MARSH & McLENNAN COMPANIES, INC.
 
              2000 SENIOR EXECUTIVE INCENTIVE AND STOCK AWARD PLAN
 
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1.    Purposes.........................................................   1
 
2.    Definitions......................................................   1
 
3.    Administration
 
      (a)   Authority of the Committee.................................   3
      (b)   Manner of Exercise of Committee Authority..................   4
      (c)   Limitation of Liability....................................   5
 
4.    Eligibility
 
      (a)   Generally..................................................   5
      (b)   Annual Per-Person Limitation Applicable to Certain Awards..   5
 
5.    Stock Subject to the Plan; Adjustments
 
      (a)   Shares Reserved............................................   5
      (b)   Manner of Counting Shares..................................   6
      (c)   Type of Shares Distributable...............................   6
      (d)   Adjustments. ..............................................   6
 
6.    Specific Terms of Awards
 
      (a)   General....................................................   7
      (b)   Options....................................................   7
      (c)   SARs.......................................................   7
      (d)   Restricted Stock...........................................   8
      (e)   Restricted Stock Units.....................................   9
      (f)   Stock Bonuses and Stock Awards in Lieu of Cash Awards......   9
      (g)   Dividend Equivalents.......................................   9
      (h)   Other Stock-Based Awards...................................   9
      (i)   Unit-Based Awards..........................................  10
 
 
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                        MARSH & McLENNAN COMPANIES, INC.
 
              2000 SENIOR EXECUTIVE INCENTIVE AND STOCK AWARD PLAN
 
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7.    Certain Provisions Applicable to Awards
 
      (a)   Stand-Alone, Additional, Tandem and Substitute Awards......  10
      (b)   Terms of Awards............................................  10
      (c)   Form of Payment Under Awards...............................  10
      (d)   Buyouts....................................................  10
      (e)   Cancellation and Rescission of Awards......................  10
      (f)   Awards to Participants Outside the United States...........  11
 
8.    Performance Awards
 
      (a)   Performance Conditions.....................................  11
      (b)   Performance Awards Granted to Designated Covered Employees.  11
      (c)   Written Determinations.....................................  12
      (d)   Status of Section 8(b) Awards Under Code Section 162(m)....  13
 
9.    Change in Control Provisions
 
      (a)   Acceleration Upon Change in Control........................  13
      (b)   "Change in Control" Defined................................  13
      (c)   "Change in Control Price" Defined..........................  14
      (d)   Additional Payments........................................  14
      (e)   Pooling of Interests.......................................  15
 
10.   General Provisions
 
      (a)   Compliance with Legal and Exchange Requirements............  15
      (b)   Nontransferability.........................................  15
      (c)   No Right to Continued Employment...........................  16
      (d)   Taxes......................................................  16
      (e)   Changes to the Plan and Awards.............................  16
      (f)   No Rights to Awards; No Stockholder Rights.................  16
      (g)   Unfunded Status of Awards and Trusts.......................  16
      (h)   Nonexclusivity of the Plan.................................  17
      (i)   No Fractional Shares.......................................  17
      (j)   Governing Law..............................................  17
      (k)   Effective Date and Approval Date...........................  17
      (l)   Titles and Headings; Certain Terms.........................  17
 
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                        MARSH & McLENNAN COMPANIES, INC.
 
              2000 SENIOR EXECUTIVE INCENTIVE AND STOCK AWARD PLAN
 
      1. PURPOSES. The purposes of the 2000 Senior Executive Incentive and Stock
Award Plan are to advance the interests of Marsh & McLennan Companies, Inc. and
its stockholders by providing a means to attract, retain, and motivate senior
executives of the Company and its Subsidiaries and Affiliates, and to strengthen
the mutuality of interest between such senior executives and the Company's
stockholders. This Plan shall be the successor to the Marsh & McLennan
Companies, Inc. 1997 Senior Executive Incentive and Stock Award Plan.
 
      2. DEFINITIONS. For purposes of the Plan, the following terms shall be
defined as set forth below:
 
      (a) "Affiliate" means any entity other than the Company and its
Subsidiaries that is designated by the Committee as a participating employer
under the Plan, provided that the Company directly or indirectly owns at least
20% of the combined voting power of all classes of voting stock of such entity
or at least 20% of the ownership interests in such entity.
 
      (b) "Award" means any Option, SAR, Restricted Stock, Restricted Stock
Unit, Stock Bonus or Stock Award in Lieu of Cash, Dividend Equivalent, Other
Stock-Based Award, or Unit- Based Award, including Performance Awards granted to
a Participant under the Plan.
 
      (c) "Award Agreement" means any written agreement, contract, or other
instrument or document evidencing an Award.
 
      (d) "Beneficiary" means the person, persons, trust or trusts which have
been designated by such Participant in his or her most recent written
beneficiary designation filed with the Company to receive the benefits specified
under this Plan upon the death of the Participant, or, if there is no designated
Beneficiary or surviving designated Beneficiary, then the person, persons, trust
or trusts entitled by will or the laws of descent and distribution to receive
such benefits.
 
      (e) "Board" means the Board of Directors of the Company.
 
      (f) "Change in Control" means Change in Control as defined with related
terms in Section 9.
 
      (g) "Code" means the Internal Revenue Code of 1986, as amended from time
to time. References to any provision of the Code shall be deemed to include
successor provisions thereto and regulations thereunder.
 
      (h) "Committee" means the Compensation Committee of the Board, or such
other Board committee as may be designated by the Board to administer the Plan.
The Committee shall consist solely of two or more directors of the Company.
 
 
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      (i) "Company" means Marsh & McLennan Companies, Inc., a corporation
organized under the laws of the State of Delaware, or any successor corporation.
 
      (j) "Dividend Equivalent" means a right, granted to a Participant under
Section 6(g), to receive cash, Stock, or other property equal in value to
dividends paid with respect to a specified number of shares of Stock or to
periodic distributions on other specified equity securities of the Company or
any Subsidiary or Affiliate. Dividend Equivalents may be awarded on a
free-standing basis or in connection with another Award and may be paid
currently or on a deferred basis.
 
      (k) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time. References to any provision of the Exchange Act shall be
deemed to include successor provisions thereto and regulations thereunder.
 
      (l) "Fair Market Value" means, with respect to Stock, Awards, or other
property, the fair market value of such Stock, Awards, or other property
determined by such methods or procedures as shall be established from time to
time by the Committee. Unless otherwise determined by the Committee in good
faith, the Fair Market Value of Stock as of any given date shall mean the per
share value of Stock as determined by using the mean between the high and low
selling prices of such Stock on the immediately preceding date (or, if the NYSE
was not open that day, the next preceding day that the NYSE was open for trading
and the Stock was traded) as reported for such date in the table titled
"NYSE--Composite Transactions," contained in The Wall Street Journal or an
equivalent successor table.
 
