<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 21, 1998
333-______________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
AON CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
6399
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
36-3051915
(I.R.S. EMPLOYER IDENTIFICATION NO.)
123 N. Wacker Drive
Chicago, Illinois 60606
(312) 701-3000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
Raymond I. Skilling Copy to:
Executive Vice President and Chief Counsel Janet E. Bauman, Esq.
123 N. Wacker Drive Sidley & Austin
Chicago, Illinois 60606 One First National Plaza
(312) 701-3000 Chicago, Illinois 60603
(312) 853-7000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: At such
time or times on or after the effective date of this Registration Statement as
the Selling Stockholder shall determine.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.[_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_] ___________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] ____________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
==============================================================================
Proposed Proposed
Maximum Maximum
Title of Each Class of Amount To Offering Aggregate Amount Of
Securities Be Price Offering Registration
To be Registered Registered Per Share Price Fee
================================================================================
Common Stock, par value
$1.00 per share 369,000 $66.75 $24,630,750 $7,267(1)
==============================================================================
(1) The fee was calculated pursuant to Rule 457(c) under the Securities Act of
1933 and was based on the average of the high and low prices of the Common
Stock on the New York Stock Exchange on April 20, 1998.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES+
+EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE +
+SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED APRIL 21, 1998
PROSPECTUS
369,000 SHARES
AON CORPORATION
COMMON STOCK, PAR VALUE $1.00 PER SHARE
This Prospectus relates to 369,000 shares (the "Shares") of common stock,
par value $1.00 per share ("Common Stock"), of Aon Corporation, a Delaware
corporation (the "Company"). The shares to which this Prospectus relates may be
offered and sold from time to time by the stockholder specified in this
Prospectus (the "Selling Stockholder"). See "Selling Stockholder and Plan of
Distribution."
The Common Stock is traded on the New York Stock Exchange under the symbol
"AOC." The Common Stock is also listed for trading on the Chicago Stock
Exchange and the International Stock Exchange London.
The Shares may be sold by the Selling Stockholder directly or through
agents designated from time to time or through underwriters or dealers. See
"Selling Stockholder and Plan of Distribution." If required, the names of any
such agents or underwriters involved in the sale of the Shares in respect of
which this Prospectus is being delivered and the applicable agent's commission,
dealer's purchase price or underwriter's discount, if any, will be set forth in
an accompanying supplement to this Prospectus (the "Prospectus Supplement").
The Selling Stockholder will receive all of the net proceeds from the sale
of the Shares offered hereby and will pay all underwriting discounts and selling
commissions, if any, applicable to the sale of the Shares.
The Selling Stockholder and any broker-dealers, agents or underwriters
which participate in the distribution of the Shares may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"), and any commission received by them or purchase by them of
the Shares at a price less than the initial price to the public may be deemed to
be underwriting commissions or discounts under the Securities Act. See "Selling
Stockholder and Plan of Distribution."
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
--------------------
The date of this Prospectus is __________ ___, 1998.
<PAGE>
FOR NORTH CAROLINA INVESTORS: THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA
(THE "NORTH CAROLINA INSURANCE COMMISSIONER") NOR HAS THE NORTH CAROLINA
INSURANCE COMMISSIONER RULED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
-----------------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the regional offices of the Commission located at 7 World
Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material
can also be obtained at prescribed rates by writing to the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
Such material may also be accessed electronically by means of the Commission's
home page on the Internet at http://www.sec.gov. In addition, such reports,
proxy statements and other information can be inspected at the offices of the
New York Stock Exchange on which certain of the Company's securities are listed.
This Prospectus constitutes a part of a registration statement on Form S-3
(the "Registration Statement") filed by the Company with the Commission under
the Securities Act. This Prospectus does not contain all the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission, and reference is
hereby made to the Registration Statement and to the exhibits relating thereto
for further information with respect to the Company. Any statements contained
herein concerning the provisions of any document are not necessarily complete,
and, in each instance, reference is made to the copy of such document filed as
an exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference in this Prospectus the
following reports filed with the Commission pursuant to Section 13 of the
Exchange Act:
(a) the Company's Annual Report on Form 10-K for the year ended
December 31, 1997; and
(b) the description of the Company's Common Stock contained in Item 12
of the Registration Statement on Form 10 of the Registrant (formerly
Combined International Corporation), filed on February 19, 1980, and any
amendments or reports filed for the purpose of updating such descriptions
which have been filed by the Company with the Commission, including the
Company's Current Report on Form 8-K dated April 23, 1987.
-2-
<PAGE>
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the securities offered hereby shall be deemed
to be incorporated by reference into this Prospectus and to be a part hereof
from the date of filing of such documents.
This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. These documents (other than exhibits to such
documents not specifically incorporated by reference therein) are available upon
request from Aon Corporation, 123 North Wacker Drive, Chicago, Illinois 60606,
telephone: (312) 701-3000, Attention: Corporate Secretary.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this
Prospectus, including the documents incorporated or deemed to be incorporated
herein by reference, as the same may be amended, supplemented or otherwise
modified from time to time. Statements contained in this Prospectus as to the
contents of any contract or other document referred to herein do not purport to
be complete, and where reference is made to the particular provisions of such
contract or other document, such provisions are qualified in all respects by
reference to all of the provisions of such contract or other document.
THE COMPANY
The Company is an insurance services holding company that comprises a
family of insurance brokerage, consulting and consumer insurance companies.
Through its insurance brokerage operations, the Company offers commercial
insurance brokerage, alternative risk solutions, risk management, employee
benefit and human resources consulting and managing general underwriting
services. In addition, the Company's insurance underwriting businesses provide a
variety of insurance products, including accident and health coverage,
traditional life insurance and extended warranties. The Company's revenues were
$5.8 billion in 1997. Based on 1997 insurance brokerage and consulting revenues,
management believes that the Company is the second largest insurance brokerage
company in the world.
The principal executive offices of the Company are located at 123 N. Wacker
Drive, Chicago, Illinois 60606-1700, and its telephone number is (312) 701-3000.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares registered hereunder. All proceeds are for the account of the Selling
Stockholder. See "Selling Stockholder and Plan of Distribution."
-3-
<PAGE>
PRICE RANGE OF COMMON STOCK AND DIVIDENDS PAID
The Common Stock of the Company is listed on the New York Stock Exchange
under the symbol "AOC." The Common Stock is also listed for trading on the
Chicago Stock Exchange and the International Stock Exchange London. The last
reported sale price of the Common Stock on the New York Stock Exchange Composite
Transactions Tape on April 17, 1998 was $67.50.
The historical prices of and dividends on the Common Stock through April
17, 1998 are shown in the table below (adjusted to give effect to the three-for-
two stock split in May 1997).
