, or any similar Federal or State law for the relief of debtors. "Board of Directors" means the Board of Directors of the Company or any duly authorized committee of such Board. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification. "Business Day" means, with respect to any series of Securities, any day other than a day on which Federal or State banking institutions in the Borough of Manhattan, The City of New York, are authorized or obligated by law, executive order or regulation to close. "Company" means Marsh & McLennan Companies, Inc., a corporation duly organized and existing under the laws of the State of Delaware, and, subject to the provisions of Article X, shall also include its successors and assigns. "Default" means any event, act or condition that with notice or lapse of time, or both, would constitute an Event of Default. "Corporate Trust Office" means the office of the Trustee at which, at any particular time, its corporate trust business shall be principally administered, which office is located at 101 Barclay Street, Floor 8 West, New York, New York 10286, Attention: Corporate Trust Administration, or such other address as the Trustee may designate from time to time by notice to the holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the holders and the Company). "Depositary" means, with respect to Securities of any series, for which the Company shall determine that such Securities will be issued as a Global Security, The Depository Trust Company, New York, New York, another clearing agency, or any successor registered as a clearing agency under the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or other applicable statute or regulation, which, in each case, shall be designated by the Company pursuant to either Section 2.01 or 2.11. "Event of Default" means, with respect to Securities of a particular series any event specified in Section 6.01, continued for the period of time, if any, therein designated. 2

"Global Security" means, with respect to any series of Securities, a Security executed by the Company and delivered by the Trustee to the Depositary or pursuant to the Depositary's instruction, all in accordance with the Indenture, which shall be registered in the name of the Depositary or its nominee. "Governmental Obligations" means securities that are (i) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America that, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to any such Governmental Obligation or a specific payment of principal of or interest on any such Governmental Obligation held by such custodian for the account of the holder of such depositary receipt; provided however, that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the Governmental Obligation or the specific payment of principal of or interest on the Governmental Obligation evidenced by such depositary receipt. "herein", "hereof and "hereunder", and other words of similar import, refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. "Indebtedness" of any person means the principal of and premium, if any, and interest due on indebtedness of such Person, whether outstanding on the date of this Indenture or thereafter created, incurred or assumed, which is (a) indebtedness for money borrowed, and (b) any amendments, renewals, extensions, modifications and refundings of any such indebtedness. For the purposes of this definition, "indebtedness for money borrowed" means (i) any obligation of, or any obligation guaranteed by, such Person for the repayment of borrowed money, whether or not evidenced by bonds, debentures, notes or other written instruments, (ii) any obligation of, or any such obligation guaranteed by, such Person evidenced by bonds, debentures, notes or similar written instruments, including obligations assumed or incurred in connection with the acquisition of properly, assets or businesses (provided, however, that the deferred purchase price of any business or property or assets shall not be considered Indebtedness if the purchase price thereof is payable in full within 90 days from the date on which such indebtedness was created), and (iii) any obligations of such Person as lessee under leases required to be capitalized on the balance sheet of the lessee under generally accepted accounting principles and leases of property or assets made as part of any sale and lease-back transaction to which such Person is a party. For purposes of this covenant only, Indebtedness also includes any obligation of, or any obligation guaranteed by, any Person for the payment of amounts due under a swap agreement or similar instrument or agreement, or under a foreign currency hedge or similar instrument or agreement. 3

"Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into in accordance with the terms hereof. "Interest Payment Date", when used with respect to any installment of interest on a Security of a particular series, means the date specified in such Security or in a Board Resolution or in an indenture supplemental hereto with respect to such series as the fixed date on which an installment of interest with respect to Securities of that series is due and payable. "Officers' Certificate" means a certificate signed by the Chairman or a Vice President and by the Treasurer or an Assistant Treasurer or the Controller or an Assistant Controller or the Secretary or an Assistant Secretary of the Company that is delivered to the Trustee in accordance with the terms hereof. Each such certificate shall include the statements provided for in Section 13.07, if and to the extent required by the provisions thereof. "Opinion of Counsel" means an opinion in writing of legal counsel, who may be an employee of or counsel for the Company that is delivered to the Trustee in accordance with the terms hereof. Each such opinion shall include the statements provided for in Section 13.07, if and to the extent required by the provisions thereof. "Outstanding", when used with reference to Securities of any series, means, subject to the provisions of Section 8.04, as of any particular time, all Securities of that series theretofore authenticated and delivered by the Trustee under this Indenture, except (a) Securities theretofore canceled by the Trustee or any paying agent, or delivered to the Trustee or any paying agent for cancellation or that have previously been canceled; (b) Securities or portions thereof for the payment or redemption of which moneys or Governmental Obligations in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Company) or shall have been set aside and segregated in trust by the Company (if the Company shall act as its own paying agent); provided, however, that if such Securities or portions of such Securities are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in Article III provided, or provision satisfactory to the Trustee shall have been made for giving such notice; and (c) Securities in lieu of or in substitution for which other Securities shall have been authenticated and delivered, or securities which shall have been paid, pursuant to the terms of Section 2.07. "Person" means any individual, corporation, partnership, joint-venture, joint-stock company, unincorporated organization or government or any agency or political subdivision thereof. "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or stolen Security shall be deemed to evidence the same debt as the lost, destroyed or stolen Security. 4

"Responsible Officer" when used with respect to the Trustee means any officer in its corporate trust department or any other officer or assistant officer of the Trustee customarily performing functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of his or her knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture. "Securities" means the debt Securities authenticated and delivered under this Indenture. "Securityholder", "holder of Securities", "registered holder", or other similar term, means the Person or Persons in whose name or names a particular Security shall be registered on the books of the Company kept for that purpose in accordance with the terms of this Indenture. "Significant Subsidiary" means Marsh Inc., Putnam, LLC or Mercer Inc. "Subsidiary" means, with respect to any Person, (i) any corporation at least a majority of whose outstanding Voting Stock shall at the time be owned, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, (ii) any general partnership, joint venture or similar entity, at least a majority of whose outstanding partnership or similar interests shall at the time be owned by such Person, or by one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries and (iii) any limited partnership of which such Person or any of its Subsidiaries is a general partner. "Trustee" means The Bank of New York, and, subject to the provisions of Article VII, shall also include its successors and assigns, and, if at any time there is more than one Person acting in such capacity hereunder, "Trustee" shall mean each such Person. The term "Trustee" as used with respect to a particular series of the Securities shall mean the trustee with respect to that series. "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended, subject to the provisions of Sections 9.01 and 9.02, as in effect at the date of execution of this instrument. "Voting Stock", as applied to stock of any Person, means shares, interests, participations or other equivalents in the equity interest (however designated) in such Person having ordinary voting power for the election of a majority of the directors (or the equivalent) of such Person, other than shares, interests, participations or other equivalents having such power only by reason of the occurrence of a contingency. 5

ARTICLE II. ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES SECTION 2.01 Designation and Terms of Securities. ----------------------------------- (a) The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series up to the aggregate principal amount of Securities of that series from time to time authorized by or pursuant to a Board Resolution of the Company or pursuant to one or more indentures supplemental hereto. Prior to the initial issuance of Securities of any series, there shall be established in or pursuant to a Board Resolution of the Company, and set forth in an Officers' Certificate of the Company, or established in one or more indentures supplemental hereto: (1) the title of the Security of the series (which shall distinguish the Securities of the series from all other Securities); (2) any limit upon the aggregate principal amount of the Securities of that series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of that series); (3) the date or dates on which the principal of the Securities of the series is payable; (4) the rate or rates at which the Securities of the series shall bear interest or the manner of calculation of such rate or rates, if any; (5) the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest will be payable or the manner of determination of such Interest Payment Dates and the record date for the determination of holders to whom interest is payable on any such Interest Payment Dates; (6) the right, if any, to extend the interest payment periods and the duration of such extension; (7) the period or periods within which, the price or prices at which and the terms and conditions upon which, Securities of the series may be redeemed, in whole or in part, at the option of the Company; (8) the obligation, if any, of the Company to redeem or purchase Securities of the series pursuant to any sinking fund or analogous provisions (including payments made in cash in participation of future sinking fund obligations) or at the option of a holder thereof and the period or periods within which, the price or prices at which, and the terms and conditions upon which, Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation; 6

(9) the form of the Securities of the series including the form of the Certificate of Authentication for such series; (10) if other than denominations of one thousand U.S. dollars ($1,000) or any integral multiple thereof, the denominations in which the Securities of the series shall be issuable; (11) any and all other terms with respect to such series (which terms shall not be inconsistent with the terms of this Indenture) including any terms which may be required by or advisable under United States laws or regulations or advisable in connection with the marketing of Securities of that series; (12) whether the Securities are issuable as a Global Security and, in such case, the identity for the Depositary for such series; (13) whether the Securities will be convertible into shares of common stock or other securities of the Company and, if so, the terms and conditions upon which such Securities will be so convertible, including the conversion price and the conversion period; (14) if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.01; (15) any additional or different Events of Default or restrictive covenants provided for with respect to the Securities of the series; (16) any provisions granting special rights to holders when a specified event occurs; and (17) any special tax implications of the notes, including provisions for original issue discount securities, if offered. All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to any such Board Resolution or in any indentures supplemental hereto. If any of the terms of the series are established by action taken pursuant to a Board Resolution of the Company, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate of the Company setting forth the terms of the series. Securities of any particular series may be issued at various times, with different dates on which the principal or any installment of principal is payable, with different rates of interest, if any, or different methods by which rates of interest may be determined, with different dates on which such interest may be payable and with different redemption dates. 7

SECTION 2.02 Form of Securities and Trustee's Certificate. -------------------------------------------- The Securities of any series and the Trustee's certificate of authentication to be borne by such Securities shall be substantially of the tenor and purport as set forth in one or more indentures supplemental hereto or as provided in a Board Resolution of the Company and as set forth in an Officers' Certificate of the Company and may have such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which Securities of that series may be listed, or to conform to usage. SECTION 2.03 Denominations: Provisions for Payment. -------------------------------------- The Securities shall be issuable as registered Securities and in the denominations of one thousand U.S. dollars ($1,000) or any integral multiple thereof, subject to Section 2.01(11). The Securities of a particular series shall bear interest payable on the dates and at the rate specified with respect to that series. The principal of and the interest on the Securities of any series, as well as any premium thereon in case of redemption thereof prior to maturity, shall be payable in the coin or currency of the United States of America that at the time is legal tender for public and private debt, at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, the City and State of New York. Each Security shall be dated the date of its authentication. Interest on the Securities shall be computed on the basis of a 360-day year composed of twelve 30-day months. The interest installment on any Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date for Securities of that series shall be paid to the Person in whose name said Security (or one or more Predecessor Securities) is registered at the close of business on the regular record date for such interest installment. In the event that any Security of a particular series or portion thereof is called for redemption and the redemption date is subsequent to a regular record date with respect to any Interest Payment Date and prior to such Interest Payment Date, interest on such Security will be paid upon presentation and surrender of such Security as provided in Section 3.03. Any interest on any Security that is payable, but is not punctually paid or duly provided for, on any Interest Payment Date for Securities of the same series (herein called "Defaulted Interest") shall forthwith cease to be payable to the registered holder on the relevant regular record date by virtue of having been such holder; and such Defaulted Interest shall be paid by the Company, at its election, as provided in clause (1) or clause (2) below: (1) The Company may make payment of any Defaulted Interest on Securities to the Persons in whose names such Securities (or their respective Predecessor Securities) are registered at the close of business on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following manner: the Company shall notify the Trustee in writing of the amount of Defaulted 8

Interest proposed to be paid on each such Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a special record date for the payment of such Defaulted Interest which shall not be more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such special record date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the special record date therefor to be mailed, first class postage prepaid, to each Securityholder at his or her address as it appears in the Security Register (as hereinafter defined), not less than 10 days prior to such special record date. Notice of the proposed payment of such Defaulted Interest and the special record date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names such Securities (or their respective Predecessor Securities) are registered on such special record date and shall be no longer payable pursuant to the following clause (2). (2) The Company may make payment of any Defaulted Interest on any Securities in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee. Unless otherwise set forth in a Board Resolution of the Company or one or more indentures supplemental hereto establishing the terms of any series of Securities pursuant to Section 2.01 hereof, the term "regular record date" as used in this Section with respect to a series of Securities with respect to any Interest Payment Date for such series shall mean either the fifteenth day of the month immediately preceding the month in which an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is the first day of a month, or the first day of the month in which an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is the fifteenth day of such month, whether or not such date is a Business Day. Subject to the foregoing provisions of this Section, each Security of a series delivered under this Indenture upon transfer of or in exchange for or in lieu of any other Security of such series shall carry the rights to interest accrued and unpaid, and to accrue, that were carried by such other Security. SECTION 2.04 Execution and Authentications. ----------------------------- The Securities shall be signed on behalf of the Company by its Chairman, or one of its Vice Presidents together with its Treasurer, or one of its Assistant Treasurers, or its Secretary, or one of its Assistant Secretaries, under its corporate seal 9

attested by its Secretary or one of its Assistant Secretaries. Signatures may be in the form of a manual or facsimile signature. The Company may use the facsimile signature of any Person who shall have been a Chairman or Vice President thereof, or of any Person who shall have been a Secretary or Assistant Secretary thereof, notwithstanding the fact that at the time the Securities shall be authenticated and delivered or disposed of such Person shall have ceased to be the Chairman or a Vice President, or the Secretary or an Assistant Secretary, of the Company. The seal of the Company may be in the form of a facsimile of such seal and may be impressed, affixed, imprinted or otherwise reproduced on the Securities. The Securities may contain such notations, legends or endorsements required by law, stock exchange rule or usage. Each Security shall be dated the date of its authentication by the Trustee. A Security shall not be valid until authenticated manually by an authorized signatory of the Trustee, or by an Authenticating Agent. Such signature shall be conclusive evidence that the Security so authenticated has been duly authenticated and delivered hereunder and that the holder is entitled to the benefits of this Indenture. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a written order of the Company for the authentication and delivery of such Securities, signed by its Chairman or any Vice President and its Secretary or any Assistant Secretary, and the Trustee in accordance with such written order shall authenticate and deliver such Securities. In authenticating such Securities and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 7.01) shall be fully protected in relying upon (i) an Officer's Certificate or executed supplemental indenture setting forth the form and terms of the Securities as required pursuant to Section 2.1 and (ii) an Opinion of Counsel stating that the form and terms thereof have been established in conformity with the provisions of this Indenture and that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will be valid and binding obligations of the Company entitled to the benefits of this Indenture, and enforceable against the Company in accordance with their terms, except to the extent that enforcement thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law). The Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner that is not reasonably acceptable to the Trustee. 10

