Exhibit
10.1


 


EMPLOYMENT AGREEMENT


 


This Employment Agreement (this “Agreement”) is dated
as of April 4, 2005, between Aon Corporation, a Delaware corporation (the “Company”),
and Gregory C. Case (the “Executive”).


 


WHEREAS, the Company seeks to employ Executive as
President and Chief Executive Officer 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 the Executive and the Executive hereby agrees to be
employed upon the terms and subject to the conditions contained in this
Agreement.  The term of employment of the
Executive pursuant to this Agreement (the “Employment Period”) shall commence
effective as of April 4, 2005 (the “Effective Date”) and shall end on April 3,
2010, unless earlier terminated pursuant to Section 4 hereof.


 


2.                                      Position and Duties;
Responsibilities; Board Service.  (a)  Position and Duties.  The Company shall employ the Executive during
the Employment Period as its President and Chief Executive Officer.  During the Employment Period, the 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.  The Executive may engage
in charitable, civic or community activities and, with the prior approval of
the Board of Directors of the Company (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 7, 8 or 9 hereof and (ii) such other business
corporation provides the Executive with director and officer insurance coverage
which, in the opinion of the Board, is adequate under the circumstances.


 


(b)  Responsibilities.  Subject to the powers, authority and
responsibilities vested in the Board and in duly constituted committees of the
Board, the Executive shall have the authority and responsibility for the
management, operation and overall conduct of the business of the Company.  The Executive shall also perform such other
duties (not inconsistent with the position of Chief Executive Officer) on
behalf of the Company and its subsidiaries as may from time to time be
authorized or directed by the Board.  The
Executive shall report to the Board.


 


(c)  Board
Service.  Promptly following the
Effective Date, the Executive will be appointed as a member of the Board.  Provided that the Executive’s employment with
the


 





















 


Company has not previously been terminated, the
Executive will be nominated for election as a member of the Board at the
Company’s 2005 annual meeting of shareholders and at each subsequent annual
meeting of shareholders during the Employment Period.  If so appointed and
elected, the Executive agrees that he will serve as a member of the Board.


 


3.                                      Compensation.  (a)  Base Salary.  During the Employment Period, the Company
shall pay to the Executive a base salary at the rate of $1,500,000 per annum (“Base
Salary”), payable semi-monthly in accordance with the Company’s executive
payroll policy.  Such Base Salary shall
be reviewed annually on the Company’s regular executive salary review schedule,
and shall be subject to adjustment at the discretion of the Board.


 


(b)  Annual
Bonus.  During the Employment Period,
commencing in calendar year 2005, the Executive shall participate in one or
more annual incentive bonus plans (collectively, the “Senior Executive Plan”).  Each such annual incentive bonus shall be
determined pursuant to the terms of the Senior Executive Plan as in effect from
time to time; provided, however, that (i) the Executive’s target annual
incentive bonus shall not be less than 125% of the Executive’s Base Salary as
in effect at the end of the fiscal year to which such annual incentive bonus
relates (the “Bonus Year”), (ii) the Executive shall be eligible to earn an
annual incentive bonus of up to 250% of the Executive’s Base Salary as in effect
at the end of the Bonus Year, (iii) the Executive’s annual incentive bonus for
Bonus Years after 2005 shall be paid 80% in cash and 20% in restricted stock
units, which restricted stock units shall vest in equal installments (33-1/3%
per year) at the end of each of the first three calendar years beginning after
the end of the Bonus Year and shall otherwise be subject to the terms and
conditions generally applicable to restricted stock unit grants under the Aon
Stock Incentive Plan, and (iv) provided that Executive is employed by the
Company on the regular payment date for the 2005 Bonus Year, Executive’s
incentive bonus for the 2005 Bonus Year shall be equal to not less than
$1,875,000 and shall be paid 100% in cash.


 


(c)  Stock
Awards.  On the Effective Date, the
Executive shall receive an inducement restricted stock unit award in the form
attached hereto as Exhibit A of 125,000 shares of common stock (“Common Stock”)
of the Company, which restricted stock units shall vest in installments of
12,500 shares at the end of each of the first four years beginning on the
Effective Date and in a final installment of 75,000 shares at the end of the
fifth year beginning on the Effective Date, and shall otherwise to the extent
not inconsistent with Exhibit A to this Agreement be subject to terms and
conditions the same as the terms and conditions generally applicable to
restricted stock unit grants under the Aon Stock Incentive Plan.  In the event of termination of the Executive’s
employment by the Company without Cause pursuant to Section 4(d) hereof, or by
the Executive for Good Reason pursuant to Section 4(e) hereof, such award shall
become immediately vested.  The Company
will file a Form S-8 registration statement with respect to such restricted
stock unit award.


 


(d)  Stock
Options.  (i)  On the Effective Date, the Executive shall be
granted  non-qualified options in the
forms attached hereto as Exhibits B and C for an aggregate of 1,000,000 shares
of the Common Stock of the Company.  The
non-qualified stock option in the form attached hereto as Exhibit B shall be
granted pursuant to the terms of the Aon Stock Incentive Plan. The
non-qualified stock option in the form attached hereto as Exhibit C shall be
granted as an inducement non-qualified stock option award outside of the Aon
Stock Incentive


 


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Plan.  The
Company will file a Form S-8 registration statement with respect to such
inducement non-qualified stock option award. 
Such options shall vest, in the aggregate, in installments of 333,334
shares at the end of the second year beginning on the Effective Date and of
333,333 shares at the end of each of the third and fourth years beginning on
the Effective Date in accordance with the terms generally applicable to option
grants under the Aon Stock Incentive Plan to the extent not inconsistent with
this Agreement.  In the event of
termination of the Executive’s employment by the Company without Cause pursuant
to Section 4(d) hereof, or by the Executive for Good Reason pursuant to Section
4(e) hereof, such options shall continue to vest in accordance with their
original vesting schedules.


 


(ii)  In each
calendar year after 2005 during the Employment Term, subject to the approval of
the committee administering the Aon Stock Incentive Plan, the Executive shall
be granted annually, on the regular date for annual executive option grants,
non-qualified stock options to purchase shares of Common Stock with a
Black-Scholes value (based on the same methodology as used in valuing regular
2005 option grants under the Aon Stock Incentive Plan) of not less than
$1,800,000, each such option shall vest in accordance with the terms generally
applicable to option grants under the Aon Stock Incentive Plan; provided,
however, that in the event of termination of
the Executive’s employment by the Company without Cause pursuant to Section
4(d) hereof, or by the Executive for Good Reason pursuant to Section 4(e)
hereof, each such option shall become vested to the extent that it would have
become vested if the Executive’s employment had continued until the second
anniversary of the date of the Executive’s termination of employment.


 


(e)  Other
Benefits.  During the Employment
Period, the Executive shall be entitled to participate in the Company’s
employee benefit plans generally available to executives of the Company (such
benefits being hereinafter referred to as the “Employee Benefits”); provided
that life insurance coverage shall be no less than $5 million.  The Executive also shall be entitled to take
time off for vacation (not less than 4 weeks per year) 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.  If the Executive’s termination
of employment occurs for any reason, other than by the Company for Cause
pursuant to Section 4(c), after the Executive has both attained at least age 50
and completed at least ten years of continuous employment with the Company, the
Executive and the Executive’s spouse and dependent children shall be eligible
for coverage under the Company’s retiree medical program, as such program may
be amended, excluding any amendment of the age and service eligibility
requirements, from time to time (the “Retiree Medical Plan”).


 


(f)  Expense
Reimbursement.  During the Employment
Period the Company shall reimburse the Executive in accordance with the Company’s
policies and procedures, for all proper expenses incurred by him in the
performance of his duties hereunder.  The
Company shall pay the reasonable legal fees and expenses incurred by the
Executive in connection with the negotiation and preparation of this Agreement
in an amount not to exceed $25,000.


 


4.                                      Termination.  (a)  Death. 
Upon the death of the Executive, all rights of the Executive and the
Executive’s heirs, executors and administrators to compensation and other
benefits under this Agreement shall cease immediately, except that the
Executive’s heirs, executors or administrators, as the case may be, shall be
entitled to:


 


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(i)                                     accrued Base Salary through and including
the Executive’s date of death;


 


(ii)                                  the amount of any annual incentive bonus
earned and payable but not yet paid for the Bonus Year prior to the year in
which the Executive’s termination of employment occurs;


 


(iii)                               prorated
annual incentive bonus (based on the target bonus under the Senior Executive
Plan or any successor plan for the Bonus Year in which the Executive’s
termination of employment occurs) through and including the Executive’s date of
death;


 


(iv)                              other
Employee Benefits to which the Executive was entitled on the date of death in
accordance with the terms of the plans and programs of the Company;


 


(v)                                 the
treatment of the restricted stock units granted to the Executive pursuant to
Section 3(c) hereof in accordance with the terms thereof; and


 


(vi)                              the
treatment of the options granted to the Executive pursuant to Section 3(d)
hereof in accordance with the terms thereof.


 


(b)                                 Disability.  The Company
may, at its option, terminate the Executive’s employment upon written notice to
the Executive if the Executive, because of physical or mental incapacity or
disability, fails to perform the essential functions of the Executive’s
position, with or without reasonable accommodation, if relevant, required of
the Executive hereunder for a continuous period of 120 days or any 180 days
within any 12-month period.  Upon such
termination, the Executive’s entitlement to compensation and benefits shall
cease immediately, except that the Executive shall be entitled to:


 


(i)                                     accrued Base Salary through and including
the effective date of the Executive’s termination of employment;


 


(ii)                                  the amount of any annual incentive bonus
earned and payable but not yet paid for the Bonus Year prior to the year in
which the Executive’s termination of employment occurs;


 


(iii)                               prorated annual incentive bonus (based on
the target bonus under the Senior Executive Plan  or any successor plan for the Bonus Year in
which the Executive’s termination of employment occurs) through and including
the effective date of the Executive’s termination of employment;


 


(iv)                              other Employee Benefits to which the
Executive is entitled upon termination of employment in accordance with the
terms of the plans and programs of the Company;


 


(v)                                 the treatment of the restricted stock
units granted to the Executive pursuant to Section 3(c) hereof in accordance
with the terms thereof; and


 


(vi)                              the
treatment of the options granted to the Executive pursuant to Section 3(d)
hereof in accordance with the terms thereof.


 


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In the
event of any dispute regarding the existence of the Executive’s incapacity or
disability hereunder, the matter shall be resolved by the determination of a
physician selected by the Board and reasonably acceptable to the
Executive.  The Executive shall submit to
appropriate medical examinations for purposes of such determination.


 


(c)                                  Cause.  (i)  The Company may, at its option, terminate the
Executive’s employment under this Agreement for Cause (as hereinafter defined)
upon written notice to the Executive (the “Cause Notice”).  The Cause Notice shall state the particular
action(s) or inaction(s) giving rise to termination for Cause.  No action(s) or inaction(s) will constitute
Cause unless (1) a resolution finding that Cause exists has been approved by a
majority of all of the members of the Board (excluding the Executive) at a
meeting at which the Executive is allowed to appear with his legal counsel and
(2) where remedial action is feasible, the Executive fails to remedy the
action(s) or inaction(s) within 10 days after receiving the Cause Notice.  If the Executive so effects a cure to the
satisfaction of the Board, the Cause Notice shall be deemed rescinded and of no
force or effect.


 


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


 


(A)                              any
willful refusal by the Executive to follow lawful directives of the Board which
are consistent with the scope and nature of the Executive’s duties and
responsibilities as set forth herein;


 


(B)                                the
Executive’s conviction of, or plea of guilty or nolo contendere to, a felony or
of any crime involving moral turpitude, fraud or embezzlement;


 


(C)                                any
gross negligence or willful misconduct of the Executive resulting in a material
loss to the Company or any of its subsidiaries, or material damage to the
reputation of the Company or any of its subsidiaries;


 


(D)                               any
material breach by the Executive of any one or more of the covenants contained
in Section 7, 8 or 9 hereof; or


 


(E)                                 any
violation of any statutory or common law duty of loyalty to the Company or any
of its subsidiaries.


