Exhibit 10.4

 

Aon Corporation

Executive Committee Incentive Plan

(Amended and Restated Effective January 1, 2010)

 

Overview

 

Since 2001, Aon has maintained its Omnibus Incentive Plan to encourage the
highest level of performance of its executives through the establishment of
quantifiable performance goals.  Awards granted under the Omnibus Incentive Plan
are intended to qualify as deductible “performance-based” compensation pursuant
to Section 162(m) of the Code.

 

This Plan was adopted by the Committee, originally effective January 1, 2008,
and as amended and restated herein effective as of January 1, 2010, as a
sub-plan to the Omnibus Incentive Plan to provide a discretionary framework
regarding the funding of awards under the Omnibus Plan, and to provide certain
terms and conditions relating to the form and timing of awards under the Omnibus
Plan.

 

Performance Period

 

The Plan is based on successive calendar-year performance periods.

 

Eligibility

 

All members of Aon’s Executive Committee are eligible to participate in the Plan
if they: (a) are actively employed by Aon as of the last day of the calendar
year; (b) are on an approved leave of absence as of the last day of the calendar
year; or (c) terminated employment on account of death or Total and Permanent
Disability during the calendar year.  The Committee may modify the eligibility
criteria as it deems necessary or appropriate.

 

Award Calculation

 

At the beginning of each calendar year, the Committee will approve a “target
incentive award” for each participant as a percentage of his or her base
salary.  The Committee will also establish corporate performance metrics
applicable to the funding of incentive awards under the Plan, and those metrics
may include:  (1) the achievement of a specified pre-tax income from ongoing
operations; (2) the growth in pre-tax income from ongoing operations as compare
to the prior year; (3) organic revenue growth; and/or (4) any other factors as
determined by the Committee in its sole discretion.  In addition, business unit,
functional and individual performance metrics may be established and assigned
weights to guide the Committee in its allocation of awards to participants.

 

After the close of the calendar year, awards to participants will be determined
in the sole discretion of the Committee and paid to participants pursuant to and
contingent upon satisfaction of all conditions under the Omnibus Incentive
Plan.  Awards will be funded in accordance with the corporate performance
criteria adopted by the Committee.  Awards will be allocated in the sole
discretion of the Committee taking into account, among other facts, the
participants’ target incentive awards and achievement of the assigned metrics. 
Any resulting awards will be paid pursuant to the terms and conditions of the
Omnibus Incentive Plan; provided, however, in no event will an Award be paid
later than two and one-half months after the end of the calendar year to which
such award relates.  In no event may an award to a participant exceed the
maximum set forth in the Omnibus Incentive Plan (i.e. $5 million). In no event
may an award to a participant fail to qualify as deductible “performance-based”
compensation under Section 162(m) of the Code.

 

Payout Process

 

After the awards are determined by the Committee, they will be paid out partly
in cash and partly in restricted stock units of Aon common stock pursuant to the
Stock Plan, unless Aon is contractually obligated to provide a participant’s
award fully in cash.

 

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For 2010 and later calendar years, Awards exceeding $100,000 in value will be
paid 65% in cash and 35% in restricted stock units.

 

The restricted stock units will be subject to the terms and conditions
established by the Committee; provided, however, that they will vest in three
equal installments on each of the first through third anniversaries of the date
of grant.  The Committee may modify the manner of distribution for an individual
participant or one or more groups of participants as it deems necessary or
appropriate.

 

A participant will have no right to an award until it is paid.

 

Administration

 

It is expressly understood that the Committee has the discretionary authority to
administer, construe, and make all determinations necessary or appropriate to
the administration of the Plan, all of which will be binding upon the
participant.  The Committee has the sole discretion to set the Target Award
Percentage for each participant and to determine any final award payment taking
into account factors it selects in its sole discretion including, but not
limited to, the duration of a participant’s employment with the Company during
the year.

 

General Provisions

 

This Plan constitutes a legal document which governs all matters involved with
its interpretation and administration and superseded any writing or
representation inconsistent with its terms.

 

To the extent not preempted by federal law, this Plan will be construed in
accordance with, and subject to, the laws of the state of Illinois without
regard to any conflict of laws principles.  Any legal action related to this
Plan must be brought in a federal or state court located in Illinois.

