UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-Q
 
ý       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
FOR THE QUARTERLY PERIOD ENDED March 31, 2013
 
OR
 
o          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Commission file number 1-7933
 
Aon plc
(Exact Name of Registrant as Specified in Its Charter)

	
			
ENGLAND AND WALES	 	98-1030901	
(State or Other Jurisdiction of	 	(I.R.S. Employer	
Incorporation or Organization)	 	Identification No.)	

	
			
8 DEVONSHIRE SQUARE, LONDON, ENGLAND	 	EC2M 4PL	
(Address of Principal Executive Offices)	 	(Zip Code)	
 
+44 20 7623 5500
(Registrant’s Telephone Number,
Including Area Code)
 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  YES  ý   NO  o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  YES  ý   NO  o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

	
			
Large accelerated filer x	 	Accelerated filer o	
 	 	 	
Non-accelerated filer o	 	Smaller reporting company o	
(Do not check if a smaller reporting company)	 	 	
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES o NO ý
 
Number of Class A Ordinary Shares of Aon plc, $0.01 nominal value, outstanding as of March 31, 2013 :  309,126,345

Part I Financial Information
ITEM 1. FINANCIAL STATEMENTS
 
Aon plc
Condensed Consolidated Statements of Income
(Unaudited)

	
									
 	 	Three Months Ended	
(millions, except per share data)	 	March 31, 2013	 	March 31, 2012	
Revenue	 	 		 	 		
Commissions, fees and other	 	$	2,908		 	$	2,829		
Fiduciary investment income	 	7		 	12		
Total revenue	 	2,915		 	2,841		
 	 	 	 	 	
Expenses	 	 		 	 		
Compensation and benefits	 	1,725		 	1,661		
Other general expenses	 	780		 	778		
Total operating expenses	 	2,505		 	2,439		
Operating income	 	410		 	402		
Interest income	 	1		 	3		
Interest expense	 	(52	)	 	(59	)	
Other income	 	9		 	—		
Income before income taxes	 	368		 	346		
Income taxes	 	96		 	97		
Net income	 	272		 	249		
Less: Net income attributable to noncontrolling interests	 	11		 	11		
Net income attributable to Aon shareholders	 	$	261		 	$	238		
 	 	 	 	 	
Basic net income per share attributable to Aon shareholders	 	$	0.82		 	$	0.72		
Diluted net income per share attributable to Aon shareholders	 	$	0.82		 	$	0.71		
Cash dividends per share paid on ordinary shares	 	$	0.16		 	$	0.15		
Weighted average ordinary shares outstanding - basic	 	316.4		 	332.4		
Weighted average ordinary shares outstanding - diluted	 	320.0		 	336.6		
 
See accompanying Notes to the Condensed Consolidated Financial Statements (Unaudited).

2

Aon plc
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)

	
									
 	 	Three Months Ended	
(millions)	 	March 31, 2013	 	March 31, 2012	
Net income	 	$	272		 	$	249		
Less: Net income attributable to noncontrolling interests	 	11		 	11		
Net income attributable to Aon shareholders	 	261		 	238		
Other comprehensive (loss) income, net of tax:	 	 		 	 		
Change in fair value of derivatives	 	(14	)	 	7		
Foreign currency translation adjustments	 	(174	)	 	104		
Post-retirement benefit obligation	 	23		 	21		
Total other comprehensive (loss) income	 	(165	)	 	132		
Less: Other comprehensive income attributable to noncontrolling interests	 	—		 	1		
Total other comprehensive (loss) income attributable to Aon shareholders	 	(165	)	 	131		
Comprehensive income attributable to Aon shareholders	 	$	96		 	$	369		
 
See accompanying Notes to the Condensed Consolidated Financial Statements (Unaudited).

3

Aon plc
Condensed Consolidated Statements of Financial Position

	
									
(millions, except nominal value)	 	Mar 31, 2013	 	Dec 31, 2012	
 	 	(Unaudited)	 	 	
ASSETS	 	 		 	 		
 	 	 	 	 	
CURRENT ASSETS	 	 		 	 		
Cash and cash equivalents	 	$	408		 	$	291		
Short-term investments	 	352		 	346		
Receivables, net	 	2,884		 	3,101		
Fiduciary assets	 	12,224		 	12,214		
Other current assets	 	389		 	430		
Total Current Assets	 	16,257		 	16,382		
Goodwill	 	8,786		 	8,943		
Intangible assets, net	 	2,844		 	2,975		
Fixed assets, net	 	816		 	820		
Investments	 	152		 	165		
Other non-current assets	 	1,174		 	1,201		
TOTAL ASSETS	 	$	30,029		 	$	30,486		
 	 	 	 	 	
LIABILITIES AND EQUITY	 	 		 	 		
LIABILITIES	 	 		 	 		
CURRENT LIABILITIES	 	 		 	 		
Fiduciary liabilities	 	$	12,224		 	$	12,214		
Short-term debt and current portion of long-term debt	 	802		 	452		
Accounts payable and accrued liabilities	 	1,440		 	1,853		
Other current liabilities	 	795		 	831		
Total Current Liabilities	 	15,261		 	15,350		
Long-term debt	 	3,770		 	3,713		
Pension, other post-retirement and other post-employment liabilities	 	2,027		 	2,276		
Other non-current liabilities	 	1,338		 	1,342		
TOTAL LIABILITIES	 	22,396		 	22,681		
 	 	 	 	 	
EQUITY	 	 		 	 		
Ordinary shares - $0.01 nominal value
Authorized: 750 shares (issued: 2013 - 309.1; 2012 - 310.9)	 	3		 	3		
Additional paid-in capital	 	4,507		 	4,436		
Retained earnings	 	5,844		 	5,933		
Accumulated other comprehensive loss	 	(2,775	)	 	(2,610	)	
TOTAL AON SHAREHOLDERS’ EQUITY	 	7,579		 	7,762		
Noncontrolling interests	 	54		 	43		
TOTAL EQUITY	 	7,633		 	7,805		
TOTAL LIABILITIES AND EQUITY	 	$	30,029		 	$	30,486		
 
See accompanying Notes to the Condensed Consolidated Financial Statements (Unaudited).

4

Aon plc
Condensed Consolidated Statement of Shareholders’ Equity
(Unaudited)

	
																								
(millions)	 	Shares	 	Ordinary
Shares and
Additional
Paid-in Capital	 	Retained
Earnings	 	Accumulated Other
Comprehensive
Loss, Net of Tax	 	Non-
controlling
Interests	 	Total	
Balance at December 31, 2012	 	310.9		 	$	4,439		 	$	5,933		 	$	(2,610	)	 	$	43		 	$	7,805		
Net income	 	—		 	—		 	261		 	—		 	11		 	272		
Shares issued - employee benefit plans	 	0.4		 	16		 	—		 	—		 	—		 	16		
Shares issued - employee compensation	 	2.8		 	(36	)	 	—		 	—		 	—		 	(36	)	
Shares purchased	 	(5.0	)	 	—		 	(300	)	 	—		 	—		 	(300	)	
Tax benefit - employee benefit plans	 	—		 	21		 	—		 	—		 	—		 	21		
Share-based compensation expense	 	—		 	69		 	—		 	—		 	—		 	69		
Dividends to shareholders	 	—		 	—		 	(50	)	 	—		 	—		 	(50	)	
Net change in fair value of derivatives	 	—		 	—		 	—		 	(14	)	 	—		 	(14	)	
Net foreign currency translation adjustments	 	—		 	—		 	—		 	(174	)	 	—		 	(174	)	
Net post-retirement benefit obligation	 	—		 	—		 	—		 	23		 	—		 	23		
Purchase of subsidiary shares from non-controlling interests	 	—		 	1		 	—		 	—		 	—		 	1		
Balance at March 31, 2013	 	309.1		 	$	4,510		 	$	5,844		 	$	(2,775	)	 	$	54		 	$	7,633		
 
See accompanying Notes to the Condensed Consolidated Financial Statements (Unaudited).

5

Aon plc
Condensed Consolidated Statements of Cash Flows
(Unaudited)

	
									
 	 	Three Months Ended	
(millions)	 	March 31, 2013	 	March 31, 2012	
CASH FLOWS FROM OPERATING ACTIVITIES	 	 		 	 		
Net income	 	$	272		 	$	249		
Adjustments to reconcile net income to cash provided by (used for) operating activities:	 	 		 	 		
Depreciation of fixed assets	 	59		 	55		
Amortization of intangible assets	 	99		 	104		
Share-based compensation expense	 	69		 	55		
Deferred income taxes	 	13		 	16		
Change in assets and liabilities:	 	 		 	 		
Fiduciary receivables	 	(42	)	 	(644	)	
Short term investments - funds held on behalf of clients	 	(322	)	 	(62	)	
Fiduciary liabilities	 	364		 	706		
Receivables, net	 	174		 	61		
Accounts payable and accrued liabilities	 	(417	)	 	(451	)	
Restructuring reserves	 	(16	)	 	(16	)	
Current income taxes	 	(65	)	 	41		
Pension, other post-retirement and other post-employment liabilities	 	(196	)	 	(110	)	
Other assets and liabilities	 	62		 	(19	)	
CASH PROVIDED BY (USED FOR) OPERATIONS	 	54		 	(15	)	
 	 	 	 	 	
CASH FLOWS FROM INVESTING ACTIVITIES	 	 		 	 		
Sales of long-term investments	 	18		 	36		
Purchases of long-term investments	 	(3	)	 	(3	)	
Net (purchases) sales of short-term investments - non-fiduciary	 	(16	)	 	283		
Acquisition of businesses, net of cash acquired	 	(2	)	 	(23	)	
Proceeds from sale of businesses	 	1		 	—		
Capital expenditures	 	(60	)	 	(71	)	
CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES	 	(62	)	 	222		
 	 	 	 	 	
CASH FLOWS FROM FINANCING ACTIVITIES	 	 		 	 		
Share repurchase	 	(300	)	 	(100	)	
Issuance of shares for employee benefit plans	 	36		 	49		
Issuance of debt	 	1,150		 	75		
Repayment of debt	 	(715	)	 	(140	)	
Cash dividends to shareholders	 	(50	)	 	(49	)	
Purchase of shares from noncontrolling interests	 	(1	)	 	—		
Dividends paid to noncontrolling interests	 	—		 	(1	)	
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES	 	120		 	(166	)	
 	 	 	 	 	
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	 	5		 	10		
NET INCREASE IN CASH AND CASH EQUIVALENTS	 	117		 	51		
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	 	291		 	272		
CASH AND CASH EQUIVALENTS AT END OF PERIOD	 	$	408		 	$	323		
 	 	 	 	 	
Supplemental disclosures:	 	 		 	 		
Interest paid	 	$	32		 	$	75		
Income taxes paid, net of refunds	 	$	148		 	$	40		
 
See accompanying Notes to the Condensed Consolidated Financial Statements (Unaudited).

