Exhibit 10(a)
Aon STOCK AWARD PLAN
(AS AMENDED AND RESTATED THROUGH FEBRUARY, 2000)
1. PURPOSE
Aon Corporation and its subsidiaries (the "Corporation"), has adopted the
Aon Stock Award Plan (as amended and restated through February 2000) (the
"Plan"). The purpose of the Plan is to foster and promote the long-term
financial success of the Corporation and materially increase stockholder value
by: (a) strengthening the Corporation's capability to develop, maintain, and
direct an outstanding management team; (b) motivating superior performance by
means of long-term performance related incentives; (c) encouraging and providing
for obtaining an ownership interest in the Corporation; (d) attracting and
retaining outstanding executive talent by providing incentive compensation
opportunities competitive with other major companies; and (e) enabling
executives to participate in the long-term growth and financial success of the
Company.
2. ADMINISTRATION
The Plan shall be administered by the Organization and Compensation
Committee (the "Committee") of Aon Corporation's Board of Directors (the
"Board"). Subject to the limitations of the plan, the Committee shall have the
sole and complete authority to: (a) select from the regular, full-time employees
of the Corporation, those who shall participate in the Plan ("Participant"); (b)
make awards in such forms and amounts as it shall determine; (c) impose such
limitations, restrictions and conditions upon such awards as it shall deem
appropriate; (d) interpret the Plan and adopt, amend and rescind administrative
guidelines and other rules and regulations relating to the Plan; (e) correct any
defect or omission or reconcile any inconsistency in this Plan or in any award
granted hereunder; and (f) make all other determinations and take all other
actions deemed necessary or advisable for the implementation and administration
of the Plan. The Committee's determinations on matters within its authority
shall be conclusive and binding upon the Corporation and all other persons.
3. TYPES OF AWARDS
Awards of the common stock, $1.00 par value per share of the Corporation
(the "Common Stock") under this Plan may be in the form of any one or more of
the following: (a) incentive stock options (as defined by Internal Revenue Code
Section 422 and referred to herein as "ISO's"); (b) regular stock options (not
intended to be accorded favored tax treatment, and referred to herein as
"RSO's"); and (c) stock awards granted pursuant to Section 7.
4. SHARES SUBJECT TO THE PLAN
Since the adoption of the Plan in 1987, after giving effect to subsequent
additions approved by shareholders and stock splits, the aggregate number of
shares of Common Stock which may be issued pursuant to awards under the Plan
shall be 19,350,000, subject to adjustment pursuant to Section 10 hereof.
5. STOCK OPTION TERMS AND CONDITIONS
The Committee may make option grants of Common Stock in the form of ISO's
and/or RSO's (collectively referred to as "Option Grant").
The purchase price per share of Common Stock subject to an Option Grant
shall not be less than 100% of the fair market value of the Common Stock on the
date such Option Grant is made. "Fair Market Value" as used in the Plan with
regard to a date means the arithmetic mean of the high and low prices of the
Common Stock as quoted on the New York Stock Exchange, as published in The Wall
Street Journal, or, if The Wall Street Journal is no longer published, such
other periodical as is chosen by the Committee.
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An Option Grant shall vest after a Participant's period of continuous
employment by the Corporation from the date of the Option Grant ("Grant Date")
in accordance with the schedule set forth below:
Participant's Full Years of Continuous
Employment From Grant Date Percent Vested
-------------------------- --------------
2 33%
3 34%
4 33%
A Participant, following the vesting of any portion of an Option Grant as
set forth above, may elect to exercise an option by giving written notice to the
Corporation on such form as the Committee may prescribe. Payment for all shares
to be purchased pursuant to an exercise of an option shall be made in a form or
manner authorized by the Committee, including, but not limited to, cash or, if
the Committee so permits, (a) by delivery of certification of ownership to the
Corporation of the number of shares of Common Stock which have been owned by the
holder for at least six (6) months prior to the date of exercise having an
aggregate Fair Market Value of not less than the product of the purchase price
of the option multiplied by the number of shares the Participant intends to
purchase upon exercise of the option on the date of delivery; or (b) in a
cashless exercise through a broker. Delivery of such certificates is conditioned
on the Participant's prior compliance with this Section and with the terms of
Section 9. Upon receipt of such stock certificate, the Participant is free to
hold or subject to Section 15 dispose of it at will. The Participant does not
have the right to vote any shares of Common Stock subject to an Option Grant or
receive dividends on such shares prior to the time that the option to which they
are subject is exercised. The Committee at its discretion may alter the terms of
the vesting of Option Grants; provided however, no Option Grant may be exercised
after the tenth (10th) anniversary of the date of the making of such Option
Grant.
Notwithstanding any provision contained in the Plan to the contrary, the
maximum number of shares for which Option Grants may be made under this Plan to
any one Participant in any one calendar year is 675,000 shares of Common Stock,
subject to adjustment pursuant to Section 10 hereof.