 


(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 the Executive’s
employment for Cause, the Executive’s entitlement to compensation and benefits
shall cease immediately, except that the Executive shall be entitled to the
payments and benefits specified in Sections 4(b)(i) and 4(b)(iv) hereof.


 


(v)                                 If the Company terminates the Executive’s
employment for Cause, the Executive agrees to immediately resign from the
Board.


 


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(d)                                 Termination Without Cause. 
The Company may, at its option, terminate the Executive’s employment
under this Agreement upon written notice to the Executive for a reason other
than a reason set forth in Section 4(a), 4(b) or 4(c).  Any such termination shall be authorized by
the Board.  If the Company terminates the
Executive’s employment for any such reason, the Executive’s entitlement to
compensation and benefits shall cease immediately, except that the Executive
shall be entitled to:


 


(i)                                     the
payments and benefits specified in Sections 4(b)(i) through 4(b)(iv) hereof,
inclusive;


 


(ii)                                  other
Employee Benefits to which the Executive is entitled upon termination of
employment in accordance with the terms of the plans and programs of the
Company; provided that the Company shall continue to provide medical, dental
and vision benefits to the Executive, spouse and dependent children for
twenty-four (24) months following the date on which the Executive’s employment
terminates, followed immediately thereafter with immediate eligibility for
coverage under the Retiree Medical Plan (irrespective of his age and years of
continuous employment), until the Executive, spouse and dependent children
become covered by the plan of another employer providing comparable benefits;


 


(iii)                               the
treatment of the restricted stock units granted to the Executive pursuant to
Section 3(c) hereof in accordance with the terms thereof;


 


(iv)                              the
treatment of the options granted to the Executive pursuant to Section 3(d)
hereof in accordance with the terms thereof; and


 


(v)                                 a
lump sum cash payment equal to the product of (x) two, and (y) the sum of the
Base Salary and the Executive’s target annual incentive bonus under the Senior
Executive Plan for the Bonus Year in which the Executive’s employment
terminates; provided that for this purpose the Executive’s Base Salary and
target annual bonus shall be no less than his initial Base Salary and initial
target bonus.


 


(e)                                  Voluntary Termination. 
Upon 60 days prior written notice to the Company (or such shorter period
as may be permitted by the Board), the Executive may voluntarily terminate the
Executive’s employment with the Company for any reason.  If the Executive voluntarily terminates the
Executive’s employment pursuant to this Section 4(e), the Executive’s
entitlement to compensation and benefits shall cease immediately, except that
the Executive shall be entitled to the payments and benefits specified in
Sections 4(b)(i) and 4(b)(iv) hereof.


 


(f)                                    Termination for Good Reason. 
(i)  Upon 30 days prior written
notice to the Company (or such shorter period as may be permitted by the
Board), the Executive may voluntarily terminate the Executive’s employment with
Good Reason (as hereinafter defined).  If
the Executive voluntarily terminates employment pursuant to this Section 4(f),
the Executive’s entitlement to compensation and benefits shall cease
immediately, except that the Executive shall be entitled to:


 


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(A)                              the
payments and benefits specified in Sections 4(b)(i) through 4(b)(iv) hereof,
inclusive;


 


(B)                                other
Employee Benefits to which the Executive is entitled upon termination of
employment in accordance with the terms of the plans and programs of the
Company; provided that the Company shall continue to provide medical, dental
and vision benefits to the Executive, spouse and dependent children for
twenty-four (24) months following the date on which the Executive’s employment
terminates, followed immediately thereafter with immediate eligibility for
coverage under the Retiree Medical Plan (irrespective of his age and years of
continuous employment), until the Executive, spouse and dependent children
become covered by the plan of another employer providing comparable benefits;


 


(C)                                the
treatment of the restricted stock units granted to the Executive pursuant to
Section 3(c) hereof in accordance with the terms thereof;


 


(D)                               the
treatment of the options granted to the Executive pursuant to Section 3(d)
hereof in accordance with the terms thereof; and


 


(E)                                 a
lump sum cash payment equal to the product of (x) two, and (y) the sum of the
Base Salary and the Executive’s target annual incentive bonus under the Senior
Executive Plan for the Bonus Year in which the Executive’s employment
terminates; provided that for this purpose the Executive’s Base Salary and
target annual bonus shall be no less than his initial Base Salary and initial
target bonus.


 


(ii)  As used in
this Agreement, the term “Good Reason” shall mean during the Employment Period,
without the written consent of the Executive, any one or more of the following,
provided that an isolated, insubstantial or inadvertent action not taken in bad
faith or failure not occurring in bad faith which is remedied by the Company
promptly after receipt of notice thereof given by the Executive shall not
constitute Good Reason:


 


(A)                              the
assignment to the Executive of any duties materially inconsistent in any respect
with the Executive’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by this
Agreement;


 


(B)                                any
failure by the Company to comply with the provisions of Section 3 hereof;


 


(C)                                any
requirement by the Company that the Executive’s principal office be located
more than 50 miles outside of the greater Chicago metropolitan area; or


 


(D)                               any
other material breach by the Company of this Agreement.


 


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5.                                      Change in Control. 
During the Employment Term, the Executive shall be entitled to Change in
Control severance protection pursuant to the Severance Agreement attached
hereto as Exhibit D, which Severance Agreement may not, without the Executive’s
consent, be amended or terminated during the Employment Term.


 


6.                                      Federal and State
Withholding.  The Company shall deduct from the amounts
payable to the Executive pursuant to this Agreement the amount of all required
federal, state and local withholding taxes in accordance with the Executive’s
Form W-4 on file with the Company, and all applicable federal employment taxes.


 


7.                                      Noncompetition;
Nonsolicitation.  (a)  General.  The 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 affiliates.


 


(b)  Noncompetition.  The Executive agrees that during the period
of his employment with the Company and for a period of two years thereafter
(the “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 the Executive was involved
or had knowledge, being conducted by, or contemplated by, the Company or any of
its subsidiaries as of the termination of the Executive’s employment in any
geographic area in which the Company or any of its subsidiaries is then
conducting such business.


 


(c)  Nonsolicitation.  The Executive further agrees that during the
Noncompetition Period he shall not in any manner, directly or indirectly,
induce or attempt to induce any 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 7 shall prohibit the
Executive from being (i) a stockholder in a mutual fund or a diversified
investment company or (ii) a passive owner of not more than two percent 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.  If, at any time of enforcement of this
Section 7, 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.


 


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


 


8.                                      Confidentiality.  The 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 the Executive, (b) is required to be disclosed by any law,
regulation or order of any court or regulatory commission, department or
agency, provided that the 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 the Executive’s duties under this
Agreement.  Promptly following the
termination of the Employment Period, the 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.  The 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 the
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.  The 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.  The 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 Section 7, 8 or 9 of this Agreement 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).  The Executive agrees that he will submit
himself to


 


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the personal jurisdiction of the courts of the State
of Illinois in any action by the Company to enforce any provision of Section 7,
8 or 9 of this Agreement.


 


11.                               Survival.  Sections 4, 5,
7, 8, 9 and 10 of this Agreement shall survive and continue in full force and
effect in accordance with their respective terms, notwithstanding any
termination of the Employment Period.


 


12.                               Notices.  All notices
and other communications required or permitted hereunder shall be in writing
and shall be deemed given when (i) delivered personally or by overnight courier
to the following address of the other party hereto (or such other address for
such party as shall be specified by notice given pursuant to this Section 12)
or (ii) sent by facsimile to the following facsimile number of the other party
hereto (or such other facsimile number for such party as shall be specified by
notice given pursuant to this Section 12), with the confirmatory copy delivered
by overnight courier to the address of such party pursuant to this Section 12:


 


If to
the Company, to:


 


Aon
Corporation


200
East Randolph


Chicago,
Illinois 60601


Attention:
Chairman of the Board


 


with
copies to:


 


Aon
Corporation


200
East Randolph


Chicago, Illinois 60601


Attention: Chairman of the Governance Committee


 


Aon Corporation


200
East Randolph


Chicago, Illinois 60601


Attention: General Counsel


 


If to
the Executive, to the Executive’s home address as shown on the Company’s
records.


 


13.                               Reimbursement of Legal Expenses.  In the event that the Executive is
successful, whether in arbitration or litigation, in pursuing any claim or dispute
involving the Executive’s employment with the Company, including any claim or
dispute relating to (a) this Agreement, (b) termination of the Executive’s
employment with the Company or (c) the failure or refusal of the Company to
perform fully in accordance with the terms hereof, the Company shall promptly
reimburse the Executive for all costs and expenses (including, without
limitation, attorneys’ fees) relating solely, or allocable, to such successful
claim.  In any other case, the Executive
and the Company shall each bear all their own respective costs and attorneys’
fees.


 


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14.                               Indemnification.  The Company shall maintain, for the benefit
of the Executive, director and officer liability insurance in form at least as
comprehensive as, and in an amount that is at least equal to, that maintained
by the Company for any other officer or director.  In addition, the Executive shall be
indemnified by the Company against liability as an officer and director of the
Company and any subsidiary or affiliate of the Company to the maximum extent
permitted by applicable law.  The
Executive’s rights under this Section 14 shall continue so long as he may be
subject to such liability, whether or not this Agreement may have terminated
prior thereto.


 


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 by or between the parties,
written or oral, which may have related in any manner to the subject matter
hereof.


 


17.                               No Mitigation. 
In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement, and such amounts shall
not be reduced whether or not the Executive obtains other employment.


 


18.                               Successors and Assigns.  This Agreement
shall be enforceable by the Executive and his heirs, executors, administrators
and legal representatives, and by the Company 
and its successors and assigns, and shall be binding on such successors
and assigns.


 


19.                               Headings; Inconsistency. 
Section headings in this Agreement are included herein for convenience
of reference only and shall not constitute a part of this Agreement for any
other purpose.  In the event of any
inconsistency between the terms of this Agreement and any form, award
(including the award agreements attached hereto as Exhibits A, B and C), plan
or policy of the Company or any other agreement between the Executive and the
Company, the terms of this Agreement shall control.


 


20.                               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.


 


21.                               Amendment and Waiver.  The provisions
of this Agreement may be amended or waived only by the written agreement of the
Company and the 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.


 


11





















 


22.                               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.


 


12





















 


IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first written above.


 


	
   

  	
  AON CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Patrick G. Ryan

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   Chairman & Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
  /s/ Greg Case

  	
   

  
					



 





















 


EXHIBIT A


 


	
  Notice of Grant

  of Restricted Stock Units

  	
   

  	
  

  



 


 


Notice is hereby given of
the following restricted stock unit (RSU) grant.


 


Employee:  Gregory C. Case


Employee Address:


 


Grant Date:  April 4, 2005


Grant Number:


Number of RSU’s:  125,000


 


The RSU’s will vest in
increments according to the schedule below:


 


	
  Shares

  	
   

  	
  Vest Date

  
	
  12,500

  	
   

  	
  April 3, 2006

  
	
  12,500

  	
   

  	
  April 3, 2007

  
	
  12,500

  	
   

  	
  April 3, 2008

  
	
  12,500

  	
   

  	
  April 3, 2009

  
	
  75,000

  	
   

  	
  April 3, 2010

  



 


 


Other pertinent details
related to this grant are contained in the Inducement Restricted Stock Unit
Agreement attached hereto.


 





















 


INDUCEMENT RESTRICTED STOCK UNIT AGREEMENT


 


This Inducement Restricted Stock Unit Agreement  (the “Agreement”) is entered into between Aon
Corporation, a Delaware corporation (the “Company”) and the employee (the “Employee”)
as listed on the “Notice of Grant of Restricted Stock Units”(the “Notice”).


 


The Company desires to grant the Employee restricted stock units (“RSU’s”),
each RSU representing the right to receive a share of Aon common stock (“Common
Stock”), $1.00 par value per share of Common Stock, to encourage the Employee
to remain in the employ of the Company or its subsidiaries, to provide the
Employee with an incentive to contribute to the financial progress of the
Company, and to encourage ownership of the Company’s stock by the Employee.