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Notes to the Condensed Consolidated Financial Statements (Unaudited)
 
1.  Basis of Presentation
 
The accompanying unaudited Condensed Consolidated Financial Statements and Notes thereto have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).  The Condensed Consolidated Financial Statements include the accounts of Aon plc and all controlled subsidiaries (“Aon” or the “Company”).  All material intercompany accounts and transactions have been eliminated.  The Condensed Consolidated Financial Statements include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly the Company’s consolidated financial position, results of operations and cash flows for all periods presented.
 
Certain information and footnote disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.  These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.  The results for the three months ended March 31, 2013 are not necessarily indicative of operating results that may be expected for the full year ending December 31, 2013.
 
Company Redomestication
 
On April 2, 2012, the Company completed the reorganization of the corporate structure of the group of companies controlled by its predecessor, Aon Corporation, as holding company of the Aon group, pursuant to which Aon Corporation merged with one of its indirect, wholly-owned subsidiaries and Aon plc became the publicly-held parent company of the Aon group.  This transaction is referred to as the Redomestication.  In the Redomestication, each issued and outstanding share of Aon Corporation common stock held by stockholders of Aon Corporation was converted into the right to receive one Class A Ordinary Share, nominal value $0.01 per share, of Aon plc.  Likewise, equity incentive and compensation plans were assumed by Aon plc and amended to provide that those plans will now provide for the award and issuance of Class A Ordinary Shares instead of shares of common stock of Aon Corporation on a one -for-one basis.  Shares of treasury stock of Aon Corporation were cancelled in the Redomestication.  Any references to “Aon”, “the Company”, “us”, or “we,” or any similar references relating to periods before the Redomestication shall be construed as references to Aon Corporation, being the previous parent company of the Aon group.
 
Use of Estimates
 
The preparation of the accompanying unaudited Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of reserves and expenses. These estimates and assumptions are based on management’s best estimates and judgments.  Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances.  Aon adjusts such estimates and assumptions when facts and circumstances dictate.  Illiquid credit markets, volatile equity markets, and foreign currency movements have combined to increase the uncertainty inherent in such estimates and assumptions.  As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates.  Changes in estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

7

2.  Accounting Principles and Practices
 
Changes in Accounting Principles

Accumulated Other Comprehensive Income
 
In February 2013, the Financial Accounting Standards Board ("FASB") issued guidance on the disclosure of amounts to be reclassified out of accumulated other comprehensive income. The guidance requires that amounts reclassified out of accumulated other comprehensive income be presented either on the face of the statement of operations or in the notes to the financial statements by component. The guidance is effective for Aon in the first quarter 2013. The adoption of this guidance did not have a material impact on the Company's Condensed Consolidated Financial Statements.

Indefinite-Lived Intangible Asset Impairment
 
In July 2012, the FASB issued guidance on the testing of indefinite-lived intangible assets for impairment that gives an entity the option to perform a qualitative assessment that may eliminate the requirement to perform the annual quantitative test.  The guidance gives an entity the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a an indefinite-lived intangible asset is less than its carrying amount.  If an entity concludes that this is the case, it must perform the quantitative test.  The guidance is effective for Aon in the first quarter 2013.  The adoption of this guidance did not have a material impact on the Company’s Condensed Consolidated Financial Statements.
 
Balance Sheet Offsetting
 
In December 2011, the FASB issued guidance on the disclosure of offsetting assets and liabilities to enable users of financial statements to evaluate the effect or potential effect of netting arrangements on an entity's financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS. The guidance requires certain derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and lending transactions to disclose both the gross and net position of these financial instruments. The guidance is effective for Aon in the first quarter 2013.  The adoption of this guidance did not have a material impact on the Company’s Condensed Consolidated Financial Statements.
 
3.  Cash and Cash Equivalents
 
Cash and cash equivalents include cash balances and all highly liquid investments with initial maturities of three months or less.  Short-term investments include certificates of deposit, money market funds and highly liquid debt instruments purchased with initial maturities in excess of three months but less than one year and are carried at amortized cost, which approximates fair value.
 
The Company is required to hold £77 million of operating funds in the U.K. as required by the Financial Conduct Authority, which were included in Short-term investments.  These operating funds, when translated to U.S. dollars, were $117 million and $124 million at March 31, 2013 and December 31, 2012 , respectively.  Cash and cash equivalents included restricted balances of $153 million and $76 million at March 31, 2013 and December 31, 2012 respectively. The increase in restricted balances is due to a short-term funding requirement for a catastrophe bond that was in place on March 31, 2013 and settled in early April 2013, after which the requirement was lifted.

8

4.  Other Income
 
Other income consists of the following (in millions):

	
								
 	Three months ended
March 31,	
 	2013	 	2012	
Equity earnings	$	2		 	$	5		
Realized gain on sale of investments	1		 	10		
Foreign currency remeasurement gains (losses)	24		 	(18	)	
Derivative (losses) gains	(18	)	 	2		
Other	—		 	1		
 	$	9		 	$	—		
 
5.  Acquisitions and Dispositions
 
Acquisitions
 
During the three months ended March 31, 2013 , the Company completed the acquisition of one business in the HR Solutions segment.  During the three months ended March 31, 2012 , the Company completed the acquisition of two businesses in the Risk Solutions segment.
 
The following table includes the aggregate consideration transferred and the preliminary value of intangible assets recorded as a result of the Company’s acquisitions.

	
									
 	 	Three months ended March 31,	
(millions)	 	2013	 	2012	
Consideration	 	$	2		 	$	21		
Intangible assets:	 	 		 	 		
Goodwill	 	$	2		 	$	19		
Other intangible assets	 	1		 	8		
     Total	 	$	3		 	$	27		
 
The results of operations of these acquisitions are included in the Condensed Consolidated Financial Statements as of the acquisition date.  The results of operations of the Company would not have been materially different if these acquisitions had been reported from the beginning of the period.
 
Dispositions — Continuing Operations
 
During the three months ended March 31, 2013 , the Company completed the sale of three businesses in the Risk Solutions segment. No gain or loss was recognized on these sales. During the three months ended March 31, 2012 , the Company completed the sale of one business in the HR Solutions segment.  No gain or loss was recognized on this sale.

9

6.  Goodwill and Other Intangible Assets
 
The change in the net carrying amount of goodwill by reportable segment for the three months ended March 31, 2013 is as follows (in millions):

	
												
 	Risk
Solutions	 	HR
Solutions	 	Total	
Balance as of December 31, 2012	$	5,982		 	$	2,961		 	$	8,943		
Goodwill related to current year acquisitions	—		 	2		 	2		
Goodwill related to prior year acquisitions	(2	)	 	—		 	(2	)	
Foreign currency translation	(136	)	 	(21	)	 	(157	)	
Balance as of March 31, 2013	$	5,844		 	$	2,942		 	$	8,786		

 Other intangible assets by asset class are as follows (in millions):

	
																								
 	March 31, 2013	 	December 31, 2012	
 	Gross
Carrying
Amount	 	Accumulated
Amortization	 	Net Carrying
Amount	 	Gross
Carrying
Amount	 	Accumulated
Amortization	 	Net
Carrying
Amount	
Intangible assets with indefinite lives:	 		 	 		 	 		 	 		 	 		 	 		
Tradenames	$	1,025		 	$	—		 	$	1,025		 	$	1,025		 	$	—		 	$	1,025		
 	 	 	 	 	 	 	 	 	 	 	 	
Intangible assets with finite lives:	 		 	 		 	 		 	 		 	 		 	 		
Customer related and contract based	2,670		 	1,037		 	1,633		 	2,714		 	969		 	1,745		
Marketing, technology and other (1)	605		 	419		 	186		 	619		 	414		 	205		
 	$	4,300		 	$	1,456		 	$	2,844		 	$	4,358		 	$	1,383		 	$	2,975		
 ______________________________________________

(1) Tradenames with finite lives disclosed separately in prior years are now presented in Marketing, technology and other

Amortization expense from finite lived intangible assets was $99 million and $104 million for the three months ended March 31, 2013 and 2012 , respectively.
 
The estimated future amortization for intangible assets as of March 31, 2013 is as follows (in millions):

	
												
 	HR Solutions	 	Risk Solutions	 	Total	
Remainder of 2013	$	208		 	$	85		 	$	293		
2014	243		 	96		 	339		
2015	212		 	82		 	294		
2016	177		 	69		 	246		
2017	140		 	53		 	193		
Thereafter	347		 	107		 	454		
 	$	1,327		 	$	492		 	$	1,819		
 
7.  Restructuring
 
Aon Hewitt Restructuring Plan
 
On October 14, 2010, Aon announced a global restructuring plan (“Aon Hewitt Plan”) in connection with the acquisition of Hewitt Associates, Inc. ("Hewitt").  The Aon Hewitt Plan is intended to streamline operations across the combined Aon Hewitt organization and includes approximately 2,200 job eliminations. The Company expects these restructuring activities and related expenses to affect operations into 2013.  The Aon Hewitt Plan is expected to result in cumulative costs of approximately $325 million through the end of the plan, consisting of approximately $213 million in employee termination costs and approximately $112 million in real estate rationalization costs across the Company.

10

 
From the inception of the Aon Hewitt Plan through March 31, 2013 , approximately 2,180 jobs have been eliminated and total expenses of $281 million have been incurred.  The Company recorded $26 million and $12 million of restructuring and related charges in the three months ended March 31, 2013 and 2012 , respectively. Charges related to the restructuring are included in Compensation and benefits and Other general expenses in the accompanying Condensed Consolidated Statements of Income.
 
The following table summarizes restructuring and related costs by type that have been incurred and are estimated to be incurred through the end of the restructuring initiative related to the Aon Hewitt Plan (in millions):

	
																								
 	2010	 	2011	 	2012	 	First Quarter
2013	 	Total
to Date	 	Estimated
Total Cost for
Restructuring
Plan (1)	
Workforce reduction	$	49		 	$	64		 	$	74		 	$	24		 	$	211		 	$	213		
Lease consolidation	3		 	32		 	18		 	2		 	55		 	86		
Asset impairments	—		 	7		 	4		 	—		 	11		 	21		
Other costs associated with restructuring (2)	—		 	2		 	2		 	—		 	4		 	5		
Total restructuring and related expenses	$	52		 	$	105		 	$	98		 	$	26		 	$	281		 	$	325		
 ______________________________________________

(1)	Actual costs, when incurred, will vary due to changes in the assumptions built into this plan.  Significant assumptions that may change when plans are finalized and implemented include, but are not limited to, changes in severance calculations, changes in the assumptions underlying sublease loss calculations due to changing market conditions, and changes in the overall analysis that might cause the Company to add or cancel component initiatives.	