<TABLE>
<CAPTION>
Cash
Dividends
High Low Paid
---- --- ---------
<S> <C> <C> <C>
1995
1st quarter.................. $25.000 $20.917 $.20
2nd quarter.................. 25.333 23.750 .23
3rd quarter.................. 27.833 24.167 .23
4th quarter.................. 33.917 27.000 .23
1996
1st quarter.................. $36.875 $32.500 $.23
2nd quarter.................. 37.250 33.250 .24
3rd quarter.................. 36.375 31.625 .24
4th quarter.................. 43.125 36.000 .24
1997
1st quarter.................. $44.875 $40.625 $.24
2nd quarter.................. 53.375 40.188 .26
3rd quarter.................. 56.125 50.063 .26
4th quarter.................. 58.875 50.250 .26
1998
1st quarter.................. $66.188 $54.813 $.26
2nd quarter (through
April 17, 1998)............ 67.563 65.938 .28(1)
</TABLE>
(1) On March 20, 1998, the Board of Directors of the Company declared a
dividend of $.28 per share of Common Stock payable on May 18, 1998 to
holders of record as of the close of business on May 5, 1998.
In determining the amount and timing of future dividends of Common Stock,
the Board of Directors will consider such factors as the Company's financial
condition, certain restrictions on dividend payments contained in various debt
instruments and such other factors as the Board may from time to time deem
relevant. For dividends payable upon the Company's outstanding preferred stock,
see "Description of Capital Stock."
-4-
<PAGE>
DESCRIPTION OF CAPITAL STOCK
Under the Second Restated Certificate of Incorporation, as amended, of the
Company (the "Certificate of Incorporation"), the authorized capital stock of
the Company consists of 300,000,000 shares of Common Stock and 25,000,000 shares
of serial Preferred Stock, par value $1.00 per share. As of February 25, 1998,
approximately 167,971,048 shares of Common Stock were issued and outstanding
(exclusive of shares of Common Stock owned by affiliates of the Company). In
addition, the Company has 1 million shares of Series C Cumulative Preferred
Stock (the "Series C Preferred Stock") outstanding.
The Board of Directors is authorized by the Certificate of Incorporation,
without first obtaining the approval of the holders of the Common Stock or any
series of Preferred Stock, to issued Preferred Stock from time to time in series
and to establish as to each series the designation and number of shares to be
issued, the dividend rate, the redemption price and terms (if any), the amount
payable upon voluntary or involuntary dissolution, sinking fund provisions (if
any), the terms of the conversion or exchange into any other class or series of
shares (if any), and any other preferences, special rights, qualifications
limitations or restrictions thereof. With respect to liquidation and dividend
rights, holders of Common Stock are subordinate to holders of the Series C
Preferred Stock and may also be subordinate to the holders of any additional
series of Preferred Stock issued by the Company by action of the Board of
Directors.
The Series C Preferred Stock pays an annual dividend of $2.55 per share,
paid quarterly. The terms for the Series C Preferred Stock provide that the
Company will be entitled to, and the holder(s) of such stock will have the right
to require the Company to, redeem such stock at $50.00 per share on or after the
later of February 9, 1999 or the first anniversary of the death of the later of
the two initial holders to die.
At every meeting of stockholders, the holders of Common Stock and Series C
Preferred Stock shall have the right to vote in the election of directors and
upon each other matter coming before any meeting of the stockholders on the
basis of one vote for each share of Common Stock and Series C Preferred Stock
held.
The holders of Common Stock have no preemptive rights, cumulative voting
rights or subscription rights. In the event of any liquidation, dissolution or
winding up of the business of the Company, whether voluntary or involuntary, the
holders of Common Stock shall be entitled, after payment or provision for
payment of the debts and other liabilities of the Company and the amount of any
liquidation preference to which the holders of Series C Preferred Stock (and any
other series of Preferred Stock that may from time to time be issued) are
entitled, to share ratably in the remaining net assets of the Company.
Subject to the prior rights of the holders of the Series C Preferred Stock
(and any other series of Preferred Stock that may from time to time be issued),
the holders of Common Stock shall be entitled to receive, when, as and if
declared by the Board of Directors of the Company, out of the funds legally
available therefor, dividends payable either in cash, in property, or in Common
Stock.
First Chicago Trust Company of New York is the transfer agent and registrar
for the Common Stock.
SELLING STOCKHOLDER AND PLAN OF DISTRIBUTION
The 369,000 shares of Common Stock (the "Shares") being offered hereby are
being offered and sold by Robert A. Meister (the "Selling Stockholder"). The
Selling Stockholder does not own any shares of Common Stock other than the
Shares.
-5-
<PAGE>
On January 19, 1994, the Company purchased shares representing 80% of the
issued and outstanding common stock (after giving effect to such purchase) of
N.B. Life Agents, Inc., a New York corporation ("NBL"), from NBL. Prior to such
purchase, the Selling Stockholder owned 100% of the issued and outstanding
common stock of NBL. Simultaneously with such purchase: (i) pursuant to a
promissory note, NBL loaned the Selling Stockholder $6,000,000 ($1,800,000 of
which was forgiven on January 19, 1997 in accordance with the terms of such
promissory note); (ii) NBL issued 6,500 shares of preferred stock to the Selling
Stockholder; (iii) the Selling Stockholder pledged such preferred stock to
secure his obligations under the promissory note; (iv) the Selling Stockholder
entered into an employment agreement with NBL pursuant to which, among other
things, NBL agreed to employ the Selling Stockholder as the Vice Chairman of the
Board of NBL for a term ending December 31, 2008 (unless earlier terminated
pursuant to the terms of such employment agreement); and (v) the Selling
Stockholder and the Company entered into a Put and Call Agreement pursuant to
which the Selling Stockholder had the right (exercisable from January 19, 1996
to July 19, 1996) to require the Company to exchange 360,000 shares (as adjusted
for prior stock splits) of Common Stock for the Selling Stockholder's equity
interest in NBL (including common and preferred stock) and the Company had the
right (exercisable from July 19, 1996 to January 19, 1997) to exchange 378,000
shares (as adjusted for prior stock splits) of Common Stock for the Selling
Stockholder's equity interest in NBL. Pursuant to an agreement dated as of July
1, 1997, the Company exchanged 369,000 shares of Common Stock for the Selling
Stockholder's equity interest in NBL. In connection therewith, the Company
agreed to use its best efforts to file, upon written request from the Selling
Stockholder, and cause to be declared effective as promptly as practicable
thereafter, and to keep continuously effective until the earlier of the first
anniversary of the date of such written request or the date that the Selling
Stockholder disposes of all of such shares, a registration statement on Form S-3
under the Securities Act with respect to such shares.
