EXHIBIT 10(P)
EMPLOYMENT AGREEMENT
This Employment Agreement dated as of June 1, 1993 among Aon
Corporation, a Delaware corporation ("Aon"), Aon's wholly-owned subsidiary, Aon
Risk Services, Inc., a Delaware corporation ("Aon Risk"), and Xxxxxxx X.
X'Xxxxxxxx ("X'Xxxxxxxx").
WHEREAS, pursuant to an Employment Agreement dated as of April 15, 1988
(the "Prior Agreement"), X'Xxxxxxxx has been Chairman and Chief Executive
Officer of Aon Risk, and has served as a director and/or officer of subsidiaries
of Aon Risk; and
WHEREAS, while the term of the Prior Agreement does not end until
November 1, 1997, the parties to the Prior Agreement and this Agreement desire
to continue the services of X'Xxxxxxxx beyond November 1, 1997 and provide for
new terms and conditions governing X'Xxxxxxxx'x employment by Aon Risk.
NOW, THEREFORE, in consideration of the mutual covenant contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I: Scope of Employment
1.1 TERM. X'Xxxxxxxx will continue to be an employee of one or more of
Aon's subsidiaries for a term ending on December 31, 1998 (the "Initial Term").
The term of X'Xxxxxxxx'x employment will be subject to automatic renewal for
successive twelve-month periods thereafter unless this Agreement is terminated
by X'Xxxxxxxx or the Aon subsidiary by which he is then principally employed as
of the expiration of any such twelve-month period upon not less than 30 days'
prior written notice to the other party.
1.2 DUTIES. Aon Risk has caused X'Xxxxxxxx to be elected, and
X'Xxxxxxxx agrees to serve, as Chairman, Chief executive officer and a director
of Aon Risk. X'Xxxxxxxx will report directly to Aon Risk's board of directors.
1.3 BOARD REPRESENTATION. While Aon, Aon Risk and X'Xxxxxxxx recognize
that the right to elect directors is by law vested in stockholders, it is
nevertheless mutually contemplated, subject to such right, that during the
entire time that X'Xxxxxxxx is principally employed by Aon Risk, X'Xxxxxxxx
shall continue to serve as a director of Aon Risk; provided, however, that
X'Xxxxxxxx'x removal from Aon Risk's board of directors shall not be deemed a
breach of this Agreement.
1.4 EXCLUSIVE EMPLOYMENT. So long as X'Xxxxxxxx is an employee of any
of Aon's subsidiaries, X'Xxxxxxxx (i) will devote his best efforts and all of
his business time, efforts, and attention to furthering the interests of such
subsidiaries; and (ii) will not, directly or indirectly, engage in any business
activity which is competitive with any business activity conducted by such
subsidiaries.
1.5 NO VIOLATION OF COVENANTS AND RESTRICTIONS. X'Xxxxxxxx agrees not
to violate any legally enforceable covenants or restrictions affecting his work
for any of Aon's subsidiaries, as set forth in any agreements into which he may
have entered, including, but not limited to, employment agreements, sales
agreements, deferred compensation agreements, restricted stock or option
agreements. X'Xxxxxxxx will not act in any capacity as a reinsurance
intermediary that would violate any then-legally enforceable covenants or
restrictions affecting his work.
1.6 REPRESENTATION REGARDING PRIOR EMPLOYMENT. X'Xxxxxxxx represents
and warrants to Aon that he has provided Aon with copies of all covenants and
restrictions which may be applicable to his employment hereunder and that all
such covenants and restrictions are accurately identified in Exhibit A attached
to this Agreement.
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1.7 TERMINATION. X'Xxxxxxxx'x employment with any of Aon's subsidiaries
may be terminated at any time by the Aon subsidiary by which X'Xxxxxxxx is then
principally employed in the event of X'Xxxxxxxx'x dishonesty as determined by
the Compensation Committee of Aon's Board of Directors ("Dishonesty"). Such
termination is hereinafter referred to as a "Termination for Dishonesty."
