Exhibit 10.1


 


December 9, 2005


 


Patrick G. Ryan


Executive Chairman


Aon Corporation


200 E. Randolph Drive


Chicago, Illinois 60601


 


Dear Pat:


 


In connection
with our recent discussions regarding the valuable role you have played and
will continue to play within Aon, this letter describes the benefits Aon will
provide in consideration for your agreement to continue to assist Aon in an
Executive Chairman capacity.  As
Executive Chairman, you will aid Greg Case and other senior executives in
business development and client retention initiatives and to provide advice to
Greg concerning all aspects of the business. 
In addition, you may have other executive administrative duties and
responsibilities on behalf of Aon and its subsidiaries as may from time to time
be authorized or directed by Aon’s board of directors.


 


Aon hereby
agrees to provide the following benefits to you and your family:


 


1.             Stock
Option Vesting.  Consistent with Aon’s
treatment of other senior executives in the past, Aon hereby agrees that the unvested
portion of any option you hold to purchase shares of Aon common stock shall
immediately vest as of the date you cease to be employed by Aon.  The options shall be exercisable in
accordance with the terms of the applicable award agreements; provided,
however, you will be granted additional time within which to exercise each such
option until the later of (a) the 15th day of the third month
following the date such exercise period would otherwise have expired or (b)
December 31 of such calendar year during which the exercise period would
otherwise have expired.


 


2.             Health
Care Coverage.  When you cease to be
employed by Aon, you shall be entitled to continue participation in the
Aon-sponsored group health plans for yourself and your eligible family members
for life.  For the first six months
following the date you cease to be employed by Aon, such coverage shall be
provided under Aon’s programs in accordance with the provisions of the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), and your cost
of coverage will be Aon’s regular COBRA rate. 
Beginning on the first day of the seventh month following the date you
cease to be employed by Aon, health care coverage will be provided under Aon’s
early retiree program and you will be responsible for the applicable premiums,
co-payments and deductibles; provided, however, that you and your eligible
family members will receive primary coverage under the Aon plan and secondary
coverage through Medicare.  The provision
of such coverage is taxable income to you and Aon will report such taxable
benefit accordingly.  Notwithstanding
anything to the contrary in Aon’s retiree health care program as it may be
amended from time to time, in the event of your death your surviving spouse and
eligible dependents shall continue such coverage under Aon health care program
for life in the manner described above.


 


1





















 


3.             Additional
Nonqualified Pension Credit.


 


(a)     In
recognition of your years of employment with the Ryan Insurance Group prior to
the date such entity was acquired by Aon, to the extent such years are not
considered under Aon’s pension plans, you shall be entitled to receive upon the
date you cease to be employed by Aon a supplemental pension benefit.  The supplemental pension benefit shall be
payable on a single life annuity basis at the date you cease to be employed by
Aon and it will provide you with aggregate pension benefits (taking into
account the offsets described in paragraph (b) below), in an annual amount
equal to the aggregate annual pension benefit to which you would be entitled
under Aon’s qualified and nonqualified defined benefit plans as in effect on
the date of this letter as if your Years of Service (as such term is defined in
Aon’s pension plan) for benefit calculation purposes is equal to (i) 15 years
plus (ii) your actual Years of Service under Aon’s pension plans.


 


(b)     The
amount of the supplemental pension benefit described in paragraph (a) above
shall be offset by the pension benefits provided to you under any of Aon’s
qualified or non-qualified pension plans. 
The offset described in this paragraph shall be determined on the basis
of such benefits payable on a single life annuity basis payable at the date you
cease to be employed by Aon.


 


(c)     The
supplemental pension benefit will be paid in installments over a five-year
period beginning on the first day of the seventh month following the date you
cease to be employed by Aon.


 


(d)     If
you die before the supplemental pension benefit becomes payable, your spouse
will be entitled to receive a survivor annuity. 
The survivor annuity shall be payable as of your date of death.  The amount of the survivor annuity shall be
equal to the 50% joint and survivor annuity to which your spouse is entitled as
if:  (i) your employment terminated
immediately before your death; (ii) you were fully vested in the supplemental
pension benefit as of such date; and (iii) you elected to commence the benefit
in the form of a joint and 50% survivor annuity.


 


2





















 


Please sign and date the copy of this letter
attached hereto and return it to me by facsimile at your earliest
convenience.  If you have any questions,
please contact me.


 


	
   

  	
   

  	
  Kindest regards,

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Richard C. Notebaert

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Richard C. Notebaert

  	
   

  
	
   

  	
   

  	
  Chairman

  	
   

  
	
   

  	
   

  	
  Organization & Compensation Committee

  
	
   

  	
   

  	
  Board of Directors of Aon Corporation

  
	
   

  	
   

  	
   

  	
   

  
	
  AGREED and ACKNOWLEDGED:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Patrick G. Ryan

  	
   

  	
   

  	
  Dec 9, 2005

  	
   

  	
   

  
	
  Patrick G. Ryan

  	
   

  	
   

  	
  Date

  	
   

  	
   

  
							



 


3