 


NOW,
THEREFORE, in consideration of the mutual promises hereinafter set forth, the
parties hereto agree as follows:


 


1.              Grant
of Restricted Stock Units.  The
Company grants to the Employee an award of RSU’s as specified in the “Notice of
Grant of Restricted Stock Units”.


 


2.              Notice
of Grant of Restricted Stock Units.  The
Notice shall specify the date of grant (the “Grant Date”), number of RSU’s and
the vesting schedule of the RSU’s. The Notice is incorporated herein by
reference and the terms of this Agreement are incorporated by reference in the
Notice.


 


3.              Tax
Withholding Obligations.  Prior to
the delivery of shares, the Employee shall deposit with the Company, through
means provided for by the Company, an amount of cash equal to the amount
determined by the Company to be necessary upon delivery of the shares for any
taxes, social security / social insurance contributions, or the like under any
government statute. Alternatively, the Company may, at its sole election, a)
withhold the required amounts from the Employee’s pay, or b) may permit the
Employee, subject to such conditions as the Company shall require, to sell a
number of shares otherwise deliverable having a value sufficient to satisfy all
or part of the Employee’s estimated total tax obligations associated with
vesting of the shares.  The Company shall
not deliver any of the shares until and unless the Employee has made the
deposit required herein or proper provision for required withholding has been
made.


 


4.              Effect
of Termination of Employment.


a)              Voluntary
termination prior to age 55. The unvested portion of the RSU will be
forfeited.


b)              Termination
due to disability or death. The RSU shall
continue to vest as if the Employee remained employed by the Company.


c)              Involuntary
termination (other than for cause) or termination for good reason.  The RSU shall be immediately vested in
full.  Termination for good reason shall
mean termination pursuant to the provisions of Section 4(f) of the Employee’s
Employment Agreement with the Company dated as of April 4, 2005 (the “Employment
Agreement”).  


d)              Voluntary
termination on or after age 55.  The
RSU shall be immediately vested pro rata. The remaining unvested portion of the
RSU shall be forfeited. Pro rata vesting is based on the period of employment
since the Grant Date.


e)              Termination
for cause. All unvested shares shall be forfeited. Termination for cause
shall mean termination pursuant to the provisions of Section 4(c) of the
Employment Agreement.


 


5.              Receipt
by the Employee of the Prospectus. 
The Employee acknowledges receipt of the prospectus that contains the
entire 2001 Aon Stock Incentive Plan (the “Plan”), and is incorporated herein
by reference.  The Employee represents
and warrants that the Employee has read the Plan and agrees that all RSU’s
awarded under this Agreement shall, to the extent not inconsistent with this
Agreement, be subject to terms and conditions which are the same as the terms
and conditions of the Plan.


 


 





















 


6.              Issuance
of Shares.  RSU’s shall be converted
to shares of Common Stock as of the vesting date. Shares of Common Stock will
be issued to the Employee as soon as practicable after the vesting date,
subject to Section 3 of this Agreement


 


7.              Rights
as Shareholder.  The Employee may not
have voting or any other right as a shareholder of the Company with respect to
the RSU’s. Upon conversion of the RSU to shares of Company Stock, the Employee
will obtain full voting and other rights as a shareholder of the Company


 


8.              Additional
Covenants


a)              Non-Solicitation
Covenant


 


(i)            Business Considerations. The Company is in the business of
providing insurance brokerage, reinsurance brokerage, benefits consulting,
compensation consulting, human resources consulting, managing underwriting and
related insurance services including accounting, claims management and
handling, contract wording, information systems and actuarial services. An
essential element of its business is the development and maintenance of
personal contacts and relationships with clients.  Because of these contacts and relationships,
it is common for the Company’s clients to develop identification with the
employee who services its insurance needs, rather than with the Company itself.
The personal identification of clients of the Company with a Company employee
creates the potential for the Employee’s appropriation of the benefits of the
relationships developed with clients on behalf of and at the expense of the
Company.  Since the Company would suffer
irreparable harm if Employee left its employ and solicited the insurance or
other related business of clients of the Company, it is reasonable to protect
the Company against solicitation activities by Employee for a limited period of
time after Employee leaves the Company so that the Company may renew or restore
its business relationship with its client.


 


(ii)        Covenant Not to Solicit. 
Employee hereby covenants and agrees that, except with the prior written
consent of the Company, Employee will not for a period of two years after the
end of employment compete directly or indirectly in any way with the business
of the Company.  For the purposes of this
Agreement, “compete directly or indirectly in any way with the business of the
Company” means to enter into or attempt to enter into (on Employee’s own behalf
or on behalf of any other person or entity) any business relationship of the
same type or kind as the business relationship which exists between the Company
and its clients or customers to provide services related to the business of the
Company for any individual, partnership, corporation, association or other entity
who or which was a client or customer for whom the Employee was the producer or
on whose account Employee worked or became familiar during 24 months prior to
the end of employment.


 


(iii)    Covenant Not to Hire. The Employee hereby also agrees not to
induce or attempt to induce, or to cause any person or other entity to induce
or attempt to induce, any person who is an employee of the Company to leave the
employ of the Company during the term of the covenant set forth in (ii) above.


 


(iv)       Acknowledgments.  The
Company and the Employee acknowledge and agree that the covenants contained in
(ii) and (iii) are reasonably necessary for the protection of the Company and
are reasonably limited with respect to the activities they prohibit, their
duration, their geographical scope and their effect on the Employee and the
public. The parties acknowledge that the purpose and effect of the covenants
simply are to protect the Company for a limited period of time from unfair
competition by the Employee.


 


Nothing in this Agreement shall prohibit the Employee
from obtaining a livelihood. The intent of the parties is that the restrictive
covenant of non-solicitation by the Employee is limited to those clients and
customers of the Company, as reflected by the books of the Company, during the
24 months prior to the end of Employee’s employment with the Company.


 


b)              Company’s Right to Injunctive
Relief; Attorneys’ Fees.  The Employee acknowledges that
the Employee’s services to the Company are of a unique character which gives
them a special value to the Company, the loss of which cannot reasonably or
adequately be compensated in damages in an action at


 





















 


law, and that a breach of this Agreement will result in irreparable and
continuing harm to the Company, and that therefore, in addition to any other
remedy which the Company may have at law or in equity, the Company shall be
entitled to injunctive relief for a breach of this Agreement by Employee.   In the event that the Company brings an action
to enforce the terms and conditions of this Agreement, Employee shall pay the
costs and expenses incurred by the Company in bringing such action, including
legal fees.


 


c)              Trade Secrets and Confidential
Information.
Employee acknowledges that the Company’s business depends to a significant
degree upon the possession of information which is not generally known to
others, and that the profitability of such business requires that this
information remain proprietary to the Company. 
The Employee shall not, except as required in the course of employment
by the Company, disclose or use during or subsequent to the course of
employment, any trade secrets or confidential or proprietary information
relating to the business of the Company of which the Employee becomes aware by
reason of being employed or to which Employee gains access during his
employment by the Company and which has not been publicly disclosed (other than
by Employee in breach of this provision).


 


Such information
includes client and customer lists, data, records, computer programs, manuals,
processes, methods and intangible rights which are either developed by the
Employee during the course of employment or to which the Employee has
access.  All records and equipment and
other materials relating in any way to any confidential information relating to
clients or business of the Company shall be and remain the sole property of the
Company during and after the end of employment.


 


9.                                      Other Provisions


a)              Prior
Employment Agreement Shall Not Control. Employee’s acceptance of this
Agreement shall signify Employee’s acceptance that the terms and conditions of
this grant shall supercede provisions of any prior agreement that could be
construed as governing the terms of this grant.


 


b)              Restriction
on Transfer.  Unless the RSU’s are
vested as provided above, they may not
be sold, transferred, pledged, assigned, or otherwise alienated at any time.


 


c)              Right
of Employment.  Grants of RSU’s under
this Agreement do not confer upon Employee any right to continue in the employ
of theCompany.


 


d)              Beneficiary.  An Employee’s “beneficiary” means the
person(s) or entity designated by the Employee in the most recent written
beneficiary designation form filed with the Company to receive the benefits
specified under the RSUs awarded under this Agreement upon the death of the
Employee, or, if there is no designated beneficiary or surviving designated
beneficiary, then the estate of the Employee.


 


e)              Data
Privacy.  Employee understands and
authorizes that Employee’s personal data (i.e. identification data, including
name, address, telephone; financial data, including account numbers, wages;
personal data, including age, gender, date of birth; education related data,
including academic curriculum, professional experience; profession related
data, including title and description of functions with the Company) will be
shared with third party vendors hired by the Company to assist in administering
the RSUs granted under this Agreement. 
Employee also authorizes the Company to receive, possess, use, retain,
and transfer the data, in electronic form or other, and to further transfer
data to third party vendors for purposes of assisting in the administration of
the RSUs granted under this Agreement.


 


f)                Need
to Accept Grant.  Employee
acknowledges that this grant must be accepted within ninety (90) days of the
Grant Date in order to be eligible to receive any benefits from this grant. If
this grant is not accepted within ninety days, the grant will be cancelled and
all benefits under this grant will be forfeited. To accept this grant, the
Employee must sign the agreement and return it to Aon’s Executive Compensation
Department within ninety (90) days.


 





















 


g)             Computation
of Severance / Retirement Benefits.   Benefits and rights acquired under the Plan do
not constitute “base salary” or other regular employment earnings.  Accordingly, Employee understands and accepts
that benefits provided under the Plan will not be considered in calculating any
of the Company’s and its subsidiaries’ obligations to Employee for bonus,
retirement, severance, termination, health and welfare, or any other such
payments, unless otherwise specified in the applicable plan.


 


h)             Waiver.  Waiver of any term or condition of this
Agreement by any party shall not be construed as a waiver of a subsequent
breach or failure of the same term or condition, or a waiver of any other term
or condition of this Agreement.  Any
waiver must be in writing.


 


i)                Severability.  To the extent that the terms set forth in
this Agreement or any word, phrase, clause or sentence is found to be illegal
or unenforceable for any reason, such word, phrase, clause or sentence shall be
modified or deleted in such manner so as to afford the Company the fullest
protection commensurate with making this Agreement, as modified, legal and enforceable
under applicable laws, and the balance of this Agreement shall not be affected
thereby, the balance being construed as severable and independent.


 


j)                Governing
Law. The validity, interpretation, instruction,
performance, enforcement and remedies of or relating to this Agreement, and the
rights and obligations of the parties hereunder, shall be governed by and
construed in accordance with the substantive laws of the State of Illinois,
without regard to the conflict of law principles, rules or statutes of any
jurisdiction.


 


k)            Notice.  All notices given hereunder shall be in
writing and, if intended for the Company, shall be addressed to it or delivered
to it at its principal office to the attention of Executive Compensation
Department. If intended for the Employee, notices shall be delivered personally
or shall be addressed (if sent by mail) to the Employee’s then current
residence address as shown on the Company’s records, or to such other address
as the Employee directs in a notice to the Company.  All notices shall be deemed to be given on
the date received at the address of the addressee or, if delivered personally,
on the date delivered.


 


 


IN WITNESS WHEREOF, the
parties have accepted this Agreement as of the date hereof.


 


 


	
  AON
  CORPORATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  

  	
   

  
	
  Patrick G. Ryan, Chairman and Chief
  Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  RSU Recipient
  (Employee)

  	
  Date

  
			



 





















 


EXHIBIT B


 


	
  Notice of Grant

  of Stock Options

  	
   

  	
  

  



 


 


Notice is
hereby given of the following option grant (the “Option”) to purchase shares of
Aon Corporation common stock, under the 2001 Aon Stock Incentive Plan.


 


Employee:   Gregory C. Case


Employee Address:


 


Grant Date:  April 4, 2005


Grant Number:


Number of Shares:  675,000


Exercise Price:


Type of Option:  NQ


Expiration Date:  April 3, 2015


 


 


The Option will vest
according to the schedule below:


 


	
  Shares

  	
   

  	
  Vest Date

  
	
  225,000

  	
   

  	
  April 3, 2007

  
	
  225,000

  	
   

  	
  April 3, 2008

  
	
  225,000

  	
   

  	
  April 3, 2009

  



 


 


Other pertinent details
related to this grant are contained in the 2001 Aon Stock Incentive Plan Stock
Option Agreement and the 2001 Aon Stock Incentive Plan prospectus.


