EXHIBIT 10 (ak)


 


EMPLOYMENT AGREEMENT


 


This Employment Agreement (this “Agreement”) is dated as of August 1,
2005 (“Effective Date”), between Combined Insurance Company of America, an
Illinois insurance corporation (the “Company”), and Richard M. Ravin (“Executive”).


 


WHEREAS, the Company seeks to continue to employ Executive as President
and Chief Executive Officer of the Company and to have him serve as senior
executive officer of one or more subsidiaries of the Company; and


 


WHEREAS, Executive desires to serve and to be employed upon the terms
and subject to the conditions set forth herein.


 


NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the parties hereby agree as follows:


 


1. Employment.
The Company hereby agrees to employ Executive, and Executive hereby agrees to
be employed upon the terms and subject to the conditions contained in this
Agreement. The term of employment of Executive pursuant to this Agreement shall
commence effective as of August 1, 2005 and shall end on March 31,
2009 or, if later, the day immediately following the date on which the
Organization and Compensation Committee (“Committee”) of Aon’s Board of
Directors (“Board”) meets in 2009 to award bonus or incentive compensation (“Employment
Period”), unless earlier terminated pursuant to Section 4 hereof.


 


2. Position and
Duties; Responsibilities.


 


(a)                                  Position
and Duties. Executive shall be employed as President and Chief Executive
Officer of the Company and shall, during the Employment Period, be employed in
such other positions with subsidiaries of the Company as from time to time
determined by the Board. In all circumstances and for all purposes, Executive
shall report directly to the Board. During the Employment Period, Executive
shall perform faithfully and loyally and to the best of his abilities the duties assigned to him hereunder and shall
devote his full business time, attention and effort to the affairs of the
Company and its subsidiaries and shall use his best efforts to promote the
interests of the Company and its subsidiaries. Executive may engage in
charitable, civic or community activities and, with the prior approval of the
Board, may serve as a director of any other business corporation, provided
that (i) such activities or service do not interfere with his duties
hereunder or violate the terms of any of the covenants contained in Sections 6,
8 or 9 hereof and (ii) such other business corporation provides Executive
with director and officer insurance coverage which, in the opinion of the
Board, is adequate under the circumstances.


 


(b)                                 Responsibilities.
Executive shall have the authority and duty to supervise and direct the
business of the Company, subject to the control and direction of the Board.
Executive shall have the authority and responsibility for and in connection
with the hiring, firing,


 

















 


employment, supervision, discipline, duties and
responsibilities of all personnel, including direct reports employed by the
Company or any Subsidiary. Executive shall use his best efforts to support the
development of policies and services of Aon as deemed appropriate by the Board
and to develop a succession plan for the Company; provided, however, that
Executive’s bonus under Section 3(b) shall not in any respect be
based on the success or failure of any such succession plans. As of the
Effective Date and continuing for the Employment Period, Executive shall also
have other executive administrative duties and responsibilities on behalf of
the Company and its subsidiaries as may from time to time be authorized or
directed by the Board; provided that Executive shall not, without his consent,
be assigned tasks that would be inconsistent or interfere with those of
President and Chief Executive Officer of the Company.


 


3. Compensation.


 


(a)                                  Salary.
During the Employment Period, the Company shall pay to Executive a base salary
payable in accordance with the Company’s payroll policy (“Salary”) at the rate
of no less than $800,000 per annum.


 


(b)                                 Annual
Bonus. For each calendar year of the Employment Period beginning with
2006,  Executive shall be eligible for
payment of an annual cash bonus under the Senior Officer Incentive Compensation
Plan, as approved by Aon’s stockholders in 2001 and as amended or replaced from
time to time thereafter (the “Plan”). Executive’s annual cash bonus shall be
determined in accordance with the Executive Incentive Compensation guidelines
applicable to Aon’s Chairman, CEO and members of the Aon Policy Committee (the “Guidelines”)
which provide, in part, that 50% of any bonus to which Executive is entitled is
based on the performance of Aon (“Aon Portion”) and 50% of any such bonus is
based on the performance of the Company (“Company Portion”). Notwithstanding
anything to the contrary herein, for the calendar year 2005, the maximum amount
of Executive’s annual cash bonus shall be $1,440,000 (the “Target Bonus”). Executive
shall receive up to 75% of the Target Bonus (i.e., $1,080,000) based on the “revenue”,
“GAAP pre-tax profit” and “Bonus as % Salary” values set forth in the document
entitled “Richard Ravin: Incentive Plan 2005.” 
Executive shall be eligible to receive the remaining 25% of his 2005
Target Bonus (i.e., up to $360,000) based on the performance of Aon and other
personal and discretionary objectives as determined by Aon’s CEO. Annual cash
bonuses shall be paid to Executive no later than the date on which bonuses are
typically paid to Aon’s Chairman, CEO and members of Aon’s Policy Committee.


