Exhibit 10.2
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Employment Agreement (this
“ Agreement ”) is dated as of June 10, 2009
(the “Effective Date”) between Aon Corporation, a
Delaware corporation (the “Company”) and Ted T. Devine
(the “Executive”).
WHEREAS, the Company seeks to employ
Executive as Executive Vice President of Aon Corporation and Chief
Executive Officer of Aon Specialty; and
WHEREAS, Executive desires to
continue to serve and be employed upon the terms and subject to the
conditions as amended and restated herein.
NOW, THEREFORE, in consideration of
the premises and the mutual agreements contained herein, the
parties hereby agree as follows:
1.
Employment
. The Company hereby agrees to
employ the Executive and the Executive hereby agrees to be employed
upon the terms and subject to the conditions contained in this
Agreement. The term of employment of the Executive commenced
on May 2, 2005 (the “Employment Date”) and will
continue pursuant to this Agreement until April 30, 2013,
unless earlier terminated pursuant to Section 4 hereof (the
“Employment Period”).
2.
Position and Duties;
Responsibilities; Board Service. (a) Position
and Duties . The Company shall employ the Executive during the
Employment Period as Executive Vice President of Aon Corporation
and Chief Executive Officer of Aon Specialty, or in another Level
1A senior executive capacity with profit and loss responsibility as
may be authorized or directed by the Chief Executive Officer of the
Company (the “CEO”). During the Employment
Period, the Executive shall perform faithfully and loyally and to
the best of his abilities the duties assigned to him hereunder and
shall devote his full business time, attention and effort to the
affairs of the Company and its subsidiaries and shall use his best
efforts to promote the interests of the Company and its
subsidiaries. The Executive may engage in charitable, civic
or community activities and, with the prior approval of the CEO,
may serve as a director of any other business corporation, provided
that (i) such activities or service do not interfere with his
duties hereunder or violate the terms of any of the covenants
contained in Section 6, 7, or 8 hereof and (ii) such
other business corporation provides the Executive with director and
officer insurance coverage which, in the opinion of the CEO, is
adequate under the circumstances.
(b)
Responsibilities
. The Executive will have the
authority and responsibility typically held by an Executive Vice
President of a large, global publicly-traded company. The
Executive will also perform such other duties (not inconsistent
with his positions) on behalf of the Company and its subsidiaries
as may be from time to time authorized or directed by the
CEO. The Executive will report to the CEO.
3.
Compensation
. (a) Base Salary .
The Company will pay the Executive a base salary of $950,000
per annum (“Base Salary”), payable semi-monthly in
accordance with the Company’s executive payroll policy.
Such Base Salary shall be reviewed annually on the Company’s
regular executive salary review schedule, and shall be subject to
adjustment at the discretion of the CEO and Organization and
Compensation Committee of the Board of Directors.
(b)
Annual Bonus
. During the Employment
Period, the Executive’s annual bonus target will be 150% of
his Base Salary in effect at the end of the year, and the maximum
annual bonus payable will be three times such target. Except
as set forth herein, the Executive’s bonus shall be subject
to the terms of the Company’s shareholder-approved Senior
Officer Incentive Compensation Plan and to the Aon Incentive Stock
Program, as those plans and programs may be amended from time to
time.
(c)
Initial Stock Award
. On the Employment Date, the
Executive received a restricted stock unit award of 100,000 shares
of common stock of the Company. Except as otherwise set forth
herein, such restricted stock units are subject to terms and
conditions generally applicable to restricted stock unit grants
under the Aon Stock Incentive Plan (the “Incentive
Plan”). In the event of termination of the
Executive’s employment by the Company without Cause pursuant
to Section 4(d) hereof such award shall continue to vest
in accordance with its full original vesting schedule.
(d)
Initial Stock Option
. (i) On the Employment
Date, the Executive was granted a non-qualified option of 150,000
shares of the common stock of the Company. The non-qualified
stock option was granted pursuant to and, except as otherwise set
forth herein, is subject to, the terms of the Incentive Plan.
Such options shall vest in accordance with the terms generally
applicable to option grants under the Aon Stock Incentive
Plan. In the event of termination of the Executive’s
employment by the Company without Cause pursuant to
Section 4(d) hereof such option shall continue to vest in
accordance with its full original vesting schedules.
(e)
Other Benefits
. During the Employment
Period, the Executive shall be entitled to participate in the
Company’s employee benefit plans generally available to
executives of the Company (such benefits being hereinafter referred
to as the “Employee Benefits”). The Executive
also shall be entitled to vacation (not less than 4 weeks per year)
or illness in accordance with the Company’s policy for
executives and to receive all other fringe benefits as are from
time to time made generally available to executives of the
Company.
(f)
Expense Reimbursement
. During the Employment
Period, the Company shall reimburse the Executive in accordance
with the Company’s policies and procedures, for all proper
expenses incurred by him in the performance of his duties
hereunder.