 





















 


IMPORTANT NOTICE


 


This grant must be accepted within ninety (90) days of the grant date
in order to be eligible to receive any benefits from this grant. Refer to
Section 11 Other Provisions, Item g. “Need to Accept Grant” for more
information. Additionally, if this is your first grant of Options from Aon,
please make sure to submit a “Stock Option Beneficiary” form now. The form can
be found under the OptionsLink “Company Information” tab. The same form is also
used to change your beneficiary.


 


AON CORPORATION

2001 AON STOCK INCENTIVE PLAN

STOCK OPTION AGREEMENT


 


This Stock Option Award Agreement 
(the “Agreement”) is entered into between Aon Corporation, a Delaware
corporation (the “Company”) and the employee (the “Employee”) as listed on the
“Notice of Grant of Stock Options”(the “Notice”).


 


The Company desires, by affording the Employee an opportunity to
purchase shares of Aon’s common stock (the “Common Stock”) as hereinafter
provided, to encourage the Employee to remain in the employ of the Company or
its subsidiaries, to provide the Employee with an incentive to contribute to
the financial progress of the Company, and to encourage ownership of the
Company’s stock by the Employee.


 


NOW,
THEREFORE, in consideration of the mutual promises hereinafter set forth, the
parties hereto agree as follows:


 


1.              Grant
of Option and Option Price.  The
Company grants to the Employee under the 2001 Aon Stock Incentive Plan (the “Plan”)
the right and option (“Option”) to purchase all or part of the number of shares
of the Common Stock of the Company and at the Option price per share specified
in the “Notice of Grant of Stock Options” (the “Notice”).


 


2.              Notice
of Grant of Stock Options.  The
Notice shall specify the date of grant (the “Grant Date”), the Option price
(the “Exercise Price”), the number of shares granted to the Employee, the
expiration date of the Option, the vesting schedule of the Option, and the type
of Option, specifying whether the grant is for non-qualified stock options (“NQ”)
or incentive stock options (“ISO”). The ISO only applies to Employees in the
United States and is intended to qualify as an incentive stock option within
the meaning of Section 422 of the United States Internal Revenue Code of 1986,
as amended. The Notice is incorporated herein by reference and the terms of
this Agreement are incorporated by reference in the Notice.


 


3.              Timing
of Exercise. Any portion of the Option may be exercised at any time after
such options have become vested as long as the Employee remains employed, and
for periods thereafter as indicated in Section 6 of this Agreement, but no
later than 10 years after the Grant Date.


 


4.              Payment
of Exercise Price. The Employee shall at the time of exercise of an Option
(except in the case of a cashless exercise) tender the full Exercise
Price.  At the discretion of the
Committee, and subject to such rules and regulations as it may adopt, the
Exercise Price may be paid: (i) in full in cash through means provided by the
Company;  (ii) by delivering irrevocable
instructions to a broker to promptly deliver to the Company the amount of sale
or loan proceeds to pay the Exercise Price; (iii) by attesting to the ownership
of sufficient shares of Common Stock which have been held by the Employee for
at least six months to pay the Exercise Price; or (iv) through a cashless
exercise with a broker approved for this purpose by the Company.


 





















 


5.              Tax
Deposit.  Upon exercising all or any
part of an Option, the Employee shall deposit with the Company, through means
provided for by the Company, an amount of cash equal to the amount determined
by the Company to be withheld upon the exercise of the Option for any
withholding taxes, social security / social insurance contributions, or the
like under any government statute. The Committee may, at its sole discretion,
and subject to such rules as it may adopt, permit the Employee to satisfy this
withholding obligation, in whole or in part, by electing to sell shares of
Common Stock having a fair market value on the date that the amount of tax to
be withheld is determined equal to the applicable required minimum
withholding.  The Company shall not issue
and deliver any of its Common Stock upon the exercise of any Option until and
unless the Employee has made the deposit required herein or proper provision
for withholding has been made.


 


6.              Effect
of Termination of Employment.


a)              Voluntary
termination prior to age 55. The vested portion of the Option may be
exercised no later than the 90-day period following termination of employment
and the unvested portion will be forfeited.


b)              Voluntary
termination on or after age 55. The Option shall be immediately vested pro
rata, and may be exercised no later than three years from the date of
termination (not to exceed the expiration date of the Option). The remaining
unvested portion of the Option shall be forfeited. Pro rata vesting is based on
the period of employment since the Grant Date.


c)              Termination
due to disability or death.   The Option shall continue to vest
as if the Employee remained employed and may be exercised no later than the
later of one year after the Option becomes 100% vested or one year from the
date of termination, (not to exceed the expiration date of the Option).


d)              Involuntary
termination (other than for cause) or termination for good reason.  The Option shall continue to vest as if
the Employee remained employed and may be exercised no later than the the
90-day period following the later of the date the Option becomes 100% vested or
the date of termination, (not to exceed the expiration date of the
Option).  Termination for good reason
shall mean termination pursuant to the provisions of Section 4(f) of the
Employee’s Employment Agreement with the Company dated as of April 4, 2005 (the
“Employment Agreement”).


e)              Termination
for cause. The Option will not be exercisable. Termination for cause shall
mean termination pursuant to the provisions of Section 4(c) of the Employment
Agreement.


 


7.              Receipt
by the Employee of the Prospectus. 
The Employee acknowledges receipt of the Plan prospectus that contains
the entire Plan, and is incorporated herein by reference.  The Employee represents and warrants that
Employee has read the Plan and agrees that all Options awarded under it shall
be subject to all of the terms and conditions of the Plan.


 


8.              Expiration
Date of Option.  An Option awarded
under the Plan shall expire ten (10) years from the Grant Date, subject to the
terms and conditions set forth in the Plan and this Agreement.


 


9.              Issuance
of Shares.  The Employee shall have
no interest in the shares covered by the Option grant contained in this
Agreement unless and until shares are issued following the exercise of an
Option.


 


10.       Additional
Covenants


a)              Non-Solicitation
Covenant


 


(i)            Business Considerations. The Company is in the business of
providing insurance brokerage, reinsurance brokerage, benefits consulting,
compensation consulting, human resources consulting, managing underwriting and
related insurance services including accounting, claims management and
handling, contract wording, information systems and


 





















 


actuarial
services. An essential element of its business is the development and
maintenance of personal contacts and relationships with clients.  Because of these contacts and relationships,
it is common for the Company’s clients to develop identification with the
employee who services its insurance needs, rather than with the Company itself.
The personal identification of clients of the Company with a Company employee
creates the potential for the Employee’s appropriation of the benefits of the
relationships developed with clients on behalf of and at the expense of the
Company.  Since the Company would suffer
irreparable harm if Employee left its employ and solicited the insurance or
other related business of clients of the Company, it is reasonable to protect
the Company against solicitation activities by Employee for a limited period of
time after Employee leaves the Company so that the Company may renew or restore
its business relationship with its client.


 


(ii)        Covenant Not to Solicit. 
Employee hereby covenants and agrees that, except with the prior written
consent of the Company, Employee will not for a period of two years after the
end of employment compete directly or indirectly in any way with the business
of the Company.  For the purposes of this
Agreement, “compete directly or indirectly in any way with the business of the
Company” means to enter into or attempt to enter into (on Employee’s own behalf
or on behalf of any other person or entity) any business relationship of the
same type or kind as the business relationship which exists between the Company
and its clients or customers to provide services related to the business of the
Company for any individual, partnership, corporation, association or other
entity who or which was a client or customer for whom the Employee was the
producer or on whose account Employee worked or became familiar during 24
months prior to the end of employment.


 


(iii)    Covenant Not to Hire. The Employee hereby also agrees not to
induce or attempt to induce, or to cause any person or other entity to induce
or attempt to induce, any person who is an employee of the Company to leave the
employ of the Company during the term of the covenant set forth in (ii) above.


 


(iv)       Acknowledgments. 
The Company and the Employee acknowledge and agree that the covenants
contained in (ii) and (iii) are reasonably necessary for the protection of the
Company and are reasonably limited with respect to the activities they prohibit,
their duration, their geographical scope and their effect on the Employee and
the public. The parties acknowledge that the purpose and effect of the
covenants simply are to protect the Company for a limited period of time from
unfair competition by the Employee.


 


Nothing in this Agreement shall prohibit the Employee
from obtaining a livelihood. The intent of the parties is that the restrictive
covenant of non-solicitation by the Employee is limited to those clients and
customers of the Company, as reflected by the books of the Company, during the
24 months prior to the end of Employee’s employment with the Company.


 


b)              Company’s Right to Injunctive
Relief; Attorneys’ Fees.  The Employee acknowledges that
the Employee’s services to the Company are of a unique character which gives
them a special value to the Company, the loss of which cannot reasonably or
adequately be compensated in damages in an action at law, and that a breach of
this Agreement will result in irreparable and continuing harm to the Company,
and that therefore, in addition to any other remedy which the Company may have
at law or in equity, the Company shall be entitled to injunctive relief for a
breach of this Agreement by Employee.  
In the event that the Company brings an action to enforce the terms and
conditions of this Agreement, Employee shall pay the costs and expenses
incurred by the Company in bringing such action, including legal fees.


 


c)              Trade Secrets and Confidential
Information.
Employee acknowledges that the Company’s


 





















 


business depends to a significant degree upon the possession of
information which is not generally known to others, and that the profitability
of such business requires that this information remain proprietary to the
Company.  The Employee shall not, except
as required in the course of employment by the Company, disclose or use during
or subsequent to the course of employment, any trade secrets or confidential or
proprietary information relating to the business of the Company of which the
Employee becomes aware by reason of being employed or to which Employee gains
access during his employment by the Company and which has not been publicly
disclosed (other than by Employee in breach of this provision).


 


Such information
includes client and customer lists, data, records, computer programs, manuals,
processes, methods and intangible rights which are either developed by the
Employee during the course of employment or to which the Employee has
access.  All records and equipment and
other materials relating in any way to any confidential information relating to
clients or business of the Company shall be and remain the sole property of the
Company during and after the end of employment.


 


11.       Other
Provisions


 


a)              Plan
Terms. Options are granted pursuant to the Plan, the terms and condition of
which are incorporated into this Agreement by reference.


 


b)              Prior
Employment Agreement Shall Not Control. 
Employee’s acceptance of this Agreement shall signify Employee’s
acceptance that the terms and conditions of this grant shall supercede
provisions of any prior agreement that could be construed as governing the
terms of this grant


 


c)              Nontransferability.  Except as described below, ISOs and NQs
are not transferable by the Employee other than by will, the laws of descent
and distribution, or pursuant to a beneficiary designation. Except as described
below, any ISO or NQ is exercisable, during the Employee’s lifetime, only by
the Employee or Employee’s legal representative.  The ISOs and NQs may not be pledged,
mortgaged, hypothecated or otherwise encumbered, or subject to the claims of
creditors, or assigned pursuant to any domestic relations order. The Employee
may transfer all or a portion of a NQ for no consideration to or for the
benefit of the Employee’s immediate family (spouse, parents, children,
stepchildren, adopted children, siblings and grandchildren).  Such transfer may be directly to immediate
family members, to a partnership, limited liability company or trust for the
benefit of one or more immediate family members, or any other transfer deemed
to be consistent with such a transfer.


 


d)              Right
of Employment.  Grants of Stock
Options under the Plan and of this Agreement do not confer upon Employee any
right to continue in the employ of the Employer.


 


e)              Beneficiary.  An Employee’s “beneficiary” means the
person(s) or entity as designated by Employee in the most recent written
beneficiary designation form filed with the Company to receive the benefits
specified under the Plan upon the death of the Employee, or, if there is no
designated beneficiary or surviving designated beneficiary, then the estate of
the Employee.