(2)	Other costs associated with restructuring initiatives, including moving costs and consulting and legal fees, are recognized when incurred.	
 
The following table summarizes the restructuring and related expenses, by segment, that have been incurred and are estimated to be incurred through the end of the restructuring initiative related to the Aon Hewitt Plan (in millions):

	
																								
 	2010	 	2011	 	2012	 	First Quarter 2013	 	Total
to Date	 	Estimated
Total Cost for
Restructuring
Plan (1)	
HR Solutions	$	52		 	$	49		 	$	66		 	$	15		 	$	182		 	$	213		
Risk Solutions	—		 	56		 	32		 	11		 	99		 	112		
Total restructuring and related expenses	$	52		 	$	105		 	$	98		 	$	26		 	$	281		 	$	325		
 (1) Costs included in the Risk Solutions segment are associated with the transfer of the health and benefits consulting business from HR Solutions to Risk Solutions effective January 1, 2012. Costs incurred in 2011 in the HR Solutions segment of $41 million related to the health and benefits consulting business have been reclassified and presented in the Risk Solutions segment.
 
As of March 31, 2013 , the Company’s liabilities for its restructuring plans are as follows (in millions):

	
																				
 	Aon Hewitt
Plan	 	Aon Benfield
Plan	 	2007 Plan	 	Other	 	Total	
Balance at December 31, 2012	$	96		 	$	3		 	$	35		 	$	3		 	$	137		
Expensed	26		 	—		 	—		 	—		 	26		
Cash payments	(28	)	 	(1	)	 	(13	)	 	—		 	(42	)	
Foreign exchange translation and other	1		 	—		 	2		 	—		 	3		
Balance at March 31, 2013	$	95		 	$	2		 	$	24		 	$	3		 	$	124		

11

8.  Investments
 
The Company earns income on cash balances and investments, as well as on premium trust balances that the Company maintains for premiums collected from insureds but not yet remitted to insurance companies, and funds held under the terms of certain outsourcing agreements to pay certain obligations on behalf of clients.  Premium trust balances and receivables, as well as a corresponding liability, are included in Fiduciary assets and Fiduciary liabilities in the accompanying Condensed Consolidated Statements of Financial Position.
 
The Company’s interest-bearing assets and other investments are included in the following categories in the Condensed Consolidated Statements of Financial Position (in millions):

	
								
 	March 31,
2013	 	December 31,
2012	
Cash and cash equivalents	$	408		 	$	291		
Short-term investments	352		 	346		
Fiduciary assets (1)	4,253		 	4,029		
Investments	152		 	165		
 	$	5,165		 	$	4,831		
  ______________________________________________

(1)	Fiduciary assets include funds held on behalf of clients but does not include fiduciary receivables.	
 
The Company’s investments are as follows (in millions):

	
								
 	March 31,
2013	 	December 31,
2012	
Equity method investments (2)	$	93		 	$	102		
Other investments, at cost	40		 	43		
Fixed-maturity securities	19		 	20		
 	$	152		 	$	165		
  ______________________________________________

(2)	The reduction in equity method investments is primarily due to redemptions.	
 
9.  Debt
 
The Company uses proceeds from the commercial paper market from time to time in order to meet short-term working capital needs.  At March 31, 2013 , the Company had $383 million commercial paper outstanding as compared to $50 million of commercial paper outstanding at December 31, 2012. The weighted average commercial paper outstanding for the three months ended March 31, 2013 was $162 million . The weighted average interest rate of the commercial paper outstanding for the same period was 0.40% . In addition to commercial paper outstanding, the Company had £20 million ( $30 million at March 31, 2013 exchange rates) outstanding on its five -year €650 million ( $836 million at March 31, 2013 exchange rates) multi-currency foreign credit facility ("Euro Facility") as compared to no borrowings on its lines of credit at December 31, 2012.

On March 8, 2013, the Company issued $90 million aggregate principal amount of 4.250% Notes Due 2042. The 4.250% Notes Due 2042 constitute a further issuance of, and were consolidated to form a single series of debt securities with, the $166 million aggregate principal amount of the 4.250% Notes Due 2042 issued by Aon plc on December 12, 2012 (collectively, the "Original Notes"). The Original Notes were unconditionally guaranteed as to the payment of principal and interest by Aon Corporation.

On April 15, 2013, an S-4 registration statement registering $256 million aggregate principal amount of the 4.250% Notes Due 2042 (the "Exchange Notes") under the Securities Act of 1933 as amended (the "Securities Act") was declared effective by the Securities and Exchange Commission. The Exchange Notes are to be exchanged for the Original Notes. The form and terms of the Exchange Notes are substantially identical in all material respects to those of the Original Notes except that the Exchange Notes are registered under the Securities Act and the transfer restrictions, registration rights and related additional interest provisions applicable to the Original Notes do not apply to the Exchange Notes. Like the Original Notes, the Exchange Notes will issued by Aon plc and will be unconditionally guaranteed by Aon Corporation.

12

On April 29, 2013, the Company amended its Euro Facility agreement to add Aon plc as an additional borrower.

10.  Shareholders’ Equity
 
Ordinary Shares
 
In April 2012, the Company’s Board of Directors authorized a share repurchase program under which up to $5.0 billion of Class A Ordinary Shares may be repurchased (“2012 Share Repurchase Program”). Under this program, shares may be repurchased through the open market or in privately negotiated transactions, from time to time, based on prevailing market conditions, and will be funded from available capital.
 
During the three months ended March 31, 2013 , the Company repurchased 5.0 million shares at an average price per share of $59.82 for a total cost of $300 million under the 2012 Share Repurchase Program.  The remaining authorized amount for share repurchase under the 2012 Share Repurchase Program is $3.7 billion . Since the inception of the 2012 Share Repurchase Program, the Company repurchased a total of 24.5 million shares for an aggregate cost of $1.3 billion .
 
Participating Securities
 
Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities, as defined, and therefore, should be included in computing basic and diluted earnings per share using the two class method.  Certain of the Company’s restricted share awards allow the holder to receive a non-forfeitable dividend equivalent.
 
Net income attributable to participating securities was $3 million in the three month periods ended March 31, 2013 and 2012, respectively.
 
Weighted average shares outstanding are as follows (in millions):

	
						
 	Three months ended
March 31,	
 	2013	 	2012	
Shares for basic earnings per share (1) 	316.4		 	332.4		
Common stock equivalents	3.6		 	4.2		
Shares for diluted earnings per share	320.0		 	336.6		
   ______________________________________________

(1)	Includes 4.2 million and 4.9 million of participating securities for the three months ended March 31, 2013 and 2012 , respectively.	
 
Certain ordinary share equivalents were not included in the computation of diluted net income per share because their inclusion would have been antidilutive.  The number of shares excluded from the calculation was 0.2 million and 1.0 million for the three months ended March 31, 2013 and 2012 , respectively.

13

Accumulated Other Comprehensive Loss
 
Changes in Accumulated other comprehensive loss by component, net of related tax, are as follows (in millions):

	
																
 	Change in Fair Value of Derivatives (1)	 	Foreign Currency Translation Adjustments (2)	 	Post-Retirement Benefit Obligation (3)	 	Total	
Balance at December 31, 2012	$	(28	)	 	$	233		 	$	(2,815	)	 	$	(2,610	)	
     Other comprehensive loss before
        reclassifications, net	(22	)	 	(174	)	 	—		 	(196	)	
     Amounts reclassified from accumulated
        other comprehensive loss:			 			 			 			
     Amounts reclassified from accumulated
        other comprehensive loss	13		 	—		 	33		 	46		
     Tax benefit	(5	)	 	—		 	(10	)	 	(15	)	
     Amounts reclassified from accumulated
        other comprehensive loss, net	8		 	—		 	23		 	31		
Net current period other comprehensive (loss) income	(14	)	 	(174	)	 	23		 	(165	)	
Balance at March 31, 2013	$	(42	)	 	$	59		 	$	(2,792	)	 	$	(2,775	)	
______________________________________________

(1) Reclassifications from Accumulated other comprehensive loss are recorded in Other general expense or Other income
(2) Reclassifications from Accumulated other comprehensive loss are recorded in Other income
(3) Reclassifications from Accumulated other comprehensive loss are recorded in Compensation and benefits

11.  Employee Benefits
 
The following table provides the components of the net periodic benefit cost for Aon’s U.S. pension plans, along with its most significant international pension plans, which are located in the U.K., the Netherlands and Canada (in millions):

	
																
 	Three months ended March 31,	
 	U.K. and Non-U.S.	 	U.S.	
 	2013	 	2012	 	2013	 	2012	
Service cost	$	5		 	$	4		 	$	—		 	$	—		
Interest cost	64		 	66		 	28		 	30		
Expected return on plan assets	(90	)	 	(80	)	 	(34	)	 	(32	)	
Amortization of net actuarial loss	18		 	14		 	13		 	11		
Net periodic benefit cost	$	(3	)	 	$	4		 	$	7		 	$	9		
 
Based on current assumptions, in 2013, Aon plans to contribute $167 million and $381 million to its U.S. and most significant international defined benefit pension plans, respectively.  During the three months ended March 31, 2013 , contributions of $33 million were made to the Company’s U.S. pension plans and $167 million were made to its most significant international pension plans.

14

12.  Share-Based Compensation Plans
 
The following table summarizes share-based compensation expense recognized in the Condensed Consolidated Statements of Income in Compensation and benefits (in millions):

	
								
 	Three months ended
March 31,	
 	2013	 	2012	
Restricted stock units (“RSUs”)	$	55		 	$	49		
Performance share awards (“PSAs”)	11		 	2		
Stock options	1		 	2		
Employee stock purchase plans	2		 	2		
Total stock-based compensation expense	$	69		 	$	55		
 
Share Awards
 
A summary of the status of the Company’s RSUs is as follows (shares in thousands):

	
														
 	Three months ended March 31,	
 	2013	 	2012	
 	Shares	 	Fair
Value (1)	 	Shares	 	Fair
Value (1)	
Non-vested at beginning of period	10,432		 	$	44		 	9,916		 	$	42		
Granted	1,764		 	60		 	2,278		 	47		
Vested	(2,080	)	 	46		 	(2,022	)	 	43		
Forfeited	(128	)	 	44		 	(179	)	 	44		
Non-vested at end of period	9,988		 	47		 	9,993		 	43		
 ______________________________________________

(1)	Represents per share weighted average fair value of award at date of grant	

The vesting of PSAs is contingent upon meeting various individual, divisional or company wide performance conditions, including revenue generation, or growth in revenue, pretax income or earnings per share over a one to five -year period. The performance conditions are not considered in the determination of the grant date fair value for these awards. The fair value of PSAs is based upon the market price of the Aon ordinary share at the date of grant. Compensation expense is recognized over the performance period, and in certain cases an additional vesting period, based on management's estimate of the number of units expected to vest. Compensation expense is adjusted to reflect the actual number of shares issued at the end of the programs. The actual issue of shares may range from 0 - 200% of the target number of PSAs granted, based on the plan. Dividend equivalents are not paid on PSAs.