      (m) "ISO" means any Option intended to be and designated as an incentive
stock option within the meaning of Section 422 of the Code.
 
      (n) "NQSO" means any Option that is not an ISO.
 
      (o) "Option" means a right, granted to a Participant under Section 6(b),
to purchase Stock. An Option may be either an ISO or an NQSO.
 
      (p) "Other Stock-Based Award" means a right, granted to a Participant
under Section 6(h), that is denominated or payable in, valued in whole or in
part by reference to, or otherwise based on, or related to, Stock or other
securities of the Company or any Subsidiary or Affiliate, including, without
limitation, rights convertible or exchangeable into Stock or such other
securities, purchase rights for Stock or such other securities, and Awards with
value or payment contingent upon performance of the Company, a Subsidiary, or
Affiliate, or upon any other factor or performance condition designated by the
Committee.
 
      (q) "Participant" means a person who, as an officer or employee of the
Company, a Subsidiary or Affiliate, has been granted an Award under the Plan.
 
      (r) "Performance Award" means an Award of one of the types specified in
Section 6 the grant, exercise, or settlement of which is subject to achievement
of performance goals and other terms specified under Section 8.
 
      (s) "Plan" means this 2000 Senior Executive Incentive and Stock Award
Plan, as amended from time to time.
 
 
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      (t) "Preexisting Plans" mean the Marsh & McLennan Companies, Inc. 1997
Senior Executive Incentive and Stock Award Plan and any other Company plan
adopted prior to 1997 and approved by the Company's stockholders that provides
for the grant or award of equity-based compensation.
 
      (u) "Qualified Member" means a member of the Committee who is a
"Non-Employee Director" within the meaning of Rule 16b-3(b)(3) and an "outside
director" within the meaning of Treasury Regulation 1.162-27(e)(3) under Code
Section 162(m).
 
      (v) "Restricted Stock" means an award of shares of Stock to a Participant
under Section 6(d) that may be subject to certain restrictions and to a risk of
forfeiture.
 
      (w) "Restricted Stock Unit" means an award, granted to a Participant under
Section 6(e), representing the right to receive either Stock or cash or any
combination thereof at the end of a specified deferral period.
 
      (x) "Rule 16b-3" means Rule 16b-3, as from time to time in effect and
applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.
 
      (y) "Stock" means the Common Stock, $1.00 par value per share, of the
Company or such other securities as may be substituted or resubstituted therefor
pursuant to Section 5.
 
      (z) "SAR" or "Stock Appreciation Right" means the right, granted to a
Participant under Section 6(c), to be paid an amount measured by the
appreciation in the Fair Market Value of Stock from the date of grant to the
date of exercise of the right, with payment to be made in cash, Stock, other
Awards, or other property as specified in the Award or determined by the
Committee.
 
      (aa) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.
 
      (bb) "Unit-Based Award" means a unit, granted to a Participant under
Section 6(i), with value or payment contingent upon performance of the Company,
a Subsidiary, or Affiliate, or upon any other factor or performance condition
designated by the Committee.
 
      3. ADMINISTRATION.
 
      (a) Authority of the Committee. The Plan shall be administered by the
Committee. The Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions of
the Plan:
 
            (i) to select Participants to whom Awards may be granted;
 
            (ii) to designate Affiliates;
 
            (iii) to determine the type or types of Awards to be granted to each
      Participant;
 
 
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            (iv) to determine the type and number of Awards to be granted, the
      number of shares of Stock to which an Award may relate, the terms and
      conditions of any Award granted under the Plan (including any exercise
      price, grant price, or purchase price, any restriction or condition, any
      schedule for lapse of restrictions or conditions relating to
      transferability or forfeiture, exercisability, or settlement of an Award,
      and waivers or accelerations thereof, and waivers of performance
      conditions relating to an Award, based in each case on such considerations
      as the Committee shall determine), and all other matters to be determined
      in connection with an Award;
 
            (v) to determine whether, to what extent, and under what
      circumstances an Award may be settled, or the exercise price of an Award
      may be paid, in cash, Stock, other Awards, or other property, or an Award
      may be canceled, forfeited, exchanged, or surrendered;
 
            (vi) to determine whether, to what extent, and under what
      circumstances cash, Stock, other Awards, or other property payable with
      respect to an Award will be deferred either automatically, at the election
      of the Committee, or at the election of the Participant, and whether to
      create trusts and deposit Stock or other property therein;
 
            (vii) to prescribe the form of each Award Agreement, which need not
      be identical for each Participant;
 
            (viii) to adopt, amend, suspend, waive, and rescind such rules and
      regulations and appoint such agents as the Committee may deem necessary or
      advisable to administer the Plan;
 
            (ix) to correct any defect or supply any omission or reconcile any
      inconsistency in the Plan and to construe and interpret the Plan and any
      Award, rules and regulations, Award Agreement, or other instrument
      hereunder; and
 
            (x) to make all other decisions and determinations as may be
      required under the terms of the Plan or as the Committee may deem
      necessary or advisable for the administration of the Plan.
 
Other provisions of the Plan notwithstanding, the Board may perform any function
of the Committee under the Plan, including for the purpose of ensuring that
transactions under the Plan by Participants who are then subject to Section 16
of the Exchange Act in respect of the Company are exempt under Rule 16b-3. In
any case in which the Board is performing a function of the Committee under the
Plan, each reference to the Committee herein shall be deemed to refer to the
Board, except where the context otherwise requires.
 
      (b) Manner of Exercise of Committee Authority. At any time that a member
of the Committee is not a Qualified Member, any action of the Committee relating
to an Award to be granted to a Participant who is then subject to Section 16 of
the Exchange Act in respect of the Company, or relating to an Award intended to
constitute "qualified performance-based compensation" within the meaning of Code
Section 162(m) and regulations thereunder, may be taken either (i) by a
subcommittee composed solely of two or more Qualified Members, or (ii) by the
Committee but with each such member who is a not Qualified Member abstaining or
recusing himself or herself from such action, provided that, upon such
abstention or recusal, the Committee remains composed solely of two or more
Qualified Members. Such action, authorized by such a subcommittee or by the
Committee upon the abstention or recusal of such non-Qualified Member(s), shall
be the action of the Committee for purposes of the Plan. Any
 
 
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action of the Committee with respect to the Plan shall be final, conclusive, and
binding on all persons, including the Company, Subsidiaries, Affiliates,
Participants, any person claiming any rights under the Plan from or through any
Participant, and stockholders. The express grant of any specific power to the
Committee, and the taking of any action by the Committee, shall not be construed
as limiting any power or authority of the Committee. The Committee may delegate
to officers or managers of the Company or any Subsidiary or Affiliate the
authority, subject to such terms as the Committee shall determine, to perform
administrative functions and such other functions as the Committee may
determine, to the extent permitted under applicable law and, with respect to any
Participant who is then subject to Section 16 of the Exchange Act in respect of
the Company, to the extent performance of such function will not result in a
subsequent transaction failing to be exempt under Rule 16b-3(d).
 
