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| Aon |
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| DEFERRED COMPENSATION |
| PLAN |
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Aon DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
PAGE
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SECTION 1 DEFINITION OF TERMS
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1.01 Accounts............................................................ 2
1.02 Aon Common Stock Account............................................ 2
1.03 Aon General Account................................................. 2
1.04 Beneficiary......................................................... 2
1.05 Board............................................................... 2
1.06 Change of Control................................................... 2
1.07 Code................................................................ 3
1.08 Committee........................................................... 3
1.09 Company............................................................. 3
1.10 Compensation........................................................ 3
1.11 Employee............................................................ 3
1.12 Participant......................................................... 4
1.13 Performance......................................................... 4
1.14 Plan................................................................ 4
1.15 Subsidiary.......................................................... 4
SECTION 2 ELIGIBILITY AND PARTICIPATION
- --------- -----------------------------
2.01 Eligibility......................................................... 4
2.02 Participation....................................................... 4
SECTION 3 ELECTION TO DEFER
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3.01 Irrevocable Election................................................ 5
3.02 First Calendar Year Election........................................ 5
3.03 Election as to Period Deferral...................................... 5
3.04 Election as to Aon Common Stock Account or Aon General Account...... 5
3.05 Failure to Make an Election......................................... 5
SECTION 4 DEFERRED COMPENSATION AMOUNTS
- --------- -----------------------------
4.01 Deferral Period Subaccounts......................................... 6
4.02 Amounts Credited to the Aon Common Stock Account.................... 6
4.03 Amounts Credited to the Aon General Account......................... 6
4.04 Dividends Credited to Aon Common Stock Account...................... 7
SECTION 5 METHOD OF DISTRIBUTION OF DEFERRED COMPENSATION
- --------- -----------------------------------------------
5.01 Election of Distribution............................................ 7
5.02 Method of Distribution.............................................. 7
5.03 Installment Payments................................................ 8
5.04 Termination of Employment Prior to Distribution Date................ 8
5.05 Hardship Withdrawals................................................ 8
5.06 Distribution Upon Death after Payments Have Commenced............... 9
5.07 Distribution to Beneficiaries....................................... 9
5.08 Distributions from Aon Common Stock Account......................... 10
SECTION 6 MISCELLANEOUS
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6.01 Other Benefit Plans................................................. 10
6.02 Participant's Rights................................................ 10
6.03 Change of Control................................................... 11
6.04 Nonalienability and Nontransferability.............................. 11
6.05 Plan Administrator.................................................. 12
6.06 Amendment and Termination........................................... 12
SECTION 7 GENERAL PROVISIONS
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7.01 Notices............................................................. 12
7.02 Controlling Law..................................................... 12
7.03 Gender and Number................................................... 12
7.04 Captions............................................................ 13
7.05 Action by the Company............................................... 13
7.06 Facility of Payment................................................. 13
7.07 Withholding Payroll Taxes........................................... 13
7.08 Severability........................................................ 13
7.09 Liability........................................................... 13
7.10 Successors.......................................................... 14
7.11 Unfunded Status of the Plan......................................... 14
Aon Deferred Compensation Plan
------------------------------
Preamble
--------
The name of this plan is the Aon Deferred Compensation Plan (the "Plan").
Its purpose is to provide certain select management or highly compensated
employees of Aon Corporation and its subsidiaries with the opportunity to
defer amounts earned as an employee. The Plan shall be effective as of
October 1, 1994.
SECTION 1
---------
DEFINITIONS
-----------
1.01 "Accounts" shall mean the Aon Common Stock Account and the Aon
General Account.
1.02 "Aon Common Stock Account" shall mean the account established on
the books of the Company or a Subsidiary for a Participant who
has elected to defer Compensation or the Performance Bonus, as if
such deferral had been invested in whole and fractional shares of
Aon common stock.
1.03 "Aon General Account" shall mean the account established on the
books of the Company or a Subsidiary for a Participant who has
elected to defer Compensation or to defer a Performance Bonus as
if such deferral had been invested in accordance with Section
4.03.
1.04 "Beneficiary" shall mean the beneficiary or beneficiaries
designated by the Participant to receive the amount, if any,
payable under the Plan upon the death of the Participant.
