Document:

Exhibit 10.3

 

AON CORPORATION

LEADERSHIP PERFORMANCE PROGRAM

(EFFECTIVE JANUARY 1, 2008)

 

Overview

 

The
Program has been adopted by the Committee as a sub-plan to the Stock Plan.  The Program is the third layer of multi-year
performance programs implemented by the Company.  Earlier programs covered the performance
periods January 1, 2006 through December 31, 2008 and January 1,
2007 through December 31, 2009, respectively.

 

Performance
Cycle

 

The
Program covers a multi-year performance cycle that begins on January 1,
2008 and ends on December 31, 2010 (“Performance Cycle”).

 

Eligibility

 

As
recommended by the CEO and approved by the Committee, key members of the
Company’s senior leadership team are eligible to participate in the Program.
The CEO and the Company’s Executive Chairman are also eligible to participate
in the Program as approved by the Committee.

 

Participation

 

The Committee will approve in writing no later than May 31,
2008 the identity of the participants eligible to participate in the Program
and each participant’s Award, denominated in US dollars.  Those participants so identified by May 31,
2008 shall be eligible to participate in the full Performance Cycle,
retroactive to January 1, 2008.

 

If
a participant is no longer considered a member of the Company’s senior
leadership team, but the participant’s employment with the Company has not
terminated, the participant’s Award under the Program shall be unaffected by
the change in status.

 

Award
Components

 

Stock Options

 

At
the outset of participation in the Program, each participant will receive 20%
of his of her Award value in nonqualified options to purchase shares of the
Company’s common stock.  The number of
stock options will be derived by dividing the value of the Award to be granted
in stock options (20% of the total value) by the Fair Market Value of a share
the Company’s common stock on the Grant Date, and then multiplying the
resulting number by 3.

 

Performance Share Units

 

In
addition, each participant will be awarded 80% of his or her Award value as
target Performance Share Units.  The
number of such target units will be derived by dividing the value of the Award
to be granted in performance share units (i.e. 80% of the total value) by the
Fair Market Value of a share of the Company’s common stock on the Grant Date.

 

Rules Applicable
to Stock Options

1.                                       The options
will be priced at the Fair Market Value on the Grant Date.

 

2.                                       The options
will become exercisable during employment as follows:  (a) one-third on the first anniversary
of the Grant Date; (b) one-third on the second anniversary of the Grant
Date; and (c) the remainder on the third anniversary of the Grant Date.

 

3.                                       After the
options become exercisable in whole or in part in accordance with the table set
forth in rule #7 below and until they expire, the options may be
exercised, and the participant’s tax withholding obligations may be fulfilled,
in the manner specified by 

 

 

 

the Committee.  Under no
circumstances may the options be exercised after they have expired.

 

4.                                       The options
will have a term of six years.

 

5.                                       If the options
would expire, or the exercise period would end, on a date that is not a
business day, they will expire, or become unexercisable, at the close of
business on the last business day preceding that date.  A business day is any day on which the Company’s
common stock is traded on the New York Stock Exchange.

 

6.                                       The participant
must accept the stock option award agreement through his or her Company-related
E*Trade account.

 

7.                                       If a
participant’s employment is terminated, the following rules will apply to
the vesting and exercise of the participant’s stock options:

 

	
  Reason
  for Employment Termination

  	
   

  	
  Impact on Vesting of
  Performance Share Units

  
	
   

  	
   

  	
   

  
	
  Retirement
  or termination by Company without Cause

  	
   

  	
  Stock
  options will vest pro rata through the date of termination or Retirement. In
  the event of the participant’s Retirement, the vested stock options will be
  exercisable for 36 months. In the event of a termination by the Company
  without Cause, the stock options will be exercisable for 90 days.

  
	
   

  	
   

  	
   

  
	
  Death
  or Total and Permanent Disability

  	
   

  	
  Stock
  options will immediately and fully vest upon the participant’s death or Total
  and Permanent Disability. The stock options will be exercisable for twelve
  months.