 


f)                Data
Privacy. Employee understands and authorizes Employer to share Employee’s
personal data with the Company, the U.S. parent company. Employee also understands
and authorizes that this data, as listed below, will be shared with third party
vendors hired by the Company to assist in administering the Plan.  Employee consents to the Employee’s Employer
sharing of personal data (i.e. identification data, including name, address,
telephone; financial data, including account numbers, wages; personal data,
including age, gender, date of birth; education related data, including
academic curriculum, professional experience; profession related data,
including title and description of functions with the Company).  Employee also authorizes Employer and the
Company to receive, possess, use, retain, and transfer the data, in


 





















 


electronic
form or other, and to further transfer data to third party vendors for purposes
of assisting in the administration and managing Employee’s participation in the
Plan.


 


g)             Need to
Accept Grant.  Employee acknowledges
that this grant must be accepted within ninety (90) days of the Grant Date in
order to be eligible to receive any benefits from this grant. If this grant is
not accepted within the ninety (90) days, the grant will be cancelled and all
benefits under this grant will be forfeited. To accept this grant, Employee
must sign the agreement and return it to Aon’s Executive Compensation
Department within ninety (90) days.


 


h)             Computation
of Severance / Retirement Benefits.   Benefits and rights acquired under the Plan do
not constitute “base salary” or other regular employment earnings.  Accordingly, Employee understands and accepts
that benefits provided under the Plan will not be considered in calculating any
of the Company’s and its subsidiaries’ obligations to Employee for bonus,
retirement, severance, termination, health and welfare, or any other such
payments, unless otherwise specified in the applicable plan.


 


i)                Plan
Changes / Acquired Rights.  Employee
understands and agrees that the Company may terminate, change or otherwise
alter the terms and conditions of the Plan at any time, and that any such
termination, change or alteration will not amount to a breach or breaches,
fundamental or otherwise, of Employee’s terms and conditions of employment. The scope of any change in terms is unforeseen; however,
potential changes to the Plan may include, but are not limited to, 1) alteration
of the discount at which employees are allowed to acquire Company shares, 2)
modification of the vesting and/or offering periods, 3) adjustment of the award
amounts, and 4) cancellation of the Plan. 
Employee hereby elects to participate in the Plan with full knowledge
that benefits under the Plan can be terminated or otherwise modified by the
Company at its sole discretion at any time.


 


j)                Waiver.  Waiver of any term or condition of this
Agreement by any party shall not be construed as a waiver of a subsequent
breach or failure of the same term or condition, or a waiver of any other term
or condition of this Agreement.  Any
waiver must be in writing.


 


k)            Severability.  To the extent that the terms set forth in
this Agreement or any word, phrase, clause or sentence is found to be illegal
or unenforceable for any reason, such word, phrase, clause or sentence shall be
modified or deleted in such manner so as to afford the Company the fullest
protection commensurate with making this Agreement, as modified, legal and
enforceable under applicable laws, and the balance of this Agreement shall not
be affected thereby, the balance being construed as severable and independent.


 


l)                Governing
Law. The validity, interpretation, instruction,
performance, enforcement and remedies of or relating to this Agreement, and the
rights and obligations of the parties hereunder, shall be governed by and
construed in accordance with the substantive laws of the State of Illinois,
without regard to the conflict of law principles, rules or statutes of any
jurisdiction. For Employees outside of the United
States, this Agreement shall be governed by the applicable regulations or
international treaty.


 


m)          Notice.  All notices given hereunder shall be in
writing and, if intended for the Company, shall be addressed to it or delivered
to it at its principal office to the attention of Executive Compensation
Department. If intended for the Employee, notices shall be delivered personally
or shall be addressed (if sent by mail) to the Employee’s then current
residence address as shown on the Company’s records, or to such other address
as the Employee directs in a notice to the Company.  All notices shall be deemed to be given on
the date received at the address of the addressee or, if delivered personally,
on the date delivered.


 





















 


IN WITNESS WHEREOF, the
parties have signed this Agreement as of the date hereof.


 


	
  AON
  CORPORATION

  	
   

  
	
   

  	
   

  
	
  

  	
   

  
	
  Patrick G. Ryan, Chairman and Chief
  Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Option Recipient
  (Employee)

  	
  Date

  
				



 





















 


EXHIBIT C


 


	
  Notice
  of Grant

  of Stock Options

  	
  

  



 


Notice
is hereby given of the following option grant (the “Option”) to purchase shares
of Aon Corporation common stock.


 


Employee:  Gregory
C. Case


Employee Address:


 


 


Grant Date:  April
4, 2005


Grant Number:


Number of Shares:  325,000


Exercise Price:


Type of Option:  NQ


Expiration Date:  April
3, 2015


 


The Option will vest according to the schedule below:


 


	
  Shares

  	
   

  	
  Vest Date

  
	
  108,334

  	
   

  	
  April 3, 2007

  
	
  108,333

  	
   

  	
  April 3, 2008

  
	
  108,333

  	
   

  	
  April 3, 2009

  



 


 


Other pertinent details related to this grant are contained in the
Inducement Stock Option Agreement attached hereto.


 





















 


INDUCEMENT STOCK OPTION AGREEMENT


 


This Inducement Stock Option Agreement  (the “Agreement”) is entered into
between Aon Corporation, a Delaware corporation (the “Company”) and the
employee (the “Employee”) as listed on the “Notice of Grant of Stock Options”(the
“Notice”).


 


The Company desires, by
affording the Employee an opportunity to purchase shares of Aon’s common stock
(the “Common Stock”) as hereinafter provided, to encourage the Employee to
remain in the employ of the Company or its subsidiaries, to provide the
Employee with an incentive to contribute to the financial progress of the
Company, and to encourage ownership of the Company’s stock by the Employee.


 


NOW,
THEREFORE, in consideration of the mutual promises hereinafter set forth, the
parties hereto agree as follows:


 


1.              Grant
of Option and Option Price.  The
Company grants to the Employee the right and option (“Option”) to purchase all
or part of the number of shares of the Common Stock of the Company and at the
Option price per share specified in the “Notice of Grant of Stock Options” (the
“Notice”).


 


2.              Notice
of Grant of Stock Options.  The
Notice shall specify the date of grant (the “Grant Date”), the Option price
(the “Exercise Price”), the number of shares granted to the Employee, the
expiration date of the Option, the vesting schedule of the Option, and that the
grant is for non-qualified stock options (“NQ”). The Notice is incorporated
herein by reference and the terms of this Agreement are incorporated by
reference in the Notice.


 


3.              Timing
of Exercise. Any portion of the Option may be exercised at any time after
such options have become vested as long as the Employee remains employed, and
for periods thereafter as indicated in Section 6 of this Agreement, but no
later than 10 years after the Grant Date.


 


4.              Payment
of Exercise Price. The Employee shall at the time of exercise of an Option
(except in the case of a cashless exercise) tender the full Exercise
Price.  At the discretion of the
Committee (as defined in the 2001 Aon Stock Incentive Plan (the “Plan”), and
subject to such rules and regulations as it may adopt, the Exercise Price may
be paid: (i) in full in cash through means provided by the Company;  (ii) by delivering irrevocable instructions
to a broker to promptly deliver to the Company the amount of sale or loan
proceeds to pay the Exercise Price; (iii) by attesting to the ownership of
sufficient shares of Common Stock which have been held by the Employee for at
least six months to pay the Exercise Price; or (iv) through a cashless exercise
with a broker approved for this purpose by the Company.


 


5.              Tax
Deposit.  Upon exercising all or any
part of an Option, the Employee shall deposit with the Company, through means
provided for by the Company, an amount of cash equal to the amount determined
by the Company to be withheld upon the exercise of the Option for any
withholding taxes, social security / social insurance contributions, or the
like under any government statute. The Committee may, at its sole discretion,
and subject to such rules as it may adopt, permit the Employee to satisfy this
withholding obligation, in whole or in part, by electing to sell shares of
Common Stock having a fair market value on the date that the amount of tax to
be withheld is determined equal to the applicable required minimum
withholding.  The Company shall not issue
and deliver any of its Common Stock upon the exercise of any Option until and
unless the Employee has made the deposit required herein or proper provision
for withholding has been made.


 





















 


6.              Effect
of Termination of Employment.


a)              Voluntary
termination prior to age 55.  The
vested portion of the Option may be exercised no later than the 90-day period
following termination of employment and the unvested portion will be forfeited.


b)              Voluntary
termination on or after age 55.  The
Option shall be immediately vested pro rata, and may be exercised no later than
three years from the date of termination (not to exceed the expiration date of
the Option). The remaining unvested portion of the Option shall be forfeited.
Pro rata vesting is based on the period of employment since the Grant Date.


c)              Termination
due to disability or death.  The
Option shall continue to vest as if the Employee remained employed and may be
exercised no later than the later of one year after the Option becomes 100%
vested or one year from the date of termination, (not to exceed the expiration
date of the Option).


d)              Involuntary
termination (other than for cause) or termination for good reason.  The Option shall continue to vest as if the
Employee remained employed and may be exercised no later than the the 90-day
period following the later of the date the Option becomes 100% vested or the
date of termination, (not to exceed the expiration date of the Option).  Termination for good reason shall mean
termination pursuant to the provisions of Section 4(f) of the Employee’s
Employment Agreement with the Company dated as of April 4, 2005 (the “Employment
Agreement”).


e)              Termination
for cause.  The Option will not be
exercisable. Termination for cause shall mean termination pursuant to the
provisions of Section 4(c) of the Employment Agreement.


 


7.              Receipt
by the Employee of the Prospectus. 
The Employee acknowledges receipt of the Plan prospectus that contains
the entire Plan, and is incorporated herein by reference.  The Employee represents and warrants that
Employee has read the Plan and agrees that all Options awarded under this
Agreement shall, to the extent not inconsistent with this Agreement, be subject
to terms and conditions which are the same as the terms and conditions of the
Plan.


 


8.              Expiration
Date of Option.  An Option awarded
under this Agreement shall expire ten (10) years from the Grant Date, subject
to terms and conditions which are the same as the terms and conditions set
forth in the Plan and to this Agreement.


 


9.              Issuance
of Shares.  The Employee shall have
no interest in the shares covered by the Option grant contained in this
Agreement unless and until shares are issued following the exercise of an
Option.


 


10.       Additional
Covenants


a)              Non-Solicitation
Covenant


 


(i)            Business Considerations. The Company is in the business of
providing insurance brokerage, reinsurance brokerage, benefits consulting,
compensation consulting, human resources consulting, managing underwriting and
related insurance services including accounting, claims management and
handling, contract wording, information systems and actuarial services. An
essential element of its business is the development and maintenance of
personal contacts and relationships with clients.  Because of these contacts and relationships,
it is common for the Company’s clients to develop identification with the
employee who services its insurance needs, rather than with the Company itself.
The personal identification of clients of the Company with a Company employee
creates the potential for the Employee’s appropriation of the benefits of the
relationships developed with clients on behalf of and at the expense of the
Company.  Since the Company would suffer
irreparable harm if Employee left its employ and solicited the insurance or
other related business of clients of the Company, it is reasonable to protect
the Company against solicitation activities by Employee for a limited period of
time after Employee leaves the


 





















 


Company
so that the Company may renew or restore its business relationship with its
client.


 


(ii)        Covenant Not to Solicit. 
Employee hereby covenants and agrees that, except with the prior written
consent of the Company, Employee will not for a period of two years after the
end of employment compete directly or indirectly in any way with the business
of the Company.  For the purposes of this
Agreement, “compete directly or indirectly in any way with the business of the
Company” means to enter into or attempt to enter into (on Employee’s own behalf
or on behalf of any other person or entity) any business relationship of the
same type or kind as the business relationship which exists between the Company
and its clients or customers to provide services related to the business of the
Company for any individual, partnership, corporation, association or other
entity who or which was a client or customer for whom the Employee was the
producer or on whose account Employee worked or became familiar during 24
months prior to the end of employment.


 


(iii)    Covenant Not to Hire. The Employee hereby also agrees not to
induce or attempt to induce, or to cause any person or other entity to induce
or attempt to induce, any person who is an employee of the Company to leave the
employ of the Company during the term of the covenant set forth in (ii) above.


