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                                                                   EXHIBIT 10.17

                           EXECUTIVE BONUS AGREEMENT

     This AGREEMENT is made and entered into as of the 2nd day of June, 2000, by
and between MICHAEL J. CLOHERTY (hereinafter referred to as the "Executive") and
ARTHUR J. GALLAGHER & CO. ("Corporation"), its subsidiaries, divisions and
affiliated and related companies (hereinafter collectively referred to as the
"Company").

     IN CONSIDERATION of the mutual covenants hereinafter made by each party to
the other, the Executive and the Company agree as follows:

                       EMPLOYMENT AND BONUS COMPENSATION

     Paragraph One. The Company agrees to continue to employ the Executive in
accordance with the terms of this Agreement. Company shall provide Executive
with access to the resources and data of the Company to assist Executive in such
management.

     Paragraph Two. The Company agrees that, in addition to the semimonthly
payment of compensation as determined by Company, an annual paid vacation and
various employee benefit plans, the Executive shall be entitled to participate
in the AJG Financial Services, Inc. Bonus Plan, as amended from time to time,
subject to the terms and conditions provided therein. A copy of the current AJG
Financial Services, Inc. Bonus Plan is attached hereto as Schedule I.

                             FIDUCIARY OBLIGATIONS
                                OF THE EXECUTIVE

     Paragraph Three. The Executive agrees to devote his full energies,
abilities, attention and business time to the performance of his employment
obligations and responsibilities as assigned by the Corporation's management.
The Executive further agrees that he will not engage in any activity which
conflicts or interferes with, or in any way compromises, his performance of
those obligations and responsibilities.

     Paragraph Four. The Executive recognizes that, by virtue of his employment
by the Company and to assist him in the performance of his duties, he will be
granted otherwise prohibited access to confidential and proprietary data of the
Company which is not known either to its competitors or within the business
community generally and which has independent economic value to the Company.
This information (hereinafter referred to as "Confidential Information")
includes, but is not limited to: data relating to the Company's unique marketing
and servicing programs, procedures and techniques; business, financial,
management, investment and personnel strategies; the criteria and formulae used
by the Company in pricing its products and services; and other data relating to
the financial administration and investment strategies of the Company. The
Executive recognizes that this Confidential Information constitutes a valuable
property of the Company, developed over a long period of time and at substantial
expense. Accordingly, the Executive agrees that he will not, at any time during
his employment by the Company, divulge such Confidential Information or make use
of it for his own purposes or the purposes of another. The Executive
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agrees that all intellectual property, such as computer programs, systems or
software, developed during his employment or as a result of his employment is
work for hire performed by the Executive in the scope of his employment. The
Company shall retain all proprietary rights to any and all such intellectual
property. Executive agrees to execute any documents necessary to perfect
Company's interest in such intellectual property upon Company's request.

                                 TERMINATION OF
                            EMPLOYMENT RELATIONSHIP

     Paragraph Five. The Executive and the Company understand and agree that
each has the right, upon fourteen (14) days' written notice (hereinafter
referred to as the "Notice Period"), to terminate the employment relationship
for any reason whatsoever. The Company may, at its option, pay the Executive for
the Notice Period in lieu of active employment during the Notice Period. It is
further agreed that Company may terminate such employment without any notice in
the event Executive breaches this Agreement, commits any dishonest or fraudulent
act or is unable to lawfully perform his duties hereunder.

     Paragraph Six. The Company agrees to continue in effect during the Notice
Period any compensation and benefits to which the Executive may be entitled as
an employee of the Company. It is understood and agreed that at the expiration
of the Notice Period, the Executive's entitlement to any such compensation and
benefits shall cease.

     Paragraph Seven. The Executive agrees that during the Notice Period, he
will cooperate fully with the Company in all matters relating to the winding up
of any pending work and the orderly transfer to other Company employees of work
for which he has most recently been responsible. The Executive further agrees
that, during the Notice Period (whether or not active employment continues
during the Notice Period), Executive's fiduciary duties to Company shall remain
in effect.