  
	
   

  	
   

  	
   

  
	
  Voluntary
  Resignation

  	
   

  	
  Unvested
  stock options will be immediately forfeited. Stock options that vested in
  accordance with three-year graded vesting schedule will be exercisable for 90
  days.

  
	
   

  	
   

  	
   

  
	
  Termination
  by Company for Cause

  	
   

  	
  All
  vested and unexercised and unvested stock options will be immediately
  forfeited.

  
	
   

  	
   

  	
   

  
	
  Termination
  due to Change in Control

  	
   

  	
  Regardless
  whether a successor to the Company assumes and continues this Program after a
  Change in Control, the stock options will be subject to the following rules:
  (1) if the participant’s employment is terminated by the Company without
  Cause within two years after the Change in Control, the participant will
  become immediately vested in any unvested stock options and the stock options
  will be exercisable for 90 days; and (2) if the participant’s employment
  is terminated by the Company for Cause, by the participant in a voluntary
  resignation, or by reason of the participant’s death or Total and Permanent
  Disability, or if the participant’s employment is continued through the end
  of the Performance Cycle, the rules of the Program shall continue to
  apply to the stock options as if the Change in Control had not occurred.

  

 

Rules Applicable
to Performance Share Units

1.                                       The Performance
Share Units will be earned and will vest as of the Settlement Date, subject to
the satisfaction of the performance criteria set forth herein.

 

2.                                       The payout
resulting from the vesting of the Performance Share Units will be determined
based on the Company’s cumulative Earnings per Share over the Performance Cycle
as compared to the target Earnings Per Share.

 

3.                                       Payouts will
range from 0% to 200% of the targeted number of Performance Share Units
awarded.

 

 

2

 

4.                                       The Performance
Share Units will pay out in shares of the Company’s common stock issued under,
and subject to, the limitations of the Stock Plan or such other
shareholder-approved Company equity-based incentive plan as designated by the
Committee.

 

5.                                       The Company
shall have the right to satisfy all federal, state and local withholding tax
requirements with respect to the award earned by reducing the number of earned
shares by the number of shares determined by dividing the amount of withholding
required by the Fair Market Value of a share of the Company’s common stock on
the Settlement Date.

 

6.                                       The Performance
Share Units are not transferable and may not be sold, assigned, pledged,
hypothecated or otherwise encumbered.

 

7.                                       Until the
Settlement Date, the participant will not be treated as a stockholder as to
those shares of the Company’s common stock relating to the Performance Share
Units.  No cash payments will be provided
for dividend equivalents or other distributions.

 

8.                                       The participant
will be granted a Performance Award Certificate at the outset of his or her
participation in the Program.  The
certificate will set forth the target number of Performance Share Units granted
to the participant.  The participant must
sign and return to the Company the certificate to indicate that he or she
agrees to be bound by the provisions of the Program, including the restrictive
covenants described herein.  Failure to
return a signed certificate to the Company will result in forfeiture of the
Performance Share Units.

 

9.                                       If a
participant’s employment with the Company terminates before the last day of the
Performance Cycle, the following rules will apply to the vesting of the
Performance Share Units:

 

	
  Reason
  for Employment Termination

  	
   

  	
  Impact on Vesting of
  Performance Share Units

  
	
   

  	
   

  	
   

  
	
  Retirement
  or termination by Company without Cause

  	
   

  	
  Performance
  Share Units will vest pro rata through the date of termination or Retirement.
  The Committee’s determination regarding the vested portion and payout will
  occur after the close of the Performance Cycle. The number of units earned
  will be pro-rated based on the proportion of achievement of the target
  cumulative earnings per share as of the last full calendar quarter preceding
  the participant’s termination or Retirement date.

  
	
   

  	
   

  	
   

  
	
  Death
  or Total and Permanent Disability

  	
   

  	
  Performance
  Share Units will become immediately vested at the greater of the target award
  level or the number of units that would have been earned based on the actual
  cumulative earnings per share during the period of the Performance Cycle in which
  the participant was employed by the Company.

  
	
   

  	
   

  	
   

  
	
  Voluntary
  Resignation

  	
   

  	
  Performance
  Share Units will be forfeited in their entirety.