      (c) Limitation of Liability. Each member of the Committee shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him or her by any officer or other employee of the Company or any
Subsidiary or Affiliate, the Company's independent certified public accountants,
or other professional retained by the Company to assist in the administration of
the Plan. No member of the Committee, nor any officer or employee of the Company
acting on behalf of the Committee, shall be personally liable for any action,
determination, or interpretation taken or made in good faith with respect to the
Plan, and all members of the Committee and any officer or employee of the
Company acting on their behalf shall, to the fullest extent permitted by law, be
fully indemnified and protected by the Company with respect to any such action,
determination, or interpretation.
 
      4. ELIGIBILITY.
 
      (a) Generally. Senior executives of the Company and Subsidiaries and
Affiliates (including any director who is also an employee but excluding
directors of the Company who are not employees) are eligible to be granted
Awards under the Plan. In addition, any person who has been offered employment
as a senior executive of the Company or a Subsidiary or Affiliate is eligible to
be granted awards under the Plan, provided that such prospective executive may
not receive any payment or exercise any right relating to an Award until such
person has commenced employment with the Company or a Subsidiary or Affiliate.
 
      (b) Annual Per-Person Limitation Applicable to Certain Awards. In each
fiscal year during any part of which the Plan is in effect, a Participant may be
granted (i) Options under Section 6(b), (ii) SARs under Section 6(c), and (iii)
Performance Awards pursuant to Section 8(b), involving Awards under Sections
6(d),6(e), 6(f), or 6(h), relating, in the aggregate, to no more than two
million shares of Stock, subject to adjustment as provided in Section 5(d). With
respect to Performance Awards pursuant to Section 8(b) not relating to Stock at
the date of grant (including Unit-Based Awards), the maximum amount payable to a
Participant in settlement of such an Award in any fiscal year shall be the
greater of the Fair Market Value of the number of shares of Stock specified in
the preceding sentence (subject to adjustment) at the date of grant or at the
date of settlement of the Performance Award (this limitation is separate and not
affected by the limitation on shares of Stock set forth in the preceding
sentence).
 
      5. STOCK SUBJECT TO THE PLAN; ADJUSTMENTS.
 
      (a) Shares Reserved. Subject to adjustment as hereinafter provided, the
total number of shares of Stock reserved for issuance in connection with Awards
under the Plan shall be four million (4,000,000), plus (for Awards other than
ISOs) the additional number of shares of Stock specified in the succeeding
sentence. There shall be added to the number of shares of Stock reserved for
issuance under this Section 5(a) the number of shares authorized and
 
 
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reserved for awards under the Preexisting Plans to the extent (A) that such
shares were available for grants of awards under the Preexisting Plans
immediately prior to the Approval Date or (B) that such shares were subject to
outstanding awards under the Preexisting Plans on the Approval Date and
thereafter an event occurs (including expiration or forfeiture) which would
result in such shares again being available for Awards under the Plan (as
determined pursuant to Section 5(b)). No Award may be granted if the number of
shares to which such Award relates, when added to the number of shares
previously issued under the Plan and the number of shares to which other
then-outstanding Awards relate, exceeds the number of shares reserved under this
Section 5(a). Shares of Stock issued under the Plan shall be counted against
this limit in the manner specified in Section 5(b).
 
      (b) Manner of Counting Shares. If any shares subject to an Award or
Preexisting Plan award are forfeited, canceled, exchanged, or surrendered or
such Award or award is settled in cash or otherwise terminates without a
distribution of shares to the Participant, including (i) the number of shares
withheld in payment of any exercise or purchase price of or tax obligation
relating to such an Award or award and (ii) the number of shares equal to the
number surrendered in payment of any exercise or purchase price of or tax
obligation relating to any Award or award, such number of shares will again be
available for Awards under the Plan. The Committee may make determinations and
adopt regulations for the counting of shares relating to any Award to ensure
appropriate counting, avoid double counting (in the case of tandem or substitute
awards), and provide for adjustments in any case in which the number of shares
actually distributed differs from the number of shares previously counted in
connection with such Award.
 
      (c) Type of Shares Distributable. Any shares of Stock distributed pursuant
to an Award may consist, in whole or in part, of authorized and unissued shares
or treasury shares, including shares acquired by purchase in the open market or
in private transactions.
 
      (d) Adjustments. In the event that any large, special and non-recurring
dividend or other distribution (whether in the form of cash or property other
than Stock), recapitalization, forward or reverse split, Stock dividend,
reorganization, merger, consolidation, spin-off, combination, repurchase, share
exchange, liquidation, dissolution or other similar corporate transaction or
event affects the Stock such that an adjustment is determined by the Committee
to be appropriate under the Plan, then the Committee shall, in such manner as it
may deem equitable, adjust any or all of (i) the number and kind of shares of
Stock which may thereafter be issued in connection with Awards, (ii) the number
and kind of shares of Stock issued or issuable in respect of outstanding Awards
or, if deemed appropriate, make provisions for payment of cash or other property
with respect to any outstanding Award, (iii) the exercise price, grant price, or
purchase price relating to any Award, and (iv) the number and kind of shares of
Stock set forth in Section 4(b) as the annual per-person limitation; provided,
however, in each case that, with respect to ISOs, such adjustment shall be made
in accordance with Section 424(h) of the Code, unless the Committee determines
otherwise. In addition, the Committee is authorized to make adjustments in the
terms and conditions of, and the criteria and performance objectives included
in, Awards (including Performance Awards and performance goals) in recognition
of unusual or non-recurring events (including events described in the preceding
sentence, as well as acquisitions and dispositions of assets or all or part of
businesses) affecting the Company or any Subsidiary, Affiliate, or business
unit, or the financial statements thereof, or in response to changes in
applicable laws, regulations, accounting principles, tax rates and regulations,
or business conditions or in view of the Committee's assessment of the business
strategy of the Company, a Subsidiary, Affiliate, or business unit thereof,
performance of comparable organizations, economic and business conditions,
personal performance of a Participant, and any other circumstances deemed
relevant; provided that, unless otherwise determined by the
 
 
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Committee, no such adjustment shall be made if and to the extent that such
adjustment would cause Options, SARs, or Performance Awards granted pursuant to
Section 8(b) hereof to Participants designated by the Committee as Covered
Employees (as defined in Section 8(d) hereof) to fail to qualify as
"performance-based compensation" under Code Section 162(m) and regulations
thereunder.
 