Information as of March 31, 2013 regarding the Company’s target PSAs granted and shares that would be issued at current performance levels for PSAs granted during the three months ended March 31, 2013 and the years ended December 31, 2012 and 2011 , respectively, is as follows (shares in thousands, dollars in millions, except fair value):

	
												
 	As of March 31, 2013	 	As of December
31, 2012		 	As of December
31, 2011		
Target PSAs granted	1,135		 	1,369		 	1,715		
Fair value (1)	$	58		 	$	47		 	$	50		
Number of shares that would be issued based on current performance levels	1,135		 	1,720		 	1,118		
Unamortized expense, based on current performance levels	$	65		 	$	51		 	$	15		
 ______________________________________________

(1)	Represents per share weighted average fair value of award at date of grant.	

15

Share Options
 
The Company did not grant any share options in the three months ended March 31, 2013 .  During the three months ended March 31, 2012 , the Company did not grant any share options.
 
A summary of the status of the Company’s share options and related information is as follows (shares in thousands):

	
														
 	Three months ended March 31,	
 	2013	 	2012	
 	Shares	 	Weighted- Average
Exercise Price	 	Shares	 	Weighted- Average
Exercise Price	
Beginning outstanding	5,611		 	$	32		 	9,116		 	$	32		
Granted	—		 	—		 	—		 	—		
Exercised	(610	)	 	31		 	(1,032	)	 	35		
Forfeited and expired	(10	)	 	33		 	(12	)	 	40		
Outstanding at end of period	4,991		 	32		 	8,072		 	31		
Exercisable at end of period	4,579		 	32		 	7,173		 	30		
 
The weighted average remaining contractual life, in years, of outstanding options was 2.5 years and 3.1 years at March 31, 2013 and 2012 , respectively.
 
The aggregate intrinsic value represents the total pretax intrinsic value, based on options with an exercise price less than the Company’s closing stock price of $61.50 as of March 31, 2013 , which would have been received by the option holders had those option holders exercised their options as of that date.  At March 31, 2013 , the aggregate intrinsic value of options outstanding was $145 million , of which $137 million was exercisable.
 
Other information related to the Company’s share options is as follows (in millions):

	
								
 	Three months ended
March 31,	
 	2013	 	2012	
Aggregate intrinsic value of stock options exercised	$	17		 	$	13		
Cash received from the exercise of stock options	20		 	37		
Tax benefit realized from the exercise of stock options	3		 	1		
 
Unamortized deferred compensation expense, which includes both options and awards, amounted to $345 million as of March 31, 2013 , with a remaining weighted-average amortization period of approximately 2.0 years.

13.  Derivatives and Hedging
 
The Company is exposed to market risks, including changes in foreign currency exchange rates and interest rates.  To manage the risk related to these exposures, the Company enters into various derivative instruments that reduce these risks by creating offsetting exposures.  The Company does not enter into derivative transactions for trading or speculative purposes.
 
Foreign Exchange Risk Management
 
The Company is exposed to foreign exchange risk when it receives revenues, pays expenses, or enters into intercompany loans denominated in a currency that differs from its functional currency, or other transactions that are denominated in a currency other than its functional currency.  The Company uses foreign exchange derivatives, typically forward contracts, options and cross currency swaps, to reduce its overall exposure to the effects of currency fluctuations on cash flows.  These exposures are hedged, on average, for less than two years; however, in limited instances, the Company has hedged certain exposures up to five years in the future.
 
The Company also uses foreign exchange derivatives, typically forward contracts and options, to hedge its net investments in foreign operations for up to two years in the future.

16

The Company also uses foreign exchange derivatives, typically forward contracts and options, to manage the currency exposure of the Company’s global liquidity profile, including monetary assets or liabilities that are denominated in a non-functional currency of an entity, for up to one year in the future. These derivatives are not accounted for as hedges, and changes in fair value are recorded each period in Other income in the Condensed Consolidated Statements of Income.
 
Interest Rate Risk Management
 
The Company holds variable-rate short-term brokerage and other operating deposits. The Company uses interest rate derivatives, typically swaps, to reduce its exposure to the effects of interest rate fluctuations on the forecasted interest receipts from these deposits for up to two years in the future.
 
Certain derivatives also give rise to credit risks from the possible non-performance by counterparties.  The credit risk is generally limited to the fair value of those contracts that are favorable to the Company.  The Company has limited its credit risk by using International Swaps and Derivatives Association (“ISDA”) master agreements, collateral and credit support arrangements, entering into non-exchange-traded derivatives with highly-rated major financial institutions and by using exchange-traded instruments.  The Company monitors the creditworthiness of, and exposure to, its counterparties.  As of March 31, 2013 , all net derivative positions were free of credit risk contingent features.  The Company has not received or pledged any collateral as of March 31, 2013 .
 
The notional and fair values of derivative instruments are as follows (in millions):

	
																								
 	Notional Amount	 	Derivative Assets	 	Derivative Liabilities	
 	March 31,
2013	 	December 31,
2012	 	March 31,
2013	 	December 31,
2012	 	March 31,
2013	 	December 31,
2012	
Derivatives accounted for as hedges:	 		 	 		 	 		 	 		 	 		 	 		
Interest rate contracts	$	322		 	$	336		 	$	16		 	$	17		 	$	—		 	$	—		
Foreign exchange contracts	1,098		 	1,208		 	50		 	191		 	131		 	250		
Total	1,420		 	1,544		 	66		 	208		 	131		 	250		
Derivatives not accounted for as hedges:	 		 	 		 	 		 	 		 	 		 	 		
Foreign exchange contracts	253		 	305		 	2		 	2		 	1		 	1		
   Total	$	1,673		 	$	1,849		 	$	68		 	$	210		 	$	132		 	$	251		
 
Offsetting of financial assets and derivatives assets are as follows (in millions):

																								
 	Gross Amounts of Recognized Assets	 	Gross Amounts Offset in the Statement of Financial Position	 	Net Amounts of Assets Presented in the Statement of Financial Position (1)	
 	March 31,
2013	 	December 31,
2012	 	March 31,
2013	 	December 31,
2012	 	March 31,
2013	 	December 31,
2012	
Derivatives accounted for as hedges:	 		 	 		 	 		 	 		 	 		 	 		
Interest rate contracts	$	16		 	$	17		 	$	—		 	$	—		 	$	16		 	$	17		
Foreign exchange contracts	50		 	191		 	(32	)	 	(160	)	 	18		 	31		
Total	66		 	208		 	(32	)	 	(160	)	 	34		 	48		
Derivatives not accounted for as hedges:	 		 	 		 	 		 	 		 	 		 	 		
Foreign exchange contracts	2		 	2		 	(1	)	 	—		 	1		 	2		
   Total	$	68		 	$	210		 	$	(33	)	 	$	(160	)	 	$	35		 	$	50		
______________________________________________

(1) Included within Other current assets or Other non-current assets

Offsetting of financial liabilities and derivative liabilities are as follows (in millions):

17

	
																								
 	Gross Amounts of Recognized Liabilities	 	Gross Amounts Offset in the Statement of Financial Position	 	Net Amounts of Liabilities Presented in the Statement of Financial Position (2)	
 	March 31,
2013	 	December 31,
2012	 	March 31,
2013	 	December 31,
2012	 	March 31,
2013	 	December 31,
2012	
Derivatives accounted for as hedges:	 		 	 		 	 		 	 		 	 		 	 		
Interest rate contracts	$	—		 	$	—		 	$	—		 	$	—		 	$	—		 	$	—		
Foreign exchange contracts	(131	)	 	(250	)	 	32		 	160		 	(99	)	 	(90	)	
Total	(131	)	 	(250	)	 	32		 	160		 	(99	)	 	(90	)	
Derivatives not accounted for as hedges:	 		 	 		 	 		 	 		 	 		 	 		
Foreign exchange contracts	(1	)	 	(1	)	 	1		 	—		 	—		 	(1	)	
   Total	$	(132	)	 	$	(251	)	 	$	33		 	$	160		 	$	(99	)	 	$	(91	)	
______________________________________________

(2) Included within Other current liabilities or Other non-current liabilities

The amounts of derivative gains (losses) recognized in the Condensed Consolidated Financial Statements for the three months ended March 31, 2013 and 2012 are as follows (in millions):

	
								
 	Three months ended March 31,	
 	2013	 	2012	
Gain (Loss) recognized in Accumulated Other Comprehensive Loss:	 		 	 		
Cash Flow Hedges:	 		 	 		
Interest rate contracts	$	—		 	$	—		
Foreign exchange contracts	(29	)	 	2		
Total	$	(29	)	 	$	2		
Foreign Net Investment Hedges:	 		 	 		
Foreign exchange contracts	$	—		 	$	(10	)	
Gain (Loss) reclassified from Accumulated Other Comprehensive
    Loss into Income (Effective Portion):	 	 	 	
Cash Flow Hedges:	 		 	 		
Interest rate contracts (1)	$	—		 	$	—		
Foreign exchange contracts (2)	(11	)	 	(8	)	
Total	(11	)	 	(8	)	
Foreign Net Investment Hedges:	 		 	 		
Foreign exchange contracts	$	—		 	$	—		
  ______________________________________________

(1) Included within Fiduciary investment income and Interest expense
(2) Included within Other income and Interest expense

	
												
 	Three months ended March 31,	
 	Amount of Gain (Loss)
Recognized in Income on
Derivative (1) (2)	 	Amount of Gain (Loss)
Recognized in Income on
Related Hedge Item (2)	
 	2013	 	2012	 	2013	 	2012	
Fair value hedges:	 		 	 		 	 		 	 		
Interest rate contracts	(1	)	 	2		 	1		 	(2	)	
  ______________________________________________

(1) Relates to fixed rate debt
(2) Included in Interest expense

18

 
The Company estimates that approximately $28 million of pretax losses currently included within Accumulated other comprehensive loss will be reclassified into earnings in the next twelve months.
 
The amount of gain (loss) recognized in income on the ineffective portion of derivatives for the three months ended March 31, 2013 and 2012 was not material.
 
During the three months ended March 31, 2013 and 2012 , the Company recorded a loss of $9 million and a gain of $5 million , respectively, in Other income for foreign exchange derivatives not designated or qualifying as hedges. 
 
14.  Fair Value and Financial Instruments
 
Accounting standards establish a three tier fair value hierarchy that prioritizes the inputs used in measuring fair values as follows:

•	Level 1 — observable inputs such as quoted prices for identical assets in active markets;	
		
•	Level 2 — inputs other than quoted prices for identical assets in active markets, that are observable either directly or indirectly; and	
		
•	Level 3 — unobservable inputs in which there is little or no market data which requires the use of valuation techniques and the development of assumptions.	