The Selling Stockholder continues to serve as Vice Chairman of the Board of
NBL.
The Shares may be offered for sale from time to time by the Selling
Stockholder or by his pledgees, donees, transferees or other successors in
interest, to or through underwriters or directly to other purchasers or through
agents in one or more transactions on any Exchange on which the Common Stock is
traded, in the over-the-counter market, in one or more private transactions or
in a combination of such methods of sale, at prices and on terms then
prevailing, at prices related to such prices or at negotiated prices. Such
methods of distribution may include, without limitation, (a) a distribution
through underwriting syndicates represented by one or more managing
underwriters, or by one or more underwriters without a syndicate; (b) a block
trade in which an agent will attempt to sell the Shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction; (c) purchases by one or more brokers or dealers as principals and
resale by such brokers or dealers for their own account at fixed or varying
prices; (d) a distribution in accordance with the rules of the applicable
Exchange; and (e) ordinary brokerage transactions and transactions in which a
broker solicits purchasers. In effecting sales, such brokers may arrange for
other brokers or dealers to participate in the resales. This Prospectus may be
amended and supplemented from time to time to describe a specific plan of
distribution.
In connection with distributions of the Shares or otherwise, the Selling
Stockholder may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
Common Stock in the course of hedging the positions they assume with the Selling
Stockholder. The Selling Stockholder may also sell Common Stock short and
redeliver the Shares to close out such short positions. The Selling Stockholder
may also enter into option or other transactions with broker-dealers which
require the delivery to such broker-dealer of the Shares, which Common Stock
such broker-dealer may resell pursuant to this Prospectus. The Selling
Stockholder may also pledge the shares registered hereunder to a broker or
dealer and, upon a default, such broker or dealer may effect sales of the
pledged
-6-
<PAGE>
Common Stock pursuant to this Prospectus. In addition, any Shares covered by
this Prospectus that qualify for sale pursuant to Rule 144 may be sold under
Rule 144 under the Securities Act rather than pursuant to this Prospectus.
Underwriters, brokers, dealers or agents may receive compensation in the
form of commissions, discounts or concessions from the Selling Stockholder in
amounts to be negotiated in connection with sales pursuant hereto. The Selling
Stockholder and such brokers or dealers and any other participating brokers or
dealers may be deemed to be "underwriters" within the meaning of the Securities
Act, in connection with such sales and any such commission, discount or
concession may be deemed to be underwriting discounts or commissions under the
Securities Act.
Certain of the above-described underwriters, dealers, brokers or agents may
engage in transactions with, or perform services for, the Company and its
affiliates in the ordinary course of business.
Upon the Company being notified by the Selling Stockholder that any
agreement or arrangement has been entered into with a broker-dealer for the sale
of Shares through a block trade, special offering or secondary distribution or a
purchase by a broker-dealer, to the extent required by applicable law a
supplement to this Prospectus will be distributed that will set forth the
name(s) of the participating underwriters, dealers or agents, the aggregate
amount of the Shares being so offered and the terms of the offering, including
all underwriting discounts, commissions and other items constituting
compensation from, and the resulting net proceeds to, such Selling Stockholder,
all discounts, commissions or concessions allowed or re-allowed or paid to
dealers, if any, and, if applicable, the purchase price to be paid by any
underwriter for the Shares purchased from the Selling Stockholder.
To comply with the securities laws of certain jurisdictions, if applicable,
the Shares will be offered or sold in such jurisdictions only through registered
or licensed brokers or dealers. In addition, in certain jurisdictions the
Shares may not be offered or sold unless they have been registered or qualified
for sale in such jurisdictions or any exemption from registration or
qualification is available and is complied with.
The Selling Stockholder will be subject to applicable provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder, which provisions may limit the timing of purchases and sales of any
of the Shares by the Selling Stockholder. The foregoing may affect the
marketability of the Shares.
VALIDITY OF SECURITIES
The validity of the Common Stock offered hereby has been passed upon for
the Company by Jerome S. Hanner, Senior Counsel and Assistant Secretary of the
Company. Mr. Hanner currently owns 3,468 shares of Common Stock, has options to
purchase 4,500 shares of Common Stock and holds restricted stock awards of
29,400 shares. In addition, 1,141 shares of Common Stock held by the Company's
employee stock ownership plan may be attributed to Mr. Hanner.
-7-
<PAGE>
EXPERTS
The consolidated financial statements and schedules of the Company,
included in and incorporated by reference in the Company's Annual Report (Form
10-K) for the year ended December 31, 1997, have been audited by Ernst & Young
LLP, independent auditors, as set forth in their reports thereon included and
incorporated by reference therein and incorporated herein by reference. Such
consolidated financial statements and schedules are incorporated herein by
reference in reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.
-8-
<PAGE>
================================================================================
No dealer, salesperson or other individual has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus in connection with the offer made
by this Prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized by the Company. Neither the
delivery of this Prospectus nor any sale made hereunder shall under any
circumstance create an implication that there has been no change in the affairs
of the Company since the date hereof. This Prospectus does not constitute an
offer or solicitation by anyone in any jurisdiction in which such offer or
solicitation is not authorized or in which the person making such offer or
solicitation is not qualified to do so or to anyone to whom it is unlawful to
make such offer or solicitation.
--------------------
TABLE OF CONTENTS
Page
----
Available Information................................................... 2
Incorporation of Certain Documents by
Reference............................................................ 2
The Company............................................................. 3
Use of Proceeds......................................................... 3
Price Range of Common Stock
and Dividends Paid................................................... 4
Description of Capital Stock............................................ 5
Selling Stockholder and
Plan of Distribution................................................. 5
Validity of Securities.................................................. 7
Experts................................................................. 8
================================================================================
================================================================================
369,000 Shares
AON CORPORATION
Common Stock
------------
PROSPECTUS
------------
_____________, 1998
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*
Registration Fee......................................... $ 7,267
Printing and Engraving Expenses.......................... 1,000
Legal Fees and Expenses.................................. 25,000
Accounting Fees and Expenses............................. 2,000
Total............................................... $35,267
=======
- --------------
*Expenses are estimated except for the registration fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company was organized under and is subject to the Delaware General
Corporation Law. Delaware law provides that officers and directors may receive
indemnification from their corporations for certain actual or threatened
lawsuits. The Delaware law sets out the standard of conduct which the officers
and directors must meet in order to be indemnified, the parties who are to
determine whether the standard has been met, and the types of expenditures which
will be indemnified. Delaware law further provides that a corporation may
purchase indemnification insurance, such insurance providing indemnification for
the officers and directors whether or not the corporation would have the power
to indemnify them against such liability under the provisions of Delaware law.