 


(iv)       Acknowledgments. 
The Company and the Employee acknowledge and agree that the covenants
contained in (ii) and (iii) are reasonably necessary for the protection of the
Company and are reasonably limited with respect to the activities they
prohibit, their duration, their geographical scope and their effect on the Employee
and the public. The parties acknowledge that the purpose and effect of the
covenants simply are to protect the Company for a limited period of time from
unfair competition by the Employee.


 


Nothing in this Agreement
shall prohibit the Employee from obtaining a livelihood. The intent of the
parties is that the restrictive covenant of non-solicitation by the Employee is
limited to those clients and customers of the Company, as reflected by the
books of the Company, during the 24 months prior to the end of Employee’s
employment with the Company.


 


b)              Company’s Right to Injunctive
Relief; Attorneys’ Fees.  The Employee acknowledges that
the Employee’s services to the Company are of a unique character which gives
them a special value to the Company, the loss of which cannot reasonably or
adequately be compensated in damages in an action at law, and that a breach of
this Agreement will result in irreparable and continuing harm to the Company,
and that therefore, in addition to any other remedy which the Company may have
at law or in equity, the Company shall be entitled to injunctive relief for a
breach of this Agreement by Employee.  
In the event that the Company brings an action to enforce the terms and
conditions of this Agreement, Employee shall pay the costs and expenses
incurred by the Company in bringing such action, including legal fees.


 


c)              Trade Secrets and Confidential
Information.
Employee acknowledges that the Company’s business depends to a significant
degree upon the possession of information which is not generally known to
others, and that the profitability of such business requires that this
information remain proprietary to the Company. 
The Employee shall not, except as required in the course of employment
by the Company, disclose or use during or subsequent to the course of
employment, any trade secrets or confidential or proprietary information
relating to the business of the Company of which the Employee becomes aware by
reason of being employed or to which Employee gains access during his employment
by the Company and which has not been publicly disclosed (other than by
Employee in breach of this provision).


 





















 


Such information includes client and customer
lists, data, records, computer programs, manuals, processes, methods and
intangible rights which are either developed by the Employee during the course
of employment or to which the Employee has access.  All records and equipment and other materials
relating in any way to any confidential information relating to clients or
business of the Company shall be and remain the sole property of the Company
during and after the end of employment.


 


11.       Other
Provisions


 


a)              Prior
Employment Agreement Shall Not Control. 
Employee’s acceptance of this Agreement shall signify Employee’s
acceptance that the terms and conditions of this grant shall supercede
provisions of any prior agreement that could be construed as governing the
terms of this grant


 


b)              Nontransferability.  Except as described below,  all Options awarded under this Agreement are
not transferable by the Employee other than by will, the laws of descent and
distribution, or pursuant to a beneficiary designation. Except as described
below, any Option awarded under this Agreement is exercisable, during the
Employee’s lifetime, only by the Employee or Employee’s legal
representative.  The Options may not be
pledged, mortgaged, hypothecated or otherwise encumbered, or subject to the
claims of creditors, or assigned pursuant to any domestic relations order. The
Employee may transfer all or a portion of an Option for no consideration to or
for the benefit of the Employee’s immediate family (spouse, parents, children,
stepchildren, adopted children, siblings and grandchildren).  Such transfer may be directly to immediate
family members, to a partnership, limited liability company or trust for the
benefit of one or more immediate family members, or any other transfer deemed
to be consistent with such a transfer.


 


c)              Right of Employment.  Grants of Stock Options under this Agreement
do not confer upon Employee any right to continue in the employ of the Company.


 


d)              Beneficiary.  An Employee’s “beneficiary” means the
person(s) or entity as designated by Employee in the most recent written
beneficiary designation form filed with the Company to receive the benefits
specified under the Options awarded under this Agreement upon the death of the
Employee, or, if there is no designated beneficiary or surviving designated
beneficiary, then the estate of the Employee.


 


e)              Data
Privacy. Employee also understands and authorizes that Employee’s personal
data (i.e. identification data, including name, address, telephone; financial
data, including account numbers, wages; personal data, including age, gender,
date of birth; education related data, including academic curriculum,
professional experience; profession related data, including title and
description of functions with the Company) will be shared with third party
vendors hired by the Company to assist in administering the Options awarded
under this Agreement.  Employee also
authorizes the Company to receive, possess, use, retain, and transfer the data,
in electronic form or other, and to further transfer data to third party
vendors for purposes of assisting in the administration Options awarded under
this Agreement.


 


f)                Need
to Accept Grant.  Employee
acknowledges that this grant must be accepted within ninety (90) days of the
Grant Date in order to be eligible to receive any benefits from this grant. If
this grant is not accepted within the ninety (90) days, the grant will be
cancelled and all benefits under this grant will be forfeited. To accept this
grant, Employee must sign the agreement and return it to Aon’s Executive
Compensation Department within ninety (90) days.


 


g)             Computation
of Severance / Retirement Benefits.   Benefits and rights acquired under the Plan do
not constitute “base salary” or other regular employment earnings.  Accordingly,


 





















 


Employee understands and accepts that
benefits provided under the Plan will not be considered in calculating any of the
Company’s and its subsidiaries’ obligations to Employee for bonus, retirement,
severance, termination, health and welfare, or any other such payments, unless
otherwise specified in the applicable plan.


 


h)             Waiver.  Waiver of any term or condition of this
Agreement by any party shall not be construed as a waiver of a subsequent
breach or failure of the same term or condition, or a waiver of any other term
or condition of this Agreement.  Any
waiver must be in writing.


 


i)                Severability.  To the extent that the terms set forth in
this Agreement or any word, phrase, clause or sentence is found to be illegal
or unenforceable for any reason, such word, phrase, clause or sentence shall be
modified or deleted in such manner so as to afford the Company the fullest
protection commensurate with making this Agreement, as modified, legal and
enforceable under applicable laws, and the balance of this Agreement shall not
be affected thereby, the balance being construed as severable and independent.


 


j)                Governing
Law. The validity, interpretation, instruction,
performance, enforcement and remedies of or relating to this Agreement, and the
rights and obligations of the parties hereunder, shall be governed by and
construed in accordance with the substantive laws of the State of Illinois,
without regard to the conflict of law principles, rules or statutes of any
jurisdiction.


 


k)            Notice.  All notices given hereunder shall be in
writing and, if intended for the Company, shall be addressed to it or delivered
to it at its principal office to the attention of Executive Compensation
Department. If intended for the Employee, notices shall be delivered personally
or shall be addressed (if sent by mail) to the Employee’s then current
residence address as shown on the Company’s records, or to such other address
as the Employee directs in a notice to the Company.  All notices shall be deemed to be given on
the date received at the address of the addressee or, if delivered personally,
on the date delivered.


 


IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date hereof.


 


 


	
  AON CORPORATION

  	
   

  
	
   

  	
   

  
	
  

  	
   

  	
   

  
	
  Patrick G. Ryan, Chairman and Chief
  Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Option Recipient  (Employee)

  	
  Date

  
					



 





















 


EXHIBIT D


 


SEVERANCE AGREEMENT


 


This Agreement is entered into as of April 4, 2005
between Aon Corporation, a Delaware corporation, and Gregory C. Case (the “Executive”).


 


WHEREAS, the Executive currently serves as a key
employee of the Company (as defined in Section 1) and the Executive’s services
and knowledge are valuable to the Company in connection with the management of
one or more of the Company’s principal operating facilities, divisions,
departments or subsidiaries; and


 


WHEREAS, the Board (as defined in Section 1) has
determined that it is in the best interests of the Company and its stockholders
to secure the Executive’s continued services and to ensure the Executive’s
continued dedication and objectivity in the event of any threat or occurrence
of, or negotiation or other action that could lead to, or create the possibility
of, a Change in Control (as defined in Section 1) of the Company, without
concern as to whether the Executive might be hindered or distracted by personal
uncertainties and risks created by any such possible Change in Control, and to
encourage the Executive’s full attention and dedication to the Company, the
Board has authorized the Company to enter into this Agreement.


 


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


 


1.                                       Definitions. 
As used in this Agreement, the following terms shall have the respective
meanings set forth below:


 


(a)                                  “Board”
means the Board of Directors of the Company.


 


(b)                                 “Cause” means:


 


(1)                                  a material breach by the Executive of
those duties and responsibilities of the Executive which do not differ in any
material respect from the duties and responsibilities of the Executive during
the 90-day period immediately prior to a Change in Control (other than as a
result of incapacity due to physical or mental illness) which is demonstrably
willful and deliberate on the Executive’s part, which is committed in bad faith
or without reasonable belief that such breach is in the best interests of the
Company and which is not remedied in a reasonable period of time after receipt
of written notice from the Company specifying such breach;


 


(2)                                  Gross misconduct, theft, fraud, breach of
trust or any act of dishonesty by the Executive which results in material harm
to the Company; or


 


(3)                                  the commission by the Executive of a felony
involving moral turpitude.


 


(c)                                  “Change
in Control” means:


 





















 


(1)                                  the
acquisition by any individual, entity or group (a “Person”), including any “person”
within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of
either (i) the then outstanding shares of common stock of the Company (the “Outstanding
Common Stock”) or (ii) the combined voting power of the then outstanding
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Voting Securities”); excluding, however, the
following: (A) any acquisition directly from the Company (excluding any
acquisition resulting from the exercise of an exercise, conversion or exchange
privilege unless the security being so exercised, converted or exchanged was
acquired directly from the Company), (B) any acquisition by the Company, (C)
any acquisition by an employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (D)
any acquisition by any corporation pursuant to a transaction which complies with
clauses (i), (ii) and (iii) of subsection (3) of this Section 1(c); provided
further, that for purposes of clause (B), if any Person (other than the Company
or any employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company) shall become the
beneficial owner of 30% or more of the Outstanding Common Stock or 30% or more
of the Outstanding Voting Securities by reason of an acquisition by the
Company, and such Person shall, after such acquisition by the Company, become
the beneficial owner of any additional shares of the Outstanding Common Stock
or any additional Outstanding Voting Securities and such beneficial ownership
is publicly announced, such additional beneficial ownership shall constitute a
Change in Control;


 


(2)                                  individuals
who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of such Board; provided that
any individual who becomes a director of the Company subsequent to the date
hereof whose election, or nomination for election by the Company’s
stockholders, was approved by the vote of at least a majority of the directors
then comprising the Incumbent Board shall be deemed a member of the Incumbent
Board; and provided further, that any individual who was initially elected as a
director of the Company as a result of an actual or threatened solicitation by
a Person other than the Board for the purpose of opposing a solicitation by any
other Person with respect to the election or removal of directors, or any other
actual or threatened solicitation of proxies or consents by or on behalf of any
Person other than the Board shall not be deemed a member of the Incumbent
Board;


 


(3)                                  the
consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company (a “Corporate
Transaction”); excluding, however, a Corporate Transaction pursuant to which
(i) all or substantially all of the individuals or entities who are the
beneficial owners, respectively, of the Outstanding Common Stock and the
Outstanding Voting Securities immediately prior to such Corporate Transaction
will beneficially own, directly or indirectly, more than 60%
of, respectively, the outstanding shares of common stock, and the combined
voting power of the outstanding securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting


 


2





















 


from such
Corporate Transaction (including, without limitation, a corporation which as a
result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or indirectly) in substantially the same
proportions relative to each other as their ownership, immediately prior to
such Corporate Transaction, of the Outstanding Common Stock and the Outstanding
Voting Securities, as the case may be, (ii) no Person (other than:  the Company; any employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation
controlled by the Company; the corporation resulting from such Corporate
Transaction; and any Person which beneficially owned, immediately prior to such
Corporate Transaction, directly or indirectly, 30% or more of the Outstanding
Common Stock or the Outstanding Voting Securities, as the case may be) will
beneficially own, directly or indirectly, 30% or more of, respectively, the
outstanding shares of common stock of the corporation resulting from such
Corporate Transaction or the combined voting power of the outstanding
securities of such corporation entitled to vote generally in the election of
directors and (iii) individuals who were members of the Incumbent Board will
constitute at least a majority of the members of the board of directors of the
corporation resulting from such Corporate Transaction; or


 


(4)                                  the consummation of a plan of complete liquidation or
dissolution of the Company.