 


(c)                                  Restricted
Stock Units. There shall be granted to Executive an award of 33,500
restricted stock units of Aon common stock (“RSUs”), subject to approval by the
Committee at its regular meeting at which such matters are considered,  in March 2006 (“Grant Date”). The RSUs
will be granted pursuant to the Aon Stock Incentive Plan (“Incentive Plan”);
provided that, notwithstanding anything to the contrary in the Incentive Plan,
the RSUs shall vest over a three-year period as follows, if Executive is
employed by the Company on the applicable date: 20% to vest on the first anniversary
of the Grant Date, 20% to vest on the second anniversary of the Grant Date and
60% to vest on the third anniversary of the Grant Date. The RSUs shall be
appropriately adjusted for any stock splits or stock


 


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dividends affecting Aon common stock after the
Effective Date.


 


(d)                                 Other
Benefits. During the Employment Period, Executive shall be entitled to
participate in the Company’s employee benefit plans generally available to
executives of the Company (“Employee Benefits”). Executive shall be entitled to
take paid time off for vacation or illness in accordance with the Company’s
policy for executives and to receive all other fringe benefits as are from time
to time made generally available to executives of the Company.


 


(e)                                  Expense
Reimbursement. During the Employment Period the Company shall reimburse
Executive in accordance with the Company’s policies and procedures, for all
proper expenses incurred by him in the performance of his duties hereunder.


 


(f)                                    Pension.
Executive shall be entitled to a Pension from the Company or any successor
thereto upon his termination of employment for any or no reason, subject to the
following:


 


(i)  The Pension shall be paid monthly to
Executive for life commencing as of the first day of the calendar month
following his termination of employment in an amount equal to one-twelfth
(1/12) of .5% of Executive’s final average pay multiplied by his aggregate
number of years of service with the Company (or any affiliate or subsidiary
thereof) up to 20. The first monthly payment shall include an additional amount
equal to the maximum amount that would be paid under the Aon Severance Plan
(currently 30 weeks) regardless of whether Executive otherwise qualifies for
such amount.


 


(ii)  Executive’s final average pay is equal to
the average of Executive’s five highest consecutive calendar years of earnings
(Salary and bonus) out of his last 10 calendar years of earnings.


 


(iii)  The Pension shall be in addition to, and
not in lieu of, Executive’s rights to pension or other retirement benefits
under any employee 401(k), pension or other retirement plan that is
tax-qualified under Code Section 401(a) or any nonqualified deferred
compensation plan or supplemental executive retirement plan maintained by the
Company. The Pension provided under this Section shall not in any way
affect Executive’s rights with respect to such other plans and benefits.


 


4. Termination.


 


(a)                                  Death.
Upon the death of Executive during the Employment Period, this Agreement shall
automatically terminate and Executive’s executor, administrator or designated
beneficiary shall be entitled to receive Executive’s Base Salary which shall
have accrued to the date of such death.


 


(b)                                 Disability.
The Company may, at its option, terminate this Agreement upon written notice to
Executive if Executive, because of physical or mental incapacity or disability,
fails to perform the essential functions of his position, with reasonable
accommodation if relevant, required of him hereunder for a continuous period of
120 days or any 180 days within any 12-month period. Upon such termination,
Executive or his legal representative


 


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shall be entitled to receive the Base Salary which
shall have accrued to the date of termination. In the event of any dispute
regarding the existence of Executive’s incapacity or disability hereunder, the
matter shall be resolved by the determination of an independent physician
agreed upon between Executive and the Board specializing in the claimed area of
incapacity or disability. Executive shall submit to appropriate medical
examinations for purposes of such determination.


