Aon
SEVERANCE
PLAN
Aon Severance Plan
Preamble
The name of this plan is the Aon Severance Plan (the "Plan"). Its purpose
is to compensate staff employees of Aon Corporation and its subsidiaries
for unavoidable and permanent loss of employment under the circumstances
specified below. Benefits are in consideration of the waiver of any
employment-related litigation and claims against Aon Corporation or its
subsidiaries. The Plan shall be effective as of May 1, 1997, and apply to
employees notified of termination of employment by Aon Corporation or by
a subsidiary on or after that date. All prior existing severance pay
plans, programs or practices for employees, whether formal or informal,
are hereby revoked and terminated.
SECTION 1
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DEFINITIONS
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1.01 "Board" shall mean the board of directors of Aon Corporation.
1.02 "Cause" shall mean:
(a) excessive absenteeism or tardiness which violates the Company's
attendance standards;
(b) unsatisfactory job performance;
(c) violation of Company policies;
(d) breach of fiduciary duty; theft; fraud; dishonesty; embezzlement;
violation of securities laws; violation of non-competition,
nonsolicitation or confidentiality agreements;
(e) falsification of employment application or other business records;
(f) insubordination (e.g., failure to follow direct supervisory
instructions);
(g) unethical or criminal conduct.
1.03 "Committee" shall mean the Benefits Committee appointed by the Board. The
Committee is designated as the plan administrator and named fiduciary.
1.04 "Company" shall mean Aon Corporation and its majority owned subsidiaries.
1.05 "Compensation" shall mean solely salary and fixed base compensation.
Compensation shall be determined before excluding any pretax deferrals
for retirement, health, welfare, death, insurance, or similar plans of
the Company. The following are examples of items that are not included in
Compensation: (a) net and deferred commission payments; (b) bonuses; (c)
stock awards; (d) expense reimbursements; (e) income from exercise of
stock options; (f) overtime pay; (g) overrides; and (h) car allowances.
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1.06 "Employee" shall mean any regular United States staff employee of the
Company working 20 or more hours a week. The term, "Employee" shall not
include independent contractors, any individual treated as an independent
contractor by the Company but considered an employee by the Internal
Revenue Service or other third party, leased employees, and temporary
employees.
1.07 "Involuntary Termination of Employment" shall mean any Termination of
Employment with the Company due to the following:
(a) Elimination of the Employee's job, provided that (i) the
Employee has made a good faith effort to secure another
position within the Company; and (ii) there is no
possibility that another position may be secured within the
Company. A temporary or seasonal lay-off shall not be
considered an Involuntary Termination of Employment.
(b) Divestiture or other disposition of a subsidiary or unit of
the Company, where an Employee of such subsidiary or unit
is not employed by the acquiring company or offered
employment by the acquiring company.
An Involuntary Termination of Employment shall not include, among other
events: Resignation; Termination of Employment for Cause; and Termination
of Employment on account of disability.
1.08 "Participant" shall mean an Employee eligible for benefits under Section
2.01.
1.09 "Plan" shall mean the Aon Severance Plan.
1.10 "Release" shall mean a release of Employee claims in the form set forth
in Appendix A.
1.11 "Resignation" shall mean a Termination of Employment effected by the
Employee, or effected by mutual agreement between the Employee and the
Company.
1.12 "Termination of Employment" shall mean the cessation of the
classification of an Employee as an active employee on the payroll
records of the Company.
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SECTION 2
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ELIGIBILITY
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2.01 Eligibility. Any Employee of the Company who: (a) incurs an Involuntary
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Termination of Employment; (b) signs a Release in accordance with Section
2.03, which Release shall have become effective under its terms; and (c)
returns all Company property in the possession of the Employee, shall
receive benefits in accordance with Section 3 of this Plan.
2.02 Involuntary Termination. Involuntary Termination of Employment shall be a
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condition to receipt of benefits under this Plan. The determination of
whether an Employee has incurred an Involuntary Termination of Employment
shall be made based on the good faith belief of the Corporate Human
Resources Department.
2.03 Release. As a condition to receipt of benefits under this Plan, the
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Employee must sign a Release which shall have become effective in
accordance with its terms. The failure or refusal of an Employee to sign
a Release, or the revocation of a Release (to the extent permitted by its
terms) shall disqualify the employee from receiving benefits under this
Plan. If an Employee files a legal action asserting any claim or demand
within the scope of the Release, the Company shall retain all rights and
benefits of the Release and may (a) cancel all future obligations under
the Release; and (b) recoup the value of all payments and benefits paid
under this Plan, together with the Company's costs and attorneys fees.