SECTION 2.05 Registration of Transfer and Exchange. ------------------------------------- (a) Securities of any series may be exchanged upon presentation thereof at the office or agency of the Company designated for such purpose in the Borough of Manhattan, the City and State of New York, for other Securities of such series of authorized denominations, and for a like aggregate principal amount, upon payment of a sum sufficient to cover any tax or other governmental charge in relation thereto, all as provided in this Section. In respect of any Securities so surrendered for exchange, the Company shall execute, the Trustee shall authenticate and such office or agency shall deliver in exchange therefor the Security or Securities of the same series that the Securityholder making the exchange shall be entitled to receive, bearing numbers not contemporaneously outstanding. (b) The Company shall keep, or cause to be kept, at its office or agency designated for such purpose in the Borough of Manhattan, the City and State of New York, or such other location designated by the Company a register or registers (herein referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall register the Securities and the transfers of Securities as in this Article provided and which at all reasonable times shall be open for inspection by the Trustee. The registrar for the purpose of registering Securities and transfer of Securities as herein provided shall be appointed as authorized by Board Resolution (the "Security Registrar"). Upon surrender for transfer of any Security at the office or agency of the Company designated for such purpose, the Company shall execute, the Trustee shall authenticate and such office or agency shall deliver in the name of the transferee or transferees a new Security or Securities of the same series as the Security presented for a like aggregate principal amount. All Securities presented or surrendered for exchange or registration of transfer, as provided in this Section, shall be accompanied (if so required by the Company or the Security Registrar) by a written instrument or instruments of transfer, in form satisfactory to the Company or the Security Registrar, duly executed by the registered holder or by such holder's duly authorized attorney in writing. (c) No service charge shall be made for any exchange or registration of transfer of Securities, or issue of new Securities in case of partial redemption of any series, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge in relation thereto, other than exchanges pursuant to Section 2.06, the second paragraph of Section 3.03 and Section 9.04 not involving any transfer. (d) The Company shall not be required (i) to issue, exchange or register the transfer of any Securities during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of less than all the Outstanding Securities of the same series and ending at the close of business on the day of such mailing, nor (ii) to register the transfer of or exchange any Securities of any series or portions thereof called for redemption. The provisions of this Section 2.05 are, with respect to any Global Security, subject to Section 2.11 hereof. 11

SECTION 2.06 Temporary Securities. -------------------- Pending the preparation of definitive Securities of any series, the Company may execute, and the Trustee shall authenticate and deliver, temporary Securities (printed, lithographed or typewritten) of any authorized denomination. Such temporary Securities shall be substantially in the form of the definitive Securities in lieu of which they are issued, but with such omissions, insertions and variations as may be appropriate for temporary Securities, all as may be determined by the Company. Every temporary Security of any series shall be executed by the Company and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Securities of such series. Without unnecessary delay the Company will execute and will furnish definitive Securities of such series and thereupon any or all temporary Securities of such series may be surrendered in exchange therefor (without charge to the holders), at the office or agency of the Company designated for the purpose in the Borough of Manhattan, the City and State of New York, and the Trustee shall authenticate and such office or agency shall deliver in exchange for such temporary Securities an equal aggregate principal amount of definitive Securities of such series, unless the Company advises the Trustee in writing to the effect that definitive Securities need not be executed and furnished until further notice from the Company. Until so exchanged, the temporary Securities of such series shall be entitled to the same benefits under this Indenture as definitive Securities of such series authenticated and delivered hereunder. SECTION 2.07 Mutilated, Destroyed, Lost or Stolen Securities. ----------------------------------------------- In case any temporary or definitive Security shall become mutilated or be destroyed, lost or stolen, the Company (subject to the next succeeding sentence) shall execute, and upon the Company's request the Trustee (subject as aforesaid) shall authenticate and deliver, a new Security of the same series, bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated Security, or in lieu of and in substitution for the Security so destroyed, lost or stolen. In every case the applicant for a substituted Security shall furnish to the Company and the Trustee such security or indemnity as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company and the Trustee evidence to their satisfaction of the destruction, loss or theft of the applicant's Security and of the ownership thereof. The Trustee may authenticate any such substituted Security and deliver the same upon the written request or authorization of any officer of the Company. Upon the issuance of any substituted Security, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. In case any Security that has matured or is about to mature shall become mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Security, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Security) if the applicant for such payment shall furnish to the Company and the Trustee such security or indemnity as they may require to save them harmless, and, in case of destruction, loss or theft, evidence to the satisfaction of the Company and the Trustee of the destruction, loss or theft of such Security and of the ownership thereof. 12

Every replacement Security issued pursuant to the provisions of this Section shall constitute an additional contractual obligation of the Company whether or not the mutilated, destroyed, lost or stolen Security shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of the same series duly issued hereunder. All Securities shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities, and shall preclude (to the extent lawful) any and all other rights or remedies, notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender. SECTION 2.08 Cancellation. ------------ All Securities surrendered for the purpose of payment, redemption, exchange or registration of transfer shall, if surrendered to the Company or any paying agent, be delivered to the Trustee for cancellation, or, if surrendered to the Trustee, shall be cancelled by it, and no Securities shall be issued in lieu thereof except as expressly required or permitted by any of the provisions of this Indenture. On written request of the Company at the time of such surrender, the Trustee shall deliver to the Company canceled Securities held by the Trustee. In the absence of such request the Trustee may dispose of canceled Securities in accordance with its standard procedures. If the Company shall otherwise acquire any of the Securities, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Securities unless and until the same are delivered to the Trustee for cancellation. SECTION 2.09 Benefits of Indenture. --------------------- Nothing in this Indenture or in the Securities, express or implied, shall give or be construed to give to any Person, other than the parties hereto and the holders of the Securities any legal or equitable right, remedy or claim under or in respect of this Indenture, or under any covenant, condition or provision herein contained; all such covenants, conditions and provisions being for the sole benefit of the parties hereto and of the holders of the Securities. SECTION 2.10 Authenticating Agent. -------------------- So long as any of the Securities of any series remain Outstanding there may be an Authenticating Agent for any or all such series of Securities which the Trustee shall have the right to appoint. Said Authenticating Agent shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon exchange, transfer or partial redemption thereof, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. All references in this Indenture to the authentication of Securities by the Trustee shall be deemed to include authentication by an Authenticating Agent for such series. Each Authenticating Agent shall be acceptable to the Company and shall be a corporation that has a combined capital and surplus, as most recently reported or determined by it, sufficient under the laws of any jurisdiction under which it is organized or in which it is doing business to 13

conduct a trust business, and that is otherwise authorized under such laws to conduct such business and is subject to supervision or examination by Federal or State authorities. If at any time any Authenticating Agent shall cease to be eligible in accordance with these provisions, it shall resign immediately. Any Authenticating Agent may at any time resign by giving written notice of resignation to the Trustee and to the Company. The Trustee may at any time (and upon written request by the Company shall) terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and to the Company. Upon resignation, termination or cessation of eligibility of any Authenticating Agent, the Trustee may appoint an eligible successor Authenticating Agent acceptable to the Company. Any successor Authenticating Agent, upon acceptance of its appointment hereunder, shall become vested with all the rights, powers and duties of its predecessor hereunder as if originally named as an Authenticating Agent pursuant hereto. SECTION 2.11 Global Securities. ----------------- (a) If the Company shall establish pursuant to Section 2.01 that the Securities of a particular series are to be issued as a Global Security, then the Company shall execute and the Trustee shall, in accordance with Section 2.04, authenticate and deliver, a Global Security that (i) shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, all of the Outstanding Securities of such series, (ii) shall be registered in the name of the Depositary or its nominee, (iii) shall be delivered by the Trustee to the Depositary or pursuant to the Depositary's instruction and (iv) shall bear a legend substantially to the following effect: "Except as otherwise provided in Section 2.11 of the Indenture, this Security may be transferred, in whole but not in part, only to another nominee of the Depositary or to a successor Depositary or to a nominee of such successor Depositary." (b) Notwithstanding the provisions of Section 2.05, the Global Security of a series may be transferred, in whole but not in part and in the manner provided in Section 2.05, only to another nominee of the Depositary for such series, or to a successor Depositary for such series selected or approved by the Company or to a nominee of such successor Depositary. (c) If at any time the Depositary for a series of the Securities notifies the Company that it is unwilling or unable to continue as Depositary for such series or if at any time the Depositary for such series shall no longer be registered or in good standing under the Exchange Act, or other applicable statute or regulation, and a successor Depositary for such series is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such condition, as the case may be, this Section 2.11 shall no longer be applicable to the Securities of such series and the Company will execute, and subject to Section 2.05, the Trustee will authenticate and deliver the Securities of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security of such series in exchange for such Global Security. In addition, the Company may at any time determine that the 14

Securities of any series shall no longer be represented by a Global Security and that the provisions of this Section 2.11 shall no longer apply to the Securities of such series. In such event the Company will execute and subject to Section 2.05, the Trustee, upon receipt of an Officers' Certificate evidencing such determination by the Company, will authenticate and deliver the Securities of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security of such series in exchange for such Global Security. Upon the exchange of the Global Security for such Securities in definitive registered form without coupons, in authorized denominations, the Global Security shall be canceled by the Trustee. Such Securities in definitive registered form issued in exchange for the Global Security pursuant to this Section 2.11(c) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to the Depositary for delivery to the Persons in whose names such Securities are so registered. SECTION 2.12 CUSIP Numbers. ------------- The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee in writing of any change in the "CUSIP" numbers. ARTICLE III. REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS SECTION 3.01 Redemption. ---------- The Company may redeem the Securities of any series issued hereunder on and after the dates and in accordance with the terms established for such series pursuant to Section 2.01 hereof. SECTION 3.02 Notice of Redemption. -------------------- (a) In case the Company shall desire to exercise such right to redeem all or, as the case may be, a portion of the Securities of any series in accordance with the right reserved so to do, the Company shall, or shall cause the Trustee to, give notice of such redemption to holders of the Securities of such series to be redeemed by mailing, first class postage prepaid, a notice of such redemption not less than 30 days and not more than 90 days before the date fixed for redemption of that series to such holders at their last addresses as they shall appear upon the Security Register unless a shorter period is specified in the Securities to be redeemed. Any notice that is mailed 15

in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the registered holder receives the notice. In any case, failure duly to give such notice to the holder of any Security of any series designated for redemption in whole or in part, or any defect in the notice, shall not affect the validity of the proceedings for the redemption of any other Securities of such series or any other series. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers' Certificate evidencing compliance with any such restriction. Each such notice of redemption shall specify the date fixed for redemption and the redemption price at which Securities of that series are to be redeemed, and shall state that payment of the redemption price of such Securities to be redeemed will be made at the office or agency of the Company in the Borough of Manhattan, the City and State of New York, upon presentation and surrender of such Securities, that interest accrued to the date fixed for redemption will be paid as specified in said notice, that from and after said date interest will cease to accrue and that the redemption is for a sinking fund, if such is the case. If less than all the Securities of a series are to be redeemed, the notice to the holders of Securities of that series to be redeemed in whole or in part shall specify the particular Securities to be so redeemed. In case any Security is to be redeemed in part only, the notice that relates to such Security shall state the portion of the principal amount thereof to be redeemed, and shall state that on and after the redemption date, upon surrender of such Security, a new Security or Securities of such series in principal amount equal to the unredeemed portion thereof will be issued. (b) If the Trustee is to provide notice to the holders of Securities in accordance with section 3.02 (a) above, for a partial or full redemption, the Company shall give the Trustee at least 45 days notice in advance of the date fixed for redemption as to the aggregate principal amount of Securities of the series to be redeemed, and thereupon, in the case of a partial redemption, the Trustee shall select, by lot or in such other manner as it shall deem appropriate and fair in its discretion and that may provide for the selection of a portion or portions (equal to one thousand U.S. dollars ($1,000) or any integral multiple thereof) of the principal amount of such Securities of a denomination larger than $1,000, the Securities to be redeemed and shall thereafter promptly notify the Company in writing of the numbers of the Securities to be redeemed, in whole or in part. The Company may, if and whenever it shall so elect, by delivery of instructions signed on its behalf by its Chairman or any Vice President, instruct the Trustee or any paying agent to call all or any part of the Securities of a particular series for redemption and to give notice of redemption in the manner set forth in this Section, such notice to be in the name of the Company or its own name as the Trustee or such paying agent may deem advisable. In any case in which notice of redemption is to be given by the Trustee or any such paying agent, the Company shall deliver or cause to be delivered to, or permit to remain with, the Trustee or such paying agent, as the case may be, such Security Register, transfer books or other records, or suitable copies or extracts therefrom, sufficient to enable the Trustee or such paying agent to give any notice by mail that may be required under the provisions of this Section. 16