The Company has adopted an article within its Second Restated Certificate
of Incorporation, as amended (the "Certificate of Incorporation"), which
provides that the Company will indemnify its officers and directors to the full
extent permitted by Delaware law.
Furthermore, the Company is covered by insurance which will reimburse it
within the policy limits for amounts it is obligated to pay in lawsuits
involving officers and directors serving in such capacities in which the
damages, judgments, settlements, costs, charges or expenses incurred in
connection with the defense of the action, suit or proceeding are reimbursable
pursuant to the law and the Certificate of Incorporation of the Company.
ITEM 16. EXHIBITS.
EXHIBIT
- -------
4.1 Second Restated Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3(a) to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1991).
4.2 Certificate of Amendment of the Registrant's Second Restated Certificate of
Incorporation (incorporated by reference to Exhibit 3 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1994).
4.3 Bylaws of the Registrant (incorporated by reference to Exhibit (d) to the
Registrant's Annual Report on Form 10-K for the year ended December 31,
1982).
II-1
<PAGE>
4.4 Certificate of Designation for the Registrant's Series C Cumulative
Preferred Stock (incorporated by reference to Exhibit 4.1 to the
Registrant's Current Report on Form 8-K dated February 9, 1994).
4.5 Indenture dated September 15, 1992 between the Registrant and Continental
Bank Corporation (now known as Bank of America Illinois), as Trustee
(incorporated by reference to Exhibit 4(a) to the Registrant's Current
Report on Form 8-K dated September 23, 1992).
4.6 Resolutions establishing terms of 6.875% Notes Due 1999 and 7.40% Notes Due
2002 (incorporated by reference to Exhibit 4(d) to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1992).
4.7 Resolutions establishing terms of 6.70% Notes Due 2003 (incorporated by
reference to Exhibit 4(c) to the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1993 (the "1993 Form 10-K")).
4.8 Resolutions establishing terms of 6.30% Notes Due 2004 (incorporated by
reference to Exhibit 4(d) to the 1993 Form 10-K).
4.9 Junior Subordinated Indenture dated as of January 13, 1997 between the
Registrant and The Bank of New York, as trustee (incorporated by reference
to Exhibit 4.1 to the Registrant's Amendment No. 1 to the Registration
Statement on Form S-4 No. 333-21237 dated March 27, 1997 (the "Capital
Securities Registration")).
4.10 First Supplemental Indenture dated as of January 13, 1997 between the
Registrant and The Bank of New York, as trustee (incorporated by reference
to Exhibit 4.2 to the Capital Securities Registration).
4.11 Amended and Restated Trust Agreement of Aon Capital A dated as of January
13, 1997 among the Registrant, as Depositor, The Bank of New York, as
Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, the
Administrative Trustees named therein, and the holders, from time to time,
of the 8.205% Capital Securities of Aon Capital A (incorporated by
reference to Exhibit 4.5 to the Capital Securities Registration).
4.12 Capital Securities Guarantee Agreement dated as of May 20, 1997 between the
Registrant and The Bank of New York, as guarantee trustee.
4.13 Agreement as to Expenses and Liabilities dated as of January 13, 1997
between the Registrant and Aon Capital A (incorporated by reference to
Exhibit 4.13 to the Capital Securities Registration).
5 Opinion of Jerome S. Hanner, Senior Counsel and Assistant Secretary of the
Registrant.
23 Consent of Ernst & Young LLP.
23.1 Consent of Jerome S. Hanner (included in Exhibit 5).
24 Powers of Attorney (included in the Signatures page of this Registration
Statement).
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes that insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the provisions described under Item 15 above, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned Registrant hereby further undertakes:
II-2
<PAGE>
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) (Section 230.424(b) of 17 C.F.R.) if, in the
aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago, State of Illinois, on April 21, 1998.
AON CORPORATION
By: /s/ Patrick G. Ryan
------------------------------------------------
Patrick G. Ryan
Chairman, President and Chief Executive Officer
KNOW ALL BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Patrick G. Ryan, Harvey N. Medvin and Raymond I.
Skilling, and each of them, his or her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, in any and all
capacities, to sign any or all amendments (including post-effective amendments)
to this Registration Statement, and to file the same with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or their substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Patrick G. Ryan Chairman, President, April 21, 1998
- --------------------------------- Chief Executive
Patrick G. Ryan Officer and Director
(principal executive officer)
/s/ Harvey N. Medvin Executive Vice President and April 21, 1998
- --------------------------------- Chief Financial Officer
Harvey N. Medvin (principal financial and
accounting officer)
/s/ Daniel T. Carroll Director April 21, 1998
- ---------------------------------
Daniel T. Carroll
<PAGE>
/s/ Franklin A. Cole Director April 21, 1998
- ---------------------------------
Franklin A. Cole
/s/ Edgar D. Jannotta Director April 21, 1998
- ---------------------------------
Edgar D. Jannotta
/s/ Perry J. Lewis Director April 21, 1998
- ---------------------------------
Perry J. Lewis
/s/ Andrew J. McKenna Director April 21, 1998
- ---------------------------------
Andrew J. McKenna
/s/ Newton N. Minow Director April 21, 1998
- ---------------------------------
Newton N. Minow
/s/ Richard C. Notebaert Director April 21, 1998
- ---------------------------------
Richard C. Notebaert
/s/ Donald S. Perkins Director April 21, 1998
- ---------------------------------
Donald S. Perkins
/s/ John W. Rogers, Jr. Director April 21, 1998
- ---------------------------------
John W. Rogers, Jr.
/s/ George A. Schaefer Director April 21, 1998
- ---------------------------------
George A. Schaefer
/s/ Raymond I. Skilling Director April 21, 1998
- ---------------------------------
Raymond I. Skilling
/s/ Fred L. Turner Director April 21, 1998
- ---------------------------------
Fred L. Turner
/s/ Arnold R. Weber Director April 21, 1998
- ---------------------------------
Arnold R. Weber
/s/ Carolyn Y. Woo Director April 21, 1998
- ---------------------------------
Carolyn Y. Woo
<PAGE>
EXHIBIT INDEX
EXHIBIT
- -------
4.1 Second Restated Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3(a) to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1991).
4.2 Certificate of Amendment of the Registrant's Second Restated Certificate of
Incorporation (incorporated by reference to Exhibit 3 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1994).
4.3 Bylaws of the Registrant (incorporated by reference to Exhibit (d) to the
Registrant's Annual Report to the Securities and Exchange Commission on
Form 10-K for the year ended December 31, 1982).
4.4 Certificate of Designation for the Registrant's Series C Cumulative
Preferred Stock (incorporated by reference to Exhibit 4.1 to the
Registrant's Current Report on Form 8-K dated February 9, 1994).
