Exhibit 10.1


 


SEVERANCE AGREEMENT


 


This Agreement is entered into as of September 19, 2008, between
Aon Corporation, a Delaware corporation, and                                                             
(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


 


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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 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;


 


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(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


 


(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.


 


The Executive’s employment may be terminated by the Executive for Good
Reason if (x) an event or circumstance set forth in this Section 1(f) shall
have occurred and the Executive provides the Company with written notice
thereof within 90 days after the Executive has knowledge of the occurrence or
existence of such event or circumstance, which notice shall specifically
identify the event or circumstance that the Executive believes constitutes Good
Reason, (y) the Company fails to correct the circumstance or event so
identified within 30 days after the receipt of such notice, and (z) the
Executive resigns during the Termination Period and after the date of delivery
of the notice referred to in clause (x) above.


 


(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.


 


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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 and
release of claims substantially in the form of Exhibit A hereto (the “Noncompetition
Agreement and Release”) 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 Agreement and Release, the payments and benefits described in
this Section 3.  For purposes of
this Agreement, the Executive shall be considered to have a termination of
employment with the Company and its subsidiaries on the date the Executive has
a “separation from service” as described under Section 409A of the Code
and the guidance and Treasury Regulations issued thereunder with the Company
and its subsidiaries.  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 Release and a
waiver in the form of Exhibit B hereto (the “Waiver of Severance Payments
and Benefits”) within 60 days following the Termination Date waiving 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 Noncompetition Agreement and Release 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)           Except as otherwise
provided in Section 6, 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 Release and, if
applicable, the Waiver 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 


 


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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 two (2) times the sum of (a) Executive’s annual
base salary from the Company and its affiliated companies in effect on the
Termination Date and (b) the average incentive compensation paid to the
Executive by the Company over the previous two years; 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.


 


(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 two (2) additional
years of age and service credits and, in the case of the Aon Corporation
Supplemental Savings Plan, two (2) additional years of Retirement Plan
Contributions.


 


(c)           For the period
commencing on the Termination Date and ending on the earlier of (i) the
date which is two(2) 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).  Payment or reimbursement of
expenses incurred by the Executive pursuant to this Section 3(c) shall
be made promptly and in no event later than December 31 of the year
following the year in which such expenses were incurred, and the amount of
expenses eligible for reimbursement, or in-kind benefits provided, in any year
shall not affect the amount of expenses eligible for reimbursement, or in-kind
benefits to be provided,


 


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in any other year, except
for any limit on the amount of expenses that may be reimbursed under an
arrangement described in Section 105(b) of the Code.  Additionally, such right to payment or
reimbursement, or in-kind benefits to be provided, shall not be subject to
liquidation or exchange for another benefit. 
If the Executive is a “specified employee” under Section 409A of
the Code, the full cost of the continuation or provision of employee benefits
described under this Section 3(c) (other than any cost of medical or
dental benefit plans or programs or the cost of any other plan or program that
is exempt from Section 409A of the Code) shall be paid by the Executive
until the earlier to occur of the Executive’s death or the date that is six
months and one day following the Executive’s termination of employment, and
such cost shall be reimbursed by the Company or the applicable subsidiary to,
or on behalf of, the Executive in a lump sum cash payment on the earlier to
occur of the Executive’s death or the date that is six months and one day
following the Executive’s termination of employment.


 


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.  Notwithstanding the foregoing, the
time or schedule of any payment or amount scheduled to be paid pursuant to the
terms of this Section 4, including but not limited to any restricted stock
unit or other equity-based award, payment or amount that provides for the “deferral
of compensation” (as such term is defined under Section 409A of the Code),
may not be accelerated except as otherwise permitted under Section 409A of
the Code and the guidance and Treasury regulations issued thereunder.  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 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 Release and a waiver in the form of Exhibit C
hereto (the “Waiver of Exercisability and Vesting”) within 60 days following
the Termination Date waiving all rights to the Alternative Equity Vesting, and
has not revoked the Noncompetition Agreement and Release.