The following methods and assumptions are used to estimate the fair values of the Company’s financial instruments:
 
Money market funds and highly liquid debt securities are carried at cost and amortized cost, respectively, as an approximation of fair value. Based on market convention, the Company considers cost a practical and expedient measure of fair value.
 
Cash, cash equivalents, and highly liquid debt instruments consist of cash and institutional short-term investment funds. The Company independently reviews the short-term investment funds to obtain reasonable assurance the fund net asset value is $1 per share.
 
Equity investments consist of domestic and international equity securities and exchange traded equity derivatives valued using the closing stock price on a national securities exchange. Over the counter equity derivatives are valued using observable inputs such as underlying prices of the equity security and volatility. The Company independently reviews the listing of Level 1 equity securities in the portfolio and agrees the closing stock prices to a national securities exchange, and on a sample basis, independently verifies the observable inputs for Level 2 equity derivatives and securities.
 
Fixed income investments consist of certain categories of bonds and derivatives. Corporate, government, and agency bonds are valued by pricing vendors who estimate fair value using recently executed transactions and proprietary models based on observable inputs, such as interest rate spreads, yield curves and credit risk. Asset-backed securities are valued by pricing vendors who estimate fair value using discounted cash flow models utilizing observable inputs based on trade and quote activity of securities with similar features. Fixed income derivatives are valued by pricing vendors using observable inputs such as interest rates and yield curves. The Company obtains a detailed understanding of the models, inputs, and assumptions used in developing prices provided by its vendors. This understanding includes discussions with valuation resources at the vendor. During these discussions, the Company uses a fair value measurement questionnaire, which is part of the Company’s internal controls over financial reporting, to obtain the information necessary to assert the model, inputs and assumptions used comply with U.S. GAAP, including disclosure requirements. The Company also obtains observable inputs from the pricing vendor and independently verifies the observable inputs, as well as assesses assumptions used for reasonableness based on relevant market conditions and internal Company guidelines. If an assumption is deemed unreasonable, based on the Company’s guidelines, it is then reviewed by a member of management and the fair value estimate provided by the vendor is adjusted, if deemed appropriate. These adjustments do not occur frequently and have not historically been material to the fair value estimates used in the Condensed Consolidated Financial Statements.
 
Pooled funds consist of various equity, fixed income, commodity, and real estate mutual fund type investment vehicles. Pooled investment funds fair value is estimated based on the proportionate share ownership in the underlying net assets of the investment, which is based on the fair value of the underlying securities that trade on a national securities exchange. Where possible, the Company independently reviews the listing securities in the portfolio and agrees the closing stock prices to a national securities exchange. The Company gains an understanding of the investment guidelines and valuation policies of the fund and discusses fund performance with pooled fund managers. The Company obtains audited fund manager financial

19

statements, when available. If the pooled fund is designed to replicate a publicly traded index, the Company compares the performance of the fund to the index to assess the reasonableness of the fair value measurement.
 
Alternative investments consist of limited partnerships, private equity and hedge funds. Alternative investment fair value is generally estimated based on the proportionate share ownership in the underlying net assets of the investment as determined by the general partner or investment manager. The valuations are based on various factors depending on investment strategy, proprietary models, and specific financial data or projections. The Company obtains audited fund manager financial statements, when available. The Company obtains a detailed understanding of the models, inputs and assumptions used in developing prices provided by the investment managers (or appropriate party) through regular discussions. During these discussions with the investment managers, the Company uses a fair value measurement questionnaire, which is part of the Company’s internal controls over financial reporting, to obtain the information necessary to assert the model, inputs and assumptions used comply with U.S. GAAP, including disclosure requirements. The Company also obtains observable inputs from the investment manager and independently verifies the observable inputs, as well as assesses assumptions used for reasonableness based on relevant market conditions and internal Company guidelines. If an assumption is deemed unreasonable, based on the Company’s guidelines, it is then reviewed by a member of management and the fair value estimate provided by the vendor is adjusted, if deemed appropriate. These adjustments do not occur frequently and have not historically been material to the fair value estimates in the Condensed Consolidated Financial Statements.
 
Derivatives are carried at fair value, based upon industry standard valuation techniques that use, where possible, current market-based or independently sourced pricing inputs, such as interest rates, currency exchange rates, or implied volatilities.
 
Annuity contracts consist of insurance group annuity contracts purchased to match the pension benefit payment stream owed to certain selected plan participant demographics within a few major United Kingdom defined benefit plans. Annuity contracts are valued using a discounted cash flow model utilizing assumptions such as discount rate, mortality, and inflation. The Company independently verifies the observable inputs.
 
Real estate and REITs consist of publicly traded REITs and direct real estate investments. Level 1 REITs are valued using the closing stock price on a national securities exchange. The Level 3 values are based on the proportionate share of ownership in the underlying net asset value as determined by the investment manager. The Company independently reviews the listing of Level 1 REIT securities in the portfolio and agrees the closing stock prices to a national securities exchange. The Company gains an understanding of the investment guidelines and valuation policies of the Level 3 real estate funds and discusses performance with the fund managers. The Company obtains audited fund manager financial statements, when available. See the description of “Alternative Investments” for further detail on valuation procedures surrounding Level 3 REITs.
 
Guarantees are carried at fair value, which is based on discounted estimated cash flows using published historical cumulative default rates and discount rates commensurate with the underlying exposure.
 
Debt is carried at outstanding principal balance, less any unamortized discount or premium. Fair value is based on quoted market prices or estimates using discounted cash flow analyses based on current borrowing rates for similar types of borrowing arrangements.

20

The following tables present the categorization of the Company’s assets and liabilities that are measured at fair value on a recurring basis at March 31, 2013 and December 31, 2012 (in millions):

	
																
 	 	 	Fair Value Measurements Using	
 	Balance at March 31, 2013	 	Quoted Prices in Active Markets
for Identical
Assets (Level 1)	 	Significant Other
Observable
Inputs (Level 2)	 	Significant Unobservable
Inputs
(Level 3)	
Assets:	 		 	 		 	 		 	 		
Money market funds and highly liquid debt securities (1)	$	2,118		 	$	2,093		 	$	25		 	$	—		
Other investments	 		 	 		 	 		 	 		
Fixed maturity securities	 		 	 		 	 		 	 		
Corporate bonds	12		 	—		 	—		 	12		
Government bonds	7		 	—		 	7		 	—		
Equity Securities	4		 	4		 	—		 	—		
Derivatives	 		 	 		 	 		 	 		
Interest rate contracts	16		 	—		 	16		 	—		
Foreign exchange contracts	52		 	—		 	52		 	—		
Liabilities:	 		 	 		 	 		 	 		
Derivatives	 		 	 		 	 		 	 		
Foreign exchange contracts	132		 	—		 	132		 	—		
  ______________________________________________

(1) Includes $2,093 million of money market funds and $25 million of highly liquid debt securities that are classified as Fiduciary assets, Short-term investments or Cash and cash equivalents in the Condensed Consolidated Statements of Financial Position, depending on their nature and initial maturity.  See Note 8 “Investments” for additional information regarding the Company’s investments.

	
																
 	 	 	Fair Value Measurements Using	
 	 	 	Quoted Prices in	 	Significant	 	Significant	
 	Balance at December 31, 2012	 	Active Markets
for Identical
Assets (Level 1)	 	Other
Observable
Inputs (Level 2)	 	Unobservable
Inputs
(Level 3)	
Assets:	 		 	 		 	 		 	 		
Money market funds and highly liquid debt securities (1)	$	2,133		 	$	2,108		 	$	25		 	$	—		
Other investments	 		 	 		 	 		 	 		
Fixed maturity securities	 		 	 		 	 		 	 		
Corporate bonds	12		 	—		 	—		 	12		
Government Bonds	8		 	—		 	8		 	—		
Equity Securities	5		 	5		 	—		 	—		
Derivatives	 		 	 		 	 		 	 		
Interest rate contracts	17		 	—		 	17		 	—		
Foreign exchange contracts	193		 	—		 	193		 	—		
Liabilities:	 		 	 		 	 		 	 		
Derivatives	 		 	 		 	 		 	 		
Foreign exchange contracts	251		 	—		 	251		 	—		
  ______________________________________________

(1)  Includes $2,108 million of money market funds and $25 million of highly liquid debt securities that are classified as Fiduciary assets, Short-term investments or Cash and cash equivalents in the Condensed Consolidated Statements of Financial Position, depending on their nature and initial maturity.  See Note 8 “Investments” for additional information regarding the Company’s investments.

21

There were no transfers of assets or liabilities between fair value hierarchy levels during either the three months ended March 31, 2013 and 2012 . There were no realized or unrealized gains or losses recognized in the Condensed Consolidated Statements of Income during either the three months ended March 31, 2013 and 2012 , related to assets and liabilities measured at fair value using unobservable inputs.
 
The fair value of all long-term debt instruments is classified as Level 2. The following table discloses the Company’s financial instruments where the carrying amounts and fair values differ (in millions):

	
																
 	March 31, 2013	 	December 31, 2012	
 	Carrying	 	Fair	 	Carrying	 	Fair	
 	Value	 	Value	 	Value	 	Value	
Long-term debt	$	3,770		 	$	4,218		 	$	3,713		 	$	4,162		

15.  Commitments and Contingencies
 
Legal
 
Aon and its subsidiaries are subject to numerous claims, tax assessments, lawsuits and proceedings that arise in the ordinary course of business, which frequently include errors and omissions (“E&O”) claims. The damages claimed in these matters are or may be substantial, including, in many instances, claims for punitive, treble or extraordinary damages. Aon has historically purchased E&O insurance and other insurance to provide protection against certain losses that arise in such matters. Aon has exhausted or materially depleted its coverage under some of the policies that protect the Company and, consequently, is self-insured or materially self-insured for some historical claims. Accruals for these exposures, and related insurance receivables, when applicable, have been provided to the extent that losses are deemed probable and are reasonably estimable. These amounts are adjusted from time to time as developments warrant. Amounts related to settlement provisions are recorded in Other general expenses in the Condensed Consolidated Statements of Income.
 