 

All awards will be subject to applicable withholding taxes and other required
deductions.

 

Participants may not assign, transfer, sell, pledge or otherwise alienate their
award opportunities, other than by will or by the laws of descent and
distribution.  Any award payable on behalf of a deceased participant will be
paid to the participant’s estate.

 

Aon is not required to establish a separate account or fund or to make any other
segregation of its assets in connection with awards that could become payable
under this Plan.  Participants will have rights with regard to earned but unpaid
awards that are no greater than the rights of unsecured general creditors.

 

This Plan and the benefits provided hereunder are intended to comply with
Section 409A of the Code and the guidance and Treasury Regulations issued
thereunder to the extent applicable thereto.  Notwithstanding any provision of
the Plan to the contrary, the Plan shall be interpreted and construed consistent
with this intent.  Notwithstanding the foregoing, Aon shall not be required to
assume any increased economic burden in connection therewith.  Although Aon
intends to administer the Plan so that it will comply with the requirements of
Section 409A of the Code, Aon does not represent or warrant that the Plan will
comply with Section 409A of the Code or any other provision of federal, state,
local, or non-United States law.  Neither Aon, nor any subsidiary, nor its or
their respective directors, officers, employees or advisers shall be liable to
any participant (or any other individual claiming a benefit through the
participant) for any tax, interest, or penalties the participant might owe as a
result of participation in the Plan, and neither Aon nor any subsidiary shall
have any obligation to indemnify or otherwise protect any participant from the
obligation to pay any taxes pursuant to Section 409A of the Code.

 

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Reservation and Retention of Company Rights

 

Participation in this Plan will not give a participant any right to be retained
in the employ of Aon.  No employee will at any time have a right to be selected
for participation in another performance-based incentive program, including any
future program, on account of his or her participation in this Plan.

 

All awards under this Plan are gratuitous in nature and will not become part of
any employment condition or contract.

 

The Committee reserves the right to amend or terminate this Plan, prospectively
or retroactively, at any time and for any reason.

 

Omnibus Incentive Plan and Stock Plan Control

 

In the event of any inconsistency between this Plan and the Omnibus Incentive
Plan or the Stock Plan, the Omnibus Incentive Plan or the Stock Plan, as
applicable, will control unless otherwise specified herein.

 

Definitions

 

“Aon” means Aon Corporation, a Delaware corporation, and its operating
subsidiaries and affiliates.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Committee” means the Organization and Compensation Committee of the Board of
Directors of Aon.

 

“Executive Committee” means the committee comprised of senior members of Aon’s
management team as established from time to time.

 

“Omnibus Incentive Plan” means the 2001 Senior Officer Incentive Compensation
Plan, as amended and restated effective January 1, 2006, or any successor plan.

 

“Organic Revenue Growth” means the growth in revenue exclusive of the impact of
foreign exchange rate changes, acquisitions, divestitures, transfers between
business units, investment income, reimbursable expenses, and unusual items.

 

“Pre-tax income from ongoing operations” means such term calculated according to
GAAP and as adjusted for certain extraordinary or special items, in the form and
manner determined in the sole discretion of the Committee and in compliance with
IRS regulations, including, but not limited to: change in accounting policy;
gain/loss on disposition of assets or business; charge for goodwill impairment;
extraordinary legal/regulatory settlements; extraordinary market conditions;
significant currency fluctuations; effects of nature or man-made disasters (e.g.
World Trade Center); hyperinflation (e.g. >15%); change in statutory tax
rates/regulations; charges from Board-approved restructuring programs; results
of discontinued operations held for sale after sale closing; other
extraordinary, unusual or infrequently occurring items — as defined by GAAP.

 

“Stock Plan” means the 2001 Aon Stock Incentive Plan, as amended and re-approved
by Aon’s stockholders at the 2006 annual meeting of stockholders, or any
successor plan.

 

“Total and Permanent Disability” means (a) for US employees, entitlement to
long-term disability benefits under Aon’s program as amended from time to time,
and (b) for non-US employees, as established by applicable company policy or as
required by local law or regulations.

 

If a term is used but not defined, it has the meaning given such term in the
Omnibus Incentive Plan.

 

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