     Paragraph Eight. The Executive agrees that, prior to the expiration of the
Notice Period, he will return to the Company all literature, correspondence,
memoranda, reports, summaries, manuals, proposals, prospectuses, contracts and
other documents of any kind which relate in any way to the business of the
Company, including specifically all materials which comprise or refer to the
Company's Confidential Information. It is understood and agreed that the
Executive will not retain any copy, facsimile or note intended to memorialize
any such data.

     Paragraph Nine. The Executive understands and agrees that, during or at the
expiration of the Notice Period, he will attend any meeting the Company may
convene to: (i) review the status of the projects for which the Executive has
most recently been responsible; (ii) ensure that the Executive has fully
obtained his entitlements under this Agreement; and/or (iii) confirm that the
Executive clearly understands the nature and scope of his post-employment
obligations.

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                         POST-EMPLOYMENT OBLIGATIONS
                                OF THE PARTIES

     Paragraph Ten. The Company agrees that the Executive, upon the termination
of his employment, shall be entitled to such severance pay, if any, as may then
be provided for under the Company's personnel policies. It is understood and
agreed that the Company may, in its discretion, increase both the amount of
severance pay due the Executive, and the time period for distributing same.

     Paragraph Eleven. The Executive recognizes the highly sensitive nature of
the Confidential Information to which he will have access during his employment,
and acknowledges the Company's legitimate interest in safeguarding same from
disclosure. Accordingly, the Executive agrees that, for a period of two (2)
years following the termination of his employment for any reason whatsoever, he
will not divulge the Company's Confidential Information or make use of it for
his own purpose or the purpose of another.

     Paragraph Twelve. The Executive recognizes that employees of the Company
are a valuable resource of the Company. Accordingly, the Executive agrees that,
for a period of two (2) years following the termination of his employment for
any reason whatsoever, he will not, directly or indirectly, solicit, induce or
recruit any employee of the Company to leave the employ of the Company.

     Paragraph Thirteen. Notwithstanding anything contained herein to the
contrary, the Post-Employment obligations of the Executive contained in
Paragraph Eleven and Paragraph Twelve shall become null and void and have no
further effect immediately upon a Hostile Change in Control of the Corporation
as defined herein. The Company shall send written notice to the Executive within
ten (10) days of a Hostile Change in Control of the Corporation, notifying the
Executive that such event has taken place. Failure of the Company to send such
notice shall not preclude the release of the Executive from the Post-Employment
Obligations contained in Paragraph Eleven and Paragraph Twelve. For the purposes
of this Paragraph Thirteen, the following definitions apply:

     A.   The term "Hostile Change in Control" means a transaction, event or
     election constituting a Change in Control, which was not approved by, or,
     in an election, the directors elected were not nominated by, at least two-
     thirds of the members of the Board of Directors of the Corporation in
     office immediately prior to the Change in Control who have not died or
     become permanently disabled.

     B.   The term "Change in Control" of the Corporation means and includes
     each and all of the following occurrences:

          1.   A Business Combination, unless:

               (a)  the Business Combination is approved or authorized by the
               affirmative vote of the holders of not less than 80% of the
               outstanding shares of voting stock of the Corporation and the
               affirmative vote of the holders of not less than 67% of the
               outstanding shares of the voting stock held by shareholders other
               than Related Persons; or

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               (b)  the Continuing Directors of the Corporation by a two-thirds
               vote (i) have expressly approved in advance the acquisition of
               outstanding shares of voting stock of the corporation that caused
               the Related Person to become a Related Person, or (ii) have
               approved the Business Combination prior to the Related Person
               involved in the Business Combination having become a Related
               Person; or

               (c)  the Business Combination is solely between this corporation
               and another corporation, 50% or more of the voting stock of which
               is owned by the Corporation and none of which is owned by the
               Related Person; or

               (d)  all of the following conditions are satisfied:

                    (i)  The cash or fair market value of the property,
               securities or "other consideration to be received" per share by
               holders of common stock in the Corporation in the Business
               Combination is not less than the higher of:

                         (A)  the highest per share price (including brokerage
               commissions, transfer taxes and soliciting dealers' fees) paid by
               the Related Person in acquiring any of its holdings of the
               Corporation's common stock, or

                         (B)  an amount that bears that same percentage
               relationship to the market price of the Corporation's common
               stock immediately prior to the announcement of such Business
               Combination as the highest per share price determined in (A)
               above bears to the market price of the Corporation's common stock
               immediately prior to the commencement of the acquisition of the
               Corporation's voting stock that caused such Related Person to
               become a Related Person, or

                         (C)  an amount calculated by multiplying the earnings
               per share of the Corporation's common stock for the four fiscal
               quarters immediately preceding the record date for determination
               of stockholders entitled to vote on such Business Combination by
               the price/earnings multiple of the Related Person as of the
               record date as customarily computed and reported in the financial
               press.