  
	
   

  	
   

  	
   

  
	
  Termination
  by Company for Cause

  	
   

  	
  Performance
  Share Units will be forfeited in their entirety.

  
	
   

  	
   

  	
   

  
	
  Termination
  due to Change in Control

  	
   

  	
  If
  a successor to the Company assumes and continues this Program substantially
  in its current form after a Change in Control, the Performance Share Units
  will be subject to the following rules: (1) if the participant’s
  employment is terminated by the Company without Cause after the Change in
  Control but prior to the end of the Performance Cycle, the participant will
  become immediately vested in the greater of the target performance share
  units or the number of units that would be earned based on the proportion of achievement
  of the target cumulative earnings per share as of the last full calendar
  quarter preceding the participant’s termination date; and (2) if the
  participant’s employment is terminated by the Company for Cause, by the
  participant in a voluntary resignation, or by reason of the participant’s
  death or Total and Permanent Disability, or if the participant’s employment
  is continued through the end of the Performance Cycle, the rules of the
  Program shall continue to apply to the Performance Share Units as if the
  Change in Control had not occurred.  

   

  If
  the successor to the Company does not assume and continue this Program
  substantially in its current form, the performance share units shall become
  immediately vested at the greater of the target performance share units or
  the number of units that would have been earned based on the proportion of
  achievement of the target cumulative earnings per share as of the last full
  calendar quarter preceding the effective date of the Change in Control.

  

 

 

3

 

Performance
Measure for Performance Share Units

 

The
performance measure for the Performance Share Units will be cumulative Earnings
per Share for the Performance Cycle, for which the Committee has established a
target of $8.85.

 

Following
the end of the Performance Cycle, the Committee will determine in its sole
discretion the payout, which determination shall be final and binding.  Performance Share Units will be subject to
complete forfeiture if the Company’s performance for the Performance Cycle does
not meet or exceed a minimum cumulative Earnings per Share of $8.35, and the
payout for performance at or above that level will be calculated as follows:

 

	
  2008-2010
  Cumulative EPS 

  	
   

  	
  % of
  Targeted Units Earned

  
	
  $8.35

  	
   

  	
  50%

  
	
  $8.85

  	
   

  	
  100%

  
	
  $9.35

  	
   

  	
  150%

  
	
  $9.70
  or higher

  	
   

  	
  200%

  

 

The
Performance Share Units will pay out linearly between each set of data points.

 

Adjustments
to Performance Measures or Results

 

The
Committee will make appropriate adjustments to the target Earnings per Share or
the Company’s actual results on account of: change in accounting policy;
gain/loss on disposition of assets or business; charge for goodwill impairment;
extraordinary legal/regulatory settlements; effects of natural or man-made
disasters (e.g. Word Trade Center); hyperinflation (e.g. >15%); change in
statutory tax rates/regulations; charges from Board-approved restructuring
programs; results of discontinued operations held for sale after sale closing;
other extraordinary, unusual or infrequently occurring items — as defined by
GAAP. The form and manner of any such adjustment shall be at the sole
discretion of the Committee.  By way of
example, the following events will not require adjustment:  change in accounting estimate; gained/lost
pre-tax income from sold/acquired businesses that represent less than 5% of
total pre-tax income; inflation; general tax developments; litigation costs;
effects of repaying or issuing debt; effects of share buyback/issue; effects of
pension plan funding; changes in benefit/incentive plans; or currency/interest
rate fluctuations.

 

 

4

 

Restrictive
Covenants

 

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

 

Covenant
Not to Solicit

 

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

 

Covenant
Not to Hire

 

The
employee also agrees not to induce or attempt to induce, or to cause any person
or other entity to induce or attempt to induce, any person who is an employee
of the Company to leave the employ of the Company during the term of the
covenant set forth above.

 

If
the Company determines that a participant has breached any of the covenants,
his or her stock options and Performance Share Units will be immediately
forfeited.  In the event any of the
restrictive covenants set forth herein is deemed unenforceable, such as against
a non-US employee, the employee agrees that the maximum period, scope or
geographic area reasonable under such circumstances shall be substituted for
the stated period, scope or area and that the court shall be allowed to revise
the restrictions accordingly.