      6. Specific Terms of Awards.
 
      (a) General. Awards may be granted on the terms and conditions set forth
in this Section 6. In addition, the Committee may impose on any Award or the
exercise thereof, at the date of grant or thereafter (subject to Section 10(e)),
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Committee shall determine, including terms regarding forfeiture
of Awards or continued exercisability of Awards in the event of termination of
employment by the Participant.
 
      (b) Options. The Committee is authorized to grant Options to participants
on the following terms and conditions:
 
            (i) Exercise Price. The exercise price per share of Stock
      purchasable under an Option shall be determined by the Committee;
      provided, however, that, except as provided in Section 7(a), such exercise
      price shall be not less than the Fair Market Value of a share on the date
      of grant of such Option, and in no event shall the exercise price for the
      purchase of shares be less than par value.
 
            (ii) Time and Method of Exercise. The Committee shall determine at
      the date of grant or thereafter the time or times at which an Option may
      be exercised in whole or in part, the methods by which such exercise price
      may be paid or deemed to be paid, the form of such payment, including
      cash, Stock, other Awards, shares or units valued by reference to shares
      issued under any other plan of the Company or a Subsidiary or Affiliate
      (including shares or units subject to restrictions, so long as an equal
      number of shares issued upon exercise of the Option are subject to
      substantially similar restrictions), or notes or other property, and the
      methods by which Stock will be delivered or deemed to be delivered to
      Participants (including deferral of delivery of shares under a deferral
      arrangement).
 
            (iii) ISOs. The terms of any ISO granted under the Plan shall comply
      in all respects with the provisions of Section 422 of the Code.
 
      (c) SARs. The Committee is authorized to grant SARs to Participants on the
following terms and conditions:
 
            (i) Right to Payment. An SAR shall confer on the Participant to whom
      it is granted a right to receive with respect to each share subject
      thereto, upon exercise thereof, the excess of (1) the Fair Market Value of
      one share of Stock on the date of exercise (or, if the Committee shall so
      determine in the case of any such right other than one related to an ISO,
      the Fair Market Value of one share at any time during a specified period
      before or after the date of exercise, or the Change in Control Price as
      defined in Section 9(c)) over (2) the grant price of the SAR as of the
      date of grant of the SAR, which shall be not less than the Fair Market
      Value of one share of Stock on the date of grant of such SAR (or, in the
      case of an SAR granted in tandem with an Option, shall be equal to the
      exercise price of the underlying Option).
 
 
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            (ii) Other Terms. The Committee shall determine, at the time of
      grant or thereafter, the time or times at which an SAR may be exercised in
      whole or in part, the method of exercise, method of settlement, form of
      consideration payable in settlement, method by which Stock will be
      delivered or deemed to be delivered to Participants, whether or not an SAR
      shall be in tandem with any other Award, and any other terms and
      conditions of any SAR. Unless the Committee determines otherwise, an SAR
      (1) granted in tandem with an NQSO may be granted at the time of grant of
      the related NQSO or at any time thereafter or (2) granted in tandem with
      an ISO may only be granted at the time of grant of the related ISO.
 
      (d) Restricted Stock. The Committee is authorized to grant Restricted
Stock to Participants on the following terms and conditions:
 
            (i) Issuance and Restrictions. Restricted Stock shall be subject to
      such restrictions on transferability and other restrictions, if any, as
      the Committee may impose at the date of grant or thereafter, which
      restrictions may lapse separately or in combination at such times, under
      such circumstances, in such installments, or otherwise, as the Committee
      may determine. Except to the extent restricted under the Award Agreement
      relating to the Restricted Stock, a Participant granted Restricted Stock
      shall have all of the rights of a stockholder including the right to vote
      Restricted Stock and the right to receive dividends thereon.
 
            (ii) Forfeiture. Upon termination of employment (as determined by
      the Committee) during the applicable restriction period, Restricted Stock,
      and any accrued but unpaid dividends or Dividend Equivalents, that is or
      are then subject to a risk of forfeiture shall be forfeited; provided,
      however, that the Committee may provide, by rule or regulation or in any
      Award Agreement, or may determine in any individual case, that
      restrictions or forfeiture conditions relating to Restricted Stock and any
      accrued but unpaid dividends or Dividend Equivalents will be waived in
      whole or in part in the event of terminations resulting from specified
      causes, and the Committee may in other cases waive in whole or in part the
      forfeiture of Restricted Stock and any accrued but unpaid dividends or
      Dividend Equivalents.
 
            (iii) Certificates for Stock. Restricted Stock granted under the
      Plan may be evidenced in such manner as the Committee shall determine. If
      certificates representing Restricted Stock are registered in the name of
      the Participant, such certificates shall bear an appropriate legend
      referring to the terms, conditions, and restrictions applicable to such
      Restricted Stock, the Company shall retain physical possession of the
      certificate, and the Company may require the Participant to deliver a
      stock power, endorsed in blank, relating to the Restricted Stock.
 
            (iv) Dividends. Dividends paid on Restricted Stock shall be either
      paid at the dividend payment date in cash or in shares of unrestricted
      Stock having a Fair Market Value equal to the amount of such dividends, or
      the payment of such dividends shall be deferred or the amount or value
      thereof automatically reinvested in additional Restricted Stock,
      Restricted Stock Units, other Awards, or other investment vehicles, as the
      Committee shall determine or permit the Participant to elect. Stock
      distributed in connection with a Stock split or Stock dividend, and other
      property distributed as a dividend, shall be subject to restrictions and a
      risk of forfeiture to the same extent as the Restricted Stock with respect
      to which such Stock or other property has been distributed.
 
 
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      (e) Restricted Stock Units. The Committee is authorized to grant
Restricted Stock Units to Participants, subject to the following terms and
conditions:
 
            (i) Award and Restrictions. Delivery of Stock or cash, as the case
      may be, will occur upon expiration of the deferral period specified for
      Restricted Stock Units by the Committee (or, if permitted by the
      Committee, as elected by the Participant). In addition, Restricted Stock
      Units shall be subject to such restrictions as the Committee may impose,
      if any, at the date of grant or thereafter, which restrictions may lapse
      at the expiration of the deferral period or at earlier or later specified
      times, separately or in combination, in installments or otherwise, as the
      Committee may determine.
 