1.05 "Board" shall mean the board of directors of the Company.
1.06 "Change of Control" shall mean:
(a) the purchase or other acquisition by any person (as defined
by (S)(S) 13(d) or 14(d)(2) of the Securities Exchange Act of
1934 (the "Act") or any comparable successor provisions) of
beneficial ownership (within the meaning of Rule 13d-3 under the
Act) of 20% or more of either the outstanding shares of common
stock or the
2
combined voting power of the Company's then outstanding voting
securities entitled to vote generally; or
(b) the consummation of a merger or equivalent combination in
which the Company is not the continuing or surviving corporation,
or pursuant to which shares of Aon common stock are converted
into cash, securities or other property, other than a merger of
the Company in which the holders of Aon common stock immediately
prior to the merger have substantially the same proportionate
ownership of common stock of the surviving corporation
immediately after the merger; or
(c) the election by stockholders of members of the Board 20% or
more whom are persons who were not nominated in the most recent
proxy statement of the Company; or
(d) a liquidation or dissolution of the Company or the sale of
all or substantially all of the Company's assets.
1.07 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.08 "Committee" shall mean the Organization and Compensation
Committee of the Board (or such successor committee of the Board
as shall from time to time have responsibility for compensation
matters).
1.09 "Company" shall mean Aon Corporation.
1.10 "Compensation" shall mean the following types of earnings paid
to an Employee for his service on behalf of the Company or the
Subsidiaries: salary and fixed base compensation including
compensation for overtime, and net commission, renewal and
override compensation. Compensation shall be determined before
excluding any pretax deferrals for retirement, health, welfare,
death, insurance, or similar plans of the Company.
The following shall not be included in Compensation: (i) deferred
commission payments; (ii) bonuses; (iii) stock awards; (iv)
expense reimbursements; (v) income from exercise of stock
options; (vi) distributions from, and Company or Subsidiary
contributions to, the Aon Savings Plan, the Aon Employee Stock
Ownership Plan, the Aon Pension Plan or any other Company or
Subsidiary fund or plan providing retirement, health, welfare,
death, insurance or similar benefits; (vii) amounts paid to an
Employee in respect to employment during which he is not
permanently employed within the United States or its possessions;
and (viii) amounts previously deferred under the terms of the
Plan.
3
1.11 "Employee" shall mean any United States staff employee of the
Company and its Subsidiaries.
1.12 "Participant" shall mean any eligible Employee who elects to
participate in the Plan pursuant to Section 2.
1.13 "Performance Bonus" shall mean any amount paid by the Company or
a Subsidiary to an Employee pursuant to periodic individual
performance appraisals or a formal contractual bonus program.
1.14 "Plan" shall mean the Aon Deferred Compensation Plan.
1.15 "Subsidiary" shall mean any corporation of which 50% or more of
the voting stock is owned or controlled, directly or indirectly,
by the Company or by one or more of such corporations.
SECTION 2
---------
ELIGIBILITY AND PARTICIPATION
-----------------------------
2.01 Eligibility. Any Employee of the Company or a Subsidiary who
received wages or compensation as reported on Box 1 of IRS Form
W-2 of $125,000 or more in the prior calendar year or whose rate
of annual base pay in the current calendar year is $125,000 or
more shall be eligible to participate in the Plan in accordance
with the requirements of Section 2.02, unless otherwise decided
by the Committee. In addition, other select management or highly
compensated Employees may be eligible to participate at the
option of the Committee.
2.02. Participation. Every eligible Employee shall become a
Participant after making an irrevocable election to participate
as described in Sections 3.01 or 3.02 and as of the first day of
the first period for which amounts are deferred. Where the
context so requires, an individual for whose benefit an account
is being maintained under this Plan shall also be deemed to be a
Participant. The Company will establish an Aon Common Stock
Account and Aon General Account, as applicable, for each
Participant. Such accounts shall be book entries maintained by
the Company or its Subsidiaries, and the existence of such book
entries shall not create and shall not be deemed to create a
trust of any kind, or a fiduciary relationship between the
Company or the Subsidiary and the Employee or Beneficiary.