 


(c)                                  Cause.
(i) The Company may at any time, at its option, terminate Executive’s
employment under this Agreement immediately for Cause (as hereinafter defined).
The Company’s decision in this regard shall be taken by the Board. Executive
shall be given at least seven days advanced written notice of any meeting at
which the Board proposes to put forward for a vote a decision on whether or not
to terminate Executive for Cause and the written notice shall describe in
reasonable detail the basis on which the Board may conclude that Cause
exists. Executive shall have the opportunity to appear in person and to make
such written and/or oral presentation to such meeting of the Board as Executive
thinks necessary. If a majority of the Board authorizes by affirmative vote a
termination for Cause at such meeting (whether or not Executive makes any oral
or written presentations at such meeting) such determination shall be final and
binding upon the Company and Executive once such decision is confirmed in
writing and communicated to Executive.


 


(ii) As used in this Agreement, the term “Cause”
shall mean any one or more of the following:


 


(A)  any failure or inability (other than by
reason of physical or mental disability determined in accordance with Section 4(b))
of Executive to perform his material duties under this Agreement to the
satisfaction of at least a majority of the members of the Board, including,
without limitation, any refusal by Executive to perform such duties or to
perform such specific directives of the Board which are consistent with
the scope and nature of Executive’s duties and responsibilities under this
Agreement;


 


(B)  any intentional act of fraud, embezzlement
or theft by Executive in connection with his duties hereunder or in the course
of his employment hereunder or Executive’s admission or conviction of, or plea
of nob contendre to, a felony or of any crime involving moral turpitude, fraud,
embezzlement, theft or misrepresentation;


 


(C)  any gross negligence or willful misconduct
of Executive in connection with his duties hereunder or during the course of
his employment that results in a monetary loss to the Company, or damage to the
reputation of the Company;


 


(D)  any breach by Executive of any one or more
of the covenants contained in Section 6, 8 or 9 hereof or


 


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(E)  any violation of any statutory or common law
duty of loyalty to the Company or any of its subsidiaries in connection with
his duties hereunder or during the course of his employment.


 


(iii) The exercise of the right of the Company to
terminate this Agreement pursuant to this Section 4(c) shall not
abrogate the rights or remedies of the Company in respect of the breach giving
rise to such termination.


 


(iv) If the Company terminates Executive’s
employment for Cause, as defined in Section 4(c)(ii)(B), (C), (D) or (E), he shall be entitled to:


 


(A)  accrued Base Salary through the date of the
termination of his employment; and


 


(B) other accrued and unpaid Employee Benefits to
which Executive is entitled upon his termination of employment with the
Company, including regular and supplemental retirement and disability benefits,
in accordance with the terms of the plans and programs of the Company.


 


(v) if the Company terminates Executive’s
employment for Cause, as defined in Section 4(c)(ii)(A), he shall be
entitled to:


 


(A) the payments specified by Sections 4(c)(iv)(A) and
(B); and


 


(B) the continuation of the Base Salary, at the
rate in effect at the date of such termination of employment, for a period of
one year from the date of such termination of employment.


 


(d)                                 Termination
Without Cause. If, during the Employment Period, the Company terminates the
employment of Executive hereunder for any reason other than a reason set forth
in Section 4(a), (b) or (c), the Company shall give Executive 30 days’
prior written notice of such termination, and:


 


(i)  Upon such termination, Executive shall be
entitled to receive the payments and benefits specified by Sections 4(c)(iv)(A) and
(B);


 


(ii)  The Company shall continue to pay
Executive, through the remainder of the Employment Period, his Base Salary at
the rate in effect at the date of such termination of employment.


 


(e)                                  Voluntary
Termination. Executive may voluntarily terminate his employment with
the Company prior to the end of the Employment Period for any reason. If
Executive voluntarily terminates his employment pursuant to this Section 4(e),
Executive shall give the Company 12 months prior written notice and shall be
entitled to the payments specified by Sections 4(c)(iv)(A) and (B).


 


5. Federal and
State Withholding. The Company shall deduct from the amounts payable to
Executive pursuant to this Agreement the amount of all required federal, state
and local


 


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withholding taxes in
accordance with Executive’s Form W-4 on file with the Company, and all
applicable federal employment taxes.


 


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6. Noncompetition;
Nonsolicitation.


 


(a)                                  General.
Executive acknowledges that in the course of his employment with the Company,
he has and will become familiar with trade secrets and other confidential
information concerning the Company and its subsidiaries, and that his services
will be of special, unique and extraordinary value to the Company and its
subsidiaries.