6. LIMITATION ON ISO'S
Notwithstanding anything in the Plan to the contrary, to the extent
required from time to time by the Internal Revenue Code and promulgation's
thereunder ("Code"), the following additional provisions shall apply to Option
Grants which are intended to qualify as ISO's:
(a) The aggregate Fair Market Value (determined as of the Grant Date)
of the shares of Common Stock with respect to which ISO's are
exercisable for the first time by any Participant during any
calendar year (under all plans of the Corporation) shall not
exceed $100,000 or such other amount as may subsequently be
specified by the Code; provided that, to the extent that such
limitation is exceeded, any excess options (as determined under
the Code) shall be deemed to be RSO's.
(b) Any ISO's authorized under the Plan shall contain such other
provisions as the Committee shall deem advisable, but shall in all
events be consistent with and contain or be deemed to contain all
provisions required in order to qualify the Option Grants as ISO's.
(c) All ISO's must be granted within ten years from the effective date
of this Plan.
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7. STOCK AWARD TERMS AND CONDITIONS
The Committee may in its discretion make grants of Common Stock, subject
to this Section 7 (herein referred to as "Stock Awards"). The Stock Awards shall
vest after a Participant's period of continuous employment by the Corporation
from the date of the Stock Award (the "Award Date") in accordance with the
schedule set forth below:
Participant's Full Years of Continuous
Employment From Award Date Percent Vested
-------------------------- --------------
3 20
4 10
5 10
6 10
7 10
8 10
9 10
10 20
Within 30 days of the vesting of any portion of a Stock Award by virtue of
the Participant's completing the full years of continuous employment as set
forth above, the Corporation shall deliver to the Participant a stock
certificate covering the requisite number of shares of Common Stock. Delivery of
such certificates is conditioned on the Participant's prior compliance with the
terms of Section 9. Upon receipt of such stock certificate, the Participant is
free to hold or, subject to Section 15, dispose of it at will. The Participant
does not have the right to vote any shares of Common Stock subject to an Award
or receive dividends on such shares prior to the time they are vested. The
Committee in its discretion may alter the terms of the vesting of Stock Awards.
The Committee shall have the discretion to discharge all or a portion of its
obligation under this paragraph by paying to the Participant an amount of money
equal to the fair market value of all or a portion of the undelivered shares of
Common Stock on the date the Stock Award becomes vested, less applicable
withholding taxes.
8. EMPLOYMENT TERMINATION
If a Participant's employment terminates for any reason, other than by
death or disability, all unvested Option Grants and Stock Awards will be
forfeited. If a Participant's employment terminates because of death or
disability, all unvested Option Grants and Stock Awards will continue to vest in
accordance with Sections 5 and 7, respectively. The Committee, however, shall
have the discretion to accelerate the vesting of any unvested Option Grant or to
deliver shares of Common Stock representing all or a portion of any unvested
Stock Award, with respect to specific terminating Participants if, after
reviewing all of the facts and circumstances of such termination, the Committee
determines that such delivery is appropriate and equitable.
Any participant who terminates employment, other than by death or
disability, will be permitted to exercise any vested Option Grants, pursuant to
Section 5, for a period of 30 days immediately following the Participant's
termination of employment, after which any vested Option Grants will be
forfeited.
9. WITHHOLDING TAXES
A Participant shall have the duty to pay to the Corporation an amount
equal to the taxes required by any government to be withheld or otherwise
deducted and paid by the Corporation as a result of the exercise by the
Participant of any Option Grant or the delivery to the Participant of any shares
subject to an Option Grant and/or Stock Award. Shares of Common Stock subject to
an exercised Option Grant and/or Stock Award shall not be delivered to the
Participant until such time as such payment has been made.
The Committee may, in its discretion and subject to such rules as it may
adopt, permit or, in the absence of the receipt of payment therefore within
prescribed time periods, require the Participant to pay all or a portion of the
withholding taxes (federal, state and local) by electing to have the Corporation
withhold shares of Common Stock otherwise issuable having a Fair Market Value
equal to all or any portion of the withholding tax to be satisfied in this
manner.
However, in no event will the amount of shares of Common Stock withheld
exceed the amount necessary to satisfy the required minimum statutory
withholding.
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10. ADJUSTMENT IN EVENT OF CHANGES IN CAPITALIZATION
In the event of a recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation, rights offering,
separation, reorganization or liquidation, or any other change in the corporate
structure or shares of the Corporation, the Committee may make such equitable
adjustments, to prevent dilution or enlargement of rights, as it may deem
appropriate, including but not limited to (a) the maximum number of shares
available to be issued pursuant to Section 4; (b) the maximum number of shares
of Common Stock which may be granted in a single year pursuant to Section 5; (c)
the number of shares of Common Stock subject to outstanding Option Grants and/or
Stock Awards and (d) the exercise price of outstanding Option Grants.