4.5 Indenture dated September 15, 1992 between the Registrant and Continental
Bank Corporation (now known as Bank of America Illinois), as Trustee
(incorporated by reference to Exhibit 4(a) to the Registrant's Current
Report on Form 8-K dated September 23, 1992).
4.6 Resolutions establishing terms of 6.875% Notes Due 1999 and 7.40% Notes Due
2002 (incorporated by reference to Exhibit 4(d) to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1992).
4.7 Resolutions establishing terms of 6.70% Notes Due 2003 (incorporated by
reference to Exhibit 4(c) to the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1993 (the "1993 Form 10-K")).
4.8 Resolutions establishing terms of 6.30% Notes Due 2004 (incorporated by
reference to Exhibit 4(d) to the 1993 Form 10-K).
4.9 Junior Subordinated Indenture dated as of January 13, 1997 between the
Registrant and The Bank of New York, as trustee (incorporated by reference
to Exhibit 4.1 to the Registrant's Amendment No. 1 to the Registration
Statement on Form S-4 No. 333-21237 dated March 27, 1997 (the "Capital
Securities Registration")).
4.10 First Supplemental Indenture dated as of January 13, 1997 between the
Registrant and The Bank of New York, as trustee (incorporated by reference
to Exhibit 4.2 to the Capital Securities Registration).
4.11 Amended and Restated Trust Agreement of Aon Capital A dated as of January
13, 1997 among the Registrant, as Depositor, The Bank of New York, as
Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, the
Administrative Trustees named therein, and the holders, from time to time,
of the 8.205% Capital Securities of Aon Capital A (incorporated by
reference to Exhibit 4.5 to the Capital Securities Registration).
4.12 Capital Securities Guarantee Agreement dated as of May 20, 1997 between the
Registrant and The Bank of New York, as guarantee trustee.
4.13 Agreement as to Expenses and Liabilities dated as of January 13, 1997
between the Registrant and Aon Capital A (incorporated by reference to
Exhibit 4.13 to the Capital Securities Registration).
5 Opinion of Jerome S. Hanner, Senior Counsel and Assistant Secretary of the
Registrant.
23 Consent of Ernst & Young LLP.
23.1 Consent of Jerome S. Hanner (included in Exhibit 5).
24 Powers of Attorney (included in the Signatures page of this Registration
Statement).
<PAGE>
Exhibit 4.12
-------------------------------------------------------------
CAPITAL SECURITIES GUARANTEE AGREEMENT
Between
AON CORPORATION
(as Guarantor)
and
THE BANK OF NEW YORK
(as Trustee)
dated as of
May 20, 1997
-------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE*
Section of Trust Section of Capital Securities
Indenture Act of 1939, as amended Guarantee Agreement
- ----------------------------------- -------------------
310(a) 4.1(a)
310(b) 4.1(c), 2.8
310(c) Inapplicable
311(a) 2.2(b)
311(b) 2.2(b)
311(c) Inapplicable
312(a) 2.2(a)
312(b) 2.2(b)
313 2.3
314(a) 2.4
314(b) Inapplicable
314(c) 2.5
314(d) Inapplicable
314(e) 1.1, 2.5, 3.2
315(a) 3.1(d)
315(b) 2.7
315(c) 3.1(c)
315(d) 3.1(d)
316(a) 1.1, 2.6, 5.4
316(b) 5.4
316(c) 8.2
317(a) Inapplicable
317(b) Inapplicable
318(a) 2.1(b)
- -----------
* This Cross-Reference Table does not constitute part of the Capital
Securities Guarantee Agreement and shall not affect the interpretation of
any of its terms or provisions.
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS....................................................... 2
SECTION 1.1. Definitions........................................ 2
ARTICLE II. TRUST INDENTURE ACT.............................................. 4
SECTION 2.1. Trust Indenture Act; Application................... 4
SECTION 2.2. List of Holders.................................... 4
SECTION 2.3. Reports by the Guarantee Trustee................... 5
SECTION 2.4. Periodic Reports to the Guarantee Trustee.......... 5
SECTION 2.5. Evidence of Compliance with Conditions Precedent... 5
SECTION 2.6. Events of Default; Waiver.......................... 5
SECTION 2.7. Event of Default; Notice........................... 5
SECTION 2.8. Conflicting Interests.............................. 6
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE.............. 6
SECTION 3.1. Powers and Duties of the Guarantee Trustee......... 6
SECTION 3.2. Certain Rights of Guarantee Trustee................ 7
SECTION 3.3. Compensation....................................... 9
SECTION 3.4. Indemnity.......................................... 9
ARTICLE IV. GUARANTEE TRUSTEE................................................ 9
SECTION 4.1. Guarantee Trustee: Eligibility.................... 9
SECTION 4.2. Appointment, Removal and Resignation of the
Guarantee Trustee..................................10
ARTICLE V. GUARANTEE.........................................................11
SECTION 5.1. Guarantee..........................................11
SECTION 5.2. Waiver of Notice and Demand........................11
SECTION 5.3. Obligations Not Affected...........................11
SECTION 5.4. Rights of Holders..................................12
SECTION 5.5. Guarantee of Payment...............................12
SECTION 5.6. Subrogation........................................12
SECTION 5.7. Independent Obligations............................13
SECTION 5.8. Merger or Consolidation of Guarantor...............13
ARTICLE VI. SUBORDINATION....................................................13
SECTION 6.1. Subordination......................................13
SECTION 6.2. Pari Passu to Similar Guarantees...................14
ARTICLE VII. TERMINATION.....................................................14
SECTION 7.1. Termination........................................14
SECTION 7.2. Termination of Old Guarantee.......................14
-i-
<PAGE>
ARTICLE VIII. MISCELLANEOUS................................................. 14
SECTION 8.1. Successors and Assigns............................ 14
SECTION 8.2. Amendments........................................ 14
SECTION 8.3. Notices........................................... 15
SECTION 8.4. Benefit........................................... 16
SECTION 8.5. Interpretation.................................... 16
SECTION 8.6. Governing Law..................................... 16
-ii-
<PAGE>
CAPITAL SECURITIES GUARANTEE AGREEMENT
THIS CAPITAL SECURITIES GUARANTEE AGREEMENT, dated as of May 20, 1997
(the "Guarantee Agreement"), is executed and delivered by Aon Corporation, a
Delaware corporation (the "Guarantor"), and The Bank of New York, a New York
banking corporation, as trustee (the "Guarantee Trustee"), for the benefit of
the Holders (as defined herein) from time to time of the Capital Securities (as
defined herein) of Aon Capital A, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as
of January 13, 1997 (the "Trust Agreement"), among the Guarantor, as Depositor,
The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as
Delaware Trustee, the Administrative Trustees named therein and the holders,
from time to time, of undivided beneficial interests in the assets of the
Issuer, the Issuer issued $800,000,000 aggregate Liquidation Amount (as defined
in the Trust Agreement) of its 8.205% Capital Securities, Liquidation Amount
$1,000 per Capital Security (the "Old Capital Securities") representing
preferred undivided beneficial interests in the assets of the Issuer and having
the terms set forth in the Trust Agreement;
WHEREAS, the proceeds from the issuance of the Old Capital Securities,
together with the proceeds from the issuance of the Issuer's Common Securities
(as defined in Section 1.1), were used to purchase the Debentures (as defined in
the Trust Agreement) of the Guarantor which were deposited with The Bank of New