 


(b)                                 Noncompetition.
Executive agrees that during the period of his employment with the Company and
for a period of two years thereafter (“Noncompetition Period”) he shall not in
any manner, directly or indirectly, through any person, firm or corporation,
alone or as a member of a partnership or as an officer, director, stockholder,
investor or employee of or consultant to any other corporation or enterprise or
otherwise, engage or be engaged, or assist any other person, firm, corporation
or enterprise in engaging or being engaged, in any business in which Executive
was involved or had knowledge, being conducted by, or contemplated by, the
Company or any of its subsidiaries, as of the termination of Executive’s
employment in any geographic area in which the Company or any of its
subsidiaries is then conducting such business.


 


(c)                                  Nonsolicitation.
Executive further agrees that during the Noncompetition Period he shall not in
any manner, directly or indirectly, induce or attempt to induce any agent or
employee of the Company or any of its subsidiaries to terminate or abandon his
or her employment for any purpose whatsoever.


 


(d)                                 Exceptions.
Nothing in this Section shall prohibit Executive from being (i) a
stockholder in a mutual fund or a diversified investment company or (ii) a
passive owner of not more than 2% of the outstanding stock of any class of
a corporation, any securities of which are publicly traded, so long as
Executive has no active participation in the business of such corporation.


 


(e)                                  Reformation.
It at any time of enforcement of this Section, a court holds that the
restrictions stated herein are unreasonable under circumstances then existing,
the parties hereto agree that the maximum period, scope or geographical area
reasonable under such circumstances shall be substituted for the stated period,
scope or area and that the court shall be allowed to revise the restrictions
contained herein to cover the maximum period, scope and area permitted by law.
This Agreement shall not authorize a court to increase or broaden any of the
restrictions in this Section.


 


7. Consideration;
Breach. The Company and Executive agree that the payments to be made, and
the benefits to be provided, by the Company to Executive shall be made and
provided in consideration of Executive’s agreements contained in Section 6.
In the event that Executive shall breach any provision of Section 6, the
Company shall be entitled immediately to terminate making all remaining
payments and providing all remaining benefits pursuant to Section 3 and
upon such termination the Company shall have no further liability to Executive
under this Agreement.


 


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8. Confidentiality.
Executive shall not, at any time during the Employment Period or thereafter,
make use of or disclose, directly or indirectly, any (i) trade secret or
other confidential or secret information of the Company or of any of its
subsidiaries, or (ii) other technical, business, proprietary or financial
information of the Company or of any of its subsidiaries not available to the
public generally or to the competitors of the Company or to the competitors of
any of its subsidiaries (“Confidential Information”), except to the extent that
such Confidential Information (a) becomes a matter of public record or is
published in a newspaper, magazine or other periodical available to the general
public, other than as a result of any act or omission of Executive, (b) is
required to be disclosed by any law, regulation or order of any court or
regulatory commission, department or agency, provided that Executive gives
prompt notice of such requirement to the Company to enable the Company to seek
an appropriate protective order, or (c) is necessary to perform properly
Executive’s duties under this Agreement. Promptly following the termination of
the Employment Period, Executive shall surrender to the Company all records,
memoranda, notes, plans, reports, computer tapes and software and other
documents and data which constitute Confidential Information which he may then
possess or have under his control (together with all copies thereof).


 


9. Inventions.
Executive hereby assigns to the Company his entire right, title and interest in
and to all discoveries and improvements, patentable or otherwise, trade secrets
and ideas, writings and copyrightable material, which may be conceived by
Executive or developed or acquired by him during the Employment Period, which may pertain
directly or indirectly to the business of the Company or any of its
subsidiaries. Executive agrees to disclose fully all such developments to the
Company upon its request, which disclosure shall be made in writing promptly
following any such request. Executive shall, upon the Company’s request,
execute, acknowledge and deliver to the Company all instruments and do all
other acts which are necessary or desirable to enable the Company or any of its
subsidiaries to file and prosecute applications for, and to acquire, maintain
and enforce, all patents, trademarks and copyrights in all countries.