X'Xxxxxxxx'x employment with any Aon subsidiary may also be terminated at any
time for any or no reason by X'Xxxxxxxx or the Aon Subsidiary by which
X'Xxxxxxxx is then principally employed, upon 10 days' prior written notice
given by X'Xxxxxxxx to such Aon subsidiary ("Voluntary Termination") or given by
such Aon subsidiary to X'Xxxxxxxx ("Involuntary Termination").
ARTICLE II: Compensation
2.1 BASE COMPENSATION. From the date of this Agreement until January 1,
1994, X'Xxxxxxxx'x base salary shall continue at its' current rate per annum.
Thereafter, X'Xxxxxxxx'x base salary shall be determined annually by the Board
of Directors of the Aon subsidiary by which he is then principally employed, but
shall be at a rate not less than $750,000 per year, and shall be subject to the
approval of the Compensation Committee of the Board of Directors of Aon.
X'Xxxxxxxx'x base compensation shall be payable on the same dates and in the
same manner as the base compensation of senior executives of other Aon
subsidiaries.
2.2 EXECUTIVE BENEFITS. Subject to the terms of such plans and so long
as X'Xxxxxxxx remains employed by any of Aon's subsidiaries, X'Xxxxxxxx will be
covered under all retirement, employee investment, medical and dental,
short-term and long-term disability, life insurance, accident insurance and
other similar benefit plans substantially equivalent to such plans maintained
from time to time by Aon's subsidiary, Xxxxxxx Xxxxx Xxxx Group, Inc. for its
senior executives. If any such plan bases payments thereunder on the amount of
X'Xxxxxxxx'x compensation, his
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compensation for purposes of such plan shall, unless such plan provides
otherwise, be deemed to be his base compensation as determined pursuant to
Section 2.1 of this Agreement.
2.3 PAYMENTS IN THE EVENT OF INVOLUNTARY TERMINATION. In the event of
X'Xxxxxxxx'x Involuntary Termination before December 31, 1998 and so long as
X'Xxxxxxxx continues to satisfy his obligations under Sections 3.2 and 3.3 of
this Agreement, he will be paid compensation at the rate of $750,000 per year
for the period following such Involuntary Termination (in addition to any amount
which may be payable pursuant to Section 2.7 of this Agreement) until (i)
December 31, 1998, or (ii) the expiration of two years following such
Involuntary Termination, whichever is longer.
In addition, if this Agreement is not renewed in accordance with the
provisions of Section 1.1 of this Agreement after December 31, 1998 (unless
sooner terminated in which case the provisions of the preceding sentence of this
section shall only apply), X'Xxxxxxxx will be paid compensation at the rate of
$750,000 per year for the two years following December 31, 1998.
2.4 LOANS. X'Xxxxxxxx currently owes Aon $300,000 pursuant to an
unsecured promissory note (the "Note") which bears interest at the rate of 8%
per annum, without compounding. The principal amount and all accrued interest
under such Note will become due and payable in full on the second anniversary of
such Note; provided, however, that, as additional consideration for the
performance of services by X'Xxxxxxxx, all principal and interest due and
payable on the Note will be forgiven (x) if X'Xxxxxxxx remains an employee of
any of Aon's subsidiaries until the date such amounts would otherwise become due
and payable on such Note or (y) as provided in Section 2.7.
2.5 RESTRICTED STOCK. Pursuant to the provisions of the Aon Stock Award
Plan (the "Plan") Aon will cause to be granted to X'Xxxxxxxx Aon common stock,
par value $1.00 per share ("Aon Stock") in the following amounts effective on
the dates set forth opposite such amounts:
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(a) 20,000 January 1, 1994
(b) 20,000 January 1, 1996
(c) 20,000 January 1, 1998
Each of (a), (b), and (c) above shall be considered separate grants
under the Plan, and shall be subject to all the terms and conditions of the
Plan. Each of the grants outlined hereinabove shall be adjusted accordingly in
the event Aon Stock is subject to split, stock dividend, recapitalization or
exchange. Notwithstanding anything to the contrary herein, should X'Xxxxxxxx'x
employment terminate hereunder for any reason, no subsequent grant shall be
effective.
2.6 CLUB MEMBERSHIPS. Aon will pay all initiation fees, periodic
membership dues and reasonable client entertainment expenses incurred by
X'Xxxxxxxx at the Big Foot Country Club, the Royal Melbourne Country Club, the
Tower Club and the Tavern Club during his employment by any of Aon's
subsidiaries pursuant to this Agreement.