SECTION 3.03 Payment Upon Redemption. ----------------------- (a) If the giving of notice of redemption shall have been completed as above provided, the Securities or portions of Securities of the series to be redeemed specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest accrued to the date fixed for redemption and interest on such Securities or portions of Securities shall cease to accrue on and after the date fixed for redemption, unless the Company shall default in the payment of such redemption price and accrued interest with respect to any such Security or portion thereof. On presentation and surrender of such Securities on or after the date fixed for redemption at the place of payment specified in the notice, said Securities shall be paid and redeemed at the applicable redemption price for such series, together with interest accrued thereon to the date fixed for redemption (but if the date fixed for redemption is an interest payment date, the interest installment payable on such date shall be payable to the registered holder at the close of business on the applicable record date pursuant to Section 2.03). (b) Upon presentation of any Security of such series that is to be redeemed in part only, the Company shall execute and the Trustee shall authenticate and the office or agency where the Security is presented shall deliver to the holder thereof, at the expense of the Company, a new Security of the same series of authorized denominations in principal amount equal to the unredeemed portion of the Security so presented. SECTION 3.04 Sinking Fund. ------------ The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to any sinking fund for the retirement of Securities of a series, except as otherwise specified as contemplated by Section 2.01 for Securities of such series. The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a "mandatory sinking fund payment," and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an "optional sinking fund payment". If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 3.05. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series. SECTION 3.05 Satisfaction of Sinking Fund Payments with Securities. ----------------------------------------------------- The Company (i) may deliver Outstanding Securities of a series (other than any Securities previously called for redemption) and (ii) may apply as a credit Securities of a series that have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such Securities as provided for by the terms of such series, provided that such Securities have not 17

been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the redemption price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. SECTION 3.06 Redemption of Securities for Sinking Fund. ----------------------------------------- Not less than 45 days prior to each sinking fund payment date for any series of Securities, the Company will deliver to the Trustee an Officers' Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of the series, the portion thereof, if any, that is to be satisfied by delivering and crediting Securities of that series pursuant to Section 3.05 and the basis for such credit and will, together with such Officers' Certificate, deliver to the Trustee any Securities to be so delivered. Not less than 30 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 3.02 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 3.02. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Section 3.03. ARTICLE IV. CERTAIN COVENANTS SECTION 4.01 Payment of Principal, Premium and Interest. ------------------------------------------ The Company will duly and punctually pay or cause to be paid the principal of (and premium, if any) and interest on the Securities of that series at the time and place and in the manner provided herein and established with respect to such Securities. SECTION 4.02 Maintenance of Office or Agency. ------------------------------- So long as any series of the Securities remain Outstanding, the Company agrees to maintain an office or agency in the Borough of Manhattan, the City and State of New York, with respect to each such series and at such other location or locations as may be designated as provided in this Section 4.02, where (i) Securities of that series may be presented for payment, (ii) Securities of that series may be presented as hereinabove authorized for registration of transfer and exchange, and (iii) notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be given or served, such designation to continue with respect to such office or agency until the Company shall, by written notice signed by its Chairman or a Vice President and delivered to the trustee, designate some other office or agency for such purposes or any of them. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, notices and demands may be made or served at the Corporate Trust Office of the Trustee and the Company hereby appoints the Trustee as its agent to receive all such presentations, notices and demands. 18

SECTION 4.03 Paying Agents. ------------- (a) If the Company shall appoint one or more paying agents for all or any series of the Securities, other than the Trustee, the Company will cause each such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section: (1) that it will hold all sums held by it as such agent for the payment of the principal of (and premium, if any) or interest on the Securities of that series (whether such sums have been paid to it by the Company or by any other obligor of such Securities) in trust for the benefit of the Persons entitled thereto; (2) that it will give the Trustee notice of any failure by the Company (or by any other obligor of such Securities) to make any payment of the principal of (and premium, if any) or interest on the Securities of that series when the same shall be due and payable; (3) that it will, at any time during the continuance of any failure referred to in the preceding paragraph (a)(2) above, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such paying agent; and (4) that it will perform all other duties of paying agent as set forth in this Indenture. (b) If the Company shall act as its own paying agent with respect to any series of the Securities, it will on or before each due date of the principal of (and premium, if any) or interest on Securities of that series, set aside, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay such principal (and premium, if any) or interest so becoming due on Securities of that series until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of such action, or any failure (by it or any other obligor on such Securities) to take such action. Whenever the Company shall have one or more paying agents for any series of Securities, it will, prior to each due date of the principal of (and premium, if any) or interest on any Securities of that series, deposit with the paying agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such paying agent is the Trustee) the Company will promptly notify the Trustee of this action or failure so to act. (c) Notwithstanding anything in this Section to the contrary, (i) the agreement to hold sums in trust as provided in this Section is subject to the provisions of Section 11.05, and (ii) the Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or direct any paying agent to pay, to the Trustee all sums held in trust by the Company or such paying agent, such sums to be held by the Trustee upon the same terms and conditions as those upon which such sums were held by the Company or such paying 19

agent; and, upon such payment by any paying agent to the Trustee, such paying agent shall be released from all further liability with respect to such money. SECTION 4.04 Appointment to Fill Vacancy in Office of Trustee. ------------------------------------------------ The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so that there shall at all times be a Trustee hereunder. SECTION 4.05 Compliance with Consolidation Provisions. ---------------------------------------- The Company will not, while any of the Securities remain Outstanding, consolidate with, or merge into, or merge into itself, or sell or convey all or substantially all of its property to any other company unless the provisions of Article X hereof are complied with. SECTION 4.06. Limitation on Liens on Stock of Significant Subsidiaries. -------------------------------------------------------- The Company will not, and it will not permit any Subsidiary of the Company to, at any time directly or indirectly create, assume, incur or permit to exist any Indebtedness secured by a pledge, lien or other encumbrance (any pledge, lien or other encumbrance being hereinafter in this Section referred to as a "lien") on the voting stock or voting equity interest of a "Significant Subsidiary" without making effective provision whereby the Securities then Outstanding (and, if the Company so elects, any other Indebtedness of the Company that is not subordinate to the Securities and with respect to which the governing instruments require, or pursuant to which the Company is otherwise obligated or required, to provide such security) shall be equally and ratably secured with such secured Indebtedness so long as such other Indebtedness shall be so secured. If the Company shall hereafter be required to secure the Securities equally and ratably with any other Indebtedness pursuant to this Section, (i) the Company will promptly deliver to the Trustee an Officers' Certificate stating that the foregoing covenant has been complied with, and an Opinion of Counsel stating that in the opinion of such counsel the foregoing covenant has been complied with and (ii) the Trustee is hereby authorized to enter into an indenture or agreement supplemental hereto and to take such action, if any, as it may deem advisable to enable it to enforce the rights of the holders of the Securities so secured. SECTION 4.07 Trustee's Obligations with Respect to the Covenants. --------------------------------------------------- The Trustee shall not be obligated to monitor or confirm, on a continuing basis or otherwise, the Issuer's compliance with the covenants contained in this Article IV or with respect to reports or other documents filed under the Indenture; provided, however, that nothing herein shall relieve the Trustee of any obligations to monitor the Issuer's timely delivery of all reports and certificates required under Sections 5.01 and 5.03 of the Indenture and to fulfill its obligations under Article VII hereof. 20

SECTION 4.08 Compliance Certificate. ---------------------- The Company shall deliver to the Trustee within 120 days after the end of each of the Company's fiscal years, a certificate executed by its principal executive officer, principal financial officer or principal accounting officer, stating as to his or her knowledge the Company's compliance (without regard to periods of grace or notice requirements) with all conditions and covenants under this Indenture, and if the Company shall not be in compliance, specifying such non-compliance and the nature and status thereof of which such officer may have knowledge. ARTICLE V. SECURITYHOLDERS LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE SECTION 5.01 Company to Furnish Trustee Names and Addresses of ------------------------------------------------- Securityholders. --------------- The Company will furnish or cause to be furnished to the Trustee (a) on each regular record date (as defined in Section 2.03) a list, in such form as the Trustee may reasonably require, of the names and addresses of the holders of each series of Securities as of such regular record date, provided that the Company shall not be obligated to furnish or cause to furnish such list at any time that the list shall not differ in any respect from the most recent list furnished to the Trustee by the Company and (b) at such other times as the Trustee may request in writing within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; provided, however, that, in either case, no such list need be furnished for any series for which the Trustee shall be the Security Registrar. SECTION 5.02 Preservation of Information; Communications with ------------------------------------------------ Securityholders. --------------- (a) The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the holders of Securities contained in the most recent list furnished to it as provided in Section 5.01 and as to the names and addresses of holders of Securities received by the Trustee in its capacity as Security Registrar (if acting in such capacity). (b) The Trustee may destroy any list furnished to it as provided in Section 5.01 upon receipt of a new list so furnished. (c) Securityholders may communicate as provided in Section 312(b) of the Trust Indenture Act with other Securityholders with respect to their rights under this Indenture or under the Securities. SECTION 5.03 Reports by the Company. ---------------------- (a) The Company covenants and agrees to file with the Trustee, within 30 days after the Company is required to file the same with the Commission, copies of 21

the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) that the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not required to file information, documents or reports pursuant to either of such sections, then to file with the Trustee and the Commission, in accordance with the rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports that may be required pursuant to Section 13 of the Exchange Act, in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations. (b) The Company covenants and agrees to file with the Trustee and the Commission, in accordance with the rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants provided for in this Indenture as may be required from time to time by such rules and regulations. (c) Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). (d) The Company covenants and agrees to transmit by mail, first class postage prepaid, or reputable over-night delivery service that provides for evidence of receipt, to the Securityholders, as their names and addresses appear upon the Security Register, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to subsections (a) and (b) of this Section as may be required by rules and regulations prescribed from time to time by the Commission. SECTION 5.04 Reports by the Trustee. ---------------------- (a) On or before June 15 in each year in which any of the Securities are Outstanding, the Trustee shall transmit by mail, first class postage prepaid, to the Securityholders, as their names and addresses appear upon the Security Register, a brief report dated as of the preceding May 15, if and to the extent required under Section 313(a) of the Trust Indenture Act. (b) The Trustee shall comply with Section 313(b) and 313(c) of the Trust Indenture Act. (c) A copy of each such report shall, at the time of such transmission to Securityholders, be filed by the Trustee with the Company, with each stock exchange upon which any Securities are listed (if so listed) and also with the Commission. The 22

Company agrees to reasonably promptly notify the Trustee in writing when any Securities become listed on any stock exchange, and of any delisting thereof. ARTICLE VI. REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT SECTION 6.01 Events of Default. ----------------- (a) Whenever used herein with respect to Securities of a particular series, "Event of Default" means any one or more of the following events that has occurred and is continuing: (1) the Company defaults in the payment of any installment of interest upon any of the Securities of that series, as and when the same shall become due and payable, and continuance of such default for a period of 90 days; provided, however, that a valid extension of an interest payment period by the Company in accordance with the terms of any indenture supplemental hereto, shall not constitute a default in the payment of interest for this purpose; (2) the Company defaults in the payment of the principal of (or premium, if any, on) any of the Securities of that series as and when the same shall become due and payable whether at maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking or analogous fund established with respect to that series; provided, however, that a valid extension of the maturity of such Securities in accordance with the terms of any indenture supplemental hereto shall not constitute a default in the payment of principal or premium, if any; (3) the Company fails to observe or perform any other of its covenants or agreements with respect to that series contained in this Indenture or otherwise established with respect to that series of Securities pursuant to Section 2.01 hereof (other than a covenant or agreement that has been expressly included in this Indenture solely for the benefit of one or more series of Securities other than such series) for a period of 90 days after the date on which written notice of such failure, requiring the same to be remedied and stating that such notice is a "Notice of Default" hereunder, shall have been given to the Company by the Trustee, by registered or certified mail, or to the Company and the Trustee by the holders of at least 25% in principal amount of the Securities of that series at the time Outstanding; (4) the Company pursuant to or within the meaning of any Bankruptcy Law (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case, (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property or (iv) makes a general assignment for the benefit of its creditors; or 23

(5) a court of competent jurisdiction enters an order under any Bankruptcy Law that (i) is for relief against the Company in an involuntary case, (ii) appoints a Custodian of the Company for all or substantially all of their respective property, or (iii) orders the liquidation of the Company, and the order or decree remains unstayed and in effect for 90 days. (b) In each and every such case, unless the principal of all the Securities of that series shall have already become due and payable, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Securities of that series then Outstanding hereunder, by notice in writing to the Company (and to the Trustee if given by such Securityholders), may declare the principal of all the Securities of that series to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, notwithstanding anything contained in this Indenture or in the Securities of that series or established with respect to that series pursuant to Section 2.01 to the contrary. (c) At any time after the principal of the Securities of that series shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the holders of a majority in aggregate principal amount of the Securities of that series then Outstanding hereunder, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if: (i) the Company has paid or deposited with the Trustee a sum sufficient to pay all matured installments of interest upon all the Securities of that series and the principal of (and premium, if any, on) any and all Securities of that series that shall have become due otherwise than by acceleration (with interest upon such principal and premium, if any, and, to the extent that such payment is enforceable under applicable law, upon overdue installments of interest, at the rate per annum expressed in the Securities of that series to the date of such payment or deposit) and the amount payable to the Trustee under Section 7.06, and (ii) any and all Events of Default under the Indenture with respect to such series, other than the nonpayment of principal on Securities of that series that shall not have become due by their terms, shall have been remedied or waived as provided in Section 6.06. No such rescission and annulment shall extend to or shall affect any subsequent default or impair any right consequent thereon. (d) In case the Trustee shall have proceeded to enforce any right with respect to Securities of that series under this Indenture and such proceedings shall have been discontinued or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely to the Trustee, then and in every such case the Company, and the Trustee shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Company and the Trustee shall continue as though no such proceedings had been taken. 24