               Appropriate adjustments shall be made with respect to (A), (B)
               and (C) above for recapitalizations and for stock splits, stock
               dividends, and like distributions; and

                    (ii)  A timely mailing shall have been made to the
               stockholders of the Corporation containing in a prominent place
               (x) any recommendations as to the advisability (or
               inadvisability) of the Business Combination that the Continuing
               Directors or Outside Directors may choose to state, if there are
               at

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               the time any such directors, and (y) the opinion of a reputable
               nationally recognized investment banking or financial services
               firm as to the fairness from the financial point of view of the
               terms of the Business Combination to the stockholders of the
               Corporation other than the Related Person (such firm to be
               engaged solely on behalf of such other stockholders, to be paid a
               reasonable fee for its services by the Corporation upon receipt
               of such opinion, to be a firm that has not previously been
               significantly associated with the Related Person and, if there
               are at the time any such directors, to be selected by a majority
               of the Continuing Directors and Outside Directors).

          2.   The acquisition of outstanding shares of the Corporation's voting
          stock that causes an individual, a corporation, partnership or other
          person or entity to become a Related Person.

          3.   Individuals who at the beginning of any period of three
          consecutive years constitute the entire Board of Directors of the
          Corporation shall for any reason other than death or permanent
          disability during such period cease to constitute a majority thereof.

          4.   A change in control of a nature that would be required to be
          reported in response to Item 6(e) of Schedule 14A of Regulation 14A
          promulgated under the Securities Act of 1934, as amended.

     C.   The term "Business Combination" shall mean (i) any merger or
     consolidation of the Corporation or a subsidiary of the Corporation with or
     into a Related Person, (ii) any sale, lease, exchange, transfer or other
     disposition, including without limitation a mortgage or any other security
     device, of all or any Substantial Part of the assets either of the
     Corporation (including without limitation any voting securities of a
     subsidiary) or of a subsidiary, to a Related Person, (iii) any merger or
     consolidation of a Related Person with or into the Corporation or a
     subsidiary of the Corporation, (iv) any sale, lease, exchange, transfer or
     other disposition of all or any Substantial Part of the assets of a Related
     Person to the Corporation or a subsidiary of the Corporation, (v) the
     issuance of any securities of the Corporation or a subsidiary of the
     Corporation to a Related person, (vi) the acquisition by the Corporation or
     a subsidiary of the Corporation of any securities issued by a Related
     Person, (vii) any reclassification of securities, recapitalization or other
     transaction designed to decrease the number of holders of the Corporation's
     voting securities remaining, if there is a Related Person, and (viii) any
     agreement, contract or other arrangement providing for any of the
     transactions described in this definition of Business Combination.

     D.   The term "Related Person" shall mean and include any individual,
     corporation, partnership or other person or entity which, together with
     their "Affiliates" and "Associates" (as defined as of November 1, 1983, in
     Rule 12b-2 under the Securities Exchange Act of 1934), "Beneficially Owns"
     (as defined as of November 1, 1983, in Rule 13d-3 under the Securities
     Exchange Act of 1934) in the aggregate 20% or more of the outstanding
     shares of the voting stock of the Corporation, and any Affiliate or
     Associate of any such individual,

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     corporation, partnership or other person or entity; provided that Related
     Person shall not include any person who beneficially owned 20% or more of
     the outstanding shares of the voting stock of the Corporation on November
     1, 1983. Without limitation, any shares of voting stock of the Corporation
     that any Related Person has the right to acquire pursuant to any agreement,
     or upon exercise of conversion rights, warrants or options, or otherwise,
     shall be deemed beneficially owned by the Related Person.