2.04 Disabled Employees. An Employee receiving benefits under the Company's
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short-term disability plan who: (a) following commencement of such
benefits, is scheduled to incur an Involuntary Termination of Employment;
and (b) meets all the requirements of Section 2.01, shall be entitled to
benefits under this Plan; provided, however, that the number of weeks
during which benefits are paid (or deemed to be paid) under Section 3 of
this Plan shall be reduced by the number of weeks in which the Employee
receives short-term disability benefits after the scheduled date of
Termination of Employment.
2.05 Alexander & Alexander Employees. Any Employee who was employed by
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Alexander & Alexander Services, Inc., or any of its subsidiaries on
January 15, 1997, shall not be eligible for benefits under this Plan
until the Board or its designee shall amend this Plan to permit such
eligibility.
2.06 Service until Termination of Employment. An Employee otherwise entitled
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to receive benefits under Section 2.01 of this Plan shall not receive
benefits unless such Employee: (a) works satisfactorily through the date
determined by the Company to be the date of Termination of Employment;
and (b) prior to such date, neither voluntarily terminates employment nor
is terminated for Cause.
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SECTION 3
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BENEFITS
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3.01 Company-Provided Benefits. An Employee eligible for benefits under
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Section 2.01 shall receive an amount equal to one week's Compensation
multiplied by the lesser of: (a) the total of such Employee's Years of
Service plus four; or (b) 30. All Company-provided benefits under this
Section 3.01, in the case of a part-time Employee, will be pro rated
based upon the average number of hours worked by the part-time Employee
and the number of hours worked by full-time Employees in the part-time
Employee's location.
For purposes of this Section 3.01, "Years of Service" means the number of
years of continuous employment with the Company. Partial years of service
will be rounded to the closest Year of Service. With respect to
employment with an employer whose business was acquired by or merged into
the Company ("the Acquired Employer"), Years of Service shall include
employment with the Acquired Employer beginning with such Employee's most
recent date of hire with the Acquired Employer through the date of such
merger or acquisition. The foregoing applies only to individuals employed
by the Acquired Employer at the time of the acquisition or merger.
3.02 90-Day Subsidy for Health Benefits. Participants who elect continuation
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of health care coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (COBRA), shall be entitled to continue medical
(including HMO) and dental coverage under COBRA for the 90-day period
following termination of employment at a cost no greater than that paid
by similarly situated active Employees.
3.03 Form of Payment. Benefits under this Plan will be paid in a lump sum,
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unless the Company decides otherwise.
3.04 Other Benefit Plans. No amount paid to a Participant under this Plan
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shall be deemed to be compensation with respect to the Employee's
entitlement to benefits under any employee benefit plan established by
the Company for its employees unless otherwise specifically provided in
such plan.
3.05 Rehired Employees. A Participant who receives benefits under this Plan
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and who is rehired as an Employee at any time before the end of a number
of weeks described in Section 3.01(a), will be required to reimburse the
Company for benefits paid during, or attributable to, the period of
rehire.
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3.06 Laws Requiring Payments. To the extent that any federal, state or local
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law, including "plant closing" laws, requires the Company to make a
payment of any kind to an Employee because of such Employee's involuntary
termination due to a layoff, reduction in force, plant or facility
closing, sale of business, change of control, or other similar event, the
benefits provided under this Plan shall be reduced dollar for dollar or
eliminated.
3.07 Other Company-Provided Payments. The amount of benefits due an Employee
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in accordance with Section 3.01 shall be reduced, dollar for dollar, by
Company-provided payments due the Employee upon Termination of Employment
under such other individual employment arrangements as may cover the
Employee.
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SECTION 4
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ADMINISTRATION
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4.01 Participant Rights. If the claim of any Employee for benefits under the
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Plan is denied, the Company shall provide adequate notice in writing to
such claimant, setting forth the specific reasons for such denial. The
notice shall be written in a manner calculated to be understood by the
claimant. The Company shall afford such Employee whose claim for benefits
has been denied 60 days from the date notice of such denial is delivered
or mailed in which to appeal the decision in writing to the Committee. If
the Employee appeals the decision in writing within 60 days, the
Committee shall review the written comments and any submissions of the
Employee and render its decision regarding the appeal all within 60 days
of such appeal.
4.02 Committee Actions. The Committee may, from time to time, adopt rules and
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regulations for carrying out the Plan. The Committee shall have the
exclusive right and discretionary authority to construe the provisions of
the Plan, including without limitation, the power to interpret disputed,
ambiguous or uncertain terms, and such other powers as may be necessary
to carry out the provisions of the Plan. The Committee shall also have
the discretionary authority to determine on appeal all questions relating
to the eligibility of Employees to receive benefits under the Plan and
the amount of such benefits, and resolve all questions pertaining to the
administration, interpretation and application of the Plan provisions.