A retail insurance brokerage subsidiary of Aon provides insurance brokerage services to Northrop Grumman Corporation (“Northrop”). This Aon subsidiary placed Northrop’s excess property insurance program for the period covering 2005. Northrop suffered a substantial loss in August 2005 when Hurricane Katrina damaged Northrop’s facilities in the Gulf states. Northrop’s excess insurance carrier, Factory Mutual Insurance Company (“Factory Mutual”), denied coverage for the claim pursuant to a flood exclusion. Northrop sued Factory Mutual in the United States District Court for the Central District of California and later sought to add this Aon subsidiary as a defendant, asserting that if Northrop’s policy with Factory Mutual does not cover the losses suffered by Northrop stemming from Hurricane Katrina, then this Aon subsidiary will be responsible for Northrop’s losses. On August 26, 2010, the court granted in large part Factory Mutual’s motion for partial summary judgment regarding the applicability of the flood exclusion and denied Northrop’s motion to add this Aon subsidiary as a defendant in the federal lawsuit. On January 27, 2011, Northrop filed suit against this Aon subsidiary in state court in Los Angeles, California, pleading claims for negligence, breach of contract and negligent misrepresentation. Aon believes that it has meritorious defenses and intends to vigorously defend itself against these claims. The outcome of this lawsuit, and the amount of any losses or other payments that may result, cannot be estimated at this time.
 
Another retail insurance brokerage subsidiary of Aon has been sued in Tennessee state court by a client, Opry Mills Mall Limited Partnership (“Opry Mills”) that sustained flood damage to its property in May 2010. The lawsuit seeks $200 million from numerous insurers with whom this Aon subsidiary placed the client’s property insurance coverage. The insurers contend that only $50 million in coverage is available for the loss because the flood event occurred on property in a high hazard flood zone. Opry Mills is seeking full coverage from the insurers for the loss and has sued this Aon subsidiary in the alternative for the same $150 million difference on various theories of professional liability if the court determines there is not full coverage. In addition, Opry Mills seeks prejudgment interest, attorneys' fees and enhanced damages which could substantially increase Aon's exposure. Aon believes it has meritorious defenses and intends to vigorously defend itself against these claims. The outcome of this lawsuit, and the amount of any losses or other payments that may result, cannot be estimated at this time.
 
A pensions consulting and administration subsidiary of Hewitt prior to its acquisition by Aon provided advisory services to the Trustees of the Philips UK pension fund and the relevant employer of fund beneficiaries (together, “Philips”). In December 2011, the Aon subsidiary received notice of a potential claim alleging negligence and breach of duty. The notice asserts Philips’ right to claim damages related to Philips’ use of a credit default swap hedging strategy pursuant to the supply of the advisory services, which is said to have resulted in substantial damages to Philips. No lawsuit has yet been filed. Aon believes that it has meritorious defenses and intends to vigorously defend itself against these allegations. The outcome of this circumstance, and the amount of any losses or other payments that may result, cannot be estimated at this time.

22

 
Mazeikiu Nafta ("MN"), which operates an oil refinery in Lithuania, has sued an insurance brokerage subsidiary of Aon in London. Aon placed property damage and business interruption coverage for MN. There was a fire at the refinery in 2006. MN settled with insurers in November 2011 and claimed against Aon in December 2012. The claim is for $125 million , which is the shortfall alleged by MN to have been caused by Aon's failure to obtain appropriate business interruption coverage. Aon believes that it has meritorious defenses and intends to vigorously defend itself against these allegations. The outcome of this lawsuit, and the amount of any losses or other payments that may result, cannot be estimated at this time.
 
From time to time, Aon’s clients may bring claims and take legal action pertaining to the performance of fiduciary responsibilities. Whether client claims and legal action related to the Company’s performance of fiduciary responsibilities are founded or unfounded, if such claims and legal actions are resolved in a manner unfavorable to the Company, they may adversely affect Aon’s financial results and materially impair the market perception of the Company and that of its products and services.
 
Although the ultimate outcome of all matters referred to above cannot be ascertained, and liabilities in indeterminate amounts may be imposed on Aon or its subsidiaries, on the basis of present information, amounts already provided, availability of insurance coverages and legal advice received, it is the opinion of management that the disposition or ultimate determination of such claims will not have a material adverse effect on the consolidated financial position of Aon. However, it is possible that future results of operations or cash flows for any particular quarterly or annual period could be materially affected by an unfavorable resolution of these matters.
 
Guarantees and Indemnifications
 
In connection with the Redomestication, the Company on April 2, 2012 entered various agreements pursuant to which it agreed to guarantee the obligations of its subsidiaries arising under issued and outstanding debt securities. Those agreements included the (1) Amended and Restated Indenture, dated as of April 2, 2012, among Aon Corporation, Aon plc, and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) (amending and restating the Indenture, dated as of September 10, 2010, between Aon Corporation and the Trustee), (2) Amended and Restated Indenture, dated as of April 2, 2012, among Aon Corporation, Aon plc and the Trustee (amending and restating the Indenture, dated as of December 16, 2002, between Aon Corporation and the Trustee), (3) Amended and Restated Indenture, dated as of April 2, 2012, among Aon Corporation, Aon plc and the Trustee (amending and restating the Indenture, dated as of January 13, 1997, as supplemented by the First Supplemental Indenture, dated as of January 13, 1997) (4) First Supplemental Indenture, dated as of April 2, 2012, among Aon Finance N.S. 1, ULC, as issuer, Aon Corporation, as guarantor, Aon plc, as guarantor, and Computershare Trust Company of Canada, as trustee, and (5) Amended and Restated Trust Deed, among Aon Corporation, Aon plc, Aon Services Luxembourg & Co S.C.A. (formerly known as Aon Financial Services Luxembourg S.A.) (“Aon Luxembourg”) and BNY Mellon Corporate Trustee Services Limited, as trustee (the “Luxembourg Trustee”) (amending and restating the Trust Deed, dated as of July 1, 2009, as amended and restated on January 12, 2011, among Aon Delaware, Aon Luxembourg and the Luxembourg Trustee).
 
Effective as of the same date, the Company also entered into agreements pursuant to which it agreed to guarantee the obligations of its subsidiaries arising under the (1)$ 450,000,000 Term Credit Agreement dated June 15, 2011, among Aon Corporation, as borrower, Bank of America, N.A., as administrative agent and the other agents and lenders party thereto, (2)$ 400,000,000 Five -Year Agreement dated March 20, 2012, among Aon Corporation, as borrower, Citibank, N.A., as administrative agent and the other agents and lenders party thereto and (3)€ 650,000,000 Facility Agreement, dated October 15, 2010, among Aon Corporation, the subsidiaries of Aon Corporation party thereto as borrowers, Citibank International plc, as agent, and the other agents and lenders party thereto, as amended on July 18, 2011.
 
The Company provides a variety of guarantees and indemnifications to its customers and others. The maximum potential amount of future payments represents the notional amounts that could become payable under the guarantees and indemnifications if there were a total default by the guaranteed parties, without consideration of possible recoveries under recourse provisions or other methods. These amounts may bear no relationship to the expected future payments, if any, for these guarantees and indemnifications. Any anticipated amounts payable that are deemed to be probable and reasonably estimable are included in the Company’s Condensed Consolidated Financial Statements.

The Company expects that, as prudent business interests dictate, additional guarantees and indemnifications may be issued from time to time.

Letters of Credit

23

The Company had total letters of credit (“LOCs”) outstanding for approximately $71 million at March 31, 2013 , as compared to $74 million at December 31, 2012 . These letters of credit cover the beneficiaries related to certain of Aon’s U.S. and Canadian non-qualified pension plan schemes and secure deductible retentions for Aon’s own workers compensation program. The Company has also has issued LOCs to cover contingent payments for taxes and other business obligations to third parties, and other guarantees for miscellaneous purposes at its international subsidiaries. Amounts are accrued in the Condensed Consolidated Financial Statements to the extent the guarantees are probable and estimable.
 
Commitments

The Company has provided commitments to fund certain limited partnerships in which it has an interest in the event that the general partners request funding. Some of these commitments have specific expiration dates and the maximum potential funding under these commitments was $45 million at March 31, 2013 . During the three months ended March 31, 2013 , the Company funded $3 million of these commitments.
 
Premium Payments

The Company has certain contractual contingent guarantees for premium payments owed by clients to certain insurance companies. Costs associated with these guarantees, to the extent estimable and probable, are provided in Aon’s allowance for doubtful accounts. The maximum exposure with respect to such contractual contingent guarantees was approximately $71 million at March 31, 2013 as compared to $104 million at December 31, 2012.

16. Segment Information
 
The Company has two reportable segments:  Risk Solutions and HR Solutions.  Unallocated income and expenses, when combined with the operating segments and after the elimination of intersegment revenues and expenses, total to the amounts in the Condensed Consolidated Financial Statements.
 
Reportable operating segments have been determined using a management approach, which is consistent with the basis and manner in which Aon’s chief operating decision-maker (“CODM”) uses financial information for the purposes of allocating resources and evaluating performance.  The CODM assesses performance based on operating income and generally accounts for inter-segment revenue as if the revenue were from third parties and at what management believes are current market prices.  The Company does not present net assets by segment as this information is not reviewed by the CODM.
 
Risk Solutions acts as an advisor and insurance and reinsurance broker, helping clients manage their risks, via consultation, as well as negotiation and placement of insurance risk with insurance carriers through Aon’s global distribution network.
 
HR Solutions partners with organizations to solve their most complex benefits, talent and related financial challenges, and improve business performance by designing, implementing, communicating and administering a wide range of human capital, retirement, investment management, health care, compensation and talent management strategies.
  
Aon’s total revenue is as follows (in millions):

	
								
 	Three months ended March 31,	
 	2013		2012	
Risk Solutions	$	1,971			$	1,905		
HR Solutions	954			945		
Intersegment elimination	(10	)		(9	)	
Total revenue	$	2,915			$	2,841		

24

Commissions, fees and other revenues by product are as follows (in millions):

	
								
 	Three months ended March 31,	
 	2013	 	2012	
Retail brokerage	$	1,562		 	$	1,494		
Reinsurance brokerage	402		 	399		
Total Risk Solutions Segment	1,964		 	1,893		
Consulting services	382		 	380		
Outsourcing	581		 	568		
Intrasegment	(9	)	 	(3	)	
Total HR Solutions Segment	954		 	945		
Intersegment	(10	)	 	(9	)	
Total commissions, fees and other revenue	$	2,908		 	$	2,829		
 
Fiduciary investment income by segment is as follows (in millions):

	
								
 	Three months ended March 31,	
 	2013	 	2012	
Risk Solutions	$	7		 	$	12		
HR Solutions	—		 	—		
Total fiduciary investment income	$	7		 	$	12		
 
A reconciliation of segment operating income before tax to income before income taxes is as follows (in millions):

	
								
 	Three months ended March 31,	
 	2013	 	2012	
Risk Solutions	$	403		 	$	366		
HR Solutions	51		 	73		
Segment income before income taxes	454		 	439		
Unallocated expenses	(44	)	 	(37	)	
Interest income	1		 	3		
Interest expense	(52	)	 	(59	)	
Other income	9		 	—		
Income before income taxes	$	368		 	$	346		
 
Unallocated expenses include administrative or other costs not attributable to the operating segments, such as corporate governance costs. Interest income represents income earned primarily on operating cash balances and certain income producing securities. Interest expense represents the cost of worldwide debt obligations.
 