     E.   The term "Substantial Part" shall mean more than 30% of the fair
     market value of the total assets of the corporation in question, as of the
     end of its most recent fiscal year ending prior to the time the
     determination is being made.

     F.   The term "other consideration to be received" shall include, without
     limitation, capital stock of the Corporation retained by its existing
     public stockholders in the event of a Business Combination in which the
     Corporation is the surviving corporation.

     G.   The term "Continuing Director" shall mean a director who was a member
     of the board of directors of the Corporation immediately prior to the time
     that the Related Person involved in a Business Combination became a Related
     Person, and the term "Outside Director" shall mean a director who is not
     (a) an officer or employee of the Corporation or any relative of an officer
     or employee or (b) a Related Person or an officer, director, employee,
     Associate or Affiliate of a Related Person, or a relative of any of the
     foregoing.

                                  ENFORCEMENT

     Paragraph Fourteen. The Executive and the Company understand and agree that
any breach or evasion of any term of this Agreement will give rise to an action
for breach of contract, which may be brought in any court of competent
jurisdiction.

     Paragraph Fifteen. The Executive recognizes that the rights and privileges
granted to him by this Agreement, his services and his corresponding covenants
to the Company, are of a special, unique and extraordinary character, the loss
of which cannot reasonably or adequately be compensated for in damages in any
action at law or through the offset or withholding of any monies to which he
otherwise might be entitled from the Company. Accordingly, the Executive
understands and agrees that the Company shall be entitled to equitable relief,
including a temporary restraining order and preliminary and permanent injunctive
relief, to prevent a breach of this Agreement.

     Paragraph Sixteen. This Agreement shall be governed by and construed in
accordance with the laws of the state of residence of Executive as of the date
of this Agreement, as evidenced by the personnel records of the Company.

     Paragraph Seventeen. The provisions of this Agreement are intended to be
interpreted and construed in a manner which makes such provisions valid, legal
and enforceable. In the event any provision of this Agreement is found to be
partially or wholly invalid, illegal or unenforceable, such provision shall be
modified or restricted to the extent and in the manner necessary to render such
provision valid, legal and enforceable. It is expressly understood and agreed
between the parties that

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this modification or restriction may be accomplished by mutual accord between
the parties or, alternatively, by disposition of a court of law. If such
provision cannot under any circumstances be so modified or restricted, it shall
be excised from this Agreement without affecting the validity, legality or
enforceability of any remaining provisions.

     Paragraph Eighteen. The Executive agrees that, in the event of a breach of
the provisions of Paragraph Eleven or Twelve, or both, the time period specified
in such paragraphs shall be extended by the number of days between the date of
such breach and the date such breach is enjoined or other relief is granted the
Company by a court of competent jurisdiction. It is the intention of the parties
that the Company shall enjoy the faithful performance by Executive of the
covenants specified in said paragraphs for the full time periods specified
therein.

                                 MISCELLANEOUS

     Paragraph Nineteen. Except as hereinafter provided, this Agreement
supersedes all existing Company policies, and all previous agreements between
the parties, to the extent that such policies and agreements consider subject
matters herein addressed. Any and all prior covenants entered into by Executive
for the benefit of Company and relating to restrictions on Executive's business
activities after termination of employment with Company remain in full force and
effect. Company, however, agrees that the contingent release of Post-Employment
obligations contemplated by Paragraph Thirteen shall apply with like force and
effect to any such prior covenants.

     Paragraph Twenty. This Agreement shall inure to the benefit of and shall be
binding upon the successors and assigns of the Company and may be enforced by
any subsidiary of the Company for whom Executive has provided services
hereunder.

     Paragraph Twenty-One. As used in this Agreement, all terms of masculine
gender shall be construed, where appropriate, to be of the feminine gender.

     Paragraph Twenty-Two. In the event either party sues to enforce its rights
hereunder, the prevailing party in any such litigation shall have the right to
have up to $100,000 of its reasonable attorneys fees and costs reimbursed by the
other party.

                                 ACKNOWLEDGMENT

     The Executive and the Company, by its designated representative, hereby
acknowledge that they have read and understand each of the provisions of this
Agreement, that they have executed this

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Agreement voluntarily and with full knowledge of its significance, and that they
intend to be fully bound by the same.