2.7 ADDITIONAL COMPENSATION UPON DEATH, EXTENDED TOTAL DISABILITY OR
INVOLUNTARY TERMINATION. During the Initial Term, within 30 days after (i) the
first date on which X'Xxxxxxxx has continuously been Totally Disabled (defined
and determined in a manner consistent with the long-term disability plan or
plans under which X'Xxxxxxxx is covered pursuant to Section 2.2) for at least
one year, (ii) the date of X'Xxxxxxxx'x death while employed by any of Aon's
subsidiaries or (iii) the date of X'Xxxxxxxx'x Involuntary Termination (any such
date, the "Payment Date"), (a) X'Xxxxxxxx or the executors or administrators of
his estate, as the case may be, shall receive a payment equal to the base
compensation set forth in Section 2.1, (b) the principal of and accrued interest
on all Notes made pursuant to Section 2.4 shall be forgiven, and (c) the
unvested portion of any grant made pursuant to Section 2.5 herein shall
accelerate and become fully vested.
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ARTICLE III: CONFIDENTIALITY AND NON-COMPETITION
3.1 ACCESS TO INFORMATION. As an employee and officer of one or more of
Aon's subsidiaries, X'Xxxxxxxx acknowledges that he is expected to obtain access
to proprietary, secret or confidential information relating to (i) business,
conduct or operations of such subsidiaries and their clients, (ii) research,
processes, methods, techniques, computer programs, client lists, client
requirements, reports and similar materials used in connection with such
subsidiaries' business, and (iii) the enhancement of, or possible uses or
applications for, such items or services.
3.2 CONFIDENTIALITY. While X'Xxxxxxxx is an employee or officer of any
subsidiary of Aon and at all times thereafter, he agrees to respect the
confidentiality of any information received as a result of his association with
any subsidiary of Aon and agrees not to disclose to others any proprietary,
secret or confidential information. Upon termination of X'Xxxxxxxx'x employment
for any reason, he agrees not to take any confidential, proprietary or secret
information or copies thereof with him, nor will he use, duplicate or disclose
such information to anyone else.
3.3 NON-SOLICITATION. In light of the special and unique nature of the
relationship described herein, as consideration for X'Xxxxxxxx'x employment and
in order to protect the legitimate and protectible business interest of Aon Risk
and Aon Risk's subsidiaries, including, but not limited to, any confidential and
proprietary information to which X'Xxxxxxxx will obtain access, X'Xxxxxxxx
agrees that for a period of two years following Voluntary Termination of his
employment, Termination for Dishonesty or other expiration of his employment
under this Agreement, X'Xxxxxxxx will not directly or indirectly:
(a) solicit business from, or assist others in soliciting business from
or performing work for, any client of Aon Risk or any subsidiary of Aon Risk
which X'Xxxxxxxx personally handled or
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serviced at any time during the one year period immediately preceding
termination; or
(b) attempt to hire, hire, assist in hiring or cause to be hired by
another, any person who was an employee of Aon Risk or any subsidiary of Aon
Risk at any time during the six months preceding termination.
3.4 IRREPARABLE INJURY. X'Xxxxxxxx expressly acknowledges, recognizes
and understands that a breach of any of the provisions of Section 3.2 or Section
3.3 will cause irreparable damage to the business of one or more of Aon's
subsidiaries and that such damage will be difficult or impossible to measure.
X'Xxxxxxxx agrees that in the event of any such breach, any Aon subsidiary which
may be injured thereby, in addition to such other rights and remedies as it may
have, may apply to any court of competent jurisdiction for an order requiring
specific performance of the provisions of Section 3.2 and 3.3 and seek
temporary, preliminary and permanent injunction relief against any act which
would violate any such provision. If any provision of Section 3.2 or Section 3.3
shall be held invalid or unenforceable as written, such provision shall be
construed a restricting the activities of X'Xxxxxxxx to the extent such
activities may be lawfully restricted.