 


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


 


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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 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


 


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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 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


 


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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.


 


(e)           The Gross-Up Payment
and any other payment or reimbursement of expenses described in this Section 5
shall be made promptly and in no event later than December 31 of the year
following the year in which such expenses were incurred, and the amount of such
expenses eligible for payment or reimbursement in any year shall not affect the
amount of such expenses eligible for payment or reimbursement in any other year
nor shall such right to payment or reimbursement be subject to liquidation or
exchange for another benefit.


 


6.             Delay of Payments. 
In the event that any payment or distribution or portion of any payment
or distribution to be made to the Executive hereunder cannot be characterized
as a “short term deferral” for purposes of Section 409A of the Code or is
not otherwise exempt from the provisions of Section 409A of the Code, and
the Executive is determined to be a “specified employee” under Section 409A
of the Code, such portion of the payment shall be delayed until the earlier to
occur of the Executive’s death or the date that is six months and one day
following the Executive’s termination of employment with the Company and its
subsidiaries (the “Delay Period”).  Upon
the expiration of the Delay Period, the payments delayed pursuant to this Section 6
shall be paid to the Executive or his beneficiary in a lump sum, and any
remaining payments due under this Agreement shall be payable in accordance with
their original payment schedule.


 


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. 
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; 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 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.  Payment or reimbursement of expenses
described in this Section 8 shall be made promptly and in no event later
than December 31 of the year following the year in which such expenses
were incurred, and the amount of such expenses eligible for payment or
reimbursement in any year shall not affect the amount of such expenses eligible
for payment or reimbursement in any other year nor shall the right to payment
or reimbursement be subject to liquidation or exchange for another benefit.


 


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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.


 


11.           Scope of Agreement. 
This Agreement supersedes any and all change-in-control agreements
entered into between the Executive and the Company, its subsidiaries or
affiliates (including, if applicable, the Severance Agreement substantially in
the form set forth as Exhibit 10(z) to the Company’s Form 10-K
for the fiscal year 2004).  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.


 


(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 


 


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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 the last known residential address on file for the
Executive with the Company, 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 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 


 


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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.


 


19.           Prohibition on Acceleration of Payments. 
The time or schedule of any payment or amount scheduled to be paid
pursuant to the terms of this Agreement may not be accelerated except as
otherwise permitted under Section 409A of the Code and the guidance and
Treasury Regulations issued thereunder.


 


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20.           Code Section 409A. 
The parties intend that this Agreement and the benefits provided
hereunder be interpreted and construed to comply with Section 409A of the
Code to the extent applicable thereto. 
Notwithstanding any provision of the Agreement to the contrary, the
Agreement shall be interpreted and construed consistent with this intent,
provided that the Company shall not be required to assume any increased
economic burden in connection therewith. 
Although the Company intends to administer the Agreement so that it will
comply with the requirements of Section 409A of the Code, the Company does
not represent or warrant that the Agreement will comply with Section 409A
of the Code or any other provision of federal, state, local or non-United
States law.  Neither the Company, its
subsidiaries, nor their respective directors, officers, employees or advisers
shall be liable to the Executive (or any other individual claiming a benefit
through the Executive) for any tax, interest, or penalties the Executive may
owe as a result of compensation paid under the Agreement, and the Company and
its subsidiaries shall have no obligation to indemnify or otherwise protect the
Executive from the obligation to pay any taxes pursuant to Section 409A of
the Code.


 


21.           Entire Agreement.  This
Agreement supersedes the Severance Agreement between the parties entered into,
or approved by the Board for execution by the parties, on or after January 21,
2005.  This Agreement constitutes the
entire understanding between the parties with respect to the Executive’s
severance pay in the event of a termination of the Executive’s employment with
the Company in connection with a Change in Control; provided, however, that
except as otherwise expressly set forth in this Agreement, the rights of, and
benefits 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 broad-based 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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Executive’s Name]

  



 


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