Actions taken in good faith by the Company, the Committee, or any
employee of the Company shall be conclusive and binding on all interested
parties and shall be given the maximum possible deference allowed by the
law. The Committee has the authority to delegate its administrative
responsibilities.
4.03 Amendment and Termination. The Plan may, at any time be amended,
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modified, or terminated by action of the Board.
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SECTION 5
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GENERAL PROVISIONS
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5.01 Notices. Unless otherwise indicated, all notices to the Company shall be
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delivered to the attention of the Secretary of the Company. Any notice or
filing required or permitted to be given to the Company under this Plan
shall be sufficient if in writing and hand delivered, or sent by
registered or certified mail, to the Company at the principal office of
the Company.
5.02 Controlling Law. Except to the extent superseded by federal law, the laws
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of Illinois shall be controlling in all matters relating to the Plan.
5.03 Captions. The captions of Sections and paragraphs of this Plan are for
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convenience only and shall not control or affect the meaning or
construction of any of its provisions.
5.04 Action by the Company. Any action required or permitted by a Company
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under the Plan shall be by resolution of its Board or any person or
persons authorized by resolution of its Board.
5.05 Facility of Payment. Any amounts payable under this Plan to any person
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under legal disability or who, in the judgment of the Company, is unable
to properly manage his financial affairs may be paid to the legal
representative of such person or may be applied for the benefit of such
person in any manner which the Company may select.
5.06 Severability. Whenever possible, each provision of the Plan shall be
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interpreted in such manner as to be effective and valid under applicable
law. If, however, any provision of the Plan shall be held to be
prohibited by or invalid under applicable law, then (a) such provision
shall be deemed amended to, and to have contained from the outset such
language as shall be necessary to, accomplish the objectives of the
provision as originally written to the fullest extent permitted by law;
and (b) all other provisions of the Plan shall remain in full force and
effect.
5.07 Liability. No member of the Board, no employee of the Company, and no
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member of the Committee (nor the Committee itself) shall be liable for
any act or action under this Plan whether of omission or commission, by
any other member or employee or by any agent to whom duties in connection
with the administration of the Plan have been delegated or, except in
circumstances involving his bad faith, gross negligence or fraud, for
anything done or omitted to be done by himself. The Company will fully
indemnify and hold the members of the Committee harmless from any
liability under this Plan, except in circumstances involving a Committee
member's bad faith, gross negligence, or fraud. The Company or the
Committee may consult with legal counsel, who may be counsel for the
Company or other counsel, with respect to its obligation or duties
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under this Plan, or with respect to any action or proceeding or any
question of law, and shall not be liable with respect to any action taken
or omitted by it in good faith pursuant to the advice of counsel.
5.08 Successors. The provisions of the Plan shall bind and inure to the
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benefit of the Company and its successors and assigns. The term
"successors" as used herein shall include any corporation or other
business entity which shall by merger, consolidation, purchase, or
otherwise, acquire all or substantially all of the business and assets of
the Company and successors of any such corporation or other business
entity.
5.09 Unfunded Status of the Plan. Payments made to the Participant pursuant to
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the Plan shall be made only from the general assets of the Company.
Nothing contained in this Plan shall be deemed to create a trust of any
kind.
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IN WITNESS WHEREOF, Aon Corporation hereby adopts the Aon Severance Plan,
effective as set forth above, as of this 5th day of May , 1997.
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AON CORPORATION
By:
/s/ Daniel T. Cox
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Daniel T. Cox
Executive Vice President
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APPENDIX A
AON SEVERANCE PLAN
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WAIVER AND RELEASE OF CLAIMS
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In exchange for benefits to be provided to me under the Aon Severance Plan (the
"Plan") , which I acknowledge I am not otherwise entitled to receive, I freely
and voluntarily agree to this WAIVER AND RELEASE OF CLAIMS.
1. In signing this WAIVER AND RELEASE OF CLAIMS, I hereby waive and
release any and all claims that I may ever have had or that I now have
against the following persons and organizations:
a. Aon Corporation, its affiliates, successors and subsidiaries;
and,
b. Any and all officers, directors, employees, shareholders and
agents of Aon Corporation, its affiliates, successors and
subsidiaries.