SECTION 6.02 Collection of Indebtedness and Suits for Enforcement by ------------------------------------------------------- Trustee. ------- (a) The Company covenants that (1) in case it shall default in the payment of any installment of interest on any of the Securities of a series, or any payment required by any sinking or analogous fund established with respect to that series as and when the same shall have become due and payable, and such default shall have continued for a period of 90 Business Days, or (2) in case it shall default in the payment of the principal of (or premium, if any, on) any of the Securities of a series when the same shall have become due and payable, whether upon maturity of the Securities of a series or upon redemption or upon declaration or otherwise, then, upon demand of the Trustee, the Company will pay to the Trustee, for the benefit of the holders of the Securities of that series, the whole amount that then shall have been become due and payable on all such Securities for principal (and premium, if any) or interest, or both, as the case may be, with interest upon the overdue principal (and premium, if any) and (to the extent that payment of such interest is enforceable under applicable law) upon overdue installments of interest at the rate per annum expressed in the Securities of that series; and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, and the amount payable to the Trustee under Section 7.06. (b) If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Company or other obligor upon the Securities of that series and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or other obligor upon the Securities of that series, wherever situated. (c) In case of any receivership, insolvency, liquidation, bankruptcy, reorganization, readjustment, arrangement, composition or judicial proceedings affected the Company, or its creditors or property, the Trustee shall have power to intervene in such proceedings and take any action therein that may be permitted by the court and shall (except as may be otherwise provided by law) be entitled to file such proofs of claim and other papers and documents as may be necessary or advisable in order to have the claims of the Trustee and of the holders of Securities of such series allowed for the entire amount due and payable by the Company under the Indenture at the date of institution of such proceedings and for any additional amount that may become due and payable by the Company after such date, and to collect and receive any moneys or other property payable or deliverable on any such claim, and to distribute the same after the deduction of the amount payable to the Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized by each of the holders of Securities of such series to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly to such Securityholders, to pay to the Trustee any amount due it under Section 7.06. 25

(d) All rights of action and of asserting claims under this Indenture, or under any of the terms established with respect to Securities of that series, may be enforced by the Trustee without the possession of any of such Securities, or the production thereof at any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for payment to the Trustee of any amounts due under Section 7.06, be for the ratable benefit of the holders of the Securities of such series. In case of an Event of Default hereunder, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in the Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law. Nothing contained herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities of that series or the rights of any holder thereof or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding. SECTION 6.03 Application of Moneys Collected. ------------------------------- Any moneys collected by the Trustee pursuant to this Article with respect to a particular series of Securities shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal (or premium, if any) or interest, upon presentation of the Securities of that series, and notation thereon the payment, if only partially paid, and upon surrender thereof if fully paid: FIRST: To the payment of costs and expenses of collection and of all amounts payable to the Trustee under Section 7.06; and SECOND: To the payment of the amounts then due and unpaid upon Securities of such series for principal (and premium, if any) and interest, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium, if any) and interest, respectively. SECTION 6.04 Limitation on Suits. ------------------- No holder of any Security of any series shall have any right by virtue or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (i) 26

such holder previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof with respect to the Securities of such series specifying such Event of Default, as hereinbefore provided; (ii) the holders of not less than 25% in aggregate principal amount of the Securities of such series then Outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as trustee hereunder; (iii) such holder or holders shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby; and (iv) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity, shall have failed to institute any such action, suit or proceeding and (v) during such 60 day period, the holders of a majority in principal amount of the Securities of that series do not give the Trustee a direction inconsistent with the request. Notwithstanding anything contained herein to the contrary, any other provisions of this Indenture, the right of any holder of any Security to receive payment of the principal of (and premium, if any) and interest on such Security, as therein provided, on or after the respective due dates expressed in such Security (or in the case of redemption, on the redemption date), or to institute suit for the enforcement of any such payment on or after such respective dates or redemption date, shall not be impaired or affected without the consent of such holder and by accepting a Security hereunder it is expressly understood, intended and covenanted by the taker and holder of every Security of such series with every other such taker and holder and the Trustee, that no one or more holders of Securities of such series shall have any right in any manner whatsoever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of the holders of any other of such Securities, or to obtain or seek to obtain priority over or preference to any other such holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all holders of Securities of such series. For the protection and enforcement of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity. SECTION 6.05 Rights and Remedies Cumulative; Delay or Omission Not ----------------------------------------------------- Waiver. ------ (a) Except as otherwise provided in Section 2.07, all powers and remedies given by this Article to the Trustee or to the Securityholders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any other powers and remedies available to the Trustee or the holders of the Securities, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture or otherwise established with respect to such Securities. (b) No delay or omission of the Trustee or of any holder of any of the Securities to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power, or shall be construed to be a waiver of any such default or on acquiescence therein; and, subject to the provisions of Section 6.04, every power and remedy given by this Article or by law to the Trustee or the Securityholders may be exercised from time to 27

time, and as often as shall be deemed expedient, by the Trustee or by the Securityholders. SECTION 6.06 Control by Securityholders. -------------------------- The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding, determined in accordance with Section 8.04, shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to such series; provided, however, that such direction shall not be in conflict with any rule of law or with this Indenture or be unduly prejudicial to the rights of holders of Securities of any other series at the time Outstanding determined in accordance with Section 8.04. Subject to the provisions of Section 7.01, the Trustee shall have the right to decline to follow any such direction if the Trustee in good faith shall, by a Responsible Officer or Officers of the Trustee, determine that the proceeding so directed would involve the Trustee in personal liability. The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding affected thereby, determined in accordance with Section 8.04, may on behalf of the holders of all of the Securities of such series waive any past default in the performance of any of the covenants contained herein or established pursuant to Section 2.01 with respect to such series and its consequences, except a default in the payment of the principal of, or premium, if any, or interest on, any of the Securities of that series as and when the same shall become due by the terms of such Securities otherwise than by acceleration (unless such default has been cured and a sum sufficient to pay all matured installments of interest and principal and any premium has been deposited with the Trustee (in accordance with Section 6.01(c)). Upon any such waiver, the default covered thereby shall be deemed to be cured for all purposes of this Indenture and the Company, the Trustee and the holders of the Securities of such series shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. SECTION 6.07 Undertaking to Pay Costs. ------------------------ All parties to this Indenture agree, and each holder of any Securities by such holder's acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder, or group of Securityholders, holding more than 10% in aggregate principal amount of the Outstanding Securities of any series, or to any suit instituted by any Securityholder for the enforcement of the payment of the principal of (or premium, if any) or interest on any Security of such series, on or after the respective due dates expressed in such Security or established pursuant to this Indenture. 28

ARTICLE VII. CONCERNING THE TRUSTEE SECTION 7.01 Certain Duties and Responsibilities of Trustee. ---------------------------------------------- (a) The Trustee, prior to the occurrence of an Event of Default with respect to the Securities of a series and after the curing of all Events of Default with respect to the Securities of that series that may have occurred, shall undertake to perform with respect to the Securities of such series such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants shall be read into this Indenture against the Trustee. In case an Event of Default with respect to the Securities of a series has occurred (that has not been cured or waived), the Trustee shall exercise with respect to Securities of that series such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (b) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (1) prior to the occurrence of an Event of Default with respect to the Securities of a series and after the curing or waiving of all such Events of Default with respect to that series that may have occurred: (i) the duties and obligations of the Trustee shall with respect to the Securities of such series be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable with respect to the Securities of such series except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) in the absence of bad faith on the part of the Trustee, the Trustee may with respect to the Securities of such series conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture; (2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; 29

(3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority in principal amount of the Securities of any series at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture with respect to the Securities of that series; and (4) none of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Indenture or adequate indemnity against such risk is not reasonably assured to it. (5) whether or not therein expressly so provided, every provision of this Indenture relating to the conduct of or affecting the liability of or affording protection to the Trustee shall be subject to the requirements of the Trust Indenture Act. SECTION 7.02 Certain Rights of Trustee ------------------------- Except as otherwise provided in Section 7.01 (a) The Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, security or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) Any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by a Board Resolution or an instrument signed in the name of the Company, by the Chairman or any Vice President and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer thereof (unless other evidence in respect thereof is specifically prescribed herein); (c) The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted hereunder in good faith and in reliance thereon; (d) Subject to Section 7.01, the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders, pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that may be incurred therein or thereby; 30

(e) The Trustee shall not be liable for any action taken or omitted to be taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture; (f) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, security, or other papers or documents, unless requested in writing so to do by the holders of not less than a majority in principal amount of the Outstanding Securities of the particular series affected thereby (determined as provided in Section 8.04); provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such costs, expenses or liabilities as a condition to so proceeding. The reasonable expense of every such examination shall be paid by the Company or, if paid by the Trustee, shall be repaid by the Company upon demand; and (g) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. (h) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture. (i) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified in connection with the performance of its duties under this Indenture shall extend to the Trustee's officers, directors, agents and employees. Such immunities and protections and right to indemnification, together with the Trustee's right to compensation, shall survive the Trustee's resignation or removal and final payment of the Securities. (j) The Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture. SECTION 7.03 Trustee Not Responsible for Recitals or Issuance ------------------------------------------------ or Securities. ------------- (a) The recitals contained herein and in the Securities shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same. (b) The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. 31

(c) The Trustee shall not be accountable for the use or application by the Company of any of the Securities or of the proceeds of such Securities, or for the use or application of any moneys paid over by the Trustee in accordance with any provision of this Indenture or established pursuant to Section 2.01, or for the use or application of any moneys received by any paying agent other than the Trustee. SECTION 7.04 May Hold Securities. ------------------- The Trustee or any paying agent or Security Registrar, in its individual or any other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not Trustee, paying agent or Security Registrar. SECTION 7.05 Moneys Held in Trust. -------------------- Subject to the provisions of Section 11.05, all moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any moneys received by it hereunder except such as it may agree with the Company in writing to pay thereon. SECTION 7.06 Compensation and Reimbursement. ------------------------------ (a) The Company covenants and agrees to pay to the Trustee, and the Trustee shall be entitled to, such compensation (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust), as the Company, and the Trustee may from time to time agree in writing, for all services rendered by it in the execution of the trusts hereby created and in the exercise and performance of any of the powers and duties hereunder of the Trustee, and, except as otherwise expressly provided herein, the Company will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all Persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or bad faith. The Company also covenants to indemnify the Trustee (and its officers, agents, directors and employees) for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the Trustee and arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim of liability in the premises. (b) The obligations of the Company under this Section to compensate and indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder. Such additional indebtedness shall be secured by a lien prior to that of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the holders of particular Securities. 32

SECTION 7.07 Reliance on Officers' Certificate. --------------------------------- Except as otherwise provided in Section 7.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting to take any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officers' Certificate delivered to the Trustee and such certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted to be taken by it under the provisions of this Indenture upon the faith thereof. SECTION 7.08 Disqualification; Conflicting Interests. --------------------------------------- If the Trustee has or shall acquire any "conflicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the Company shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act. SECTION 7.09 Corporate Trustee Required; Eligibility. --------------------------------------- There shall at all times be a Trustee with respect to the Securities issued hereunder which shall at all times be a corporation or national association organized and doing business under the laws of the United States of America or any State or Territory thereof or of the District of Columbia, or a corporation or other Person permitted to act as trustee by the Commission, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least 50 million U.S. dollars ($50,000,000), and subject to supervision or examination by Federal, State, Territorial, or District of Columbia authority. If such corporation or national association publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation or national association shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Company may not, nor may any Person directly or indirectly controlling, controlled by, or under common control with the Company, serve as Trustee. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in Section 7.10. SECTION 7.10 Resignation and Removal, Appointment of Successor. ------------------------------------------------- (a) The Trustee or any successor hereafter appointed, may at any time resign with respect to the Securities of one or more series by giving written notice thereof to the Company and by transmitting notice of resignation by mail, first class postage prepaid, to the Securityholders of such series, as their names and addresses appear upon the Security Register. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee with respect to Securities of such series by written instrument, in duplicate, executed by order of the Board of 33

Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall have been so appointed and have accepted appointment within 30 days after the mailing of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee with respect to Securities of such series, or any Securityholder of that series who has been a bona fide holder of a Security or Securities for at least six months may on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee. (b) In case at any time any one of the following shall occur: (1) the Trustee shall fail to comply with the provisions of Section 7.08 after written request therefor by the Company or by any Securityholder who has been a bona fide holder of a Security or Securities for at least six months; or (2) the Trustee shall cease to be eligible in accordance with the provisions of Section 7.09 and shall fail to resign after written request therefor by the Company or by any such Securityholder; or (3) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy proceeding, or a receiver of the Trustee or of its property shall be appointed or consented to, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, the Company may remove the Trustee with respect to all Securities and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, unless the Trustee's duty to resign is stayed as provided herein, any Securityholder who has been a bona fide holder of a Security or Securities for at least six months may, on behalf of that holder and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee. Such court may thereupon after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee. (c) The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding may at any time remove the Trustee with respect to such series by so notifying the Trustee and the Company and may appoint a successor Trustee for such series with the consent of the Company. (d) Any resignation or removal of the Trustee and appointment of a successor trustee with respect to the Securities of a series pursuant to any of the provisions of this Section shall become effective upon acceptance of appointment by the successor trustee as provided in Section 7.11. 34