4
SECTION 3
---------
ELECTION TO DEFER
-----------------
3.01 Irrevocable Election. On or before December 31 of any year, each
Employee eligible to participate in the Plan shall be entitled to
make an irrevocable election to defer receipt of: (i) any whole
percentage of Compensation otherwise payable from the Company or
a Subsidiary for the following calendar year; and (ii) any whole
percentage of a Performance Bonus to be earned in the following
calendar year.
3.02 First Calendar Year Election. Within 30 days after the later of
the date the Plan is effective or the date the Employee first
becomes eligible to participate in the Plan, each Employee
eligible to participate shall be entitled to make an irrevocable
election to defer (i) any whole percentage of Compensation not
yet payable; and (ii) any whole percentage of a Performance Bonus
not yet earned.
3.03 Election as to Period of Deferral. Each Employee shall also make,
within the time specified in Section 3.01 or 3.02, an irrevocable
election as to the period of deferral and distribution in
accordance with Section 5.
3.04 Election as to Aon Common Stock Account or Aon General Account.
Each Employee shall also make, within the time specified in
Section 3.01 or 3.02, (i) an election as to the allocation of the
full amount of deferred Compensation to the Aon Common Stock
Account or to the Aon General Account; (ii) an election as to the
allocation of the full amount of the deferred Performance Bonus
to the Aon Common Stock Account or to the Aon General Account;
and, if the Participant desires, (iii) a similar election to
reallocate balances in the Aon Common Stock Account and Aon
General Account.
3.05 Failure to Make an Election. The elections set forth in any
notice described in Sections 3.01 through 3.03 shall pertain only
to the period for which they are made, and if no election is made
for a period no deferral will be made. In the event an Employee
fails to specify an allocation of Compensation or of the
Performance Bonus, 100% of the deferred portion of such
Employee's Compensation or Performance Bonus shall be credited to
the Aon General Account.
5
SECTION 4
---------
DEFERRED COMPENSATION AMOUNTS
-----------------------------
4.01 Deferral Period Subaccounts. Separate subaccounts under the Aon
Common Stock Account and under the Aon General Account for each
deferral period shall be established and maintained for each
Participant. Such subaccounts shall reflect the amount deferred
for each deferral period specified in each election form by the
Participant. In the event two or more subaccounts reflect
deferred amounts which are to be paid at the same time, all such
subaccounts shall be aggregated into a single subaccount.
4.02 Amounts Credited to the Aon Common Stock Account. With respect to
an Employee's election to defer any portion of Compensation or
the Performance Bonus, a Participant's Aon Common Stock Account
will be credited with such additions as the Participant has
elected to defer to such account. For purposes of crediting
Compensation or the Performance Bonus, deferred amounts shall be
assumed to have been invested in Aon common stock. The amount of
shares so credited will be determined by dividing the deferred
amount of the Participant's Compensation or Performance Bonus by
the fair market value of Aon common stock on the New York Stock
Exchange for the day such Compensation or Performance Bonus would
have been payable to the Participant had it not been deferred.
Fair market value on any day is the average of the highest and
lowest price at which the stock was sold on the New York Stock
Exchange that day. In the event of a recapitalization, stock
split, stock dividend, combination or exchange of shares, merger,
consolidation, rights offering, separation, reorganization or
liquidation, or any other change in the corporate structure or
shares of the Company, the Committee may make such equitable
adjustments to prevent dilution or enlargement of rights, as it
may deem appropriate, in the number and class of shares so
credited.
4.03 Amounts Credited to the Aon General Account. With respect to an
Employee's election to defer any portion of Compensation or of a
Performance Bonus, a Participant's Aon General Account will be
credited with such additions as the Participant has elected to
defer to such account. For purposes of computing such addition,
deferred amounts shall be credited as of the day such
Compensation or Performance Bonus would have been payable to the
Participant had it not been deferred, and such deferrals shall be
credited with interest, compounded semiannually, at the annual
rate determined as of January 1 and July 1 of each year by
averaging the one-year Treasury bill yield as published monthly
by the Federal Reserve Bank of St. Louis on a
6
bank discount basis through the secondary market for the last six
months immediately prior thereto. The rate of interest shall be
so determined by the Committee but may be modified by the Board
at any time in its exclusive discretion, with prospective effect
but with respect to all prior and all future deferrals; provided,
however, that no such modification may be implemented without
advance notice to Participants affected by the modification.
