MARSH & MCLENNAN COMPANIES, INC.
                  SENIOR MANAGEMENT INCENTIVE COMPENSATION PLAN
 
 
1.   PURPOSES.
 
     The purposes of the Marsh & McLennan Companies, Inc. Senior
Management Incentive Compensation Plan are to foster a partnership orientation
among selected members of senior management; to align the interests of these
employees with those of MMC's shareholders by offering significant variable
compensation opportunities payable in the form of cash or equity awards; to
promote and reinforce achievement of corporate, organizational, financial and
business development goals; and to qualify the compensation paid under this Plan
as "qualified performance-based compensation" within the meaning of Section
162(m) of the Code.
 
2.   DEFINITIONS.
 
     The following terms, as used herein, shall have the following meanings:
 
     (a)  "Award" shall mean an annual incentive compensation award granted
          pursuant to this Plan with respect to a Performance Period.
 
     (b)  "Award Pool" shall mean the aggregate amount available for Awards
          under this Plan in respect of a Performance Period, the size of which
          shall be based upon the percentage of Pre-Tax NOI determined pursuant
          to Section 5(a) hereof.
 
     (c)  "Board" shall mean the Board of Directors of MMC.
 
     (d)  "Code" shall mean the Internal Revenue Code of 1986, as amended,
          including the regulations and other guidance issued thereunder.
 
     (e)  "Committee" shall mean those members of the Compensation Committee of
          the Board who satisfy the requirements of "outside directors" within
          the meaning of Section 162(m) of the Code, and who shall not be fewer
          than two in number.
 
     (f)  "Common Stock" shall mean the common stock, par value $1.00 per share,
          of MMC.
 
     (g)  "Company" shall mean, collectively, MMC and its subsidiaries.
 
     (h)  "Covered Employee" shall have the meaning set forth in Section
          162(m)(3) of the Code.
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     (i)  "Deferral Plan" shall mean the Marsh & McLennan Companies, Inc. Cash
          Bonus Award Voluntary Deferral Plan, as amended from time to time, or
          any successor plan thereto, or other deferred compensation plans or
          arrangements of the Company.
 
     (j)  "Extraordinary Adjustments" shall mean unusual or nonrecurring events
          affecting MMC or any subsidiary, or any business division or unit or
          the financial statements of MMC or any subsidiary, such as major
          restructurings, reorganizations, special dividends, consolidations,
          spin-offs, combinations or other corporate transactions or events or
          in response to changes in applicable laws and regulations (including
          interpretations thereof), accounting principles, tax rates and
          regulations or business conditions.  The foregoing adjustments are
          intended to be objectively determinable and nondiscretionary and, as
          such, consistent with the qualification of Awards as "qualified
          performance-based compensation" under Section 162(m) of the Code,
          and shall be construed accordingly. To the extent it shall be
          determined that any such adjustment would likely cause compensation
          relating to an Award to a Covered Employee to fail to be deductible
          under Section 162(m) of the Code, such adjustment shall not be
          authorized or made, unless otherwise determined by the Committee.
 
     (k)  "Fair Market Value" on any given date shall mean the arithmetic mean
          of the high and low prices of the Common Stock on the New York Stock
          Exchange on the last trading day preceding such date.
 
     (l)  "MMC" shall mean Marsh & McLennan Companies, Inc., a Delaware
          corporation.
 
     (m)  "1992 Plan" shall mean the Marsh & McLennan Companies, Inc. 1992
          Incentive and Stock Award Plan, as amended from time to time, or any
          successor plan thereto.
 
     (n)  "Participant" shall mean a senior management employee of the Company
          who is, pursuant to Section 4 of this Plan, selected to participate
          herein.
 
     (o)  "Performance Period" shall mean each fiscal year of the Company, or
          such other period as may be established by the Committee in a manner
          consistent with the requirements of Section 162(m) of the Code.
 
     (p)  "Plan" shall mean this Marsh & McLennan Companies, Inc. Senior
          Management Incentive Compensation Plan, as amended from time to time.
 
 
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     (q)  "Pre-Tax-Income" for a Performance Period shall mean, except as
          otherwise provided herein, the consolidated pre-tax net operating
          income of the Company, as determined in accordance with generally
          accepted accounting principles and reported in the Company's audited
          financial statements for such Performance Period, before any provision
          for amounts paid or accrued in respect of annual incentive awards
          under this Plan and other bonus plans of the Company and before
          provision for any Extraordinary Adjustments.
 
3.   ADMINISTRATION.
 
     This Plan shall be administered by the Committee.  The Committee shall have
the authority in its sole discretion, subject to and not inconsistent with the
express provisions of this Plan, to administer this Plan and to exercise all the
powers and authorities either specifically granted to it under this Plan or
necessary or advisable in the administration of this Plan, including, without
limitation, the authority to grant Awards; to determine the persons to whom and
the time or times at which Awards shall be granted; to determine the terms,
conditions and restrictions relating to any Award; to determine whether, to what
extent, and under what circumstances an Award may be settled, cancelled,
forfeited, or surrendered; to determine the form and timing of payment in
settlement of an Award; to construe and interpret this Plan and any Award; to
prescribe, amend and rescind rules and regulations relating to this Plan; and to
make all other determinations deemed necessary or advisable for the
administration of this Plan.  All decisions, determinations and interpretations
of the Committee shall be final and binding on all persons, including the
Company, the Participant (or any person claiming any rights under this Plan from
or through any Participant) and any shareholder of MMC.
 
     No member of the Board or the Committee shall be liable for any action
taken or determinations made in good faith with respect to this Plan or any
Award granted hereunder.
 