(e) Any successor trustee appointed pursuant to this Section may be appointed with respect to the Securities of one or more series or all of such series, and at any time there shall be only one Trustee with respect to the Securities of any particular series. SECTION 7.11 Acceptance of Appointment By Successor. -------------------------------------- (a) In case of the appointment hereunder of a successor trustee with respect to all Securities, every such successor trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor trustee all the rights, powers, and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor trustee all property and money held by such retiring Trustee hereunder. (b) In case of the appointment hereunder of a successor trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor trustee relates, (2) shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust, that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee and that no Trustee shall be responsible for any act or failure to act on the part of any other Trustee hereunder; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein, such retiring Trustee shall with respect to the Securities of that or those series to which the appointment of such successor trustee relates have no further responsibility for the exercise of rights and powers or for the performance of the duties and obligations vested in the Trustee under this Indenture, and each such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor trustee relates; but, on request of the Company or any successor trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor trustee, to the extent 35

contemplated by such supplemental indenture, the property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor trustee relates. (c) Upon request of any such successor trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be. (d) No successor trustee shall accept its appointment unless at the time of such acceptance such successor trustee shall be qualified and eligible under this Article. (e) Upon acceptance of appointment by a successor trustee as provided in this Section, the Company shall transmit notice of the succession of such trustee hereunder by mail, first class postage prepaid, to the Securityholders, as their names and addresses appear upon the Security Register. If the Company fails to transmit such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be transmitted at the expense of the Company. SECTION 7.12 Merger, Conversion, Consolidation or Succession to -------------------------------------------------- Business. -------- Any corporation or national association into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation or national association resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation or national association succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided that such corporation shall be qualified under the provisions of Section 7.08 and eligible under the provisions of Section 7.09, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. SECTION 7.13 Preferential Collection of Claims Against the Company. ----------------------------------------------------- The Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding any creditor relationship described in Section 311(b) of the Trust Indenture Act. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act to the extent included therein. 36

ARTICLE VIII. CONCERNING THE SECURITYHOLDERS SECTION 8.01 Evidence of Action by Securityholders. ------------------------------------- Whenever in this Indenture it is provided that the holders of a majority or specified percentage in aggregate principal amount of the Securities of a particular series may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action the holders of such majority or specified percentage of that series have joined therein may be evidenced by any instrument or any number of instruments of similar tenor executed by such holders of Securities of that series in Person or by agent or proxy appointed in writing. If the Company shall solicit from the Securityholders of any series any request, demand, authorization, direction, notice, consent, waiver or other action, the Company may, at its option, as evidenced by an Officers' Certificate, fix in advance a record date for such series for the determination of Securityholders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other action, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other action may be given before or after the record date, but only the Securityholders of record at the close of business on the record date shall be deemed to be Securityholders for the purposes of determining whether Securityholders of the requisite proportion of Outstanding Securities of that series have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other action, and for that purpose the Outstanding Securities of that series shall be computed as of the record date; provided, however, that no such authorization, agreement or consent by such Securityholders on the record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date. SECTION 8.02 Proof of Execution by Securityholders. ------------------------------------- Subject to the provisions of Section 7.01, proof of the execution of any instrument by a Securityholder (such proof will not require notarization) or his agent or proxy and proof of the holding by any Person of any of the Securities shall be sufficient if made in the following manner: (a) The fact and date of the execution by any such Person of any instrument may be proved in any reasonable manner acceptable to the Trustee. (b) The ownership of Securities shall be proved by the Security Register of such Securities or by a certificate of the Security Registrar thereof. (c) The Trustee may require such additional proof of any matter referred to in this Section as it shall deem necessary. 37

SECTION 8.03 Who May be Deemed Owners. ------------------------ Prior to the due presentment for registration of transfer of any Security, the Company, the Trustee, any paying agent and any Security Registrar may deem and treat the Person in whose name such Security shall be registered upon the books of the Company as the absolute owner of such Security (whether or not such Security shall be overdue and notwithstanding any notice of ownership or writing thereon made by anyone other than the Security Registrar) for the purpose of receiving payment of or on account of the principal of, premium, if any, and (subject to Section 2.03) interest on such Security and for all other purposes; and neither the Company nor the Trustee nor any paying agent nor any Security Registrar shall be affected by any notice to the contrary. SECTION 8.04 Certain Securities Owned by Company Disregarded. ----------------------------------------------- In determining whether the holders of the requisite aggregate principal amount of Securities of a particular series have concurred in any direction, consent of waiver under this Indenture, the Securities of that series that are owned by the Company or any other obligor on the Securities of that series or by any Person directly or indirectly controlling or controlled by or under common control with the Company or any other obligor on the Securities of that series shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, except that for the purpose of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver, only Securities of such series that a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. The Securities so owned that have been pledged in good faith may be regarded as Outstanding for the purposes of this Section, if the pledgee shall establish to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not a Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any such other obligor. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. SECTION 8.05 Actions Binding on Future Securityholders. ----------------------------------------- At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 8.01, of the taking of any action by the holders of the majority or percentage in aggregate principal amount of the Securities of a particular series specified in this Indenture in connection with such action, any holder of a Security of that series that is shown by the evidence to be included in the Securities the holders of which have consented to such action may, by filing written notice with the Trustee, and upon proof of holding as provided in Section 8.02, revoke such action so far as concerns such Security. Except as aforesaid any such action taken by the holder of any Security shall be conclusive and binding upon such holder and upon all future holders and owners of such Security, and of any Security issued in exchange therefor, on registration of transfer thereof or in place thereof, irrespective of whether or not any notation in regard thereto is made upon such Security. Any action taken by the holders of the majority or percentage in aggregate principal amount of the Securities of a particular series specified in this Indenture in connection with such action shall 38

be conclusively binding upon the Company, the Trustee and the holders of all the Securities of that series. ARTICLE IX. SUPPLEMENTAL INDENTURES SECTION 9.01 Supplemental Indentures Without the Consent of ---------------------------------------------- Securityholders. --------------- In addition to any supplemental indenture otherwise authorized by this Indenture, the Company and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in effect), without the consent of the Securityholders, for one or more of the following purposes: (a) to cure any ambiguity, defect, or inconsistency herein, in the Securities of any series; (b) to comply with Article X; (c) to provide for uncertificated Securities in addition to or in place of certificated Securities; (d) to add to the covenants of the Company for the benefit of the holders of all or any Series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company; (e) to add to, delete from, or revise the conditions, limitations, and restrictions on the authorized amount, terms, or purposes of issue, authentication, and delivery of Securities, as herein set forth; (f) to make any change that does not adversely affect the rights of any Securityholder in any material respect; or (g) to provide for the issuance of and establish the form and terms and conditions of the Securities of any series as provided in Section 2.01, to establish the form of any certifications required to be furnished pursuant to the terms of this Indenture or any series of Securities, or to add to the rights of the holders of any series of Securities. The Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into any such supplemental indenture that affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. 39

Any supplemental indenture authorized by the provisions of this Section may be executed by the Company and the Trustee without the consent of the holders of any of the Securities at the time Outstanding, notwithstanding any of the provisions of Section 9.02. SECTION 9.02 Supplemental Indentures With Consent of Securityholders. ------------------------------------------------------- With the consent (evidenced as provided in Section 8.01) of the holders of not less than a majority in aggregate principal amount of the Securities of each series affected by such supplemental indenture or indentures at the time Outstanding, the Company, when authorized by Board Resolutions, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in effect) for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner not covered by Section 9.01 the rights of the holders of the Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the holders of each Security then Outstanding and affected thereby, (i) extend the fixed maturity of any Securities of any series, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof or (ii) reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture. It shall not be necessary for the consent of the Securityholders of any series affected thereby under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof. SECTION 9.03 Effect of Supplemental Indentures. --------------------------------- Upon the execution of any supplemental indenture pursuant to the provisions of this Article or of Section 10.01, this Indenture shall, with respect to such series, be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the holders of Securities of the series affected thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes. SECTION 9.04 Securities Affected by Supplemental Indentures. ---------------------------------------------- Securities of any series, affected by a supplemental indenture, authenticated and delivered after the execution of such supplemental indenture pursuant to the provisions of this Article or of Section 10.01, may bear a notation in form approved by the Company, provided such form meets the requirements of any exchange upon which such series may be listed, as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of that series so 40

modified as to conform, in the opinion of the Board of Directors of the Company, to any modification of this Indenture contained in any such supplemental indenture may be prepared by the Company, authenticated by the Trustee and delivered in exchange for the Securities of that series then Outstanding. SECTION 9.05 Execution of Supplemental Indentures. ------------------------------------ Upon the request of the Company, accompanied by its Board Resolutions authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Securityholders required to consent thereto as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion but shall not be obligated to enter into such supplemental indenture. The Trustee, subject to the provisions of Section 7.01, shall be entitled to receive an Officers' Certificate and Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article is authorized or permitted by, and conforms to, the terms of this Article and that it is proper for the Trustee under the provisions of this Article to join in the execution thereof; provided, however, that such Officers' Certificate and Opinion of Counsel need not be provided in connection with the execution of a supplemental indenture that establishes the terms of a series of Securities pursuant to Section 2.01 hereof. Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Trustee shall transmit by mail, first class postage prepaid, a notice, setting forth in general terms the substance of such supplemental indenture, to the Securityholders of all series affected thereby as their names and addresses appear upon the Security Register. Any failure of the Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture. SECTION 9.06 Conformity with Trust Indenture Act. ----------------------------------- Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect. ARTICLE X. SUCCESSOR CORPORATION SECTION 10.01 Company May Consolidate, Etc., Only on Certain Terms. ---------------------------------------------------- (a) The Company shall not consolidate with or merge into any other Person or convey, transfer or lease all or substantially all of its properties and assets to any Person, and the Company shall not permit any Person to consolidate with or merge into the Company, unless: (1) in case the Company shall consolidate with or merge into another Person or convey, transfer or lease all or substantially all of its properties and assets 41

to any Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, all or substantially all of the properties and assets of the Company shall be a corporation, partnership or trust, shall be organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, the due and punctual payment of the principal of and any premium and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed; (2) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing; and (3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with. SECTION 10.02 Successor Substitute. -------------------- Upon any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease of all or substantially all of the properties and assets of the Company in accordance with Section 10.01 above, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under the Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under the Indenture and the Notes. ARTICLE XI. SATISFACTION AND DISCHARGE SECTION 11.01 Satisfaction and Discharge of Indenture. --------------------------------------- If at any time: (a) the Company shall have delivered to the Trustee for cancellation all Securities of a series theretofore authenticated (other than any Securities that shall have been destroyed, lost or stolen and that shall have been replaced or paid as provided in Section 2.07) and Securities for whose payment money or Governmental Obligations have theretofore been deposited in trust or segregated and held in trust by the Company (and thereupon repaid to the Company or discharged from such trust, as provided in Section 11.05); or (b) all such Securities of a particular series not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under 42

arrangements satisfactory to the Trustee for the giving of notice of redemption, and the Company shall deposit or cause to be deposited with the Trustee as trust funds the entire amount in moneys or Governmental Obligations sufficient or a combination thereof, sufficient in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay at maturity or upon redemption all Securities of that series not theretofore delivered to the Trustee for cancellation, including principal (and premium, if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or cause to be paid all other sums payable hereunder with respect to such series by the Company then this Indenture shall thereupon cease to be of further effect with respect to such series except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03 and 7.10, that shall survive until the date of maturity or redemption date, as the case may be, and Sections 7.06 and 11.05, that shall survive to such date and thereafter, and the Trustee, on demand of the Company and at the cost and expense of the Company shall execute proper instruments acknowledging satisfaction of and discharging this Indenture with respect to such series. SECTION 11.02 Discharge of Obligations. ------------------------ If at any time all such Securities of a particular series not heretofore delivered to the Trustee for cancellation or that have not become due and payable as described in Section 11.01 shall have been paid by the Company by depositing irrevocably with the Trustee as trust funds moneys or an amount of Governmental Obligations sufficient to pay at maturity or upon redemption all such Securities of that series not theretofore delivered to the Trustee for cancellation, including principal (and premium, if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company with respect to such series, then after the date such moneys or Governmental Obligations, as the case may be, are deposited with the Trustee the obligations of the Company under this Indenture with respect to such series shall cease to be of further effect except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03, 7.06, 7.10 and 11.05 hereof that shall survive until such Securities shall mature and be paid. Thereafter, Sections 7.06 and 11.05 shall survive. SECTION 11.03 Deposited Moneys to be Held in Trust. ------------------------------------ All moneys or Governmental Obligations deposited with the Trustee pursuant to Sections 11.01 or 11.02 shall be held in trust and shall be available for payment as due, either directly or through any paying agent (including the Company acting as its own paying agent), to the holders of the particular series of Securities for the payment or redemption of which such moneys or Governmental Obligations have been deposited with the Trustee. SECTION 11.04 Payment of Moneys Held by Paying Agents. --------------------------------------- In connection with the satisfaction and discharge of this Indenture all moneys or Governmental Obligations then held by any paying agent under the provisions of 43

this Indenture shall, upon demand of the Company, be paid to the Trustee and thereupon such paying agent shall be released from all further liability with respect to such moneys or Governmental Obligations. SECTION 11.05 Repayment to Company. -------------------- Any moneys or Governmental Obligations deposited with any paying agent or the Trustee, or then held by the Company, in trust for payment of principal of or premium or interest on the Securities of a particular series that are not applied but remain unclaimed by the holders of such Securities for at least two years after the date upon which the principal of (and premium, if any) or interest on such Securities shall have respectively become due and payable, shall upon request of the Company, be repaid to the Company or (if then held by the Company) shall be discharged from such trust; and thereupon the paying agent and the Trustee shall be released from all further liability with respect to such moneys or Governmental Obligations, and the holder of any of the Securities entitled to receive such payment shall thereafter, as an unsecured general creditor, look only to the Company for the payment thereof. ARTICLE XII. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS SECTION 12.01 No Recourse. ----------- No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator, stockholder, officer or director, past, present or future as such, of the Company or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers or directors as such, of the Company or of any predecessor or successor corporation, or any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom; and that any and all such personal liability of every name and nature, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator, stockholder, officer or director as such, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of such Securities. 44