            (ii) Forfeiture. Upon termination of employment (as determined by
      the Committee) during the applicable deferral period or portion thereof to
      which forfeiture conditions apply (as provided in the Award Agreement
      evidencing the Restricted Stock Units), or upon failure to satisfy any
      other conditions precedent to the delivery of Stock or cash to which such
      Restricted Stock Units relate, all Restricted Stock Units, and any accrued
      but unpaid Dividend Equivalents, that are at that time subject to a risk
      of forfeiture shall be forfeited; provided, however, that the Committee
      may provide, by rule or regulation or in any Award Agreement, or may
      determine in any individual case, that restrictions or forfeiture
      conditions relating to Restricted Stock Units and any accrued but unpaid
      Dividend Equivalents will be waived in whole or in part in the event of
      termination resulting from specified causes, and the Committee may in
      other cases waive in whole or in part the forfeiture of Restricted Stock
      Units and any accrued but unpaid Dividend Equivalents.
 
      (f) Stock Bonuses and Stock Awards in Lieu of Cash Awards. The Committee
is authorized to grant Stock as a bonus, or to grant other Awards, in lieu of
Company commitments to pay cash under other plans or compensatory arrangements.
Stock or Awards granted hereunder shall have such other terms as shall be
determined by the Committee.
 
      (g) Dividend Equivalents. The Committee is authorized to grant Dividend
Equivalents to Participants. The Committee may provide, at the date of grant or
thereafter, that Dividend Equivalents shall be paid or distributed when accrued
or shall be deemed to have been reinvested in additional Stock, or other
investment vehicles as the Committee may specify.
 
      (h) Other Stock-Based Awards. The Committee is authorized, subject to
limitations under applicable law, to grant to Participants Other Stock-Based
Awards that are deemed by the Committee to be consistent with the purposes of
the Plan. The Committee shall determine the terms and conditions of such Awards
at the date of grant or thereafter. Stock or other securities or property
delivered pursuant to an Award in the nature of a purchase right granted under
this Section 6(h) shall be purchased for such consideration, paid for at such
times, by such methods, and in such forms, including, without limitation, cash,
Stock, other Awards, notes or other property, as the Committee shall determine,
subject to any required corporate action.
 
      (i) Unit-Based Awards. The Committee is authorized to grant to
Participants Unit-Based Awards that are deemed by the Committee to be consistent
with the purposes of the Plan. Such Awards may be paid or settled in cash,
Stock, other Awards or property.
 
      7. CERTAIN PROVISIONS APPLICABLE TO AWARDS.
 
      (a) Stand-Alone, Additional, Tandem and Substitute Awards. Awards granted
under the Plan may, in the discretion of the Committee, be granted either alone
or in addition to, in
 
 
                                       9
<PAGE>
 
tandem with, or in exchange or substitution for, any other Award granted under
the Plan or any award granted under any other plan of the Company, any
Subsidiary or Affiliate, or any business entity to be acquired by the Company or
a Subsidiary or Affiliate, or any other right of a Participant to receive
payment from the Company or any Subsidiary or Affiliate. Awards may be granted
in addition to or in tandem with such other Awards or awards may be granted
either as of the same time as or a different time from the grant of such other
Awards or awards. The per share exercise price of any Option, grant price of any
SAR, or purchase price of any other Award conferring a right to purchase Stock
which is granted, in connection with the substitution of awards granted under
any other plan of the Company or any Subsidiary or Affiliate or any business
entity to be acquired by the Company or any Subsidiary or Affiliate, shall be
determined by the Committee, in its discretion, and may, to the extent the
Committee determines necessary in order to preserve the value of such other
award, be less than the Fair Market Value of a share on the date of grant of
such substitute Award.
 
      (b) Terms of Awards. The term of each Award shall be for such period as
may be determined by the Committee; provided, however, that in no event shall
the term of any ISO or an SAR granted in tandem therewith exceed a period of ten
years from the date of its grant (or such shorter period as may be applicable
under Section 422 of the Code).
 
      (c) Form of Payment Under Awards. Subject to the terms of the Plan and any
applicable Award Agreement, payments to be made by the Company or a Subsidiary
or Affiliate upon the grant, maturation, or exercise of an Award may be made in
such forms as the Committee shall determine at the date of grant or thereafter,
including, without limitation, cash, Stock, or other property, and may be made
in a single payment or transfer, in installments, or on a deferred basis. The
Committee may make rules relating to installment or deferred payments with
respect to Awards, including the rate of interest to be credited with respect to
such payments.
 
      (d) Buyouts. The Committee may at any time offer to buy out any
outstanding Award for a payment in cash, Stock, other Awards (subject to Section
7(a)), or other property based on such terms and conditions as the Committee
shall determine.
 
      (e) Cancellation and Rescission of Awards. The Committee may provide in
any Award Agreement that, in the event a Participant violates a term of the
Award Agreement or other agreement with or policy of the Company or a Subsidiary
or Affiliate, takes or omits to take actions that are deemed to be in
competition with the Company or its Subsidiaries or Affiliates, an unauthorized
solicitation of customers, suppliers, or employees of the Company or its
Subsidiaries or Affiliates, or an unauthorized disclosure or misuse of
proprietary or confidential information of the Company or its Subsidiaries or
Affiliates, or takes or omits to take any other action as may be specified in
the Award Agreement, the Participant shall be subject to forfeiture of such
Award or portion, if any, of the Award as may then remain outstanding and also
to forfeiture of any amounts of cash, Stock, other Awards, or other property
received by the Participant upon exercise or settlement of such Award or in
connection with such Award during such period (as the Committee may provide in
the Award Agreement) prior to the occurrence which gives rise to the forfeiture.
 
      (f) Awards to Participants Outside the United States. The Committee may
modify the terms of any Award under the Plan granted to a Participant who is, at
the time of grant or during the term of the Award, resident or primarily
employed outside of the United States in any manner deemed by the Committee to
be necessary or appropriate in order that such Award shall conform to laws,
regulations, and customs of the country in which the Participant is then
resident or primarily employed, or so that the value and other benefits of the
Award to the
 
 
                                       10
<PAGE>
 
Participant, as affected by foreign tax laws and other restrictions applicable
as a result of the Participant's residence or employment abroad, shall be
comparable to the value of such an Award to a Participant who is resident or
primarily employed in the United States. An Award may be modified under this
Section 7(f) in a manner that is inconsistent with the express terms of the
Plan, so long as such modifications will not contravene any applicable law or
regulation.
 
      8. Performance Awards.
 
      (a) Performance Conditions. The right of a Participant to exercise or
receive a grant or settlement of any Award, and the timing thereof, may be
subject to such performance conditions as may be specified by the Committee. The
Committee may use such business criteria and other measures of performance as it
may deem appropriate in establishing any performance conditions, and may
exercise its discretion to reduce or increase the amounts payable under any
Award subject to performance conditions, except as limited under Section 8(b)
hereof in the case of a Performance Award intended to qualify under Code Section
162(m).
 
      (b) Performance Awards Granted to Designated Covered Employees. If the
Committee determines that a Performance Award to be granted to a person who is
designated by the Committee as likely to be a Covered Employee (as hereinafter
defined) should qualify as "performance-based compensation" for purposes of Code
Section 162(m), the grant and/or settlement of such Performance Award shall be
contingent upon achievement of preestablished performance goals and other terms
set forth in this Section 8(b).
 