(g)
2009 Award
. On or about April 27,
2009, the Executive received an award of 25,000 restricted stock
units of Aon Corporation common stock under the Incentive Plan, as
amended from time to time (the “2009 Award”). The
restricted stock units were granted in accordance with the approval
provided by the Organization and Compensation Committee of Aon
Corporation’s board of directors on January 29,
2009. Except as otherwise set forth herein, the award is
subject to the Company’s standard terms and provisions,
including vesting provisions. For the avoidance of doubt, the
restricted stock units will vest in equal installments of 25% on
the second through fifth anniversary of the date of grant subject
to the Executive’s continued employment.
(h)
Other Equity Awards
. Subsequent to the Employment
Date and in addition to the 2009 Award, the Executive has received
additional equity awards that except as otherwise set forth herein
are governed by the terms of the applicable award documents and by
the Incentive Plan.
4.
Termination
. (a) Death
. Upon the death of the Executive, this Agreement shall
automatically terminate and the Executive’s executor,
administrator or designated beneficiary shall be entitled to
receive the Executive’s Base Salary which shall have accrued
to the date of such
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death. The Company shall pay to the
Executive’s executor or administrator of Executive’s
estate a lump sum cash amount equal to the Executive’s Base
Salary at the rate in effect at the date of such death, to which
the Executive would have been entitled from the date of such death
until the end of the Employment Period, reduced by the amount of
any benefit paid under any individual or group life insurance
policy maintained by the Company for the benefit of the
Executive.
(b)
Disability
. The Company may, at its
option, terminate this Agreement upon written notice to the
Executive if the Executive, because of physical or mental
incapacity or disability, fails to perform the essential functions
of his position, with reasonable accommodation, if relevant,
required of him hereunder for a continuous period of 120 days or
any 180 days within any 12-month period. Upon such
termination, the Executive or his legal representative shall be
entitled to receive the Base Salary which shall have accrued to the
date of termination, plus continuation of Base Salary, at the rate
in effect at the date of such termination of employment, until the
end of the Employment Period; provided, however, that the amount of
any benefit payable under any disability insurance policy
maintained by the Company for the benefit of the Executive shall be
deducted from the payments of such Base Salary. In the event
of any dispute regarding the existence of the Executive’s
incapacity or disability hereunder, the matter shall be resolved by
the determination of an independent physician agreed to between the
Executive and the Company specializing in the claimed area of
incapacity or disability. The Executive shall submit to
appropriate medical examinations for purposes of such
determination.
(c)
Cause . (i) The Company may at any time, at
its option, terminate the Executive’s employment under this
Agreement immediately for Cause (as hereinafter defined). The
Company’s decision in this regard shall be taken by the
Governance Committee of the Board (“Governance
Committee”). The Executive shall be given at least
seven days advance written notice of any meeting at which the
Governance Committee proposes to put forward for a vote a decision
on whether or not to terminate the Executive for Cause and the
written notice shall describe in reasonable detail the basis on
which the Governance Committee may conclude that Cause
exists. The Executive shall have the opportunity to appear in
person and to make such written and/or oral presentation to such
meeting of the Governance Committee as the Executive thinks
fit. If a majority of the Governance/Nominating Committee
authorizes by affirmative vote a termination for Cause at such
meeting (whether or not the Executive makes any oral or written
presentations at such meeting) such determination shall be final
and binding upon the Company and the Executive once such decision
is confirmed in writing and communicated to the
Executive.
(ii)
As used in this Agreement, the term
“Cause” shall mean any one or more of the
following:
(A) any intentional act of
fraud, embezzlement or theft by the Executive in connection with
his duties hereunder or in the course of his employment hereunder
or the Executive’s admission or conviction of, or plea of
nolo contendere to, a felony or of any crime involving moral
turpitude, fraud, embezzlement, theft or
misrepresentation;
(B) any gross negligence or
willful misconduct of the Executive resulting in a loss to the
Company or any of its subsidiaries, or damage to the reputation of
the Company or any of its subsidiaries;
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(C) any breach by the
Executive of any one or more of the covenants contained in
Section 6, 7, or 8 hereof;
(D) any violation of any
statutory or common law duty of loyalty to the Company or any of
its subsidiaries;
(E) the determination by
Gregory Case, in his capacity as CEO, that the Executive has
breached the policies or procedures of the Company or engaged in
any action or behavior that is, or if allowed to continue could be,
detrimental to the business or reputation of the Company;
or
(F) the Executive’s
receipt of two written disciplinary notices from the Global Head of
Human Resources within any twenty-four (24) month period as a
result of the Executive’s breach of the policies or
procedures of the Company or any action or behavior by the
Executive that is, or if allowed to continue could be, detrimental
to the business or reputation of the Company.
(iii)
The exercise of the right of the
Company to terminate this Agreement pursuant to this
Section 4(c) shall not abrogate the rights or remedies of
the Company in respect of the breach giving rise to such
termination.
(iv)
If the Company terminates the
Executive’s employment for Cause, as defined in
Section 4(c), he shall be entitled to:
(A) accrued Base Salary through
the date of the termination of his employment; and
(B) other Employee Benefits to
which the Executive is entitled upon his termination of employment
with the Company, including any regular and supplemental retirement
and disability benefits required pursuant to the terms of the plans
and programs of the Company.
(v)
The definition of
“Cause” herein shall replace any other definitions of
“Cause” in any