ARTICLE XIII. MISCELLANEOUS PROVISIONS SECTION 13.01 Effect on Successors and Assigns. -------------------------------- All the covenants, stipulations, promises and agreements in this Indenture contained by or on behalf of the Company shall bind their respective successors and assigns, whether so expressed or not. SECTION 13.02 Actions by Successor. -------------------- Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force and effect by the corresponding board, committee or officer of any corporation that shall at the time be the lawful sole successor of the Company. SECTION 13.03 Surrender of Company Powers. --------------------------- The Company by instrument in writing executed by authority of 2/3 (two-thirds) of its Board of Directors and delivered to the Trustee may surrender any of the powers reserved to the Company, and thereupon such power so surrendered shall terminate both as to the Company and as to any successor corporation. SECTION 13.04 Notices. ------- Except as otherwise expressly provided herein any notice or demand that by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the holders of Securities to or on the Company may be given or served by being deposited first class postage prepaid in a post-office letterbox addressed (until another address is filed in writing by the Company with the Trustee), as follows: Marsh & McLennan Companies, Inc., 1166 Avenue of the Americas, New York, New York 10036-2774. Any notice, election, request or demand by the Company or any Securityholder to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made in writing at the Corporate Trust Office of the Trustee. SECTION 13.05 Governing Law. ------------- This Indenture and each Security shall be deemed to be a contract made under the internal laws of the State of New York, and for all purposes shall be construed in accordance with the laws of said State. SECTION 13.06 Treatment of Securities as Debt. ------------------------------- It is intended that the Securities will be treated as indebtedness and not as equity for federal income tax purposes. The provisions of this Indenture shall be interpreted to further this intention. 45

SECTION 13.07 Compliance Certificates and Opinions. ------------------------------------ (a) Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company, shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent have been complied with, except that in the case of any such application or demand as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or demand, no additional certificate or opinion need be furnished. (b) Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant in this Indenture shall include (1) a statement that the Person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such Person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with. SECTION 13.08 Payments on Business Days. ------------------------- Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and as set forth in an Officers Certificate, or established in one or more indentures supplemental to this Indenture, in any case where the date of maturity of interest or principal of any Security or the date of redemption of any Security shall not be a Business Day, then payment of interest or principal (and premium, if any) may be made on the next succeeding Business Day with the same force and effect as if made on the nominal date of maturity or redemption, and no interest shall accrue for the period after such nominal date. SECTION 13.09 Conflict with Trust Indenture Act. --------------------------------- If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control. SECTION 13.10 Counterparts. ------------ This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. 46

SECTION 13.11 Separability. ------------ In case any one or more of the provisions contained in this Indenture or in the Securities of any series shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Indenture or of such Securities, but this Indenture and such Securities shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein. SECTION 13.12 Assignment. ---------- The Company will have the right at all times to assign any of its rights or obligations under this Indenture to a direct or indirect wholly-owned Subsidiary of the Company, provided that, in the event of any such assignment, the Company, will remain liable for all such obligations. Subject to the foregoing, the Indenture is binding upon and inures to the benefit of the parties thereto and their respective successors and assigns. This Indenture may not otherwise be assigned by the parties thereto. 47

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed all as of the day and year first above written. MARSH & McLENNAN COMPANIES, INC. By: /s/ Matthew B. Bartley ----------------------------------- Name: Matthew B. Bartley Title: Vice President & Treasurer THE BANK OF NEW YORK, as Trustee By: /s/ Remo J. Reale ----------------------------------- Name: Remo J. Reale Title: Vice President

Exhibit 4.2 ================================================================================ MARSH & McLENNAN COMPANIES INC., Issuer, and The Bank of New York, Trustee ____________________ FIRST SUPPLEMENTAL INDENTURE Dated as of July 14, 2004 ____________________ $650,000,000 principal amount of 5.375% Senior Notes Due 2014 $500,000,000 principal amount of Floating Rate Senior Notes Due 2007 ================================================================================

FIRST SUPPLEMENTAL INDENTURE, dated as of July 14, 2004, between MARSH & McLENNAN COMPANIES, INC., a Delaware corporation (the "Company" and hereinafter the "Issuer"), and THE BANK OF NEW YORK, a New York banking corporation, as Trustee (the "Trustee") W I T N E S S E T H: WHEREAS, the Issuer and the Trustee executed and delivered an Indenture, dated as of July 14, 2004 (as supplemented hereby, the "Indenture"), to provide for the issuance by the Issuer from time to time of senior debt securities evidencing its unsecured indebtedness; WHEREAS, pursuant to a Board Resolution, the Issuer has authorized the issuance of $650,000,000 principal amount of 5.375% Senior Notes due 2014 (the "5.375% Notes") and $500,000,000 principal amount of Floating Rate Senior Notes due 2007 (the "Floating Rate Notes", together with the 5.375% Notes, the "Offered Securities"); WHEREAS, the entry into this First Supplemental Indenture by the parties hereto is in all respects authorized by the provisions of the Indenture; and WHEREAS, the Issuer desires to establish the terms of the Offered Securities in accordance with Section 2.01 of the Indenture and to establish the form of the Offered Securities in accordance with Section 2.02 of the Indenture; and WHEREAS, all things necessary to make this First Supplemental Indenture a valid indenture and agreement according to its terms have been done. NOW, THEREFORE, for and in consideration of the premises, the Issuer and the Trustee mutually covenant and agree for the equal and proportionate benefit of the respective holders from time to time of the Offered Securities as follows: Article 1 Section 1.01. Terms of Offered Securities. The following terms relating to the Offered Securities are hereby established: (a) The 5.375% Notes shall constitute a series of securities having the title "5.375% Senior Notes due 2014" and the Floating Rate Notes shall constitute a series of securities having the title "Floating Rate Senior Notes due 2007." (b) The aggregate principal amount of the 5.375% Notes that may be authenticated and delivered under the Indenture (except for Notes authenticated

and delivered upon registration of, transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 2.05, 2.06, 2.07 or 9.01) shall be up to $650,000,000. The aggregate principal amount of the Floating Rate Notes that may be authenticated and delivered under the Indenture (except for Notes authenticated and delivered upon registration of, transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 2.05, 2.06, 2.07 or 9.01) shall be up to $500,000,000. (c) The entire outstanding principal of the 5.375% Notes shall be payable on July 15, 2014 plus any unpaid interest accrued to such date and the entire outstanding principal of the Floating Rate Notes shall be payable on July 13, 2007 plus any unpaid interest accrued to such date. (d) The rate at which the 5.375% Notes shall bear interest shall be 5.375% per annum; the date from which interest shall accrue on the 5.375% Notes shall be July 14, 2004; the Interest Payment Dates for the 5.375% Notes on which interest will be payable shall be January 15 and July 15 in each year, beginning January 15, 2005; the Regular Record Dates for the interest payable on the 5.375% Notes on any Interest Payment Date shall be the January 1 and July 1 preceding the applicable Interest Payment Date; and the basis upon which interest shall be calculated shall be that of a 360-day year consisting of twelve 30-day months. (e) (i) The 5.375% Notes may be redeemed in whole at any time or in part from time to time, at the option of the Issuer, at a redemption price equal to the greater of (1) 100% of the principal amount of the 5.375% Notes to be redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the 5.375% Notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at then current Treasury Rate plus 15 basis points, plus accrued and unpaid interest on the principal amount being redeemed to the redemption date (the "Redemption Price"). (ii) (A) In case the Company shall desire to exercise such right to redeem all or, as the case may be, a portion of the 5.375% Notes in accordance with Section 1.01(e)(i), the Company shall, or shall cause the Trustee to, give notice of such redemption to holders of the 5.375% Notes to be redeemed by mailing, first class postage prepaid, a notice of such redemption not less than 30 days and not more than 60 days before the date fixed for redemption to such holders at their last addresses as they shall appear upon the Security Register. Any notice that is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the registered holder received the notice. In any case, failure duly to give such notice to the holder of any 5.375% Note designated for redemption in whole or in part, or any defect in the notice, 2

shall not affect the validity of the proceedings for the redemption of any other 5.375% Note of such series. Each such notice of redemption shall specify the date fixed for redemption and the Redemption Price at which the 5.375% Notes are to be redeemed, and shall state that payment of the Redemption Price of such 5.375% Notes to be redeemed will be made at the office or agency of the Company in the Borough of Manhattan, the City and State of New York, upon presentation and surrender of such 5.375% Notes, that interest accrued to the date fixed for redemption will be paid as specified in said notice and, that from and after said date interest will cease to accrue. If less than all the 5.375% Notes of a series are to be redeemed, the notice to the holders of the 5.375% Notes of that series to be redeemed in whole or in part shall specify the particular 5.375% Notes to be redeemed. In case any 5.375% Note is to be redeemed in part only, the notice that relates to such 5.375% Note shall state the portion of the principal amount thereof to be redeemed, and shall state that on and after the redemption date, upon surrender of such security, a new 5.375% Note of such series in principal amount equal to the unredeemed portion thereof will be issued. (B) If less than all the 5.375% Notes are to be redeemed, the Company shall give the Trustee at least 45 days' notice in advance of the date fixed for redemption as to the aggregate principal amount of 5.375% Notes to be redeemed, and thereupon the Trustee shall select, by lot or in such other manner as it shall deem appropriate and fair in its discretion and that may provide for the selection of a portion or portions (equal to two thousand U.S. dollars ($2,000) or any integral multiple thereof) of the principal amount of such 5.375% Notes of a denomination larger than $2,000, the 5.375% Notes to be redeemed and shall thereafter promptly notify the Company in writing of the numbers of the 5.375% Notes to be redeemed, in whole or in part. The Company may, if and whenever it shall so elect, by delivery of instructions signed on its behalf by its President or any Vice President, instruct the Trustee or any paying agent to call all or any part of the 5.375% Notes for redemption and to give notice of redemption in the manner set forth in this Section, such notice to be in the name of the Company or its own name as the Trustee or such paying agent may deem advisable. In any case in which notice of redemption is to be given by the Trustee or any such paying agent, the Company shall deliver or cause to be delivered to, or permit to remain with, the Trustee or such paying agent, as the case may be, such Security Register, transfer books or other records, or suitable copies or extracts therefrom, 3

sufficient to enable the Trustee or such paying agent to give any notice by mail that may be required under the provisions of this Section. (iii) As used herein: "Business Day" means any calendar day that is not a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to remain closed. "Comparable Treasury Issue" means the United States Treasury security selected by the Independent Investment Banker as having a maturity comparable to the remaining term ("Remaining Life") of the 5.375% Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such 5.375% Notes. "Comparable Treasury Price" means, with respect to any redemption date, (i) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (ii) if the trustee obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations. "Independent Investment Banker" means Banc of America Securities LLC and its successors, or, if such firm or the successors, if any, to such firm, as the case may be, are unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Issuer. "Reference Treasury Dealer" means Banc of America Securities LLC and its successors, and three other firms that are primary U.S. Government securities dealers (each a "Primary Treasury Dealer"), which the Company will specify from time to time; provided, however, that if any of them ceases to be a Primary Treasury Dealer, the Company will substitute another Primary Treasury Dealer. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee at 5:00 p.m., New York City time, on the third Business Day preceding such redemption date. "Treasury Rate" means, with respect to any redemption date, the rate per year equal to: 4

(i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue, provided that, if no maturity is within three months before or after the Remaining Life of the 5.375% Notes to be redeemed, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month; or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield-to-maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price of such redemption date. The Treasury Rate shall be calculated on the third Business Day preceding the redemption date. With respect to Section 1.01(e)(i)(2) above, the Trustee shall be entitled to rely upon the calculations of the Independent Investment Banker. (f) The Floating Rate Notes will bear interest at "LIBOR" plus 0.14%. Interest will accrue from July 14, 2004 and is payable quarterly in arrears on January 13, April 13, July 13, and October 13 of each year, beginning on October 13, 2004 provided that if any such date is not a Business Day, payment of interest accrued through the applicable Interest Payment Date will be made on the following Business Day unless that Business Day is in the following calendar month, in which case the Interest Payment Date will be the immediately preceding Business Day. The interest rate will be calculated quarterly on January 11, April 11, July 11 and October 11 of each year. The interest rate will be reset quarterly on January 13, April 13, July 13, and October 13 of each year (each of these dates is called an "Interest Reset Date"). Interest is payable from the date of issue of the Floating Rate Notes or from the most recent date to which interest on such Floating Rate Note has been paid or duly provided for, until the principal amount of the Floating Rate Note is paid or duly made available for payment. Interest will be paid to the person in whose name the Floating Rate Note is registered at the close of business 15 calendar days before the Interest Payment Date. Interest on the Floating Rate Notes will be computed and paid on the basis of a 360-day year and the actual number of days in each interest payment period. (g) "LIBOR" for each Interest Reset Date, other than for the initial interest rate, will be determined by the calculation agent as follows: 5