            (i) Performance Goals Generally. The performance goals for such
      Performance Awards shall consist of one or more business criteria and a
      targeted level or levels of performance with respect to each such
      criteria, as specified by the Committee consistent with this Section 8(b),
      which level may also be expressed in terms of a specified increase or
      decrease in the particular criteria compared to a past period. Performance
      goals shall be objective and shall otherwise meet the requirements of Code
      Section 162(m) and regulations thereunder (including Regulation 1.162-27
      and successor regulations thereto), including the requirement that the
      level or levels of performance targeted by the Committee result in the
      achievement of performance goals being "substantially uncertain." The
      Committee may determine that such Performance Awards shall be granted,
      exercised, and/or settled upon achievement of any one performance goal or
      that two or more of the performance goals must be achieved as a condition
      to settlement of such Performance Awards. Performance goals may differ for
      Performance Awards granted to any one Participant or to different
      Participants.
 
            (ii) Business Criteria. One or more of the following business
      criteria for the Company, on a consolidated basis, and/or for specified
      Subsidiaries, Affiliates, business units or ventures of the Company
      (except with respect to the total stockholder return and earnings per
      share criteria), shall be used by the Committee in establishing
      performance goals for such Performance Awards: (1) earnings per share; (2)
      revenues; (3) cash flow; (4) cash flow return on investment; (5) return on
      assets, return on investment, return on capital, return on equity; (6)
      identification and/or consummation of investment opportunities or
      completion of specified projects in accordance with corporate business
      plans; (7) operating margin; (8) net income; net operating income; pretax
      earnings; pretax earnings before interest, depreciation and amortization;
      pretax operating earnings after interest expense and before incentives,
      service fees, and extraordinary or special items; operating earnings; (9)
      total stockholder return; (10) economic value created; and (11) any of the
      above goals as compared to the performance of a published or special index
      deemed applicable by the Committee including, but not limited to, the
      Standard &
 
 
                                       11
<PAGE>
 
      Poor's 500 Stock Index or other indexes or groups of comparable companies
      referenced in the Company's proxy statement in response to Item 402(l) of
      Regulation S-K.
 
            (iii) Performance Period; Timing For Establishing Performance Goals.
      Achievement of performance goals in respect of such Performance Awards
      shall be measured over a performance period specified by the Committee.
      Performance goals shall be established not later than 90 days after the
      beginning of any performance period applicable to such Performance Awards,
      or at such other date as may be required or permitted for
      "performance-based compensation"under Code Section 162(m).
 
            (iv) Performance Award Pool. The Committee may establish a
      Performance Award pool, which shall be an unfunded pool, for purposes of
      measuring Company performance in connection with such Performance Awards.
      The amount of such Performance Award pool shall be based upon the
      achievement of a performance goal or goals based on one or more of the
      business criteria set forth in Section 8(b)(ii) hereof during the given
      performance period, as specified by the Committee in accordance with
      Section 8(b)(iii) hereof. The Committee may specify the amount of the
      Performance Award pool as a percentage of any of such business criteria, a
      percentage thereof in excess of a threshold amount, or an another amount
      which need not bear a strictly mathematical relationship to such business
      criteria.
 
            (v) Settlement of Such Performance Awards; Other Terms. Settlement
      of such Performance Awards shall be in cash, Stock, other Awards, or other
      property, in the discretion of the Committee. The Committee may, in its
      discretion, reduce the amount of a settlement otherwise to be made in
      connection with such Performance Awards, but may not exercise discretion
      to increase any such amount payable to a Covered Employee in respect of a
      Performance Award subject to this Section 8(b). The Committee shall
      specify the circumstances in which such Performance Awards shall be
      forfeited in the event of termination of employment by the Participant
      prior to the end of a performance period or settlement of Performance
      Awards, and other terms relating to such Performance Awards in accordance
      with Section 6 and this Section 8.
 
      (c) Written Determinations. All determinations by the Committee as to the
establishment of performance goals, the amount of any Performance Award pool or
potential individual Performance Awards and as to the achievement of performance
goals relating to Performance Awards under Section 8(b), shall be made in
writing in the case of any Award intended to qualify under Code Section 162(m).
The Committee may not delegate any responsibility relating to such Performance
Awards.
 
      (d) Status of Section 8(b) Awards Under Code Section 162(m). It is the
intent of the Company that Performance Awards under Section 8(b) hereof granted
to persons who are designated by the Committee as likely to be Covered Employees
within the meaning of Code Section 162(m) and regulations thereunder (including
Regulation 1.162-27 and successor regulations thereto) shall, if so designated
by the Committee, constitute "qualified performance-based compensation "within
the meaning of Code Section 162(m) and regulations thereunder. Accordingly, the
terms of Sections 8(b), (c), and (d), including the definitions of Covered
Employee and other terms used therein, shall be interpreted in a manner
consistent with Code Section 162(m) and regulations thereunder. The foregoing
notwithstanding, because the Committee cannot determine with certainty whether a
given Participant will be a Covered Employee with respect to a fiscal year that
has not yet been completed, the term "Covered Employee" as used herein shall
mean only a person designated by the Committee, at the time of grant of
Performance Awards, as likely to be a Covered Employee with respect to that
fiscal
 
 
                                       12
<PAGE>
 
year. If any provision of the Plan or any agreement relating to such Performance
Awards does not comply or is inconsistent with the requirements of Code Section
162(m) or regulations thereunder, such provision shall be construed or deemed
amended to the extent necessary to conform to such requirements.
 
      9.    CHANGE IN CONTROL PROVISIONS.
 
      (a) Acceleration Upon Change in Control. Except as provided in Section
9(e) or in an Award Agreement, in the event of a "Change in Control," as defined
in this Section:
 
            (i)   any Award carrying a right to exercise that was not previously
      exercisable and vested shall become fully exercisable and vested; and
 
            (ii) the restrictions, deferral limitations, and forfeiture
      conditions applicable to any other Award granted under the Plan shall
      lapse, such Awards shall be deemed fully vested, any performance
      conditions imposed with respect to Awards shall be deemed to be fully
      achieved, and payment of such Awards shall be made in accordance with the
      terms of the Award Agreements.
 
