8-KLeadership ChangesMaterial AgreementsCorporate Changes+2

Aon plc 8-K Report, Material Agreement (Feb 5, 2009)

Filed February 5, 2009For Securities:AON

Summary

This 8-K filing by Aon Corporation (Aon) on February 5, 2009, details several significant corporate governance and employee benefit plan changes approved by the Board of Directors on January 30, 2009. Notably, Aon approved a form of indemnification agreement for its directors and officers to provide contractual assurance on existing indemnification rights, particularly in light of recent Delaware case law developments. This aims to safeguard officers and directors against adverse changes to their rights related to past events. Furthermore, the company announced substantial changes to its retirement and savings plans to manage future costs. The Aon Pension Plan and the Aon Excess Benefit Plan will cease all future benefit accruals effective April 1, 2009, freezing accrued benefits as of that date. The Aon Savings Plan will see modifications including the discontinuation of discretionary contributions, the end of discretionary matching contributions for 2009 and beyond, but an increase in the company's matching contribution to 100% of employee contributions up to 6% of eligible compensation. These benefit plan adjustments are intended to reduce future pension costs for the company.

Key Highlights

  • 1Aon has entered into a material definitive agreement by approving a form of indemnification agreement for its directors and officers, reinforcing their existing rights.
  • 2The company is taking steps to reduce future pension costs by freezing benefit accruals in the Aon Pension Plan and the Aon Excess Benefit Plan effective April 1, 2009.
  • 3Accrued benefits in the Pension Plan and Excess Benefit Plan as of April 1, 2009, will not be affected by the freeze on future accruals.
  • 4The Aon Savings Plan will discontinue discretionary contributions and discretionary matching contributions from 2009 onwards.
  • 5The company is enhancing its matching contribution under the Aon Savings Plan to 100% of employee contributions up to 6% of eligible compensation, effective January 1, 2009.
  • 6Aon's Board of Directors approved amendments and restatements to the company's bylaws, primarily related to stockholder nomination and business proposal procedures, director election voting standards, and board structure.
  • 7The bylaws now clarify the role of the Chairman of the Board and the potential appointment of a lead independent director.

Frequently Asked Questions

The indemnification agreement is designed to provide directors and officers with specific contractual assurance regarding their existing indemnification and expense advancement rights. This is particularly relevant due to recent developments in Delaware case law and aims to ensure that no future amendments to Aon's Certificate of Incorporation will negatively impact these rights for events that occurred prior to any such amendment.

Aon is freezing benefit accruals in the Aon Pension Plan and the Aon Excess Benefit Plan effective April 1, 2009, as a strategic decision to reduce future pension costs for the company. This action is intended to manage the company's long-term financial obligations related to these plans.

For the Aon Savings Plan, discretionary contributions and discretionary matching contributions will be discontinued from 2009 onwards. However, the company is increasing its matching contribution to dollar-for-dollar (100%) on employee contributions up to 6% of eligible compensation, effective January 1, 2009.

The amended and restated bylaws primarily modify advance notice requirements for stockholder nominations and business proposals, revise the voting standard for director elections from majority to plurality voting, clarify the role of the Chairman of the Board and the potential appointment of a lead independent director, and adjust procedures for calling special board meetings and setting annual meeting dates.