(i) LIBOR will be the offered rate for deposits in U.S. dollars for the three month period which appears on "Telerate Page 3750" at approximately 11:00 a.m., London time, two "London banking days" prior to the applicable Interest Reset Date. (ii) If this rate does not appear on the Telerate Page 3750, the calculation agent will determine the rate on the basis of the rates at which deposits in U.S. dollars are offered by four major banks in the London interbank market (selected by the calculation agent after consulting with us) at approximately 11:00 a.m., London time, two London banking days prior to the applicable Interest Reset Date to prime banks in the London interbank market for a period of three months commencing on that Interest Reset Date and in principal amount equal to an amount not less than $1,000,000 that is representative for a single transaction in such market at such time. In such case, the calculation agent will request the principal London office of each of the aforesaid major banks to provide a quotation of such rate. If at least two such quotations are provided, LIBOR for that Interest Reset Date will be the average of the quotations. If fewer than two quotations are provided as requested, LIBOR for that Interest Reset Date will be the average of the rates quoted by three major banks in New York, New York (selected by the calculation agent after consulting with us) at approximately 11:00 a.m., New York time, two London banking days prior to the applicable Interest Reset Date for loans in U.S. dollars to leading banks for a period of three months commencing on that Interest Reset Date and in a principal amount equal to an amount not less than $1,000,000 that is representative for a single transaction in such market at such time; provided that if fewer than three quotations are provided as requested, for the period until the next Interest Reset Date, LIBOR will be the same as the rate determined on the immediately preceding Interest Reset Date. The interest rate in effect from the date of issue to the first Interest Reset Date will be based on three month LIBOR two London banking days prior to the date of issue. A "London banking day" is any day in which dealings in U.S. dollar deposits are transacted in the London interbank market. "Telerate Page 3750" means the display page so designated on the Telerate Service for the purpose of displaying London interbank offered rates of major banks (or any successor page). (h) The Offered Securities shall be issuable in denominations of $2,000 and any integral multiple thereof. (i) The Trustee shall also be the security registrar and paying agent for the Offered Securities. 6

(j) Payments of the principal of and interest on the Offered Securities shall be made in U.S. Dollars, and the Notes shall be denominated in U.S. Dollars. (k) The holders of the Offered Securities shall have no special rights in addition to those provided in the Indenture upon the occurrence of any particular events. (l) The Offered Securities shall not be subordinated to any other debt of the Issuer, and shall constitute senior unsecured obligations of the Issuer. The Offered Securities are issuable in book entry form and are not convertible into shares of common stock or other securities of the Company. Section 1.02 . Form Of Note. The form of the 5.375% Notes and the Floating Rate Notes is attached hereto as Exhibit A. Article 2 Miscellaneous Section 2.01 . Definitions. Capitalized terms used but not defined in this First Supplemental Indenture shall have the meanings ascribed thereto in the Indenture. Section 2.02 . Confirmation of Indenture. The Indenture, as heretofore supplemented and amended and as further supplemented and amended by this First Supplemental Indenture, is in all respects ratified and confirmed, and the Indenture, this First Supplemental Indenture and all indentures supplemental thereto shall be read, taken and construed as one and the same instrument. Section 2.03 . Concerning the Trustee. The Trustee assumes no duties, responsibilities or liabilities by reason of this First Supplemental Indenture other than as set forth in the Indenture and, in carrying out its responsibilities hereunder, shall have all of the rights, protections and immunities which it possesses under the Indenture. Section 2.04 . Governing Law. This First Supplemental Indenture, the Indenture and the Offered Securities shall be governed by and construed in accordance with the law of the State of New York. Section 2.05 . Separability. In case any provision in this First Supplemental Indenture shall for any reason be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 7

Section 2.06 . Counterparts. This First Supplemental Indenture may be executed in any number of counterparts each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. 8

IN WITNESS WHEREOF, this First Supplemental Indenture has been duly executed by the Company and the Trustee as of the day and year first written above. MARSH & McLENNAN COMPANIES, INC. By: /s/ Matthew B. Bartley -------------------------------- Name: Matthew B. Bartley Title: Vice President & Treasurer 9

THE BANK OF NEW YORK, as Trustee By: /s/ Remo J. Reale --------------------------------- Name: Remo J. Reale Title: Vice President 10

Exhibit A UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO, HAS AN INTEREST HEREIN. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM IN ACCORDANCE WITH THE PROVISIONS OF THE INDENTURE AND THE TERMS OF THE SECURITIES, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. Certificate No. 1 $650,000,000 CUSIP __________ MARSH & McLENNAN COMPANIES, INC. 5.375% Senior Notes due July 15, 2014 MARSH & McLENNAN COMPANIES, INC., a Delaware corporation (the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & Co., or its registered assigns, the principal sum of SIX HUNDRED AND FIFTY MILLION Dollars ($650,000,000) on July 15, 2014 and to pay interest on said principal sum from July 14, 2004 or from the most recent interest payment date (each such date, an "Interest Payment Date") to which interest has been paid or duly provided for semiannually on January 15 and July 15 of each year commencing January 15, 2005 at the rate of 5.375% per annum until the 11

principal hereof shall have become due and payable, and on any overdue principal and premium, if any, and (without duplication and to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the same rate per annum. The amount of interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on this Note is not a Business Day, then payment of interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the person in whose name this Note (or one or more Predecessor Securities, as defined in said Indenture) is registered at the close of business on the Regular Record Date for such interest installment which shall be January 1 or July 1 preceding such Interest Payment Date. Any such interest installment not punctually paid or duly provided for (as defined in the Indenture, the "Defaulted Interest") shall forthwith cease to be payable to the registered holders on such regular record date, and may be paid to the person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a special record date to be fixed by the Trustee for the payment of such Defaulted Interest, which shall not be more than 15 nor less than 10 days prior to the date of the proposed payment, and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment or at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. The principal of (and premium, if any) and the interest on this Note shall be payable at the office or agency of the Trustee maintained for that purpose in any coin or currency of the United States of America which at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company by check mailed to the registered holder at such address as shall appear in the Security Register. Notwithstanding the foregoing, so long as the Holder of this Note is Cede & Co., the payment of the principal of (and premium, if any) and interest on this Note will be made at such place and to such account as may be designated by DTC. The indebtedness evidenced by this Note is, to the extent provided in the Indenture, senior and unsecured and will rank in right of payment on parity with all other senior unsecured obligations of the Company. This Note shall not be entitled to any benefit under the Indenture hereinafter referred to, be valid or become obligatory for any purpose until the 12

Certificate of Authentication hereon shall have been signed by or on behalf of the Trustee. The provisions of this Note are continued on the reverse side hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. 13

IN WITNESS WHEREOF, the Company has caused this instrument to be executed. Dated: July 14, 2004 MARSH & McLENNAN COMPANIES, INC. By: --------------------------------- Name: Title: By: --------------------------------- Name: Title: Attest: By_________________________ Name: Title: 14

CERTIFICATE OF AUTHENTICATION This is one of the Notes of the series of Notes described in the within-mentioned Indenture. THE BANK OF NEW YORK, as Trustee By_____________________________ Authorized Signatory 15

ASSIGNMENT FORM FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to - ----------------------------------------------------------------------------- (Insert Social Security number or other identifying number of assignee) - ----------------------------------------------------------------------------- (Please print or typewrite name and address, including zip code of assignee) - ----------------------------------------------------------------------------- the within Note of Marsh & McLennan Companies, Inc. and hereby does irrevocably constitute and appoint - -------------------------------------------------------------------------------- Attorney to transfer said Note on the books of the within-named Issuer with full power of substitution in the premises. Dated:___________________ ___________________________________ ___________________________________ Signature(s) must be guaranteed by an eligible Guarantor Institution (banks, stock brokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-1 5. NOTICE: The signature to this assignment must correspond with the name as it appears on the first page of the within Note in every particular, without alteration or enlargement or any change whatever. 16

MARSH & McLENNAN COMPANIES, INC. 5.375% Senior Notes due 2014 This Note is one of a duly authorized series of Securities of the Company (herein sometimes referred to as the "Notes"), specified in the Indenture, all issued or to be issued in one or more series under and pursuant to an indenture (the "Base Indenture") dated as of July 14, 2004 among the Company, and The Bank of New York, as Trustee (the "Trustee"), as supplemented by the First Supplemental Indenture dated as of July 14, 2004 among the Company and the Trustee (the Base Indenture as so supplemented, the "Indenture"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the holders of the Notes. This series of Notes is limited in aggregate principal amount as specified in said First Supplemental Indenture. The Notes may be redeemed in whole at any time or in part from time to time, at the option of the Issuer, at a redemption price equal to the greater of (i) 100% of the principal amount of the Notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at then current Treasury Rate plus 15 basis points, plus accrued and unpaid interest on the principal amount being redeemed to the redemption date (the "Redemption Price"). In case the Company shall desire to exercise such right to redeem all or, as the case may be, a portion of the Notes, the Company shall, or shall cause the Trustee to, give notice of such redemption to holders of the Notes to be redeemed by mailing, first class postage prepaid, a notice of such redemption not less than 30 days and not more than 60 days before the date fixed for redemption to such holders at their last addresses as they shall appear upon the Security Register. Any notice that is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the registered holder received the notice. In any case, failure duly to give such notice to the holder of any Note designated for redemption in whole or in part, or any defect in the notice, shall not affect the validity of the proceedings for the redemption of any other Note of such series. Each such notice of redemption shall specify the date fixed for redemption and the Redemption Price at which the Notes are to be redeemed, and shall state that payment of the Redemption Price of such Notes to be redeemed will be made at the office or agency of the Company in the Borough of Manhattan, the City and State of New York, upon presentation and surrender of such Notes, that interest accrued to the date fixed for redemption will be paid as specified in said notice and, that from and after said date interest will cease to accrue. If less than all the Notes of a series are to be redeemed, the notice to the holders of the Notes of that 17

series to be redeemed in whole or in part shall specify the particular Notes to be redeemed. In case any Note is to be redeemed in part only, the notice that relates to such Note shall state the portion of the principal amount thereof to be redeemed, and shall state that on and after the redemption date, upon surrender of such security, a new Note of such series in principal amount equal to the unredeemed portion thereof will be issued. If less than all the Notes are to be redeemed, the Company shall give the Trustee at least 45 days' notice in advance of the date fixed for redemption as to the aggregate principal amount of Notes to be redeemed, and thereupon the Trustee shall select, by lot or in such other manner as it shall deem appropriate and fair in its discretion and that may provide for the selection of a portion or portions (equal to two thousand U.S. dollars ($2,000) or any integral multiple thereof) of the principal amount of such Notes of a denomination larger than $2,000, the Notes to be redeemed and shall thereafter promptly notify the Company in writing of the numbers of the Notes to be redeemed, in whole or in part. The Company may, if and whenever it shall so elect, by delivery of instructions signed on its behalf by its President or any Vice President, instruct the Trustee or any paying agent to call all or any part of the Notes for redemption and to give notice of redemption in the manner set forth in this Note, such notice to be in the name of the Company or its own name as the Trustee or such paying agent may deem advisable. In any case in which notice of redemption is to be given by the Trustee or any such paying agent, the Company shall deliver or cause to be delivered to, or permit to remain with, the Trustee or such paying agent, as the case may be, such Security Register, transfer books or other records, or suitable copies or extracts therefrom, sufficient to enable the Trustee or such paying agent to give any notice by mail that may be required under the provisions stated herein. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of the Notes of each series affected at the time Outstanding, as defined in the Indenture, to execute supplemental indentures for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or of modifying in any manner the rights of the Holders of the Notes; provided, however, that no such supplemental indenture shall, without the consent of the holders of each Note then Outstanding and affected thereby (i) extend the fixed maturity of any Notes of any series, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, or (ii) reduce the aforesaid percentage of Notes, the Holders of which are required to consent to any such supplemental indenture. The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the Notes of any series at the time Outstanding 18

affected thereby, on behalf of all of the Holders of the Notes of such series, to waive any past default in the performance of any of the covenants contained in the Indenture, or established pursuant to the Indenture with respect to such series, and its consequences, except a default in the payment of the principal of or premium, if any, or interest on any of the Notes of such series and except as provided in Section 6.06 of the Base Indenture. Any such consent or waiver by the registered Holder of this Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Note and of any Note issued in exchange herefor or in place hereof (whether by registration of transfer or otherwise), irrespective of whether or not any notation of such consent or waiver is made upon this Note. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, and interest on this Note at the time and place and at the rate and in the money herein prescribed. The Issuer is subject to certain covenants contained in the Indenture with respect to, and for the benefit of the Holders of, the Notes. The Trustee shall not be obligated to monitor or confirm, on a continuing basis or otherwise, the Issuer's compliance with the covenants contained in the Indenture or with respect to reports or other certificates filed under the Indenture; provided, however, that nothing herein shall relieve the Trustee of any obligations to monitor the Issuer's timely delivery of all reports and certificates required under Section 5.03 of the Indenture and to fulfill its obligations under Article VII of the Indenture. If an Event of Default as defined in the Indenture with respect to the Notes shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture. As provided in and subject to the provisions of the Indenture, the Holder of this Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes, the Holders of not less than 25% in principal amount of the Notes at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity and the Trustee shall have failed to institute any such proceeding for 60 days after receipt of such notice, request and offer of indemnity and the Trustee shall not have received from the Holders of a majority in principal amount of the Notes at the time Outstanding a direction inconsistent with such request. The foregoing shall not apply to any suit instituted by the Holder of this Note for the enforcement of any payment of principal hereof or any interest on or after the respective due dates expressed herein. 19

As provided in the Indenture and subject to certain limitations therein set forth, this Note is transferable by the registered holder hereof on the Security Register of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Company in the borough of Manhattan, the City and State of New York accompanied by a written instrument or instruments of transfer in form satisfactory to the Company or the Trustee duly executed by the registered holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of authorized denominations and for the same aggregate principal amount and series will be issued to the designated transferee or transferees. No service charge will be made for any such transfer, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in relation thereto. Prior to due presentment for registration of transfer of this Note, the Company, the Trustee, any paying agent and any Security Registrar may deem and treat the registered holder hereof as the absolute owner hereof (whether or not this Note shall be overdue and notwithstanding any notice of ownership or writing hereon made by anyone other than the Security Registrar) for the purpose of receiving payment of or on account of the principal hereof and premium, if any, and interest due hereon and for all other purposes, and neither the Company nor the Trustee nor any paying agent nor any Note Registrar shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of or the interest on this Note, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture, against any incorporator, stockholder, officer or director, past, present or future, as such, of the Company or of any predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly waived and released. The Notes of this series are issuable only in registered form without coupons in authorized denominations. As provided in the Indenture and subject to certain limitations herein and therein set forth, Notes of this series so issued are exchangeable for a like aggregate principal amount of Notes of this series of a different authorized denomination, as requested by the Holder surrendering the same. All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. THE INDENTURE AND THE NOTES INCLUDING THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. 20

Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused "CUSIP" numbers to be printed on the Notes as a convenience to the Holders of the Notes. No representation is made as to the correctness or accuracy of such CUSIP numbers as printed on the Notes, and reliance may be placed only on the other identification numbers printed hereon. Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purposes. 21

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM IN ACCORDANCE WITH THE PROVISIONS OF THE INDENTURE AND THE TERMS OF THE SECURITIES, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. Certificate No. 2 $500,000,000 CUSIP __________ MARSH & McLENNAN COMPANIES, INC. Floating Rate Senior Notes due 2007 MARSH & McLENNAN COMPANIES, INC., a Delaware corporation (the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & Co., or its registered assigns, the principal sum of FIVE HUNDRED MILLION Dollars ($500,000,000) on July 13, 2007 and to pay interest on said principal sum from July 14, 2004 or from the most recent interest payment date (each such date, an "Interest Payment Date") to which interest has been paid or duly provided for, quarterly in arrears on January 13, April 13, July 13 and October 13 of each year commencing October 13, 2004 at the rate of "LIBOR" plus 0.14% per annum until the principal hereof shall have become due and payable, and on any overdue principal and premium, if any, and (without duplication and to the extent that payment of such interest if enforceable under 22

applicable law) on any overdue installment of interest. The amount of interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year and the actual number of days in each interest payment period. In the event that any date on which interest is payable on this Note is not a Business Day, then payment of interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the person in whose name this Note (or one or more Predecessor Securities, as defined in said Indenture) is registered at the close of business 15 calendar days before the Interest Payment Date. Any such interest installment not punctually paid or duly provided for (as defined in the Indenture, the "Defaulted Interest") shall forthwith cease to be payable to the registered holders on such regular record date, and may be paid to the person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a special record date to be fixed by the Trustee for the payment of such Defaulted Interest, which shall not be more than 15 nor less than 10 days prior to the date of the proposed payment, and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment or at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. The principal of (and premium, if any) and the interest on this Note shall be payable at the office or agency of the Trustee maintained for that purpose in any coin or currency of the United States of America which at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company by check mailed to the registered holder at such address as shall appear in the Security Register. Notwithstanding the foregoing, so long as the Holder of this Note is Cede & Co., the payment of the principal of (and premium, if any) and interest on this Note will be made at such place and to such account as may be designated by DTC. "LIBOR" for each Interest Payment Date, other than for the initial interest rate, will be determined by the calculation agent as follows: (a) LIBOR will be the offered rate for deposits in U.S. dollars for the three month period which appears on "Telerate Page 3750" at approximately 11:00 a.m., London time, two "London banking days" prior to the applicable Interest Payment Date. (b) If this rate does not appear on the Telerate Page 3750, the calculation agent will determine the rate on the basis of the rates at which deposits 23

in U.S. dollars are offered by four major banks in the London interbank market (selected by the calculation agent after consulting with us) at approximately 11:00 a.m., London time, two London banking days prior to the applicable Interest Payment Date to prime banks in the London interbank market for a period of three months commencing on that Interest Payment Date and in principal amount equal to an amount not less than $1,000,000 that is representative for a single transaction in such market at such time. In such case, the calculation agent will request the principal London office of each of the aforesaid major banks to provide a quotation of such rate. If at least two such quotations are provided, LIBOR for that Interest Payment Date will be the average of the quotations. If fewer than two quotations are provided as requested, LIBOR for that Interest Payment Date will be the average of the rates quoted by three major banks in New York, New York (selected by the calculation agent after consulting with us) at approximately 11:00 a.m., New York time, two London banking days prior to the applicable Interest Payment Date for loans in U.S. dollars to leading banks for a period of three months commencing on that Interest Payment Date and in a principal amount equal to an amount not less than $1,000,000 that is representative for a single transaction in such market at such time; provided that if fewer than three quotations are provided as requested, for the period until the next Interest Payment Date, LIBOR will be the same as the rate determined on the immediately preceding Interest Payment Date. The interest rate in effect from the date of issue to the first Interest Payment Date will be based on three month LIBOR two London banking days prior to the date of issue. A "London banking day" is any day in which dealings in U.S. dollar deposits are transacted in the London interbank market. "Telerate Page 3750" means the display page so designated on the Telerate Service for the purpose of displaying London interbank offered rates of major banks (or any successor page). The indebtedness evidenced by this Note is, to the extent provided in the Indenture, senior and unsecured and will rank in right of payment on parity with all other senior unsecured obligations of the Company. This Note shall not be entitled to any benefit under the Indenture hereinafter referred to, be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been signed by or on behalf of the Trustee. The provisions of this Note are continued on the reverse side hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. 24

IN WITNESS WHEREOF, the Company has caused this instrument to be executed. Dated July 14, 2004 MARSH & McLENNAN COMPANIES, INC. By: --------------------------------- Name: Title: By: --------------------------------- Name: Title: Attest: By_______________________ Name: Title: 25

MARSH & MCLENNAN COMPANIES, INC. Floating Rate Note 2007 This Note is one of a duly authorized series of Securities of the Company (herein sometimes referred to as the "Notes"), specified in the Indenture, all issued or to be issued in one or more series under and pursuant to an indenture (the "Base Indenture") dated as of July 14, 2004 among the Company, and The Bank of New York, as Trustee (the "Trustee"), as supplemented by the First Supplemental Indenture dated as of July 14, 2004 among the Company and the Trustee (the Base Indenture as so supplemented, the "Indenture"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the holders of the Notes. This series of Notes is limited in aggregate principal amount as specified in said First Supplemental Indenture. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of the Notes of each series affected at the time Outstanding, as defined in the Indenture, to execute supplemental indentures for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or of modifying in any manner the rights of the Holders of the Notes; provided, however, that no such supplemental indenture shall, without the consent of the holders of each Note then Outstanding and affected thereby (i) extend the fixed maturity of any Notes of any series, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, or (ii) reduce the aforesaid percentage of Notes, the Holders of which are required to consent to any such supplemental indenture. The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the Notes of any series at the time Outstanding affected thereby, on behalf of all of the Holders of the Notes of such series, to waive any past default in the performance of any of the covenants contained in the Indenture, or established pursuant to the Indenture with respect to such series, and its consequences, except a default in the payment of the principal of or premium, if any, or interest on any of the Notes of such series and except as provided in Section 6.06 of the Base Indenture. Any such consent or waiver by the registered Holder of this Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Note and of any Note issued in exchange herefor or in place hereof (whether by registration of transfer or otherwise), irrespective of whether or not any notation of such consent or waiver is made upon this Note. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is 28

absolute and unconditional, to pay the principal of and premium, if any, and interest on this Note at the time and place and at the rate and in the money herein prescribed. The Issuer is subject to certain covenants contained in the Indenture with respect to, and for the benefit of the Holders of, the Notes. The Trustee shall not be obligated to monitor or confirm, on a continuing basis or otherwise, the Issuer's compliance with the covenants contained in the Indenture or with respect to reports or other certificates filed under the Indenture; provided, however, that nothing herein shall relieve the Trustee of any obligations to monitor the Issuer's timely delivery of all reports and certificates required under Section 5.03 of the Indenture and to fulfill its obligations under Article VII of the Indenture. If an Event of Default as defined in the Indenture with respect to the Notes shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture. As provided in and subject to the provisions of the Indenture, the Holder of this Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes, the Holders of not less than 25% in principal amount of the Notes at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity and the Trustee shall have failed to institute any such proceeding for 60 days after receipt of such notice, request and offer of indemnity and the Trustee shall not have received from the Holders of a majority in principal amount of the Notes at the time Outstanding a direction inconsistent with such request. The foregoing shall not apply to any suit instituted by the Holder of this Note for the enforcement of any payment of principal hereof or any interest on or after the respective due dates expressed herein. As provided in the Indenture and subject to certain limitations therein set forth, this Note is transferable by the registered holder hereof on the Security Register of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Company in the borough of Manhattan, the City and State of New York accompanied by a written instrument or instruments of transfer in form satisfactory to the Company or the Trustee duly executed by the registered holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of authorized denominations and for the same aggregate principal amount and series will be issued to the designated transferee or transferees. No service charge will be made for any such transfer, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in relation thereto. 29

Prior to due presentment for registration of transfer of this Note, the Company, the Trustee, any paying agent and any Security Registrar may deem and treat the registered holder hereof as the absolute owner hereof (whether or not this Note shall be overdue and notwithstanding any notice of ownership or writing hereon made by anyone other than the Security Registrar) for the purpose of receiving payment of or on account of the principal hereof and premium, if any, and interest due hereon and for all other purposes, and neither the Company nor the Trustee nor any paying agent nor any Note Registrar shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of or the interest on this Note, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture, against any incorporator, stockholder, officer or director, past, present or future, as such, of the Company or of any predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly waived and released. The Notes of this series are issuable only in registered form without coupons in authorized denominations. As provided in the Indenture and subject to certain limitations herein and therein set forth, Notes of this series so issued are exchangeable for a like aggregate principal amount of Notes of this series of a different authorized denomination, as requested by the Holder surrendering the same. All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. THE INDENTURE AND THE NOTES INCLUDING THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused "CUSIP" numbers to be printed on the Notes as a convenience to the Holders of the Notes. No representation is made as to the correctness or accuracy of such CUSIP numbers as printed on the Notes, and reliance may be placed only on the other identification numbers printed hereon. Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purposes. 30

                         

                                                                                    EXHIBIT 10.1







June 21, 2004



Mr. A. J. C. Smith
630 Park Avenue
New York, NY 10021

Dear Ian,

The purpose of this letter is to confirm that the terms of your consultant agreement (described in
the attached letter of June 1, 2000 and the letter of May 16, 2003 amending the terms) will
continue through May 31, 2005.  Please indicate your acceptance below.  Thank you.



Sincerely,

/s/ Francis N. Bonsignore
- ---------------------------------
Senior Vice President,
Executive Resources & Development


                                                 /s/ A. J. C. Smith     July 6, 2004
                                              _________________________________________
                                                        Accepted           (Date)
                                                     A. J. C. Smith





                                                                    Exhibit 12.1
Marsh & McLennan Companies, Inc. and Subsidiaries
Ratio of Earnings to Fixed Charges
(In millions, except ratios)



- -------------------------------------------------------------------------------------------------------------------
                                                 Six
                                               Months
                                                Ended                                      Years Ended December 31,
                                               June 30,         ---------------------------------------------------
                                                 2004
                                              (Unaudited)      2003         2002         2001       2000       1999
- -------------------------------------------------------------------------------------------------------------------
                                                                                              

Earnings
- --------
Income before income taxes and minority
     interest*                                  $1,316       $2,335       $2,133       $1,590     $1,955     $1,255

Interest expense                                    98          185          160          196        247        233

Portion of rents representative of
     the interest factor                            80          156          132          122        120        121

Amortization of capitalized interest                 -            -            -            -          -          1
- -------------------------------------------------------------------------------------------------------------------

                                                $1,494       $2,676       $2,425       $1,908     $2,322     $1,610
- -------------------------------------------------------------------------------------------------------------------

Fixed Charges
- -------------
Interest expense                                $   98       $  185       $  160       $  196     $  247     $  233

Portion of rents representative of
     the interest factor                            80          156          132          122        120        121
- -------------------------------------------------------------------------------------------------------------------

                                                $  178       $  341       $  292       $  318      $ 367     $  354
- -------------------------------------------------------------------------------------------------------------------

Ratio of Earnings to Fixed Charges                 8.4          7.8          8.3          6.0        6.3        4.5



* Minority interest has been reclassified in 1999 to conform to the current year
presentation.

EXHIBIT 31 CERTIFICATIONS I, Jeffrey W. Greenberg, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Marsh & McLennan Companies, Inc. (the "registrant"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) [Omitted pursuant to SEC Release Nos. 33-8238 and 34-47986]; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 3, 2004 /s/ Jeffrey W. Greenberg ------------------------- Jeffrey W. Greenberg Chief Executive Officer

CERTIFICATIONS I, Sandra S. Wijnberg, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Marsh & McLennan Companies, Inc. (the "registrant"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) [Omitted pursuant to SEC Release Nos. 33-8238 and 34-47986]; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 3, 2004 /s/ Sandra S. Wijnberg ----------------------- Sandra S. Wijnberg Chief Financial Officer





                                                                      EXHIBIT 32




          Certification of Chief Executive and Chief Financial Officers
          -------------------------------------------------------------


     The certification set forth below is being submitted in connection with the
Quarterly  Report on Form 10-Q for the fiscal  quarter  ended June 30, 2004 (the
"Report") for the purpose of complying  with Rule 13a-14(b) or Rule 15d-14(b) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Section
1350 of Chapter 63 of Title 18 of the United States Code.

     Jeffrey W. Greenberg,  the Chief Executive  Officer and Sandra S. Wijnberg,
the Chief Financial Officer of Marsh & McLennan  Companies,  Inc. each certifies
that, to the best of his or her knowledge:

          1. the Report fully complies with the requirements of Section 13(a) of
          the Securities Exchange Act of 1934; and

          2. the  information  contained in the Report fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of Marsh & McLennan Companies, Inc.



Dated: August 3, 2004                               /s/ Jeffrey W. Greenberg
                                                    ----------------------------
                                                    Name: Jeffrey W. Greenberg
                                                    Chief Executive Officer



Dated: August 3, 2004                               /s/ Sandra S. Wijnberg
                                                    ----------------------------
                                                    Name: Sandra S. Wijnberg
                                                    Chief Financial Officer