3.5 X'XXXXXXXX'X ACKNOWLEDGEMENT. X'Xxxxxxxx understands and expressly
acknowledges that each of the foregoing provisions is reasonable and necessary
to protect and preserve the legitimate and protectible business interest of
Aon's subsidiaries, and the economic benefit derived therefrom, and that such
restrictions will not prevent X'Xxxxxxxx from earning a livelihood in his chosen
business and are not an undue restraint on him.
3.6 SURVIVAL. The provisions of this Article III shall survive any
termination of this Agreement.
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ARTICLE IV: Miscellaneous
4.1 AON GUARANTEE. Aon guarantees the payment of its subsidiaries'
obligations to X'Xxxxxxxx hereunder.
4.2 EXPENSES. Aon will reimburse X'Xxxxxxxx for all fees and expenses
of legal counsel and accountants reasonably incurred by him in connection with
the negotiation of this Agreement. As X'Xxxxxxxx will comply with any legally
enforceable covenants and restrictions applicable to his employment hereunder,
it is unlikely that litigation will arise regarding such covenants and
restrictions. However, in the unlikely event that an action is filed against
X'Xxxxxxxx, Aon will indemnify him and hold him harmless for the fees and
expenses of legal counsel selected by Aon subject to X'Xxxxxxxx'x approval
(which approval shall not unreasonably be withheld) for the defense of any claim
by any of his present or former employers which is based primarily on his
alleged violation of the covenants and restrictions identified on Exhibit A.
4.3 GOVERNING LAW. This agreement will be governed by and construed in
accordance with the laws of the State of Illinois.
4.4 NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and sent by certified mail to his
residence address as it appears on Aon's records in the case of X'Xxxxxxxx, or
to Aon's principal office in the case of Aon or any of its subsidiaries,
addressed to the Secretary of Aon.
4.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of Aon and its successors and assigns, including any
successor by merger, consolidation or transfer of substantially all of the
assets of Aon. Such successor shall assume its performance, and shall have the
same duties and obligations as Aon. This Agreement shall be binding upon and
inure to the benefit of X'Xxxxxxxx and his heirs and personal representatives;
provided, however, that X'Xxxxxxxx shall make no assignment of any right or
benefit hereunder, except as authorized by
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specific provision hereof.
4.6 SEVERABILITY. If for any reason any provision of this Agreement
shall be held invalid in whole or in part, such invalidity shall not affect such
provision to the extent not so held invalid, or any other provisions of this
Agreement not so held invalid, and such provision and all other such provisions
shall to the full extent consistent with law continue in full force and effect.
4.7 ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties and supersedes all prior agreements or understandings between the
parties, including without limitation the Prior Agreement. This Agreement may
not be changed orally, but only by an instrument in writing signed by the party
against whom enforcement of any waiver, change, modification, extension or
discharge is sought.
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4.8 HEADINGS. The article and section headings and captions in this
Agreement are for convenience only and shall not affect the construction or
interpretation of this Agreement.
AON CORPORATION
By:/S/XXXXXXX X. XXXX
------------------------
Chairman, President and
Chief Executive Officer
AON RISK SERVICES, INC.
By:/S/XXXXXX X. XXXXXX
------------------------
Vice President
By:/S/XXXXXXX X. X'XXXXXXXX
------------------------
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EXHIBIT A
Covenants and Restrictions
1. Those covenants and restrictions affecting Xxxxxxx X. X'Xxxxxxxx as
contained in that certain Agreement dated July 10, 1981 pertaining to the
purchase of assets of First Manhattan Intermediaries, Inc. by Xxxxxx X. Xxxxxx &
Company, Inc. ("TAG").
2. Those covenants and restrictions affecting Xxxxxxx X. X'Xxxxxxxx as
contained in any stock option plan or grant made by agreement between Alexander
& Alexander Services, Inc. (A&A) and Xxxxxxx X. X'Xxxxxxxx, including but not
limited to agreements dated March 31, 1983 and August 18, 1986.
3. Those covenants and restrictions affecting Xxxxxxx X. X'Xxxxxxxx as
contained in any plan of deferred compensation of TAG or A&A, including but not
limited to a participation and deferral election agreement between TAG and
Xxxxxxx X. X'Xxxxxxxx dated November 26, 1986.