Other income consists of equity earnings, realized gains or losses on the sale of investments, gains or losses on the disposal of businesses, gains or losses on hedging activities, and gains or losses on foreign currency transactions.
 
17.  Guarantee of Registered Securities
 
As described in Note 15, in connection with the Redomestication, Aon plc entered into various agreements pursuant to which it agreed to guarantee the obligations of Aon Corporation arising under issued and outstanding debt securities. Aon Corporation is a 100% indirectly owned subsidiary of Aon plc. The debt securities that are subject to Rule 3-10 of Regulation S-X are the 3.50% senior notes due September 2015, the 3.125% senior notes due May 2016, the 5.00% senior notes due September 2020, the 8.205% junior subordinated deferrable interest debentures due January 2027 and the 6.25% senior notes due September 2040. All guarantees of Aon plc are full and unconditional. There are no subsidiaries of Aon plc that are guarantors of the debt.

25

Aon Corporation entered into an agreement pursuant to which it agreed to guarantee the obligations of Aon plc arising under the 4.250% Notes Due 2042 exchanged for Aon Corporation's outstanding 8.205% junior subordinated deferrable interest debentures due January 2027 in both Original Notes and Exchange Notes form as described in Note 9. Those notes are subject to Rule 3-10 of Regulation S-X. The guarantee of Aon Corporation is full and unconditional. There are no subsidiaries of Aon plc, other than Aon Corporation, that are guarantors of this debt security.
 
The following tables set forth condensed consolidating statements of income for the three months ended March 31, 2013 and 2012 , condensed consolidating statements of comprehensive income for the three months ended March 31, 2013 and 2012 , condensed consolidating statements of financial position as of March 31, 2013 and December 31, 2012 , and condensed consolidating statements of cash flows for the three months ended March 31, 2013 and 2012 in accordance with Rule 3-10 of Regulation S-X. The condensed consolidating financial information includes the accounts of Aon plc, the accounts of Aon Corporation, and the combined accounts of the non-guarantor subsidiaries. The condensed consolidating financial statements are presented in all periods as a merger under common control, with Aon plc presented as the parent company in all periods prior and subsequent to the Redomestication. The principal consolidating adjustments are to eliminate the investment in subsidiaries and intercompany balances and transactions.

Condensed Consolidating Statement of Income

	
																					
 	 	Three months ended March 31, 2013	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
Revenue	 	 		 	 		 	 		 	 		 	 		
Commissions, fees and other	 	$	1		 	$	2		 	$	2,907		 	$	(2	)	 	$	2,908		
Fiduciary investment income	 	—		 	—		 	7		 	—		 	7		
Total revenue	 	1		 	2		 	2,914		 	(2	)	 	2,915		
 	 	 	 	 	 	 	 	 	 	 	
Expenses	 	 		 	 		 	 		 	 		 	 		
Compensation and benefits	 	11		 	15		 	1,699		 	—		 	1,725		
Other general expenses	 	7		 	8		 	767		 	(2	)	 	780		
Total operating expenses	 	18		 	23		 	2,466		 	(2	)	 	2,505		
Operating (loss) income	 	(17	)	 	(21	)	 	448		 	—		 	410		
Interest income	 	—		 	1		 	—		 	—		 	1		
Interest expense	 	(2	)	 	(34	)	 	(16	)	 	—		 	(52	)	
Intercompany interest (expense) income	 	(7	)	 	43		 	(36	)	 	—		 	—		
Other (expense) income	 	—		 	(1	)	 	10		 	—		 	9		
(Loss) income before taxes	 	(26	)	 	(12	)	 	406		 	—		 	368		
Income tax (benefit) expense	 	(5	)	 	(5	)	 	106		 	—		 	96		
(Loss) income after taxes	 	(21	)	 	(7	)	 	300		 	—		 	272		
 	 	 	 	 	 	 	 	 	 	 	
Equity in earnings of subsidiaries, net of tax	 	282		 	262		 	255		 	(799	)	 	—		
 	 	 	 	 	 	 	 	 	 	 	
Net income	 	261		 	255		 	555		 	(799	)	 	272		
Less: Net income attributable to noncontrolling interests	 	—		 	—		 	11		 	—		 	11		
Net income attributable to Aon shareholders	 	$	261		 	$	255		 	$	544		 	$	(799	)	 	$	261		

26

Condensed Consolidating Statement of Income

	
																					
 	 	Three months ended March 31, 2012	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
Revenue	 	 		 	 		 	 		 	 		 	 		
Commissions, fees and other	 	$	—		 	$	—		 	$	2,829		 	$	—		 	$	2,829		
Fiduciary investment income	 	—		 	1		 	11		 	—		 	12		
Total revenue	 	—		 	1		 	2,840		 	—		 	2,841		
 	 	 	 	 	 	 	 	 	 	 	
Expenses	 	 		 	 		 	 		 	 		 	 		
Compensation and benefits	 	—		 	69		 	1,592		 	—		 	1,661		
Other general expenses	 	—		 	8		 	770		 	—		 	778		
Total operating expenses	 	—		 	77		 	2,362		 	—		 	2,439		
Operating (loss) income	 	—		 	(76	)	 	478		 	—		 	402		
Interest income	 	—		 	—		 	3		 	—		 	3		
Interest expense	 	—		 	(40	)	 	(19	)	 	—		 	(59	)	
Intercompany interest income (expense)	 	—		 	46		 	(46	)	 	—		 	—		
Other income (expense)	 	—		 	8		 	(8	)	 	—		 	—		
(Loss) income before taxes	 	—		 	(62	)	 	408		 	—		 	346		
Income tax (benefit) expense	 	—		 	(24	)	 	121		 	—		 	97		
(Loss) income after taxes	 	—		 	(38	)	 	287		 	—		 	249		
 	 	 	 	 	 	 	 	 	 	 	
Equity in earnings of subsidiaries, net of tax	 	238		 	247		 	209		 	(694	)	 	—		
 	 	 	 	 	 	 	 	 	 	 	
Net income	 	238		 	209		 	496		 	(694	)	 	249		
Less: Net income attributable to noncontrolling interests	 	—		 	—		 	11		 	—		 	11		
Net income attributable to Aon shareholders	 	$	238		 	$	209		 	$	485		 	$	(694	)	 	$	238		

27

Condensed Consolidating Statement of Comprehensive Income

	
																					
 	 	Three months ended March 31, 2013	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
Net income	 	$	261		 	$	255		 	$	555		 	$	(799	)	 	$	272		
Less: Net income attributable to noncontrolling interests	 	—		 	—		 	11		 	—		 	11		
Net income attributable to Aon shareholders	 	$	261		 	$	255		 	$	544		 	$	(799	)	 	$	261		
Other comprehensive loss, net of tax:	 	 		 	 		 	 		 	 		 	 		
Change in fair value of derivatives	 	—		 	1		 	(15	)	 	—		 	(14	)	
Foreign currency translation adjustments	 	—		 	(8	)	 	(166	)	 	—		 	(174	)	
Post-retirement benefit obligation	 	—		 	7		 	16		 	—		 	23		
Total other comprehensive loss	 	—		 	—		 	(165	)	 	—		 	(165	)	
Equity in other comprehensive loss of subsidiaries, net of tax	 	(165	)	 	(169	)	 	(169	)	 	503		 	—		
Less: Other comprehensive loss attributable to noncontrolling interests	 	—		 	—		 	—		 	—		 	—		
Total other comprehensive loss attributable to Aon shareholders	 	(165	)	 	(169	)	 	(334	)	 	503		 	(165	)	
Comprehensive income attributable to Aon shareholders	 	$	96		 	$	86		 	$	210		 	$	(296	)	 	$	96		
 
Condensed Consolidating Statement of Comprehensive Income

	
																					
 	 	Three months ended March 31, 2012	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
Net income	 	$	238		 	$	209		 	$	496		 	$	(694	)	 	$	249		
Less: Net income attributable to noncontrolling interests	 	—		 	—		 	11		 	—		 	11		
Net income attributable to Aon shareholders	 	$	238		 	$	209		 	$	485		 	$	(694	)	 	$	238		
Other comprehensive income, net of tax:	 	 		 	 		 	 		 	 		 	 		
Change in fair value of derivatives	 	—		 	—		 	7		 	—		 	7		
Foreign currency translation adjustments	 	—		 	4		 	100		 	—		 	104		
Post-retirement benefit obligation	 	—		 	6		 	15		 	—		 	21		
Total other comprehensive income	 	—		 	10		 	122		 	—		 	132		
Equity in other comprehensive income of subsidiaries, net of tax	 	131		 	117		 	127		 	(375	)	 	—		
Less: Other comprehensive income attributable to noncontrolling interests	 	—		 	—		 	1		 	—		 	1		
Total other comprehensive income attributable to Aon shareholders	 	131		 	127		 	248		 	(375	)	 	131		
Comprehensive income attributable to Aon Shareholders	 	$	369		 	$	336		 	$	733		 	$	(1,069	)	 	$	369		

28

Condensed Consolidating Statement of Financial Position

	
																					
 	 	As of March 31, 2013	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
ASSETS	 	 		 	 		 	 		 	 		 	 		
 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	5		 	$	251		 	$	152		 	$	—		 	$	408		
Short-term investments	 	—		 	128		 	224		 	—		 	352		
Receivables, net	 	2		 	2		 	2,880		 	—		 	2,884		
Fiduciary assets	 	—		 	—		 	12,224		 	—		 	12,224		
Intercompany receivables	 	23		 	2,499		 	4,145		 	(6,667	)	 	—		
Other current assets	 	11		 	41		 	340		 	(3	)	 	389		
Total Current Assets	 	41		 	2,921		 	19,965		 	(6,670	)	 	16,257		
Goodwill	 	—		 	—		 	8,786		 	—		 	8,786		
Intangible assets, net	 	—		 	—		 	2,844		 	—		 	2,844		
Fixed assets, net	 	—		 	—		 	816		 	—		 	816		
Investments	 	—		 	52		 	100		 	—		 	152		
Intercompany receivables	 	166		 	2,193		 	2,108		 	(4,467	)	 	—		
Other non-current assets	 	118		 	731		 	430		 	(105	)	 	1,174		
Investment in subsidiary	 	10,591		 	10,759		 	8,464		 	(29,814	)	 	—		
TOTAL ASSETS	 	$	10,916		 	$	16,656		 	$	43,513		 	$	(41,056	)	 	$	30,029		
 	 	 	 	 	 	 	 	 	 	 	