York, as Property Trustee, under the Trust Agreement, as trust assets;
WHEREAS, as an incentive for the Holders to purchase the Old Capital
Securities, the Guarantor irrevocably and unconditionally agreed, to the extent
set forth in that certain Capital Securities Guarantee Agreement dated as of
January 13, 1997 (the "Old Guarantee Agreement") between the Guarantor and the
Guarantee Trustee, for the benefit of the Holders of the Old Capital Securities,
to pay to the Holders of the Old Capital Securities the Guarantee Payments (as
defined therein) (the "Old Guarantee") and to make certain other payments on the
terms and conditions set forth therein;
WHEREAS, pursuant to that certain Guarantee Exchange and Registration
Rights Agreement, dated as of January 13, 1997 (the "Guarantee Exchange and
Registration Rights Agreement"), among the Guarantor, the Issuer and certain
Purchasers named therein, the Guarantor and the Issuer agreed that if the
Guarantor and the Issuer file a registration statement (the "Registration
Statement") to exchange the Old Capital Securities for a like aggregate
Liquidation Amount of new 8.205% Capital Securities, Liquidation Amount $1,000
per Capital Security (the "New Capital Securities" and, together with the Old
Capital Securities, the "Capital Securities"), then the Guarantor and the Issuer
will simultaneously include in the Registration Statement an offer to exchange
the Old Guarantee for the Guarantee (as defined herein) for the benefit of the
Holders of the Capital Securities;
WHEREAS, on March 28, 1997, the Registration Statement was declared
effective under the Securities Act of 1933, as amended (the "Securities Act");
WHEREAS, pursuant to the Guarantee Exchange and Registration Rights
Agreement, the Guarantor and the Issuer wish to exchange the Old Guarantee for
the Guarantee;
<PAGE>
WHEREAS, the Guarantee is substantially identical to the Old Guarantee
except that the Guarantee is registered under the Securities Act pursuant to the
Registration Statement and the Guarantee will not contain provisions restricting
transfer in the absence of registration under the Securities Act; and
WHEREAS, as required by the Guarantee Exchange Registration Rights
Agreement, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Capital Securities the
Guarantee Payments (as defined in Section 1.1) and to make certain other
payments on the terms and conditions set forth herein.
NOW, THEREFORE, as required by the Guarantee Exchange Registration
Rights Agreement, the Guarantor executes and delivers this Capital Securities
Guarantee Agreement and pursuant to Section 5.1 hereof extends the Guarantee for
the benefit of the Holders from time to time of the Capital Securities.
ARTICLE I.
DEFINITIONS
SECTION 1.1. Definitions
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings. Capitalized
or otherwise defined terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Trust Agreement as in effect on the date
hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Guarantor shall not be deemed to be an Affiliate of the Issuer. For the purposes
of this definition, "control" when used with respect to any specified Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Board of Directors" means either the board of directors of the
Guarantor or any committee of that board duly authorized to act hereunder.
"Capital Securities" has the meaning set forth in the preamble to
this Guarantee Agreement.
"Common Securities" means the 8.205% Common Securities (Liquidation
Amount $1,000 per Common Security) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided, however,
that, except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
-2-
<PAGE>
"Guarantee" has the meaning set forth in Section 5.1.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accumulated and unpaid
Distributions (as defined in the Trust Agreement) required to be paid on the
Capital Securities, to the extent the Issuer shall have funds on hand available
therefor at such time, (ii) the redemption price, including all accrued and
unpaid Distributions to but excluding the date of redemption (the "Redemption
Price") with respect to any Capital Securities called for redemption by the
Issuer, to the extent the Issuer shall have funds on hand available therefor at
such time, and (iii) upon a voluntary or involuntary termination, dissolution,
winding-up or liquidation of the Issuer, unless Debentures are distributed to
the Holders, the lesser of (a) the aggregate of the Liquidation Amount of $1,000
per Capital Security plus accumulated and unpaid Distributions on the Capital
Securities to but excluding the date of payment, to the extent the Issuer shall
have funds on hand available therefor at such time, and (b) the amount of assets
of the Issuer remaining available for distribution to Holders in liquidation of
the Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of
the Issuer, of any Capital Securities; provided, however, that in determining
whether the holders of the requisite percentage of Capital Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor or the
Guarantee Trustee.
"Indenture" means the Indenture dated as of January 13, 1997 between
the Guarantor and The Bank of New York, as trustee, as supplemented by the First
Supplemental Indenture dated as of January 13, 1997, and as may be further
supplemented or amended from time to time.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by the Holder(s), voting separately
as a class, of more than 50% of the Liquidation Amount of all then outstanding
Capital Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman of the Board, any Vice Chairman of the Board,
the Chief Executive Officer, the President, any Vice Chairman or any Vice
President (whether or not designated by a number or a word or words added before
or after the title Vice President), and by the Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary of such
Person, and delivered to the Guarantee Trustee. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
-3-
<PAGE>
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, limited liability company, trust,
unincorporated association, or government or any agency or political subdivision
thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee,
any Senior Vice President, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, any Assistant Treasurer, any trust officer
or assistant trust officer or any other officer of the corporate trust
department of the Guarantee Trustee and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II.
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2. List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (i) semiannually, not more than five days after January 15 and
July 15 of each year, beginning with July 15, 1997, a list, in such form as the
Guarantee Trustee may reasonably require, of the names and
-4-
<PAGE>
addresses of the Holders ("List of Holders") as of a date not more than 15 days
prior to the delivery thereof, and (ii) at such other times as the Guarantee
Trustee may request in writing, within 30 days after the receipt by the
Guarantor of any such request, a List of Holders as of a date not more than 15
days prior to the time such list is furnished, in each case to the extent such
information is in the possession or control of the Guarantor and is not
identical to a previously supplied list of Holders or has not otherwise been
received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Guarantee Trustee shall comply with the obligations imposed
under Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture
Act as if it were subject to the Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee.