      (b) "Change in Control" Defined. For purposes of the Plan, a "Change in
Control" shall have occurred if:
 
            (i) any "person," as such term is used in Sections 13(d) and 14(d)
      of the Exchange Act (other than the Company, any trustee or other
      fiduciary holding securities under an employee benefit plan of the Company
      or any corporation owned, directly or indirectly, by the stockholders of
      the Company in substantially the same proportions as their ownership of
      stock of the Company), is or becomes the "beneficial owner" (as defined in
      Rule 13d-3 under the Exchange Act), directly or indirectly, of securities
      of the Company representing 50% or more of the combined voting power of
      the Company's then outstanding voting securities;
 
            (ii) during any period of two consecutive years, individuals who at
      the beginning of such period constitute the Board, and any new director
      (other than a director designated by a person who has entered into an
      agreement with the Company to effect a transaction described in clause
      (i), (iii), or (iv) of this Section 9(b)) whose election by the Board or
      nomination for election by the Company's stockholders was approved by a
      vote of at least two-thirds (2/3) of the directors then still in office
      who either were directors at the beginning of the period or whose election
      or nomination for election was previously so approved, cease for any
      reason to constitute at least a majority thereof;
 
            (iii) the stockholders of the Company approve a merger or
      consolidation of the Company with any other corporation, other than (A) a
      merger or consolidation which would result in the voting securities of the
      Company outstanding immediately prior thereto continuing to represent
      (either by remaining outstanding or by being converted into voting
      securities of the surviving or parent entity) 50% or more of the combined
      voting power of the voting securities of the Company or such surviving or
      parent entity outstanding immediately after such merger or consolidation
      or (B) a merger or consolidation effected to implement a recapitalization
      of the Company (or similar transaction) in which no "person" (as
      hereinabove defined) acquired 50% or more of the combined voting power of
      the Company's then outstanding securities; or
 
 
                                       13
<PAGE>
 
            (iv) the stockholders of the Company approve a plan of complete
      liquidation of the Company or an agreement for the sale or disposition by
      the Company of all or substantially all of the Company's assets (or any
      transaction having a similar effect).
 
      (c) "Change in Control Price" Defined. For purposes of the Plan, "Change
in Control Price" means the higher of (i) the highest price per share paid in
any transaction constituting a Change in Control or (ii) the highest Fair Market
Value per share at any time during the 60-day period preceding or following a
Change in Control.
 
      (d) Additional Payments. If any payment attributable to any Award under
the Plan or any Preexisting Plan (the "Payments") will be subject to the tax
(the "Excise Tax") imposed by Section 4999 of the Code (or any similar tax that
may hereafter be imposed), the Company shall pay at the time specified below an
additional amount (the "Gross-Up Payment") such that the net amount retained by
a Participant after deduction of any Excise Tax on such Payments and any
federal, state and local income and employment tax and Excise Tax upon the
payment provided for by this Section, shall be equal to the Payments. For
purposes of determining whether any of the Payments will be subject to the
Excise Tax and the amount of such Excise Tax, (i) all payments or benefits
received or to be received by a Participant in connection with a Change in
Control of the Company or the Participant's termination of employment with the
Company, a parent corporation thereof, a Subsidiary or Affiliate (pursuant to
the Plan or any other plan, agreement or arrangement of the Company, its
Subsidiaries or Affiliates) shall be treated as "parachute payments" within the
meaning of Section 280G(b)(2) of the Code, and all "excess parachute payments"
within the meaning of Section 280G(b)(1) shall be treated as subject to the
Excise Tax, unless in the opinion of tax counsel selected by the Company's
independent auditors and acceptable to the Participant such payments or benefits
(in whole or in part) do not constitute parachute payments, or such excess
parachute payments (in whole or in part) represent reasonable compensation for
services actually rendered within the meaning of Section 280G(b)(4) of the Code
in excess of the base amount within the meaning of Section 280G(b)(3) of the
Code, or are otherwise not subject to the Excise Tax; (ii) the amount of the
Payments which shall be treated as subject to the Excise Tax shall be equal to
the lesser of (1) the total amount of the Payments or (2) the amount of excess
parachute payments within the meaning of Section 280G(b)(1) (after applying
clause (i) above); and (iii) the value of any non-cash benefits or any deferred
payment or benefit shall be determined by the Company's independent auditors in
accordance with the principles of Sections 280G(d)(3) and (4) of the Code. For
purposes of determining the amount of the Gross-Up Payment, the Participant
shall be deemed to pay federal income taxes at the highest marginal rate of
federal income taxation in the calendar year in which the Gross-Up Payment is to
be made and state and local income taxes at the highest marginal rate of
taxation in the state and locality of the Participant's residence on the date
such Gross-Up Payment is made, net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and local taxes. In
the event that the Excise Tax is subsequently determined to be less than the
amount taken into account hereunder at the time of the Gross-Up Payment, the
Participant shall repay to the Company at the time that the amount of such
reduction in Excise Tax is finally determined, the portion of the Gross-Up
Payment attributable to such reduction (plus the portion of the Gross-Up Payment
attributable to the Excise Tax and federal and state and local income tax
imposed on the Gross-Up Payment being repaid by the Participant if such
repayment results in a reduction in Excise Tax and/or a federal and state and
local income tax deduction) plus interest on the amount of such repayment at the
rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise
Tax is determined to exceed the amount taken into account hereunder at the time
of the Gross-Up Payment (including by reason of any payment the existence or
amount of which cannot be determined at the time of the Gross-Up Payment), the
Company shall make an additional Gross-Up Payment in respect of such excess
(plus any interest payable with
 
 
                                       14
<PAGE>
 
respect to such excess) at the time that the amount of such excess is finally
determined. Any Gross-Up Payment to be made to the Participant under this
paragraph shall be payable within thirty (30) days of the date of the Change in
Control.
 
      (e) Pooling of Interests. Notwithstanding the provisions of this Section
9, in the event that consummation of a Change in Control is contingent on the
ability to account for such Change in Control under "pooling of interests"
accounting methodology, the provisions of Sections 9(a) and 9(d) hereof shall
not be implemented to the extent such implementation would prevent the Change in
Control transaction from being accounted for in such manner. In such event, the
Committee may in its discretion take such action as it deems appropriate,
without precluding the Change in Control transaction from being so accounted
for, to enable holders of Awards to realize substantially similar economic
results as would have been realized through application of Sections 9(a) and
9(d) hereof.
 
      10. General Provisions.
 
      (a) Compliance with Legal and Exchange Requirements. The Plan, the
granting and exercising of Awards thereunder, and the other obligations of the
Company under the Plan and any Award Agreement, 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. The Company, in its
discretion, may postpone the issuance or delivery of Stock under any Award until
completion of such stock exchange listing or registration or qualification of
such Stock or other required action under any state, federal or foreign law,
rule or regulation as the Company may consider appropriate, and may require any
Participant to make such representations and furnish such information as it may
consider appropriate in connection with the issuance or delivery of Stock in
compliance with applicable laws, rules and regulations.
 