4.   ELIGIBILITY.
 
     Awards may be granted to senior management employees of the Company in the
sole discretion of the Committee, including for this purpose senior management
employees whose employment with the Company commences or terminates during the
Performance Period.  In determining the persons to whom Awards shall be granted,
the Committee shall take into account such factors as the Committee shall deem
appropriate in connection with accomplishing the purposes of this Plan.
 
 
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5.   AWARD POOL; PAYMENT OF AWARDS.
 
     (a)  The size of the Award Pool in respect of a Performance Period shall be
an amount equal to the sum of (a) five percent (5%) of Pre-Tax Income for such
Performance Period plus (b) an additional two-tenths of one percent (.2%) of
Pre-Tax Income for each full percentage  increase in Pre-Tax Income over the
preceding Performance Period; PROVIDED, HOWEVER, that in no event shall the
Award Pool in respect of any Performance Period exceed ten percent (10%) of Pre-
Tax Income for such Performance Period.  To the extent permitted by Section
162(m) of the Code, if the Committee establishes a Performance Period other than
a fiscal year of the Company, then (1) the Award Pool for such Performance
Period shall be based upon annualized Pre-Tax Income and the annualized increase
in Pre-Tax Income for such Performance Period, and (2) annualized Pre-Tax Income
for such Performance Period shall be utilized for purposes of applying clause
(b) above for the next succeeding Performance Period.  Annualized Pre-Tax Income
and the annualized increase in Pre-Tax Income shall be determined in accordance
with the books and records of the Company and in a manner consistent with the
terms of this Plan.
 
     (b)  Awards granted to Participants in respect of a Performance Period
shall consist of such portion of the Award Pool as the Committee may determine;
PROVIDED, HOWEVER, that no Participant who is a Covered Employee for the
calendar year with which or in which the Performance Period ends may be
allocated an amount in excess of twenty percent (20%) of such Award Pool.
Unless otherwise determined by the Committee, no payment shall be made to any
such Covered Employee unless the Committee shall have previously certified that
the performance goals necessary to the establishment and size of the Award Pool
had been attained.  The Committee shall not be obligated to grant Awards
representing the entire Award Pool.
 
     (c)  Except as hereinafter provided, all payments in respect of Awards
granted under this Plan shall be made within a reasonable period after the end
of the Performance Period.  Such payment shall be made, in the sole discretion
of the Committee, in the form of (1) cash, (2) an award of shares of restricted
stock, restricted stock units or a similar stock-based award, pursuant to and
subject to the terms and conditions of the 1992 Plan, or (3) a combination of
the foregoing.  For purposes of the preceding sentence, the value of shares of
Common Stock represented by the restricted stock, restricted stock units or
other stock-based form of payment shall be determined based on the Fair Market
Value per share of Common Stock on the date of payment.  Amounts otherwise
payable in cash under this Plan may be deferred in accordance with the terms
and conditions of the Deferral Plan.
 
 
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6.   GENERAL PROVISIONS.
 
     (a)  COMPLIANCE WITH LEGAL REQUIREMENTS.  This Plan and the granting and
payment of Awards and the other obligations of the Company under the Plan shall
be subject to all applicable federal and state laws, rules and regulations, and
to such approvals by any regulatory or governmental agency as may be required.
 
     (b)  NONTRANSFERABILITY.  Awards shall not be transferable by a
Participant.
 
     (c)  NO RIGHT TO CONTINUED EMPLOYMENT.  Nothing in this Plan or in any
Award granted under this Plan shall confer upon any Participant the right to
continue in the employ of the Company or to be entitled to any remuneration or
benefits not set forth in this Plan or to interfere with or limit in any way the
right of the Company to terminate such Participant's employment.
 
     (d)  WITHHOLDING TAXES.  In the event a Participant or other person is
entitled to receive an Award under this Plan, the Company shall withhold from
payment of such Award the amount of any taxes that the Company is required to
withhold with respect to such payment.
 
     (e)  AMENDMENT, TERMINATION AND DURATION OF THIS PLAN.  The Committee may
at any time and from time to time alter, amend, suspend, or terminate this Plan
in whole or in part; PROVIDED THAT, no amendment that requires shareholder
approval in order for this Plan to continue to comply with Code Section 162(m)
shall be effective unless the same shall be approved by the requisite vote of
the shareholders of MMC.  Notwithstanding the foregoing, no amendment shall
affect adversely any of the rights of any Participant, without such
Participant's consent, under any Award theretofore granted under this Plan.
 
     (f)  PARTICIPANT RIGHTS.  No Participant shall have any claim to be granted
any Award under this Plan, and there is no obligation for uniformity of
treatment among Participants.
 
     (g)  UNFUNDED STATUS OF AWARDS.  This Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation.  With respect to any
payments not yet made to a Participant pursuant to an Award, nothing contained
in this Plan or any Award shall give any such Participant any rights that are
greater than those of a general creditor of the Company.
 
     (h)  GOVERNING LAW.  This Plan and all determinations made and actions
taken pursuant hereto shall be governed by the laws of the State of Delaware
without giving effect to the conflict of laws principles thereof.
 
 
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     (i)  EFFECTIVE DATE.  This Plan shall become effective as of January 1,
1994, subject to the requisite approval of the shareholders of MMC in order to
comply with Section 162(m) of the Code.  In the absence of such approval, this
Plan (and any Awards theretofore made pursuant to this Plan) shall be null and
void.
 
     (j)  INTERPRETATION.  This Plan is designed and intended to comply, to the
extent applicable, with Section 162(m) of the Code, and all provisions hereof
shall be construed in a manner to so comply.  If any provision of this Plan
shall be determined by the Internal Revenue Service or a court of competent
jurisdiction to be contrary to said Section 162(m), said provision shall be
limited to the extent necessary so that such provision complies with said
Section 162(m) and such determination shall not affect any other provisions of
this Plan, which provisions shall remain in full force and effect.
 
 
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