Not later than July 15 of each year, commencing July 15, 1997, the
Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee and the Holders
such documents, reports and information, if any, as required by Section 314(a)
of the Trust Indenture Act and the compliance certificate required by Section
314 of the Trust Indenture Act, in the form, in the manner and at the times
required by Section 314 of the Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) of the Trust Indenture Act may
be given in the form of an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the Capital
Securities may, by vote, on behalf of the Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent therefrom.
SECTION 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first-class postage prepaid, to the
Holders, notices of all Events of Default
-5-
<PAGE>
known to the Guarantee Trustee, unless such defaults have been cured or waived
before the giving of such notice, provided that, except in the case of a default
in the payment of a Guarantee Payment, the Guarantee Trustee shall be protected
in withholding such notice if and so long as the Board of Directors, the
executive committee or a trust committee of directors and/or Responsible
Officers of the Guarantee Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained written notice, of such Event of
Default.
SECTION 2.8. Conflicting Interests.
The Trust Agreement shall be deemed to be specifically described in
this Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III.
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee
for the benefit of the Holders, and the Guarantee Trustee shall not transfer
this Guarantee Agreement to any Person except to a Holder exercising his or her
rights pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee, upon
acceptance by such Successor Guarantee Trustee of its appointment hereunder, and
such vesting in the Successor Guarantee Trustee and cessation of right, title
and interest with respect to the Guarantee Trustee shall be effective whether or
not conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing or waiving of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Guarantee Agreement, and no implied covenants shall be read into
this Guarantee Agreement against the Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.6), the Guarantee Trustee shall exercise such of the rights and powers vested
in it by this Guarantee Agreement, and use the same degree of care and skill in
its exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
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(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall
be determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or opinions that
by any provision hereof or of the Trust Indenture Act (were it
applicable hereto) are specifically required to be furnished to the
Guarantee Trustee, the Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent
in ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in Liquidation
Amount of the Capital Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
financial liability in the performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if the Guarantee Trustee
shall have reasonable grounds for believing that the repayment of such
funds or adequate indemnity against such risk or liability is not
reasonably assured to it under the terms of this Guarantee Agreement.
SECTION 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
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(i) The Guarantee Trustee may rely and shall be fully protected in
acting or refraining from acting in good faith upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, appraisal, bond, debenture, note, other evidence
of indebtedness or other paper or document reasonably believed by it to be
genuine and to have been signed, sent or presented by the proper party or
parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement,
the Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel of its
selection, and the advice or opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in reliance thereon and in accordance with such
advice or opinion. Such legal counsel may be legal counsel to the
Guarantor or any of its Affiliates and may be one of its employees. The
Guarantee Trustee shall have the right at any time to seek instructions
concerning the administration of this Guarantee Agreement from any court of
competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee Agreement at the
request or direction of any Holder, unless such Holder shall have offered
to the Guarantee Trustee such adequate security or indemnity against the
costs, expenses (including attorneys' fees and expenses) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Guarantee
Trustee; provided that nothing contained in this Section 3.2(a)(v) shall be
taken to relieve the Guarantee Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and powers vested in it
by this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, appraisal, bond, debenture, note, other evidence
of indebtedness or other paper or document, but the Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or
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attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it hereunder;
provided, however, that the Guarantee Trustee shall be responsible for its
own negligence with respect to the selection of any such agent or attorney
appointed by it hereunder.
(viii) Whenever in the administration of this Guarantee Agreement the
Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (A) may request instructions from the
Holders, (B) may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (C) shall be
protected in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on
it, in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.3. Compensation.
The Guarantor agrees to pay to the Guarantee Trustee from time to time
reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) and to reimburse the Guarantee
Trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by the Guarantee Trustee in accordance with any provision of
this Guarantee Agreement (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith.
SECTION 3.4. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee for, and to
hold it harmless against, any and all loss, liability, damage, claim or expense
incurred without negligence or bad faith on the part of the Guarantee Trustee,
arising out of or in connection with the acceptance or administration of this
Guarantee Agreement, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder. The Guarantee Trustee will not claim or
exact any lien or charge on any Guarantee Payments as a result of any amount due
to it under this Guarantee Agreement.
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ARTICLE IV.
GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee: Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements of Section
310(a) of the Trust Indenture Act. If such corporation publishes reports
of condition at least annually, pursuant to law or the requirements of its
supervising or examining authority, then, for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to
so act under Section 4.1(a), the Guarantee Trustee shall immediately resign in
the manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until
a Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an
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instrument of resignation, the resigning Guarantee Trustee may petition, at the
expense of the Guarantor, any court of competent jurisdiction for appointment of
a Successor Guarantee Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee.
ARTICLE V.
GUARANTEE
SECTION 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the Issuer may have or assert other than
the defense of payment (the "Guarantee"). The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.
SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the Guarantee and
of any liability to which it applies or may apply, presentment, demand for
payment, any right to require a proceeding first against the Guarantee Trustee,
Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Capital Securities
to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment
of Distributions that results from the extension of any interest payment
period on the Debentures as so provided in the Indenture), Redemption
Price, Liquidation Distribution or any other sums payable under the terms
of the Capital Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the
Capital Securities;
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<PAGE>
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Capital
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting the Issuer
or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the
intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee will
be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement;
and (iv) to the fullest extent permitted by law, any Holder may institute a
legal proceeding directly against the Guarantor to enforce its rights under this
Guarantee Agreement, without first instituting a proceeding against the
Guarantee Trustee, the Issuer or any other Person. The Guarantor waives any
right to require that any action be brought first against the Issuer or any
other Person or entity before proceeding directly against the Guarantor.
SECTION 5.5. Guarantee of Payment.
This Guarantee creates a guarantee of payment and not of collection.
This Guarantee will not be discharged except by payment of the Guarantee
Payments in full (without duplication of amounts theretofore paid by the Issuer)
or upon distribution of Debentures to Holders as provided in the Trust
Agreement.
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SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the
Holders against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Capital
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive of Section 5.3 hereof.
SECTION 5.8. Merger or Consolidation of Guarantor.
The Guarantor covenants that it will not consolidate with or merge
into any other Person, or transfer, convey or lease all or substantially all of
its assets or properties to any other Person, and no other Person shall
consolidate with or merge into the Guarantor, or transfer, convey or lease all
or substantially all of its assets to the Guarantor, unless (i) either the
Guarantor shall be the continuing corporation, or the successor shall be a
Person organized and existing under the laws of the United States of America or
a State thereof or the District of Columbia and such successor shall expressly
assume the Guarantor's obligations under this Guarantee Agreement by written
instrument satisfactory to the Trustee, executed and delivered to the Trustee by
such successor, (ii) immediately after such merger or consolidation, or such
transfer, conveyance or lease, no Event of Default hereunder, and no event
which, after notice or lapse of time or both would become an Event of Default,
shall have happened and be continuing, and (iii) such consolidation, merger,
transfer, conveyance or lease is permitted under the Trust Agreement and
Indenture and does not give rise to any breach or violation of the Trust
Agreement or Indenture.