Such deferred amounts shall be deemed to earn interest from the
date of crediting until the last day of the month preceding (i)
the Elected Distribution Date (as defined in Section 5.02) and
every 12-month anniversary of the Elected Distribution Date in
the case of installment payments; (ii) the Termination
Distribution Date (as defined in Section 5.04) and every 12-month
anniversary of the Termination Distribution Date in the case of
installment payments; or (iii) the hardship distribution date,
whichever is applicable.
4.04 Dividends Credited to Aon Common Stock Account. As of each
dividend payment date, each Participant's Aon Common Stock
Account shall be credited with the dividends that would be paid
with respect to Aon common stock on the dividend payment date as
if the Participant owned the stock credited to the Aon Common
Stock Account. Dividends will be credited as if reinvested in
whole or fractional shares on the dividend date.
SECTION 5
---------
METHOD OF DISTRIBUTION OF DEFERRED COMPENSATION
-----------------------------------------------
5.01 Election of Distribution. Any amount deferred for any period plus
any earnings or dividends attributable thereto shall be payable
under the method selected by the Participant under Section 5.02,
unless the Participant terminates employment before the Elected
Distribution Date (as defined below) or receives a hardship
withdrawal in accordance with Section 5.05 before the period of
deferral has expired.
5.02 Method of Distribution. At the time the Participant elects to
defer Compensation or the Performance Bonus pursuant to Section
3, the Participant shall also make an irrevocable election as to
(i) the beginning date of distribution with respect to amounts so
credited to the Accounts of the Participant; and (ii) the number
of annual
7
installments, not in excess of ten, over which such distribution
will be made. Payments, subject to the provisions of Sections
5.04 and 5.05, shall commence within 30 days following the date
of distribution specified by the Participant in his or her
deferral election (the "Elected Distribution Date"); provided,
however, that the Committee may in its sole discretion determine
that payment shall be made over a shorter or longer period or in
more frequent installments, or commence on an earlier or later
date, or any or all of the above. Each installment shall be
withdrawn proportionately from the Aon Common Stock Account and
the Aon General Account.
5.03 Installment Payments. The first annual installment shall be paid
within the 30-day period following the Elected Distribution Date
or following the Termination Distribution Date, whichever is
applicable. Subsequent annual installments shall be paid within
the 30-day period following the end of each 12-month anniversary
of the Elected Distribution Date or Termination Distribution
Date, whichever is applicable. The amount of the first payment
shall be a fraction of the total balances of the Participant's
Accounts for such period (with interest credited in accordance
with Section 4.03; with dividends credited in accordance with
Section 4.04, and with Aon common stock as valued under Section
5.08), the numerator of which is one and the denominator of which
is the total number of installments elected. The amount of each
subsequent payment shall be a fraction of the total balances of
the Participant's Accounts similarly computed for each subsequent
payment, the numerator of which is one and the denominator of
which is the total number of installments remaining.
5.04 Termination of Employment Prior to Distribution Date. If the
Participant terminates employment for any reason prior to the
Elected Distribution Date, payments shall commence within the 30-
day period following the first business day of the first calendar
year following the year in which employment terminated (the
"Termination Distribution Date"), and distributions shall be made
in the same number of annual installments as had been elected by
the Participant at the time of the deferral election; provided,
however, that the Committee may, in its sole discretion,
determine that distribution to a terminated employee shall
commence on any earlier or later date.
5.05 Hardship Withdrawals. If a Participant or Beneficiary would
otherwise suffer severe financial hardship and distribution of
amounts credited to the Accounts has not yet commenced, deferral
of amounts may be suspended and payment of amounts credited to
the Accounts shall commence within 30 days following the
determination of the Committee that such hardship resulted from
an unforeseeable emergency that is caused by an event beyond the
control of the
8
Participant or Beneficiary. Such suspension or withdrawal may
not exceed the amount necessary to meet the emergency.