THE EXECUTIVE                          ARTHUR J. GALLAGHER & CO.

     /s/ Michael J. Cloherty                /s/ J. Patrick Gallagher, Jr.
---------------------------------      ---------------------------------------
                                       President

Witness:                               Attest:

       /s/ Marsha J. Akin                       /s/ Christine D. Greb
---------------------------------      ---------------------------------------

                                       Christine D. Greb
                                       Assistant Secretary

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                                                                      Schedule I

                          AJG FINANCIAL SERVICES, INC.
                                   BONUS PLAN

Investment banking, fund management and joint venture projects usually reward
employees based on performance. Arthur J. Gallagher & Co. ("AJG"), on behalf of
its subsidiaries and affiliates (collectively referred to as the "Company")
follows a unique long-term investment strategy designed to accumulate capital
and provide a long-term flow of cash and income. Our strategy is designed to
maximize long-term returns and discourage any attempt to shorten the return
periods through bookkeeping/accounting and/or buy versus sell decisions.

Recognizing the unique aspects of our Financial Services Division ("FSD"), we
have designed a system to reward the contributing employees on a
divisional/portfolio basis. This avoids any influence on the investment decision
process either to make an investment or to liquidate it. A simple example is
that it may be desirable to hold a long-term high yield investment even though
it has a large unrecognized gain.

With this framework in mind, the following bonus plan was designed:

Effective in calendar year 2000 and future years, a bonus pool of 20% of extra-
ordinary gains (as defined) will be accrued for payment to the FSD employees set
out below ("FSD Team Members") on qualified projects.   Subject to the
conditions provided below, each FSD Team Member shall be entitled to receive up
to the percentage of the accrued bonus pool opposite their name.

     .  Michael J. Cloherty   30%
     .  David R. Long         25%
     .  Mark P. Strauch       25%
     .  Sally Wasikowski      20%

A. For investments initiated prior to January 1, 2001, extra-ordinary gains
   shall be defined to include the following items:

     1. Net recognized gains on the sale of tax credit investment projects and
        portfolios.

     2. 50% of unrealized annual gains on venture capital investments. This
        factor of 50% recognizes that losses can and do occur. For the purposes
        of this calculation, all investments will be marked to market. Public
        market valuations will be used where applicable. Otherwise:

          a. If a subsequent investor purchases 20% of an unlisted company, the
             value paid by the investor will be used.

          b. Without a public market or a subsequent investor, an appraisal will
             be obtained following the fifth year of investment.

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     3. Net realized gains on venture type investments (netting out the
        unrealized gains already recognized during the life of the project in #2
        above). This avoids the doubling up effect of any dollars earned.

     4. Successful tax settlement gains related to investments made by FSD. For
        investments with little or no IRS involvement, the finalization of the
        Company's tax return audit will serve as the computation date. As of
        January 1, 2000, tax years 1996, 1997 and 1998 are still open to audit.

     5. Without including the items in #1 and #3 above (realized gains), the
        amount by which net investment income exceeds 10% of the adjusted
        capital base of the FSD. Adjusted capital base will include the
        Company's basis in specific itemized FSD projects (with the exception of
        those specifically excluded by notice under #7 below) and will not
        include corporate cash and restricted cash or its related fiduciary
        investment portfolio. For purposes of this calculation, income tax
        credits will be included as investment income at 1.5 times the dollars
        realized (this puts it on a pre-tax basis).

B.   For investments initiated after January 1, 2001, extra-ordinary gains shall
     be defined to include the following items to the extent these items exceed
     10% of the adjusted capital base of the post-2000 investments. Adjusted
     capital base will include the Company's basis in all itemized FSD projects
     (with the exception of those specifically excluded by notice under #7
     below) and will not include corporate cash and restricted cash or its
     related fiduciary investment portfolio.

     1.   Net recognized gains on the sale of tax credit investment projects and
          portfolios.

     2.   50% of unrealized annual gains on venture capital investments. This
          factor of 50% recognizes that losses can and do occur. For the
          purposes of this calculation, all investments will be marked to
          market. Public market valuations will be used where applicable.
          Otherwise:

          a.   If a subsequent investor purchases 20% of an unlisted company,
               the value paid by the investor will be used.

          b.   Without a public market or a subsequent investor, an appraisal
               will be obtained following the fifth year of investment.