 


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


 


(e)                                  “Company”
means Aon Corporation, a Delaware corporation.


 


(f)                                    “Good Reason” means, without the
Executive’s express written consent, the occurrence of any of the following
events after a Change in Control:


 


(1)                                  a
material adverse change in the nature or scope of the Executive’s authority,
powers, functions, duties or responsibilities as in effect immediately prior to
such Change in Control;


 


(2)                                  a
material reduction by the Company in the Executive’s rate of annual base salary
or bonus opportunity as in effect immediately prior to such Change in Control
or as the same may be increased from time to time thereafter;


 


(3)                                  the
failure of the Company to continue in effect any material employee benefit plan
or compensation plan in which the Executive is participating immediately prior
to such Change in Control, unless the Executive is permitted to participate in
other plans providing the Executive with substantially comparable benefits, or
the taking of any action by the Company which would adversely affect the
Executive’s participation in or materially reduce the Executive’s benefits
under any such plan;


 


(4)                                  a
change in the Executive’s primary employment location to a location that is
more than 50 miles from the primary location of the Executive’s employment at
the time of such Change in Control; or


 


3





















 


(5)                                  the failure of the Company to obtain from any successor or
transferee of the Company an express written and unconditional assumption of
the Company’s obligations under this Agreement, as further described in Section
12(b) of this Agreement.


 


For purposes of this Agreement, any good faith
determination of Good Reason made by the Executive shall be conclusive; provided,
however, that an isolated, insubstantial and inadvertent action taken in
good faith and which is remedied by the Company promptly after receipt of
notice thereof given by the Executive shall not constitute Good Reason.


 


(g)                                 “Nonqualifying Termination” means a
termination of the Executive’s employment (1) by the Company for Cause, (2) by
the Executive for any reason other than a Good Reason, (3) as a result of the
Executive’s death or (4) by the Company due to the Executive’s absence from the
Executive’s duties with the Company on a full-time basis for at least 180
consecutive days as a result of the Executive’s incapacity due to physical or
mental illness.


 


(h)                                 “Termination Date” means the date during
the Termination Period on which the Executive’s employment is terminated other
than by reason of a Nonqualifying Termination.


 


(i)                                     “Termination Period” means the period of
time beginning with a Change in Control and ending on the earlier to occur of
(1) the date which is two (2) years following such Change in Control and (2)
the Executive’s death; provided, however, that, anything in this Agreement to
the contrary notwithstanding, if a Change in Control occurs and if the
Executive’s employment with the Company was terminated prior to the date on
which the Change in Control occurs, and if it is reasonably demonstrated by the
Executive that such termination of employment (a) was at the request of a third
party who was taking steps reasonably calculated to effect a Change in Control
or (b) otherwise arose in connection with or in anticipation of a Change in
Control, then for purposes of this Agreement, “Termination Period” means the
period of time commencing upon the date immediately prior to the date of such
termination of employment and ending on the earlier to occur of (x) two (2)
years following such Change in Control and (y) the Executive’s death.


 


2.                                       Obligations of the Executive. 
The Executive agrees that in the event any person or group attempts a
Change in Control, he shall not voluntarily leave the employ of the Company
without Good Reason (a) until such attempted Change in Control terminates or
(b) if a Change in Control shall occur, until 90 days following such Change in
Control.


 


3.                                       Payments
and Benefits Upon Termination of Employment.  If during the Termination Period the
employment of the Executive shall terminate, other than by reason of a
Nonqualifying Termination, and the Executive (or the Executive’s executor or
other legal representative in the case of the Executive’s death or disability
following such termination) executes a noncompetition, nonsolicitation and
confidentiality agreement substantially in the form of Exhibit A hereto (the “Noncompetition
Agreement”) within 60 days following the Termination Date, the Company shall
provide to the Executive, as compensation for services rendered to the Company,
and in consideration of the covenants set forth in the Noncompetition


 


4





















 


Agreement, the payments and
benefits described in this Section 3. 
Notwithstanding the foregoing provisions of this Section 3, if as a
result of the Executive’s termination of employment on the Termination Date the
Executive is entitled to severance payments and benefits, which benefits may,
without limitation, include enhanced supplemental pension benefits conferred or
equity awards granted as a result of termination of employment, from the
Company or any of its subsidiaries which are not payable pursuant to this
Agreement, but are payable pursuant to an employment agreement or other
compensation arrangement entered into between the Executive and the Company or
any of its subsidiaries (“Alternative Severance Payments and Benefits”), the
Executive shall have no right to any payments or benefits pursuant to this
Section 3 unless (i) the Executive (or the Executive’s executor or other legal
representative in the case of the Executive’s death or disability following
such termination) executes the Noncompetition Agreement and a release in the
form of Exhibit B hereto (the “Release of Severance Payments and Benefits”)
within 60 days following the Termination Date releasing all rights to the
Alternative Severance Payments and Benefits, other than rights to Alternative
Equity Vesting (as defined in Section 4 hereof), and has not revoked the
Release of Severance Payments and Benefits and (ii) the payments and benefits
to be received by the Executive pursuant to this Section 3 are reduced by the
amount of the Alternative Severance Payments and Benefits, if any, previously
received by the Executive.


 


(a)                                  The
Company shall pay to the Executive (or the Executive’s beneficiary or estate,
as the case may be) within 30 days following the date of execution of the
Noncompetition Agreement and, if applicable, the Release of Severance Payments
and Benefits:


 


(1)                                  a
cash amount (subject to any applicable payroll or other taxes required to be
withheld pursuant to Section 7 and any deductions authorized by the Executive)
equal to the sum of (i) the Executive’s full annual base salary from the
Company and its affiliated companies through the Termination Date, to the
extent not theretofore paid, (ii) the average of the Executive’s annual cash
incentive for each of the three fiscal years immediately preceding the fiscal
year in which the Termination Date occurs, multiplied by a fraction, the numerator
of which is the number of days in the fiscal year in which the Termination Date
occurs and the denominator of which is 365 or 366, as applicable, and (iii) any
accrued vacation pay, in each case to the extent not theretofore paid; plus


 


(2)                                  a
lump sum cash amount (subject to any applicable payroll or other taxes required
to be withheld pursuant to Section 7 and any deductions authorized by the
Executive) in an amount equal to three (3) times the sum of (i) the Executive’s
highest annual base salary from the Company and its affiliated companies in
effect during the 12-month period prior to the Termination Date and (ii) the
Executive’s target annual incentive bonus for the fiscal year in which the
Termination Date occurs; plus


 


(3)                                  a
lump sum cash amount (subject to any applicable payroll or other taxes required
to be withheld pursuant to Section 7 and any deductions authorized by the
Executive) in an amount equal to the amount forfeited by the Executive under
any qualified defined contribution plan maintained by the Company or any of its
subsidiaries as a result of the Executive’s termination of employment.


 


5





















 


(b)                                 The
Executive shall become fully (100%) vested in the Executive’s accrued benefits
under the Aon Corporation Excess Benefit Plan, the Aon Corporation Supplemental
Savings Plan and the Aon Corporation Supplemental Employee Stock Ownership
Plan, or successor plans in effect on the date of the Executive’s termination
of employment (the “Nonqualified Plans”). 
The Executive’s accrued benefits under the Aon Corporation Excess
Benefit Plan or the Aon Corporation Supplemental Savings Plan, whichever plan
is applicable to the Executive on the date of the Executive’s termination of
employment, shall be determined by crediting the Executive with three (3)
additional years of age and service credits and, in the case of the Aon
Corporation Supplemental Savings Plan, three (3) additional years of Retirement
Plan Contributions.  Within 30 days
following the Termination Date, the Company shall pay to the Executive a lump
sum cash amount equal to the actuarial equivalent of the Executive’s accrued
benefits under the Nonqualified Plans, determined as of the Executive’s
Termination Date,  notwithstanding
anything contained in the Nonqualified Plans to the contrary.  Such lump sum cash payment shall be computed
in the case of the Aon Corporation Excess Benefit Plan using the same actuarial
assumptions then in use for purposes of computing benefits under plan, provided
that the interest rate used in making such computations shall not be greater
than the interest rate permitted under section 417(c) of the Code on the date
of the Change in Control.


 


(c)                                  For
the period commencing on the Termination Date and ending on the earlier of (i)
the date which is three (3) years following the Termination Date and (ii) the
date on which the Executive becomes eligible to participate in and receive
medical, dental and life insurance benefits under a plan or arrangement
sponsored by another employer having benefits substantially equivalent to the
benefits provided pursuant to this Section 3(c), the
Company shall continue the Executive’s medical, dental and life insurance
coverage, under the Company-sponsored plans or otherwise, upon the same terms
and otherwise to the same extent as such coverage shall have been in effect
immediately prior to the Executive’s Termination Date, and the Company and the
Executive shall share the costs of the continuation of such medical, dental and
life insurance coverage in the same proportion as such costs were shared
immediately prior to the Termination Date. 
Such continuation of medical and dental coverage shall be in
satisfaction of the Company’s obligations under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (COBRA).


 


4.                                       Vesting
of Equity Awards Upon Termination Date; Exercise
Period.  Immediately upon the
Executive’s Termination Date, all stock options and other equity awards, if
any, granted by the Company to the Executive (or stock options and other equity
awards granted in substitution therefor by an acquiror of, or successor to, the
Company) that are not otherwise exercisable or vested shall become exercisable
and vested in full.  With respect to any
and all outstanding stock options granted by the Company to the Executive, each
such option shall remain exercisable following the Executive’s termination of
employment until and including the expiration date of the term of the option
(as set forth in the written agreement relating to such option).  Notwithstanding the foregoing provisions of
this Section 4, if as a result of the Executive’s termination of employment on
the Termination Date the Executive is entitled to the acceleration of
exercisability of stock options or the vesting of other equity awards granted
by the Company to the Executive (or stock options or other equity awards
granted in substitution therefor by an acquiror of, or successor to, the
Company), which acceleration or vesting is not


 


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pursuant to this Agreement, but
is pursuant to an employment agreement or other compensation arrangement
entered into between the Executive and the Company or any of its subsidiaries (“Alternative
Equity Vesting”), the Executive shall have no rights pursuant to this Section 4
unless the Executive (or the Executive’s executor or other legal representative
in the case of the Executive’s death or disability following such termination)
executes the Noncompetition Agreement and a release in the form of Exhibit C
hereto (the “Release of Exercisability and Vesting”) within 60 days following
the Termination Date releasing all rights to the Alternative Equity Vesting,
and has not revoked the Release of Exercisability and Vesting.


 


5.                                       Certain
Additional Payments by the Company. 
(a) If the Executive is entitled to receive payments and benefits under
Section 3 hereof or vesting of equity awards under Section 4 hereof, anything
in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution by the Company or its affiliated
companies to or for the benefit of the Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 5) (a “Payment”) would be subject to the excise tax imposed
by Section 4999 of the Code, or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the “Excise
Tax”), then the Executive shall be entitled to receive an additional payment (a
“Gross-Up Payment”) in an amount such that after payment by the Executive of all
taxes (including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.