 


10. Enforcement.
The parties hereto agree that the Company and its subsidiaries would be damaged
irreparably in the event that any provision of Sections 6, 8 or 9 were not
performed in accordance with its terms or were otherwise breached and that
money damages would be an inadequate remedy for any such nonperformance or
breach. Accordingly, the Company and its successors and permitted assigns shall
be entitled, in addition to other rights and remedies existing in their favor,
to an injunction or injunctions to prevent any breach or threatened breach of
any of such provisions and to enforce such provisions specifically (without
posting a bond or other security). Executive agrees that he will submit himself
to the personal jurisdiction of the courts of the State of Illinois in any
action by the Company to enforce any provision of Sections 6, 8 or 9.


 


11. Survival.
Sections 6, 8, 9 and 10 shall survive and continue in full force and effect in
accordance with their respective terms, notwithstanding any termination of the
Employment Period.


 


12. Waiver of Breach. No waiver by either party
hereto of a breach of any provision of this Agreement by the other party, or of
compliance with any condition or provision of this Agreement to be performed by
such other party, will operate or be construed as a waiver of any


 


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subsequent breach by such
other party of any similar or dissimilar provisions and conditions at the same
or any prior or subsequent time. The failure of either party hereto to take any
action by reason of such breach will not deprive such party of the right to
take action at any time while such breach continues.


 


13. Successors. This Agreement shall be binding upon,
and inure to the benefit of, the Company and its successors and assigns and upon
any person acquiring, whether by merger, consolidation, purchase of assets or
otherwise, all or substantially all of the Company’s assets and business, and
the successor shall be substituted for the Company under this Agreement. The
Company will require any successor to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such assignment or succession had taken
place.


 


14. Notices. Notices and all other communications
provided for in this Agreement shall be in writing and shall be delivered
personally or sent by registered or certified mail, return receipt requested,
postage prepaid (provided that international mail shall be sent via overnight
or two-day delivery), or sent by facsimile or prepaid overnight courier to the
parties at the addresses set forth below (or such other addresses as shall be
specified by the parties by like notice). Such notices, demands, claims and
other communications shall be deemed given:


 


(a)                                  in
the case of delivery by overnight service with guaranteed next day delivery,
the next day or the day designated for delivery;


 


(b)                                 in
the case of certified or registered U.S. mail, five days after deposit in the
U.S. mail; or


 


(c)                                  in
the case of facsimile, the date upon which the transmitting party received
confirmation of receipt by facsimile, telephone or otherwise;


 


provided, however, that in no event shall any such
communications be deemed to be given later than the date they are actually received.
Communications that are to be delivered by the U.S. mail or by overnight
service or two-day delivery service are to be delivered to the addresses set
forth below:


 


to the Company:


 


Combined
Insurance Company of America


1000
Milwaukee Avenue


Northbrook,
Illinois 60025


Attention:
Corporate Secretary


 


with copies to:


 


Aon Corporation


200 East Randolph


Chicago, Illinois 60601


Attention: Chief Executive Officer


 


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Aon Corporation


200 East Randolph


Chicago, Illinois 60601


Attention: Executive Vice President and General Counsel


 


or to Executive:


 


815
Croft Ridge Road


Highland
Park, Illinois 60035


 


Each party, by written notice furnished to the other
party, may modify the applicable delivery address, except that notice of
change of address shall be effective only upon receipt.


 


15. Severability.
Whenever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of any other provision of this Agreement or the
validity, legality or enforceability of such provision in any other
jurisdiction, but this Agreement shall be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.


 


16. Entire
Agreement. This Agreement constitutes the entire agreement and
understanding between the parties with respect to the subject matter hereof and
supersedes and preempts any prior understandings, agreements or representations
(excluding the Severance Agreement between Aon Corporation and Executive) by or
between the parties, written or oral, which may have related in any manner
to the subject matter hereof


 


17. Governing
Law. This Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of Illinois without regard to
principles of conflict of laws.


 


18. Amendment.
The provisions of this Agreement may be amended only by the written
agreement of the Company and Executive, and no course of conduct or failure or
delay in enforcing the provisions of this Agreement shall affect the validity,
binding effect or enforceability of this Agreement.


 


19. Counterparts.
This Agreement may be executed in two counterparts, each of which shall be
deemed to be an original and both of which together shall constitute one and
the same instrument.


 


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Executive has executed, and the Company has caused
this agreement to be executed in its name and on its behalf, all as of November 10,
2005.


 


 


	
  /s/
  Richard M. Ravin

  	
   

  	
  /s/
  Gregory C. Case

  	
   

  
	
  Richard
  M. Ravin

  	
  Gregory
  C. Case

  



 


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