2. I understand and agree that, in signing this document, I am waiving and
releasing any and all claims of whatever nature that I may ever have
had or now have against the persons and organizations listed in
paragraph 1. I understand and agree that among the claims that I am
waiving and releasing are the following:
a. Claims of age discrimination in employment under the federal
Age Discrimination in Employment Act of 1967;
b. Claims of race, color, sex, national origin and religious
discrimination or harassment in employment under Title VII of
the Civil Rights Act of 1964, as amended, and the Civil Rights
Act of 1866, 42 U.S.C. ss. 1981, as amended;
c. Claims of disability discrimination under the Americans With
Disabilities Act;
d. Claims of discrimination in employment under any other
federal, state or local statute, ordinance, regulation or
constitution;
e. Claims under any employment agreement or any claims of breach
of contract; and,
f. Any common law or statutory claims of wrongful discharge and
any other common law tort or statutory claims.
I understand and agree that I am waiving and releasing any and all
claims that I may ever have had or that I now have, regardless of their
nature or origin, and that the fact that such claim is not listed in
subparagraphs (a) through (f) above, does not mean that such claim is
not included in this WAIVER AND RELEASE OF CLAIMS.
3. I agree that I will never sue any of the persons or organizations
listed in paragraph 1 and I further agree that I will never seek or
receive damages for any claim or charge of employment discrimination,
for any claim released by this WAIVER AND RELEASE OF CLAIMS. I also
agree to withdraw any pending lawsuit I may have against any of the
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persons or organizations listed in paragraph 1 arising out of my
employment, including the termination of my employment.
4. In signing this agreement, I agree and understand that this WAIVER AND
RELEASE OF CLAIMS will be binding not only on me but also on my heirs,
administrators and assigns with respect to the claims covered by this
agreement. As of the date of my signing of this agreement, I have made
no assignment of any claims against any of the persons or organizations
described in paragraph 1.
5. I hereby acknowledge that, at the time I was given this WAIVER AND
RELEASE OF CLAIMS, I was informed in writing that I had at least 45
days from the date I received all the information described in
paragraph below in which to consider whether I would sign this WAIVER
AND RELEASE OF CLAIMS. I also acknowledge that, at the time I was given
this WAIVER AND RELEASE OF CLAIMS, I was informed in writing that I
should consult with an attorney before signing this agreement. I have
had an opportunity to consult with an attorney and have either had such
consultations or have decided of my own free will that I will sign this
agreement without consulting with legal counsel.
6. I acknowledge that, at the time I was given this WAIVER AND RELEASE OF
CLAIMS, I was given a complete description of the Plan, including a
description of the group of persons who are covered by this program,
the rules of eligibility and any time limits applicable to such
program. Finally, I acknowledge that I have received a list of ages and
job titles of all individuals in my organizational unit who are
eligible or were selected to receive benefits under the Plan as well as
the ages and job titles of individuals in my organizational unit who
are not eligible or were not selected to receive benefits under the
Plan.
7. I acknowledge that I have been informed that I may revoke my acceptance
of this WAIVER AND RELEASE OF CLAIMS by delivering a letter to the
Corporate Human Resources Department (see address below), within seven
days of the date I have signed this agreement. I understand that this
WAIVER AND RELEASE OF CLAIMS will not become effective until the eighth
day following my signing of this agreement. I understand and intend
that, in the event I do not revoke my acceptance of this agreement
within the seven-day period described in this paragraph, this WAIVER
AND RELEASE OF CLAIMS will be legally binding and enforceable on me, my
heirs, administrators and assigns.
8. I agree to continue to respect the trade secrets and other confidential
information to which I have had access while employed. Insofar as I
have already signed any written agreement or agreements not to deal
with customers or clients or not to hire employees of my employing
company or its affiliates for any period of time after cessation of
employment, I confirm that I shall fulfill the terms of such agreement
or agreements.
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9. This WAIVER AND RELEASE OF CLAIMS will be interpreted and enforced
according to the laws of the state of Illinois. If any part of this
WAIVER AND RELEASE OF CLAIMS is judged by a court of competent
jurisdiction to be illegal, invalid or inoperable, then that part only
will be stricken. A suitable and equitable provision will be
substituted in order to carry out, so far as may be enforceable and
valid, the intent and purpose of the stricken part, and the rest of
this WAIVER AND RELEASE OF CLAIMS will continue in full force and
effect.
I acknowledge that the number of years of service used to calculate my benefit
under the Aon Severance Plan is ____, based on my hire date of , 19__.
___________________________ _____________________________
NAME (Please Print) SIGNATURE
___________________________ _____________________________
DATE SOCIAL SECURITY NUMBER
Return the original signed copy of this form on or before the 45th day after you
have received all the information described in paragraph 6 (above) to:
Corporate Human Resources
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123 North Wacker Drive
Chicago, IL 60606
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