ARTICLE VI.
SUBORDINATION
SECTION 6.1. Subordination
The obligations of the Guarantor under this Guarantee Agreement
constitute unsecured obligations of the Guarantor and rank subordinate and
junior in right of payment to all other liabilities of the Guarantor (including
obligations under the Debentures) except (a) those liabilities which expressly
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by their terms are made pari passu or subordinate to the obligations of the
Guarantor under this Guarantee Agreement and (b) liabilities arising under
similar guarantee agreements as described in Section 6.2 hereof.
SECTION 6.2. Pari Passu to Similar Guarantees.
The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with the obligations of the Guarantor under any similar
guarantee agreements issued by the Guarantor on behalf of the holders of
preferred securities or capital securities issued by any Aon Trust (as defined
in the Indenture).
ARTICLE VII.
TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force
and effect upon the earliest of (i) full payment of the Redemption Price of all
Capital Securities, (ii) the distribution of Debentures to the Holders in
exchange for all of the Capital Securities or (iii) full payment of the amounts
payable in accordance with the Trust Agreement upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to Capital Securities or this
Guarantee Agreement. Sections 3.3 and 3.4 shall survive the termination of the
Guarantee Agreement.
SECTION 7.2. Termination of Old Guarantee.
The Old Guarantee Agreement is hereby terminated and shall have no
further force and effect except insofar as required by Section 7.1 therein.
ARTICLE VIII.
MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Capital
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Section 5.8 of this
Guarantee Agreement, the Guarantor shall not assign its obligations hereunder.
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SECTION 8.2. Amendments.
Except with respect to any changes which do not adversely affect the
rights of the Holders in any material respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may only be amended with the
prior approval of the Holders of not less than a Majority in Liquidation Amount
of all the outstanding Capital Securities. The provisions of Article VI of the
Trust Agreement concerning meetings of the Holders shall apply to the giving of
such approval.
SECTION 8.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and personally delivered, telecopied or mailed by first class mail as
follows:
(a) if given to the Guarantor, to the address set forth below or such
other address, facsimile number or to the attention of such other Person as
the Guarantor may give notice to the Holders:
Aon Corporation
123 North Wacker Drive
Chicago, Illinois 60606
Facsimile No.: (312) 701-3100
Attention: Treasurer
(b) If given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such
other address as the Guarantee Trustee on behalf of the Issuer may give
notice to the Holders:
Aon Capital A
c/o Aon Corporation
123 North Wacker Drive
Chicago, Illinois 60606
Facsimile No.: (312) 701-3100
Attention: Treasurer
with a copy to:
The Bank of New York
101 Barclay Street
Floor 21W
New York, New York 10286
Facsimile No.: (212) 815-5915
Attention: Corporate Trust Trustee Administration
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
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All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or three days after being mailed
by first class mail, postage prepaid.
SECTION 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Capital Securities.
SECTION 8.5. Interpretation.
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined
in the preamble hereto have the respective meanings assigned to them in
Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or
amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise specified;
(f) a reference to the singular includes the plural and vice versa;
and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.6. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
AON CORPORATION
By: /s/ Michael A. Conway
------------------------------------
Name: Michael A. Conway
Title: Senior Vice President and
Senior Investment Officer
By: /s/ James D. White
------------------------------------
Name: James D. White
Title: Vice President and Controller
THE BANK OF NEW YORK
as Guarantee Trustee
By:
------------------------------------
Name:
Title:
<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
AON CORPORATION
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
THE BANK OF NEW YORK
as Guarantee Trustee
By: /s/ Mary La Gumina
------------------------------------
Name: Mary La Gumina
Title: Assistant Vice President
<PAGE>
April 1, 1998 Exhibit 5
Aon Corporation
123 N. Wacker Drive
Chicago, Illinois 60606
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
I have acted as Senior Counsel to Aon Corporation, a Delaware corporation
(the "Company"), in connection with the public offering by Robert A. Meister, a
stockholder of the Company of up to 369,000 shares (the "Shares") of the
Company's common stock, par value $1.00 per share (the "Common Stock").
This opinion is being furnished in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act of 1933 (the "Act").
In connection with this opinion, I have examined originals or copies,
certified or otherwise identified to my satisfaction, of (i) the Company's
Registration Statement (the "Registration Statement") on Form S-3 to be filed
with the Securities and Exchange Commission (the "Commission") on April 21, 1998
under the Act, in accordance with the procedures of the Commission permitting a
delayed or continuous offering of the Shares pursuant to such Registration
Statement; (ii) the Agreement dated July 1, 1997 pursuant to which the Shares
were issued; (iii) the certificates evidencing the Shares; (iv) the Second
Restated Certificate of Incorporation of the Company, as presently in effect;
and (v) the By-laws of the Company, as presently in effect. I have also
examined originals or copies, certified or otherwise identified to my
satisfaction, of such records of the Company and such agreements, certificates
of public officials, certificates of officers or other representatives of the
Company and others, and such other documents, certificates and records as I have
deemed necessary or appropriate as a basis for the opinions set forth herein.
<PAGE>
In my examination, I have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. In making my examination
of documents executed or to be executed by parties other than the Company, I
have assumed that such parties had or will have the power, corporate or other,
to enter into and perform all obligations thereunder and have also assumed the
due authorization by all requisite action, corporate or other, and execution and
delivery by such parties of such documents and the validity and binding effect
thereof. As to any facts material to the opinions expressed herein which I have
not independently established or verified, I have relied upon statements and
representations of officers and other representatives of the Company and others.
I am admitted to the bar in the State of Illinois, and I do not express any
opinion as to the laws of any jurisdiction, except the General Corporation Law
of the State of Delaware.
Based upon and subject to the foregoing, I am of the opinion that the
Shares have been duly authorized and legally issued and are fully paid and
nonassessable.
I hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement. I also consent to the reference to me
under the caption "Legal Matters" in the Registration Statement. In giving this
consent, I do not thereby admit that I am included in the category of persons
whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission.
Very truly yours,
/s/ Jerome S. Hanner
Jerome S. Hanner
Senior Counsel
JSH/adc
<PAGE>
Exhibit 23
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Aon Corporation for
the registration of 369,000 shares of its common stock and to the incorporation
by reference therein of our reports dated February 10, 1998, with respect to the
consolidated financial statements and schedules of Aon Corporation included in
or incorporated by reference in its Annual Report (Form 10-K) for the year ended
December 31, 1997, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Chicago, Illinois
April 16, 1998