 

Administration

 

It
is expressly understood that the Committee has the discretionary authority to
administer, construe, and make all determinations necessary or appropriate to
the administration of the Program, all of which will be binding upon the
participant.  The Committee may delegate its authority to one or more of its members,
or to one or more members of the Company’s senior management team, to offer
participation in this Program to eligible individuals; provided, however, that
the Committee shall not delegate its authority with respect to the
participation of any officer of the Company who is subject to Section 16
of the Securities Exchange Act of 1934, as amended.  The Company shall, as necessary, adopt
conforming amendments to this Program as are necessary to comply with Section 409A
of the Internal Revenue Code of 1986, as amended.

 

 

5

 

General
Provisions

 

All
obligations of the Company under this Program with respect to payout of Awards,
and the corresponding rights granted thereunder, shall be binding on any
successor to the Company, whether the existence of such successor is the result
of a direct or indirect purchase, merger, consolidation or other acquisition of
all or substantially all of the business and/or assets of the Company.

 

This
Program constitutes a legal document which governs all matters involved with
its interpretation and administration and superseded any writing or
representation inconsistent with its terms.

 

Reservation
and Retention of Company Rights

 

The
selection of any employee for participation in this Program will not give that
participant any right to be retained in the employ of the Company.  No employee will at any time have a right to
be selected for participation in a future performance-based incentive program
despite having been selected for participation in this Program or a previous
program.

 

Stock
Plan Controls

 

Except
as specifically provided in this Program, in the event of any inconsistency
between this Program and the Stock Plan, the Stock Plan will control, but only
to the extent such Stock Plan provisions will not violate the provisions of Section 409A
of the Internal Revenue Code of 1986, as amended.

 

Definitions

 

CEO:  the Company’s Chief
Executive Officer.

 

Cause:  as determined in the sole
discretion of the Committee, means the participant:  (A) performing an act of dishonesty,
fraud, theft, embezzlement or misappropriation involving the participant’s
employment with the Company, or breach of the duty of loyalty to the Company; (B) performing
an act of race, sex, national origin, religion, disability, or age-based
discrimination which, after investigation, counsel to the Company reasonably
concludes will result in liability being imposed on the Company and/or the
participant; (C) material violation of Company policies and procedures
including, but not limited to, the Aon Code of Business Conduct and the Aon
Code of Ethics; or (D) performing an act resulting in a criminal felony
charge (or equivalent offense in a non-US jurisdiction) brought against the
participant or a criminal conviction of the participant (other than a
conviction of a minor traffic violation).

 

Change
in Control:  means the first
to occur of the following:  (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 

 

6

 

employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company) shall become the beneficial owner of 30%
or more of the Outstanding Common Stock or 30% or more of the Outstanding
Voting Securities by reason of an acquisition by the Company, and such Person
shall, after such acquisition by the Company, become the beneficial owner of
any additional shares of the Outstanding Common Stock or any additional
Outstanding Voting Securities and such beneficial ownership is publicly
announced, such additional beneficial ownership shall constitute a Change in
Control;

 

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

 

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

 

Committee:  the Organization and
Compensation Committee of the Company’s board of directors.

 

Company:  Aon Corporation, a Delaware
corporation, and its subsidiaries.

 

 

7

 

Earnings
per Share or EPS:  the Company’s
earnings per share from continuing operations as reported each quarter.  The Committee has the sole discretion to
approve an adjustment to EPS, in accordance with the adjustment criteria set
forth herein.

 

Fair
Market Value:  the average of
the high and low trading prices of the Company’s common stock as quoted on the
New York Stock Exchange as of the close of business on the Grant Date (or if
the New York Stock Exchange was not open for trading on that day, the next
preceding day that the New York Stock Exchange was open for trading and the
common stock of the Company was traded) as reported for such date by the Wall
Street Journal.