     3.   Net realized gains on venture type investments (netting out the
          unrealized gains already recognized during the life of the project in
          #2 above). This avoids the doubling up effect of any dollars earned.

     4.   Successful tax settlement gains related to investments made by FSD.
          For investments with little or no IRS involvement, the finalization of
          the Company's tax return audit will serve as the computation date. As
          of January 1, 2000, tax years 1996, 1997 and 1998 are still open to
          audit.

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     5.   Without including the items in #1 and #3 above (realized gains), the
          amount of net investment income. For purposes of this calculation,
          income tax credits will be included as investment income at 1.5 times
          the dollars realized (this puts it on a pre-tax basis).

Nothing within the plan is meant to result in any "double counting" of income.
It is the intention of the parties to only count gains one time regardless of
the periods realized or used for bonus basis.

Recognizing that the parties intend to reward for performance and encourage
long-term investment, FSD Team Members have agreed to:

1.   A three-year payout of declared bonus dollars - 50% in year one, 25% in
     years two and three; payable on or before April 15 of each year.

2.   Declare a bonus only when the Company recognizes its profit through the
     calculation of extra-ordinary gains and only on projects to which the FSD
     Team has contributed. Individual FSD Team Members will be credited with the
     designated percentage of extra-ordinary gain only on those projects that
     commenced while the Member was an employee of the Company. Employment by
     the Company is not a pre-requisite for payment on projects started during
     the term of employment for FSD Team Members. Both parties recognize this to
     be a compromise on percentage payouts versus project life and agree to the
     future payment terms regardless of future employment of the FSD Team
     Members by the Company, provided, however, that no bonus will be paid on
     projects started in the year the Member's employment with the Company
     terminates for any reason. If the Member is terminated for cause, then all
     deferred bonus and bonus on incomplete projects will be forfeited. A
     termination for cause shall include a termination based on management's
     determination that the Member has:

     a. Committed any dishonest or fraudulent act to the detriment of the
        Company;

     b. Been convicted of any crime involving moral turpitude or for any felony;
        or

     c. Violated any major Corporate policy or procedure established by
        management.

     If the Member's employment with the Company is terminated by the Company
     for reasons other than cause, or due to the death, disability or retirement
     of the Member, then the agreed bonus will be calculated and paid over the
     life of the project, to the Member or his or her estate, as the case may
     be, as if no termination had occurred. "Disability" means that the Member's
     medical condition, upon such termination, would qualify the Member to
     receive long term disability benefits under the Company's employee benefits
     plan. "Retirement" means that the Member terminates employment when the
     Member (i) is at least age 60, (ii) is immediately eligible to receive
     retirement benefits under the Company's pension plan, and (iii) has not
     committed any act which subsequently leads the Company's management to
     determine that the Member could have been terminated for cause. If the
     Member resigns and has not committed any act which subsequently leads the
     Company's management to determine that the Member could have been
     terminated for cause, then the agreed bonus will be calculated and paid
     over the life of the project, to the Member or his or her estate, as the
     case may be, until the aggregate of such post resignation payments related
     to all projects equal the lesser of 50% of the calculated bonus or Two
     Million Dollars ($2,000,000) and the

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     Member shall waive any right to receive any unpaid bonus amount in excess
     thereof, whether vested or unvested, declared or undeclared. Bonus accruals
     attributed to Members terminated for cause, or bonus accruals in excess of
     resignation payments, shall be distributed pro-rata to the remaining
     Members eligible to receive a distribution in the appropriate years. In
     this case, the FSD Team Members may receive percentage distributions higher
     than those set out above.