      (b) Nontransferability. Except as otherwise provided in this Section
10(b), Awards shall not be transferable by a Participant other than by will or
the laws of descent and distribution or pursuant to a designation of a
Beneficiary, and Awards shall be exercisable during the lifetime of a
Participant only by such Participant or his guardian or legal representative. In
addition, except as otherwise provided in this Section 10(b), no rights under
the Plan may be pledged, mortgaged, hypothecated, or otherwise encumbered, or
subject to the claims of creditors. The foregoing notwithstanding, the Committee
may, in its sole discretion, provide that Awards (or rights or interests
therein) other than ISOs and Awards in tandem with ISOs shall be transferable,
including permitting transfers, without consideration, to a Participant's
immediate family members (i.e., spouse, children, grandchildren, or siblings, as
well as the Participant), to trusts for the benefit of such immediate family
members, and to partnerships in which such family members are the only parties,
or other transfers deemed by the Committee to be not inconsistent with the
purposes of the Plan.
 
      (c) No Right to Continued Employment. Neither the Plan nor any action
taken thereunder shall be construed as giving any employee the right to be
retained in the employ of the Company or any of its Subsidiaries or Affiliates,
nor shall it interfere in any way with the right of the Company or any of its
Subsidiaries or Affiliates to terminate any employee's employment at any time.
 
      (d) Taxes. The Company or any Subsidiary or Affiliate is authorized to
withhold from any Award granted, any payment relating to an Award under the
Plan, including from a distribution of Stock, or any payroll or other payment to
a Participant, amounts of withholding and other taxes due in connection with any
transaction involving an Award, and to take such other action as the Committee
may deem advisable to enable the Company and Participants to
 
 
                                       15
<PAGE>
 
satisfy obligations for the payment of withholding taxes and other tax
obligations relating to any Award. This authority shall include authority to
withhold or receive Stock or other property and to make cash payments in respect
thereof in satisfaction of a Participant's tax obligations. Other provisions of
the Plan notwithstanding, only the minimum amount of Stock deliverable in
connection with an Award necessary to satisfy statutory withholding requirements
will be withheld.
 
      (e) Changes to the Plan and Awards. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or the Committee's authority to grant Awards
under the Plan without the consent of stockholders or Participants, except that
any such amendment, alteration, suspension, discontinuation, or termination
shall be subject to the approval of the Company's stockholders within one year
after such Board action if such stockholder approval is required by any federal
law or regulation or the rules of any stock exchange or automated quotation
system on which the Stock may then be listed or quoted; provided, however, that,
without the consent of an affected Participant, no amendment, alteration,
suspension, discontinuation, or termination of the Plan may materially adversely
affect the rights of such Participant under any Award theretofore granted to him
or her. The Committee may waive any conditions or rights under, or amend, alter,
suspend, discontinue, or terminate any Award theretofore granted and any Award
Agreement relating thereto; provided, however, that, without the consent of an
affected Participant, no such amendment, alteration, suspension,
discontinuation, or termination of any Award may materially adversely affect the
rights of such Participant under such Award. Following the occurrence of a
Change in Control, the Board may not terminate this Plan or amend this Plan with
respect to Awards that have already been granted in any manner adverse to
employees.
 
      (f) No Rights to Awards; No Stockholder Rights. No Participant or employee
shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Participants and employees. No Award
shall confer on any Participant any of the rights of a stockholder of the
Company unless and until Stock is duly issued or transferred to the Participant
in accordance with the terms of the Award.
 
      (g) Unfunded Status of Awards and Trusts. The 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 the Plan or any Award shall give any such Participant any
rights that are greater than those of a general creditor of the Company;
provided, however, that the Committee may authorize the creation of trusts or
make other arrangements to meet the Company's obligations under the Plan to
deliver cash, Stock, other Awards, or other property pursuant to any Award,
which trusts or other arrangements shall be consistent with the "unfunded"
status of the Plan unless the Committee otherwise determines. If and to the
extent authorized by the Committee, the Company may deposit into such a trust
Stock or other assets for delivery to the Participant in satisfaction of the
Company's obligations under any Award. If so provided by the Committee, upon
such a deposit of Stock or other assets for the benefit of a Participant, there
shall be substituted for the rights of the Participant to receive delivery of
Stock and other payments under this Plan a right to receive the assets of the
trust (to the extent that the deposited Stock or other assets represented the
full amount of the Company's obligation under the Award at the date of deposit).
The trustee of the trust may be authorized to dispose of trust assets and
reinvest the proceeds in alternative investments, subject to such terms and
conditions as the Committee may specify and in accordance with applicable law.
 
      (h) Nonexclusivity of the Plan. Neither the adoption of the Plan by the
Board nor its submission to the stockholders of the Company for approval shall
be construed as creating any
 
 
                                       16
<PAGE>
 
limitations on the power of the Board to adopt such other incentive arrangements
as it may deem desirable, including the granting of stock options and other
awards otherwise than under the Plan, and such arrangements may be either
applicable generally or only in specific cases.
 
      (i) No Fractional Shares. No fractional shares of Stock shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards, or other property shall be issued or paid in lieu of
such fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.
 
      (j) Governing Law. The validity, construction, and effect of the Plan, any
rules and regulations relating to the Plan, and any Award Agreement shall be
determined in accordance with the laws of the state of Delaware, without giving
effect to principles of conflicts of laws, and applicable federal law.
 
      (k) Effective Date and Approval Date. The Plan shall become effective upon
approval by the Board of Directors (the "Effective Date"); provided, however,
that the Plan shall be subject to the subsequent approval by the Company's
stockholders at a meeting of Company stockholders duly held in accordance with
the Delaware General Corporation Law, or any adjournment thereof in accordance
with applicable provisions of the Delaware General Corporation Law, such
stockholder approval to be obtained not later than one year after the Effective
Date (the date of such approval being referred to as the "Approval Date"). Any
Awards granted under the Plan prior to such approval of stockholders shall be
subject to such approval, and in the absence of such approval, such Awards shall
be null and void.
 
      (l) Titles and Headings; Certain Terms. The titles and headings of the
sections in the Plan are for convenience of reference only. In the event of any
conflict, the text of the Plan, rather than such titles or headings, shall
control. The term "including," when used in the Plan, means in each case
"including without limitation."
 
                                       17

 

AMENDMENTS TO 2000 SENIOR EXECUTIVE INCENTIVE PLAN

 
At the Annual Meeting of Stockholders of MMC held on May 19, 2005, MMC's stockholders approved an amendment to each of the Marsh & McLennan Companies, Inc. 2000 Senior Executive Incentive and Stock Award Plan and the Marsh & McLennan Companies, Inc. 2000 Employee Incentive and Stock Award Plan to: (i) permit a one-time, voluntary exchange of certain outstanding stock options for new stock options and (ii) prohibit subsequent exchanges unless stockholder approval is obtained.