11. NO RIGHT TO CONTINUED EMPLOYMENT
Nothing in the Plan shall confer on a Participant any right to continue in
the employ of the Corporation or in any way affect the Corporation's right to
terminate the Participant's employment at any time without prior notice and for
any or no reason.
12. IMPACT ON OTHER BENEFITS
The value of any shares of Common Stock delivered (or money in-lieu
thereof) under this Plan shall not be includable as compensation or earnings for
purposes of any other benefit plan offered by the Corporation.
13. BENEFICIARY
Any shares deliverable after a Participants death (or money in-lieu
thereof) shall be delivered (or paid) to the beneficiary as designated in
writing by the Participant. If no beneficiary is so designated, delivery (or
payment) will be made to the Participant's estate. The Participant may change
the designated beneficiary of this Plan by filing with the Committee written
notices of such change.
14. TERMINATION OR AMENDMENT OF THE PLAN
The Board shall have the right to amend or terminate the Plan at any time.
An outstanding Option Grant or Stock Award, however, may not in any way be
adversely affected or limited by any Plan amendment or termination approved
after the Grant Date or the Award Date, as the case may be, without the
Participant's written consent (or, if the Participant is not then living, the
affected beneficiary); provided, that adjustments pursuant to Section 10 herein
shall not be subject to the foregoing limitations of this Section 14.
15. REGULATORY COMPLIANCE AND LISTING
The delivery of any shares of Common Stock under this Plan may be
postponed by the Corporation for such period as may be required to comply with
any applicable requirements under the Federal or State securities laws, any
applicable listing or other requirements of any national securities exchange and
requirements under any other law or regulation applicable to the delivery of
such shares, and the Corporation shall not be obligated to deliver any shares of
Common Stock under this Plan if such delivery shall constitute a violation of
any provision of any law or of any regulation of any governmental authority or
any national securities exchange. In addition, the shares of Common Stock when
delivered may be subject to conditions, including transfer restrictions, if
required to comply with applicable securities law.
16. MISCELLANEOUS
The shares of Common Stock to be delivered under the Plan may be either
authorized but unissued shares or shares which have been or may be reacquired by
the Corporation, as determined from time to time by the Committee.
To the extent any shares of Common Stock are not delivered to a
Participant or beneficiary because the Option Grant or Stock Award was forfeited
or canceled, or the shares of Common Stock are not delivered because the Option
Grant or Stock Award is settled in cash or used to satisfy the applicable tax
withholding obligation, such shares shall not be deemed to have been delivered
for purposes of determining the maximum number of shares of Common Stock
available for delivery under the Plan.
If the exercise price of an Option Grant under this Plan is satisfied by
tendering shares of Common Stock to the Corporation (by either actual delivery
or by attestation), only the number of shares of Common Stock issued net of
shares of Common Stock tendered shall be deemed delivered for purposes of
determining the maximum number of shares of Common Stock available for delivery
under the Plan.
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17. TRANSFERABILITY
No Option Grant and/or Stock Award and no right under any such Option
Grant and/or Stock Award shall be transferable by a Participant otherwise than
by will or by the laws of descent and distribution; provided, however, that if
so determined by the Committee, a Participant may, in the manner established by
the Committee;
(a) designate a beneficiary or beneficiaries to exercise the rights of
the Participant and receive any property distributable with respect
to any Option Grants and/or Stock Awards upon the death of the
Participant, or;
(b) transfer an Option Grant and/or Stock Award to any member of such
Participant's "immediate family" (as such term is defined in Rule
16a-1(e) promulgated by the Securities and Exchange Commission under
the Securities Exchange Act of 1934, as amended, or any successor
rule or regulation) or to a trust or family partnership whose
beneficiaries are members of such Participant's "immediate family."
Each Option Grant and Stock Award or right under any Option Grant and Stock
Award shall be exercisable during the Participant's lifetime only by the
Participant, or by a member of such Participant's immediate family or a trust or
family partnership for members of such immediate family pursuant to a transfer
as described above, or if permissible under applicable law, by the Participant's
guardian or legal representative. No Option Grant and/or Stock Award or right
under any such Option Grant and/or Stock Award may be pledged, alienated,
attached or otherwise encumbered, any purported pledge, alienation, attachment
or encumbrance thereof shall be void and unenforceable against the Corporation.
18. DEFERRAL OF AWARDS
The Committee may, in its discretion and subject to such rules as it may
adopt, permit a Participant to defer all or a portion of such shares of Common
Stock otherwise deliverable pursuant to the Plan.
19. EFFECTIVE DATE OF THE PLAN
The Plan as amended and restated shall become effective as of the date of
approval of this Plan by the Board and the stockholders of the Company.
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