For purposes of this section, "unforeseeable emergency" is
defined as a severe financial hardship to the Participant
resulting from a sudden and unexpected illness or accident of the
Participant or of a dependent (as defined in Internal Revenue
Code Section 152(a)) of the Participant, loss of the
Participant's property due to casualty or other similar
extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of a Participant. Payment may not
be made to a Participant to the extent that such hardship is or
may be relieved:
(a) through reimbursement or compensation by insurance or
otherwise;
(b) by liquidation of the Participant's assets, to the extent
the liquidation of such assets would not itself cause severe
financial hardship.
5.06 Distribution Upon Death after Payments Have Commenced. If any
Participant dies before receiving all amounts credited to such
Participant's Accounts, the unpaid amounts in the Participant's
Accounts shall be paid to the Participant's Beneficiary or
Beneficiaries in accordance with the last effective beneficiary
designation form filed by the Participant with the Company. Such
unpaid amounts shall be paid in the same manner and at the same
time as had been elected by the Participant prior to such
Participant's death.
5.07 Distribution to Beneficiaries. Each Participant shall file with
the Company a form indicating the person, persons, or entity
which are to receive the Participant's benefits under the Plan if
the Participant dies before receiving all the balances in his
Accounts. A Participant's beneficiary designation may be changed
at any time prior to death by execution and delivery of a new
beneficiary designation form. If a Participant has failed to
designate a Beneficiary, the amounts payable hereunder shall be
made to such person or persons who, as of the date payment is to
be made under this Plan, would receive distribution of the
Participant's account balances, if any, under the terms of the
Aon Savings Plan, or, if the Participant is not a participant in
the Aon Savings Plan at the time of his death or if the
Beneficiary fails to survive the Participant, payment shall be
made in a lump sum to the estate of the Participant. A
Beneficiary who fails to survive a Participant by at least 10
days shall be deemed to have predeceased the Participant.
9
5.08 Distributions from Aon Common Stock Account. The form of
distribution from the Aon Common Stock Account may be elected by
the Participant no fewer than 30 days prior to distribution, or,
in the case of hardship pursuant to Section 5.05, at the time the
Committee determines hardship. Distributions from the Aon Common
Stock Account may be made in cash, in Aon common stock, or in a
combination of cash and Aon common stock; provided, however, that
the Committee, in its sole discretion, may modify such election
and determine the form of distribution. To the extent each
installment payment will be paid in cash, the cash value of the
Aon common stock credited to the Aon Common Stock Account shall
be obtained by multiplying the number of full and fractional
shares to be converted to cash by the average market price of Aon
common stock on the New York Stock Exchange for the last business
day of the month immediately preceding: (a) in the case of the
first annual installment, the Elected Distribution Date or the
Termination Distribution Date, whichever is applicable; (b) in
the case of subsequent installments, the 12-month anniversary of
the Elected Distribution Date or the 12-month anniversary of the
Termination Distribution Date, whichever is applicable; or (c)
the hardship determination date.
SECTION 6
---------
MISCELLANEOUS
-------------
6.01 Other Benefit Plans. The amount of each Participant's
Compensation or Performance Bonus which the Participant elects to
defer under the Plan shall be deemed compensation for the purpose
of calculating the amount of a Participant's benefits or
contributions under all retirement and welfare benefit plans
sponsored by the Company and the Subsidiaries, except to the
extent not permitted under such retirement or welfare benefit
plan and except to the extent not permitted under the Code.
No amount distributed to a Participant from a Participant's
Accounts under this Plan shall be deemed to be compensation with
respect to a Participant's entitlement to benefits under any
employee benefit plan established by the Company or the
Subsidiaries for its employees unless otherwise specifically
provided in such plan.
10
6.02 Participant's Rights. Establishment of the Plan shall not be
construed to give any Participant the right to be retained in the
Company's or a Subsidiary's service or to any benefits not
specifically provided by the Plan. Neither a Participant nor a
Beneficiary shall have any interest in the deferred compensation
or earnings credited to his accounts. All amounts deferred or
otherwise held for the account of a Participant or a Beneficiary
under the Plan shall remain the sole property of the Company or
Subsidiary. With respect to such amounts, the Participant or
Beneficiary is merely a general creditor, and any obligation of
the Company or Subsidiary hereunder is purely contractual and
shall not be funded or secured in any way, except as described in
Section 6.03.