 

Grant
Date:  the date an Award to a
participant is approved in writing by the Committee.

 

Program:  the Leadership Performance
Program, effective January 1, 2008.

 

Retire
or Retirement: a voluntary termination of employment at or after
the participant’s 55th birthday.

 

Settlement
Date:  the date that the Committee
determines whether the performance criteria applicable to the Performance Share
Units has been achieved or exceeded and determines the payout to
participants.  The Settlement Date shall
occur as soon as practicable following the close of the Performance Cycle.

 

Settlement
Date Value:  the Fair Market
Value of a share of the Company’s common stock on the date the Committee
determines the amount of the Performance Share Units earned.

 

Stock
Plan:  the 2001 Aon Stock Incentive
Plan, as amended and re-approved by the Company’s stockholders at the 2006
annual meeting of stockholders.

 

Total
and Permanent Disability:  for (a) US
employees, entitlement to long-term disability benefits under the Company’s
program, as amended from time to time and (b) non-US employees, as
established by applicable Company policy or as required by local law or
regulations.

 

If
a term is used but not defined, it has the meaning given such term in the Stock
Plan.

 

 

8Exhibit 10.4

 

Aon Corporation

2008 Executive Committee Incentive Plan

 

Overview

Since
2001, Aon has maintained its Omnibus Incentive Plan to encourage the highest
level of performance of its executives through the establishment of
quantifiable performance goals.  Awards
granted under the Omnibus Incentive Plan are intended to qualify as deductible “performance-based”
compensation pursuant to Section 162(m) of the Code.  This Plan was adopted by the Committee,
effective January 1, 2008, as a sub-plan to the Omnibus Incentive Plan to
determine the funding and form of distribution of awards under such plan.

 

Performance
Period

The
Plan is based on successive calendar-year performance periods beginning January 1,
2008.

 

Eligibility

All
members of Aon’s Executive Committee are eligible to participate in the Plan if
they: (a) are actively employed by Aon as of the last day of the calendar
year; (b) are on an approved leave of absence as of the last day of the
calendar year; (c) retired from Aon at or after age 55 during the calendar
year; or (d) terminated employment on account of death or Total and
Permanent Disability during the calendar year. 
The Committee may modify the eligibility criteria as it deems necessary
or appropriate.

 

Award
Calculation

At
the beginning of each calendar year, the Committee will approve a “target
incentive award” for each participant as a percentage of his or her base
salary.  The Committee will also
establish corporate performance metrics applicable to the funding of incentive
awards under the Plan, and those metrics may include:  (1) the achievement of a specified
pre-tax net income from ongoing operations; (2) the growth in pre-tax net
income from ongoing operations as compare to the prior year; (3) organic
revenue growth; and/or (4) any other factors as determined by the
Committee in its sole discretion.  In
addition, business unit, functional and individual performance metrics may be
established and assigned weights to guide the Committee in its allocation of
awards to participants.

 

After
the close of the calendar year, awards to participants will be determined in
the sole discretion of the Committee and paid to participants.  Awards will be funded in accordance with the
corporate performance criteria adopted by the Committee.  Awards will be allocated in the sole
discretion of the Committee taking into account the participants’ target
incentive awards and achievement of the assigned metrics.  Any resulting awards will be paid pursuant to
the terms and conditions of the Omnibus Incentive Plan.  In no event may an award to a participant
exceed the maximum set forth in the Omnibus Incentive Plan (i.e. $5 million).

 

Payout
Process

After
the awards are determined by the Committee, they will be paid out partly in
cash and partly in restricted stock units of Aon common stock pursuant to the
Stock Plan, unless Aon is contractually obligated to provide a participant’s
award fully in cash.  Awards up to 100%
of the target incentive award will be paid 80% in cash and 20% in restricted
stock units.  Awards exceeding 100% of
the target incentive award will be paid 80% in cash and 20% in restricted stock
units up to the target incentive award, and any portion of the award exceeding
the target incentive award will be paid 50% in cash and 50% in restricted stock
units.  The restricted stock units will
be subject to the terms and conditions established by the Committee; provided,
however, that they will vest in three equal installments on each of the first
through third anniversaries of the date of grant.  The Committee may modify the manner of
distribution for an individual participant or one or more groups of
participants as it deems necessary or appropriate.