 


(b)                                 Subject
to the provisions of Section 5(c), all determinations required to be made under
this Section 5, including whether and when a Gross-Up Payment is required and
the amount of such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by the Company’s public
accounting firm (the “Accounting Firm”) which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of
the receipt of notice from the Executive that there has been a Payment, or such
earlier time as is requested by the Company. 
In the event that the Accounting Firm is serving as accountant or
auditor for the individual, entity or group effecting the Change in Control,
the Executive shall appoint another nationally recognized public accounting
firm to make the determinations required hereunder (which accounting firm shall
then be referred to as the Accounting Firm hereunder).  All fees and expenses of the Accounting Firm
shall be borne solely by the Company. 
Any Gross-Up Payment, as determined pursuant to this Section 5, shall be
paid by the Company to the Executive within five days of the receipt of the
Accounting Firm’s determination.  If the
Accounting Firm determines that no Excise Tax is payable by the Executive, it
shall furnish the Executive with a written opinion that failure to report the
Excise Tax on the Executive’s applicable federal income tax return would not
result in the imposition of a negligence or similar penalty.  Any determination by the Accounting Firm
shall be binding upon the Company and the Executive.  As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have


 


7





















 


been made (“Underpayment”),
consistent with the calculations required to be made hereunder.  In the event that the Company exhausts its
remedies pursuant to Section 5(c) and the Executive thereafter is required to
make a payment of any Excise Tax, the Accounting Firm shall determine the amount
of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Executive.


 


(c)                                  The
Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company
of the Gross-Up Payment.  Such
notification shall be given as soon as practicable but no later than 10
business days after the Executive is informed in writing of such claim and
shall apprise the Company of the nature of such claim and the date on which
such claim is requested to be paid.  The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which the Executive gives such notice to the Company (or
such shorter period ending on the date that any payment of taxes with respect
to such claim is due).  If the Company
notifies the Executive in writing prior to the expiration of such period that
it desires to contest such claim, the Executive shall:


 


(1)                                  give the Company any information reasonably requested by the
Company relating to such claim;


 


(2)                                  take
such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company;


 


(3)                                  cooperate with the Company in good faith in order
effectively to contest such claim; and


 


(4)                                  permit
the Company to participate in any proceedings relating to such claim;


 


provided, however,
that the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Executive harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of costs and
expenses.  Without limitation on the foregoing
provisions of this Section 5(c), the Company shall control all proceedings
taken in connection with such contest and, at its sole option, may pursue or
forgo any and all administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim and may, at its sole option,
either direct the Executive to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided  further, that if the Company
directs the Executive to pay such claim and sue for a refund, the Company shall
advance the amount of such payment to the Executive on an interest-free basis
and shall indemnify and hold


 


8





















 


the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with respect to
such advance; and provided  further, that any extension of the
statute of limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. 
Furthermore, the Company’s control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.


 


(d)                                 If,
after the receipt by the Executive of an amount advanced by the Company
pursuant to Section 5(c), the Executive becomes entitled to receive, and
receives, any refund with respect to such claim, the Executive shall (subject
to the Company’s complying with the requirements of Section 5(c)) promptly pay
to the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto).  If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 5(c), a determination is
made that the Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify the Executive in writing of its
intent to contest such denial of refund prior to the expiration of 30 days
after such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the
extent thereof, the amount of Gross-Up Payment required to be paid.


 


6.                                       Delay of Payments. 
In the event that any payment or distribution to be made to the
Executive hereunder is determined to constitute “deferred compensation” subject
to Section 409A of the Code, and the Executive is determined to be a “specified
employee” (as defined in Section 409A of the Code), such payment or
distribution shall not be made before the date which is six months after the
termination of the Executive’s employment (or, if earlier, the date of the
Executive’s death).


 


7.                                       Withholding Taxes. 
The Company may withhold from all payments due to the Executive (or the
Executive’s beneficiary or estate) hereunder all taxes which, by applicable
federal, state, local or other law, the Company is required to withhold
therefrom.


 


8.                                       Reimbursement of Expenses; Interest on
Late Payments.


 


(a)                                  If any contest or dispute shall arise
under this Agreement involving termination of the Executive’s employment with
the Company or involving the failure or refusal of the Company to perform fully
in accordance with the terms hereof, the Company shall reimburse the Executive,
on a current basis, for all legal fees and expenses, if any, incurred by the
Executive in connection with such contest or dispute, together with interest
thereon at a rate equal to the prime rate, as published under “Money Rates” in The
Wall Street Journal from time to time plus 300 basis points, but in no
event higher than the maximum legal rate permissible under applicable law (the “Interest
Rate”), such interest to accrue from the date the Company receives the
Executive’s written statement for such fees and expenses through the date of
payment thereof; provided, however, that in the event the
resolution of any such contest or dispute includes a finding denying, in total,
the Executive’s claims in such contest or dispute, the


 


9





















 


Executive shall be required to
reimburse the Company, over a period of 12 months from the date of such
resolution, for all sums advanced to the Executive pursuant to this Section 8.


 


(b)                                 With respect to any and all payments that
are required to be made by the Company to the Executive pursuant to this Agreement
and that are not made within the time period specified herein, the Company
shall pay to the Executive interest on such payments at the Interest Rate.  Such interest shall accrue from the due date
of the required payment through the date on which such payment is made to the
Executive.


 


9.                                       Operative Event. 
No amounts shall be payable hereunder unless and until there is a Change
in Control.


 


10.                                 Termination of Agreement. 
(a)  This Agreement shall be
effective on the date hereof and shall continue until terminated by the Company
as provided in Section 10(b); provided, however, that this
Agreement shall terminate in any event upon the earlier to occur of (1)
termination of the Executive’s employment with the Company prior to a Change in
Control and (2) the Executive’s death.


 


(b)  The Company
shall have the right prior to a Change in Control, in its sole discretion,
pursuant to action by the Board, to approve the termination of this Agreement,
which termination shall not become effective until the date fixed by the Board
for such termination, which date shall be at least 120 days after notice
thereof is given by the Company to the Executive in accordance with Section 13;
provided, however, that no such action shall be taken by the
Board during any period of time when the Board has knowledge that any person
has taken steps reasonably calculated to effect a Change in Control until, in
the opinion of the Board, such person has abandoned or terminated its efforts
to effect a Change in Control; and provided  further, that in no
event shall this Agreement be terminated in the event of a Change in
Control.  In the event that this
Agreement is determined to be a “deferred compensation plan” subject to Section
409A of the Code, the Company, pursuant to action by the Board, shall, as
necessary, adopt such conforming amendments as are necessary to comply with
Section 409A of the Code without reducing the payments and benefits due to the
Executive hereunder.


 


11.                                 Scope of Agreement. 
Nothing in this Agreement shall be deemed to entitle the Executive to
continued employment with the Company or its subsidiaries and, subject to
Section 2 hereof, if the Executive’s employment with the Company shall
terminate prior to a Change in Control, then the Executive shall have no further
rights under this Agreement; provided, however, that any
termination of the Executive’s employment following a Change in Control shall
be subject to all of the provisions of this Agreement.


 


12.                                 Successors;
Binding Agreement.


 


(a)  This
Agreement shall not be terminated by any merger or consolidation of the Company
whereby the Company is or is not the surviving or resulting corporation or as a
result of any transfer of all or substantially all of the assets of the
Company.  In the event of any such merger,
consolidation or transfer of assets, the provisions of this Agreement shall be
binding upon the surviving or resulting corporation or the person or entity to
which such assets are transferred.


 


10





















 


(b)  The Company
agrees that concurrently with any merger, consolidation or transfer of assets
referred to in Section 12(a), it will cause any successor or transferee
unconditionally to assume, by written instrument delivered to the Executive (or
the Executive’s beneficiary or estate), all of the obligations of the Company
hereunder.  Failure of the Company to
obtain such assumption prior to the effectiveness of any such merger,
consolidation or transfer of assets shall be a breach of this Agreement and
shall entitle the Executive to compensation and other benefits from the Company
in the same amount and on the same terms as the Executive would be entitled
hereunder if the Executive’s employment were terminated following a Change in
Control other than by reason of a Nonqualifying Termination during the
Termination Period.  For purposes of
implementing the foregoing, the date on which any such merger, consolidation or
transfer becomes effective shall be deemed the Date of Termination.


 


(c)  This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. 
If the Executive shall die while any amounts would be payable to the
Executive hereunder had the Executive continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to such person or persons appointed in writing by the Executive
to receive such amounts or, if no person is so appointed, to the Executive’s
estate.


 


13.                                 Notices.  (a)  For purposes of this Agreement, all notices
and other communications required or permitted hereunder shall be in writing
and shall be deemed to have been duly given when delivered or five days after
deposit in the United States mail, certified and return receipt requested,
postage prepaid, addressed (1) if to the Executive, to Executive’s home address
as shown on the Company’s records, and if to the Company, to Aon Corporation,
200 East Randolph Drive, Chicago, Illinois 60602, 3d Floor, attention General
Counsel, with a copy to the Secretary, or (2) to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notices of change of address shall be effective only upon receipt.


 


(b)                                 A written notice of the Executive’s
Termination Date by the Company or the Executive, as the case may be, to the
other, shall (1) indicate the specific termination provision in this Agreement
relied upon, (2) to the extent applicable, set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated and (3) specify the
termination date (which date shall be not less than 15 days after the giving of
such notice).  The failure by the
Executive or the Company to set forth in such notice any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not waive any
right of the Executive or the Company hereunder or preclude the Executive or
the Company from asserting such fact or circumstance in enforcing the Executive’s
or the Company’s rights hereunder.


 


14.                                 Full Settlement; Resolution of Disputes. 
(a) The Company’s obligation to make any payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company may have against the Executive or others.  In no event shall the Executive be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this


 


11





















 


Agreement and, subject to
Section 3(c) hereof, such amounts
shall not be reduced whether or not the Executive obtains other employment.


 


(b)                                 If there shall be any dispute between the
Company and the Executive in the event of any termination of the Executive’s
employment, then, unless and until there is a final, nonappealable judgment by
a court of competent jurisdiction declaring that such termination was for
Cause, that the determination by the Executive of the existence of Good Reason
was not made in good faith, or that the Company is not otherwise obligated to
pay any amount or provide any benefit to the Executive and the Executive’s
dependents or other beneficiaries, as the case may be, under Sections 3 and 4
hereof, the Company shall pay all amounts, and provide all benefits, to the
Executive and the Executive’s dependents or other beneficiaries, as the case
may be, that the Company would be required to pay or provide pursuant to
Sections 3 and 4 hereof as though such termination were by the Company without
Cause or by the Executive with Good Reason; provided, however,
that the Company shall not be required to pay any disputed amounts pursuant to
this Section 14(b) except upon receipt of an undertaking by or on behalf of the
Executive to repay all such amounts to which the Executive is ultimately
adjudged by such court not to be entitled.


 


15.                                 Employment with, and Action by,
Subsidiaries.  For purposes of this Agreement, employment
with the Company or actions taken by the Company with respect to the Executive
shall include employment with or actions taken by any corporation or other
entity in which the Company has a direct or indirect ownership interest of 50%
or more of the total combined voting power of the then outstanding securities
of such corporation or other entity entitled to vote generally in the election
of directors.


 


16.                                 Governing Law; Validity. 
The interpretation, construction and performance of this Agreement shall
be governed by and construed and enforced in accordance with the internal laws
of the State of Illinois without regard to the principle of conflicts of
laws.  The invalidity or unenforceability
of any provision of this Agreement shall not affect the validity or
enforceability of any other provisions of this Agreement, which other
provisions shall remain in full force and effect.


 


17.                                 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.


 


18.                                 Miscellaneous. 
No provision of this Agreement may be modified or waived unless such
modification or waiver is agreed to in writing and signed by the Executive and
by a duly authorized officer of the Company. 
No waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.  Failure by the Executive or the
Company to insist upon strict compliance with any provision of this Agreement
or to assert any right the Executive or the Company may have hereunder,
including, without limitation, the right of the Executive to terminate
employment for Good Reason, shall not be deemed to be a waiver of such
provision or right or any other provision or right of this Agreement.  Except as otherwise expressly set forth in
this Agreement, the rights of, and benefits


 


12





















 


payable to, the Executive, the
Executive’s estate or the Executive’s beneficiaries pursuant to this Agreement
are in addition to any rights of, or benefits payable to, the Executive, the
Executive’s estate or the Executive’s beneficiaries under any other employee
benefit plan or compensation program of the Company.


 


IN WITNESS WHEREOF, the Company has caused this
Agreement to be executed by a duly authorized officer of the Company and the
Executive has executed this Agreement as of the day and year first above
written.


 


	
   

  	
  AON CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Gregory C. Case

  



 


13