3.   The bonus pool for FSD Team Members will be calculated on contribution and
     recommended by the FSD Compensation Committee. Michael J. Cloherty and
     David R. Long shall constitute the initial members of this committee. Final
     approval of the bonus calculation will always rest with the Chief Executive
     Officer of AJG in consultation with the Compensation Committee of AJG's
     Board of Directors. Final approved distributions for FSD Team Members shall
     be deemed vested for the life of the project. After the bonus pool amount
     has been calculated and announced for a given year, the FSD Team Members
     will meet and determine which, if any, of the other employees of the
     Company should participate in that year's distribution based upon their
     individual contribution, and the extent to which each such employee should
     participate. Such additional participation shall be deducted from the total
     bonus calculation prior to distribution to FSD Team Members. This list will
     be presented to the FSD Compensation Committee for consideration. The Chief
     Executive Officer of AJG, in consultation with AJG's Compensation Committee
     shall have final approval over such list. In no event can the proposed
     distribution to a non-FSD Team Member be greater than 30% of his/her
     current annual salary. In addition to the above, it is the intention of the
     parties to cap the annual aggregate bonus cash payout to FSD Team Members
     at $10,000,000. Bonus calculations in excess of the cap will be carried
     forward for payout in later years as will losses that are not offset by
     income in a given year. The Compensation Committee of AJG's Board of
     Directors reserves the right to increase (but not decrease) the cap or
     accelerate the payments to FSD Team Members.

4.   Once distribution of the annual payout bonus pool is assigned to individual
     FSD Team Members, it cannot be reassigned in later years.

5.   In the event of any disputes concerning the bonus calculation or
     determination of extra-ordinary gains, the Company shall retain Ernst &
     Young, LLP, to review this plan and the bonus accrual and calculations in
     dispute. All Company workpapers and correspondence will be made available
     to the FSD Team Members. Determination by Ernst & Young, LLP, will be
     considered final.

6.   The Company reserves the right to terminate the plan for any given calendar
     year prior to the start of such year. Vested, declared and payouts already
     committed and projects already underway will not be affected by such
     termination.

7.   The Company also reserves the right to specifically exclude any corporate
     investment from the bonus calculation, i.e. those investments where members
     of the FSD had little or no involvement in the creation, finding or
     recommendation of the investment. Notification of such determination will
     be made in writing within 120 days of the investment by the Chief Executive
     Officer of AJG.

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                                                                   EXHIBIT 10.18

                                PROMISSORY NOTE

$2,382,900.00                                                   Itasca, Illinois
                                                                  March 15, 2001

Michael J. Cloherty (the "Maker"), for value received, hereby promises to pay to
Arthur J. Gallagher & Co. (the "Company"), or order, on demand, the principal
sum of Two Million Three Hundred Eighty-Two Thousand Nine Hundred Dollars
($2,382,900.00), with interest at 5.2% compounded annually, provided, however,
that so long as the Maker remains employed with the Company, repayment of the
principal hereof shall be forgiven, on an annual basis, at the rate of thirty-
three and 1/3 percent (33 1/3%) per annum beginning March 15, 2002 and on each
March 15 thereafter. If the Company terminates the employment of the Maker
without cause or in the event Maker's employment is terminated as a result of
death or permanent disability, the entire principal hereof will be forgiven and
this note cancelled and discharged.

In the event the Maker voluntarily terminates his employment with the Company,
or if the Company terminates the employment of the Maker for cause, prior to
March 15, 2004, then the remaining principal amount of the loan, excluding any
previously forgiven portion, shall be immediately due and payable.

For purposes of this Promissory Note, whether or not a termination is "for
cause" shall be determined by the definitions contained in the AJG Financial
Services, Inc. Bonus Plan as it may be amended from time to time.

All payments shall be made at Two Pierce Place, Itasca, Illinois 60143, or at
such other address as the holder hereof may from time to time specify in
writing.

At its sole option, the Company may offset pro tanto any amount of any accrued
and unpaid salary or bonus(es) payable to the Maker by the Company after demand
for payment of the unpaid principal hereunder has been made upon the Maker by
the holder hereof. No demand shall be made by Company so long as Maker is
employed by Company and has not notified Company of his intent to voluntarily
terminate his employment with Company.

If default be made in the payment of principal as herein specified, the Maker
agrees to pay all costs of collection, including a reasonable attorney's fee,
whether suit be brought or not.

Presentment for payment, demand or notice of dishonor, protest and notice of
protest are hereby waived by the Maker and all endorsers hereof.

IN WITNESS WHEREOF, the Maker has set his hand hereunto as of the date above
first written.

                                               /s/ Michael J. Cloherty
                                       -----------------------------------------
                                                   Michael J. Cloherty

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