In case the claim of any Participant or Beneficiary for benefits
under the 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 a Participant or Beneficiary 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 Participant or Beneficiary appeals the
decision in writing within 60 days, the Committee shall review
the written comments and any submissions of the Participant or
Beneficiary and render its decision regarding the appeal all
within 60 days of such appeal.
6.03 Change of Control. Upon a Change of Control, the Company shall,
as soon as possible, but in no event longer than 45 days
following the Change of Control, establish an irrevocable grantor
trust: (a) subject to the claims of the Company's creditors; (b)
with respect to which the Participants and Beneficiaries have
only the rights of unsecured general creditors and receive no
title or beneficial ownership; (c) under which benefits payable
may not be assigned, alienated, pledged, attached or encumbered
by the Participant or Beneficiary; and (d) in substantial
compliance with the required provisions of Revenue Procedure
92-64, 1992-33 I.R.B. 11, of the Internal Revenue Service (or any
comparable successor procedure).
At the same time, the Company shall make a contribution to such
trust in an amount that is sufficient to pay each Participant or
Beneficiary the benefits to which such Participants and
Beneficiaries would be entitled pursuant to the terms of the Plan
as of the date on which the Change of Control occurred. Any
payments made to a Participant under the trust for his benefit
shall reduce dollar for dollar the amount payable to the
Participant or Beneficiary from the general assets of the
Company.
Upon the occurrence of a Change of Control, this Plan may not be
amended until all accounts have been paid in full and may be
terminated only if all accounts have been paid in full.
11
6.04 Nonalienability and Nontransferability. The rights of a
Participant to the payment of deferred compensation as provided
in the Plan shall not be assigned, transferred, pledged or
encumbered, or be subject in any manner to alienation or
anticipation. No Participant may borrow against his Accounts. No
Accounts shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance,
charge, garnishment, execution, or levy of any kind, whether
voluntary or involuntary, including any liability which is for
alimony or other payments for the support of a spouse or former
spouse, or for any other relative of any Participant.
6.05 Plan Administrator. The administrator of the Plan shall be the
Committee, which shall have authority to adopt rules and
regulations for carrying out the Plan, to delegate its
administrative responsibilities as it shall, from time to time,
deem advisable, and to interpret, construe, and implement the
provisions thereof. Any decision or interpretation of any
provision of the Plan adopted by the Committee shall be final and
conclusive.
6.06 Amendment and Termination. The Plan may, at any time (except as
provided in Section 6.03 upon a Change of Control), be amended,
modified, or terminated by action of the Board. No amendment,
modification, or termination shall, without the consent of a
Participant, adversely affect such Participant's rights with
respect to amounts accrued in his or her Accounts.
SECTION 7
---------
GENERAL PROVISIONS
------------------
7.01 Notices. All notices to the Company hereunder shall be 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. Such notice shall be deemed
given as of the date of delivery or, if delivery is made by mail,
as of the date shown on the postmark or the receipt for
registration or certification.
7.02 Controlling Law. Except to the extent superseded by federal law,
the laws of Illinois shall be controlling in all matters relating
to the Plan.
7.03 Gender and Number. Where the context admits, words in the
masculine gender shall include the feminine and neuter genders,
the
12
plural shall include the singular and the singular shall include
the plural.
7.04 Captions. The captions of Sections and paragraphs of this Plan
are for convenience only and shall not control or affect the
meaning of construction of any of its provisions.
7.05 Action by the Company. Any action required or permitted by the
Company under the Plan shall be by resolution of its Board or any
person or persons authorized by resolution of its Board.
7.06 Facility of Payment. Any amounts payable hereunder to any person
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.
7.07 Withholding Payroll Taxes. To the extent required by the laws in
effect at the time distributions or contributions are made to
this Plan, the Company shall withhold from such payments any
taxes required to be withheld for federal, state, or local
government purposes. A participant shall have the duty to pay to
the Company or the Subsidiary an amount equal to the taxes
required by any government to be withheld or otherwise deducted
and paid by the Company or a Subsidiary as a result of the
distribution to the Participant of shares of stock. Such shares
shall not be delivered to the Participant until such time as such
payment has been made.
7.08 Severability. Whenever possible, each provision of the Plan
shall be interpreted in such manner as to be effective and valid
under applicable law (including the Internal Revenue Code), but
if 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.