 

A
participant will have no right to an award until it is paid.

 

 

Administration

It
is expressly understood that the Committee has the discretionary authority to
administer, construe, and make all determinations necessary or appropriate to
the administration of the Plan, all of which will be binding upon the
participant.  The Committee has the sole
discretion to set the Target Award Percentage for each participant and to
determine any final award payment.

 

General
Provisions

This
Plan constitutes a legal document which governs all matters involved with its
interpretation and administration and superseded any writing or representation
inconsistent with its terms.

 

To
the extent not preempted by federal law, this Plan will be construed in
accordance with, and subject to, the laws of the state of Illinois without
regard to any conflict of laws principles. 
Any legal action related to this Plan must be brought in a federal or
state court located in Illinois.

 

All
awards will be subject to applicable withholding taxes and other required
deductions.

 

Participants
may not assign, transfer, sell, pledge or otherwise alienate their award
opportunities, other than by will or by the laws of descent and
distribution.  Any award payable on
behalf of a deceased participant will be paid to the participant’s estate.

 

Aon
is not required to establish a separate account or fund or to make any other
segregation of its assets in connection with awards that could become payable
under this Plan.  Participants will have
rights with regard to earned but unpaid awards that are no greater than the
rights of unsecured general creditors.

 

Reservation
and Retention of Company Rights

Participation
in this Plan will not give a participant any right to be retained in the employ
of Aon.  No employee will at any time
have a right to be selected for participation in another performance-based
incentive program, including any future program, on account of his or her
participation in this Plan.

 

All
awards under this Plan are gratuitous in nature and will not become part of any
employment condition or contract.

 

The
Committee reserves the right to amend or terminate this Plan, prospectively or
retroactively, at any time and for any reason.

 

Omnibus
Incentive Plan and Stock Plan Control

In
the event of any inconsistency between this Plan and the Omnibus Incentive Plan
or the Stock Plan, the Omnibus Incentive Plan or the Stock Plan, as applicable,
will control unless otherwise specified herein.

 

Definitions

“Aon” means Aon Corporation, a Delaware corporation, and its
operating subsidiaries and affiliates.

 

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

 

“Committee” means the Organization and Compensation Committee
of the Board of Directors of Aon.

 

“Executive Committee” means the committee comprised of senior
members of Aon’s management team as established from time to time.

 

“Omnibus Incentive Plan” means the 2001 Senior Officer
Incentive Compensation Plan, as amended and restated effective January 1,
2006.

 

 

2

 

“Organic Revenue Growth” means the growth in revenue
exclusive of the impact of foreign exchange rate changes, acquisitions,
divestitures, transfers between business units, investment income, reimbursable
expenses, and unusual items.

 

“Pre-tax income from ongoing operations” means such term
calculated according to GAAP and as adjusted for certain extraordinary or
special items, in the form and manner determined in the sole discretion of the
Committee and in compliance with IRS regulations, including, but not limited
to: changes in accounting principles or other such laws or provisions affecting
reported results; large and unusual investment gains or losses; large and
unusual legal or regulatory claims or expenses; restructuring initiatives;
other extraordinary expenses as discussed with or among Aon’s Board of
Directors; mergers, acquisitions or dispositions of businesses; and any other
item identified in the audited financial statements, including footnotes, or
the Management Discussion and Analysis section of Aon’s annual report.

 

“Stock Plan” means the 2001 Aon Stock Incentive Plan, as
amended and re-approved by Aon’s stockholders at the 2006 annual meeting of
stockholders, or any successor plan.

 

“Total
and Permanent Disability” means (a) for US employees, entitlement
to long-term disability benefits under Aon’s program as amended from time to
time, and (b) for non-US employees, as established by applicable company
policy or as required by local law or regulations.

 

If
a term is used but not defined, it has the meaning given such term in the
Omnibus Incentive Plan.

 

 

 

3

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