7.09 Liability. No member of the Board, no employee of the Company or
a Subsidiary, and no member of the Committee (nor the Committee
itself) shall be liable for any act or action hereunder 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 hereunder, except in circumstances involving a
Committee member's bad faith, gross negligence, or fraud. The
Company or the Committee may consult
13
with legal counsel, who may be counsel for the Company or other
counsel, with respect to its obligation or duties hereunder, 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.
7.10 Successors. The provisions of the Plan shall bind and inure to
the 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.
7.11 Unfunded Status of the Plan. Except as provided in Section 6.03,
any and all payments made to the Participant pursuant to the Plan
shall be made only from the general assets of the Company or a
Subsidiary. All accounts under the Plan shall be for bookkeeping
purposes only and shall not represent a claim against specific
assets of the Company or the Subsidiaries. Nothing contained in
this Plan shall be deemed to create a trust of any kind or create
any fiduciary relationship.
IN WITNESS WHEREOF, Aon Corporation hereby adopts the Aon Deferred
Compensation Plan, effective as set forth above, as of this 11th day
of October, 1994.
Aon CORPORATION
By: /s/Daniel T. Cox
---------------------
Executive Vice President
14
First Amendment to the
Aon Deferred Compensation Plan
------------------------------
Whereas, the Board of Directors of Aon Corporation desires to amend the
Aon Deferred Compensation Plan (the "Plan") pursuant to the Board's authority to
do so under Section 6.05 of the Plan;
Now, therefore, the Plan is amended as follows effective as of December
1, 1994:
Section 4.05. A new Section 4.05 shall be added to read as follows:
4.05 Company Match. The Company, at its discretion, may credit to
the Accounts of selected Participants an additional amount equal
to a specified percentage of the amount of Compensation deferred
by the Employee or a specified dollar amount (the "Company Match")
during the calendar year in which the Company Match is credited.
The following rules shall apply:
(a) the Company Match for any year shall be subject to the same
elections regarding the periods of deferral and distribution and
regarding allocation to the Accounts as the amount of Compensation
irrevocably deferred by the Employee under Sections 3.01 or 3.02
during the year in which the Company Match is credited;
(b) the Company Match shall be subject to the rules regarding
crediting under Section 4 and distributions under Section 5;
provided, however, that no hardship withdrawals under Section 5.06
shall be available either as to the Company Match or as to
earnings or dividends attributable thereto; and
(c) the amount of the Company Match credited in each separate
year shall vest separately and in accordance with the schedule set
forth below, together with earnings or dividends attributable to
that year's Company Match; provided, however, that such other
restrictions as the Company may place upon crediting, vesting or
distribution shall be satisfied:
15
Completed Years of Percent Vested
------------------ ---------------
Continuous
----------
Employment
----------
===========================================
Less than 3 years 0%
-------------------------------------------
3 20%
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4 30%
-------------------------------------------
5 40%
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6 50%
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7 60%
-------------------------------------------
8 70%
-------------------------------------------
9 80%
-------------------------------------------
10 100%
===========================================
For these purposes, "Continuous Employment" shall be computed
separately, with respect to each year's credited Company Match, to
determine the vested percentage. For each year's separate Company
Match, "Continuous Employment" shall mean the total period of time
that an individual has served as an Employee of the Company or of
a Subsidiary beginning on the date an Employee's account is first
credited with the particular Company Match for which vesting is
being computed and ending on the date an employee quits, retires,
is discharged or dies. A "Completed Year of Continuous
Employment" shall refer to a 12-month period during which a
Participant has been continuously employed. If a prior
Participant is reemployed and again becomes a Participant,
Continuous Employment after the date of reemployment shall not be
taken into account for purposes of determining such Participant's
nonforfeitable interest in the Company Match or in earnings or
dividends attributable thereto and accrued prior to the date of
reemployment.
16
IN WITNESS WHEREOF, Aon Corporation hereby adopts this First Amendment to
the Aon Deferred Compensation Plan, effective as set forth above, as of
this 16th day of December, 1994.
Aon CORPORATION
By: /s/ Daniel T. Cox
---------------------
Executive Vice President
17