LIABILITIES AND EQUITY	 	 		 	 		 	 		 	 		 	 		
 	 	 	 	 	 	 	 	 	 	 	
Fiduciary liabilities	 	$	—		 	$	—		 	$	12,224		 	$	—		 	$	12,224		
Short-term debt and current portion of long-term debt	 	—		 	748		 	54		 	—		 	802		
Accounts payable and accrued liabilities	 	15		 	76		 	1,349		 	—		 	1,440		
Intercompany payables	 	32		 	3,123		 	2,531		 	(5,686	)	 	—		
Other current liabilities	 	—		 	47		 	748		 	—		 	795		
Total Current Liabilities	 	47		 	3,994		 	16,906		 	(5,686	)	 	15,261		
Long-term debt	 	194		 	2,515		 	1,061		 	—		 	3,770		
Pension, other post-retirement and other post-employment liabilities	 	—		 	1,262		 	765		 	—		 	2,027		
Intercompany payables	 	3,090		 	166		 	2,195		 	(5,451	)	 	—		
Other non-current liabilities	 	6		 	255		 	1,182		 	(105	)	 	1,338		
TOTAL LIABILITIES	 	3,337		 	8,192		 	22,109		 	(11,242	)	 	22,396		
 	 	 	 	 	 	 	 	 	 	 	
TOTAL AON SHAREHOLDERS’ EQUITY	 	7,579		 	8,464		 	21,350		 	(29,814	)	 	7,579		
Noncontrolling interests	 	—		 	—		 	54		 	—		 	54		
TOTAL EQUITY	 	7,579		 	8,464		 	21,404		 	(29,814	)	 	7,633		
 	 	 	 	 	 	 	 	 	 	 	
TOTAL LIABILITIES AND EQUITY	 	$	10,916		 	$	16,656		 	$	43,513		 	$	(41,056	)	 	$	30,029		

29

Condensed Consolidating Statement of Financial Position

	
																					
 	 	As of December 31, 2012	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
ASSETS	 	 		 	 		 	 		 	 		 	 		
 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	131		 	$	199		 	$	(39	)	 	$	—		 	$	291		
Short-term investments	 	—		 	89		 	257		 	—		 	346		
Receivables, net	 	5		 	1		 	3,095		 	—		 	3,101		
Fiduciary assets	 	—		 	—		 	12,214		 	—		 	12,214		
Intercompany receivables	 	—		 	2,092		 	3,545		 	(5,637	)	 	—		
Other current assets	 	7		 	53		 	370		 	—		 	430		
Total Current Assets	 	143		 	2,434		 	19,442		 	(5,637	)	 	16,382		
Goodwill	 	—		 	—		 	8,943		 	—		 	8,943		
Intangible assets, net	 	—		 	—		 	2,975		 	—		 	2,975		
Fixed assets, net	 	—		 	—		 	820		 	—		 	820		
Investments	 	—		 	49		 	116		 	—		 	165		
Intercompany receivables	 	166		 	1,997		 	2,350		 	(4,513	)	 	—		
Other non-current assets	 	117		 	735		 	1,174		 	(825	)	 	1,201		
Investment in subsidiary	 	10,398		 	10,522		 	8,322		 	(29,242	)	 	—		
TOTAL ASSETS	 	$	10,824		 	$	15,737		 	$	44,142		 	$	(40,217	)	 	$	30,486		
 	 	 	 	 	 	 	 	 	 	 	
LIABILITIES AND EQUITY	 	 		 	 		 	 		 	 		 	 		
 	 	 	 	 	 	 	 	 	 	 	
Fiduciary liabilities	 	$	—		 	$	—		 	$	12,214		 	$	—		 	$	12,214		
Short-term debt and current portion of long-term debt	 	—		 	429		 	23		 	—		 	452		
Accounts payable and accrued liabilities	 	10		 	71		 	1,772		 	—		 	1,853		
Intercompany payables	 	51		 	2,637		 	2,162		 	(4,850	)	 	—		
Other current liabilities	 	—		 	49		 	779		 	3		 	831		
Total Current Liabilities	 	61		 	3,186		 	16,950		 	(4,847	)	 	15,350		
Long-term debt	 	107		 	2,515		 	1,091		 	—		 	3,713		
Pension, other post-retirement and other post-employment liabilities	 	—		 	1,294		 	982		 	—		 	2,276		
Intercompany payables	 	2,890		 	166		 	2,247		 	(5,303	)	 	—		
Other non-current liabilities	 	4		 	254		 	1,909		 	(825	)	 	1,342		
TOTAL LIABILITIES	 	3,062		 	7,415		 	23,179		 	(10,975	)	 	22,681		
 	 	 	 	 	 	 	 	 	 	 	
TOTAL AON SHAREHOLDERS’ EQUITY	 	7,762		 	8,322		 	20,920		 	(29,242	)	 	7,762		
Noncontrolling interests	 	—		 	—		 	43		 	—		 	43		
TOTAL EQUITY	 	7,762		 	8,322		 	20,963		 	(29,242	)	 	7,805		
 	 	 	 	 	 	 	 	 	 	 	
TOTAL LIABILITIES AND EQUITY	 	$	10,824		 	$	15,737		 	$	44,142		 	$	(40,217	)	 	$	30,486		

30

Condensed Consolidating Statement of Cash Flows

	
																					
 	 	Three months ended March 31, 2013	
 	 	Aon	 	Aon	 	Other
Non-Guarantor	 	Consolidating	 	 	
(millions)	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
CASH FLOWS FROM OPERATING ACTIVITIES	 	 		 	 		 	 		 	 		 	 		
 	 	 	 	 	 	 	 	 	 	 	
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES	 	$	5		 	$	(23	)	 	$	72		 	$	—		 	$	54		
 	 	 	 	 	 	 	 	 	 	 	
CASH FLOWS FROM INVESTING ACTIVITIES	 	 		 	 		 	 		 	 		 	 		
Sales of long-term investments	 	—		 	1		 	17		 	—		 	18		
Purchase of long-term investments	 	—		 	(3	)	 	—		 	—		 	(3	)	
Net (purchases) sales of short-term investments - non-fiduciary	 	—		 	(39	)	 	23		 	—		 	(16	)	
Acquisition of businesses, net of cash acquired	 	—		 	—		 	(2	)	 	—		 	(2	)	
Proceeds from sale of businesses	 	—		 	—		 	1		 	—		 	1		
Capital expenditures	 	—		 	—		 	(60	)	 	—		 	(60	)	
CASH USED FOR INVESTING ACTIVITIES	 	—		 	(41	)	 	(21	)	 	—		 	(62	)	
 	 	 	 	 	 	 	 	 	 	 	
CASH FLOWS FROM FINANCING ACTIVITIES	 	 		 	 		 	 		 	 		 	 		
Share repurchase	 	(300	)	 	—		 	—		 	—		 	(300	)	
Advances from (to) affiliates	 	96		 	(206	)	 	110		 	—		 	—		
Issuance of shares for employee benefit plans	 	36		 	—		 	—		 	—		 	36		
Issuance of debt	 	87		 	833		 	230		 	—		 	1,150		
Repayment of debt	 	—		 	(511	)	 	(204	)	 	—		 	(715	)	
Cash dividends to shareholders	 	(50	)	 	—		 	—		 	—		 	(50	)	
Purchase of shares from noncontrolling interests	 	—		 	—		 	(1	)	 	—		 	(1	)	
CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES	 	(131	)	 	116		 	135		 	—		 	120		
 	 	 	 	 	 	 	 	 	 	 	
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	 	—		 	—		 	5		 	—		 	5		
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	 	(126	)	 	52		 	191		 	—		 	117		
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	 	131		 	199		 	(39	)	 	—		 	291		
CASH AND CASH EQUIVALENTS AT END OF PERIOD	 	$	5		 	$	251		 	$	152		 	$	—		 	$	408		

31

Condensed Consolidating Statement of Cash Flows

	
																					
 	 	Three months ended March 31, 2012	
 	 	 	 	 	 	Other	 	 	 	 	
 	 	Aon	 	Aon	 	Non-Guarantor	 	Consolidating	 	 	
(millions) 	 	plc	 	Corporation	 	Subsidiaries	 	Adjustments	 	Consolidated	
CASH FLOWS FROM OPERATING ACTIVITIES	 	 		 	 		 	 		 	 		 	 		
 	 	 	 	 	 	 	 	 	 	 	
CASH (USED FOR) PROVIDED BY OPERATING ACTIVITIES	 	$	—		 	$	(66	)	 	$	51		 	$	—		 	$	(15	)	
 	 	 	 	 	 	 	 	 	 	 	
CASH FLOWS FROM INVESTING ACTIVITIES	 	 		 	 		 	 		 	 		 	 		
Sales of long-term investments	 	—		 	—		 	36		 	—		 	36		
Purchase of long-term investments	 	—		 	(3	)	 	—		 	—		 	(3	)	
Net sales of short-term investments - non-fiduciary	 	—		 	236		 	47		 	—		 	283		
Acquisition of businesses, net of cash acquired	 	—		 	—		 	(23	)	 	—		 	(23	)	
Capital expenditures	 	—		 	—		 	(71	)	 	—		 	(71	)	
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES	 	—		 	233		 	(11	)	 	—		 	222		
 	 	 	 	 	 	 	 	 	 	 	
CASH FLOWS FROM FINANCING ACTIVITIES	 	 		 	 		 	 		 	 		 	 		
Share repurchase	 	—		 	(100	)	 	—		 	—		 	(100	)	
Advances from (to) affiliates	 	17		 	(14	)	 	(3	)	 	—		 	—		
Issuance of shares for employee benefit plans	 	—		 	49		 	—		 	—		 	49		
Issuance of debt	 	—		 	75		 	—		 	—		 	75		
Repayment of debt	 	—		 	(137	)	 	(3	)	 	—		 	(140	)	
Cash dividends to shareholders	 	—		 	(49	)	 	—		 	—		 	(49	)	
Dividends paid to noncontrolling interests	 	—		 	—		 	(1	)	 	—		 	(1	)	
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES	 	17		 	(176	)	 	(7	)	 	—		 	(166	)	
 	 	 	 	 	 	 	 	 	 	 	
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	 	—		 	—		 	10		 	—		 	10		
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	 	17		 	(9	)	 	43		 	—		 	51		
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	 	—		 	(21	)	 	293		 	—		 	272		
CASH AND CASH EQUIVALENTS AT END OF PERIOD	 	$	17		 	$	(30	)	 	$	336		 	$	—		 	$	323		

32

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
EXECUTIVE SUMMARY OF FIRST QUARTER 2013 FINANCIAL RESULTS
 
On April 2, 2012, we completed the Redomestication, moving our corporate headquarters to London. In the Redomestication, each issued and outstanding share of Aon Corporation common stock held by stockholders of Aon Corporation was converted into the right to receive one Class A Ordinary Share, nominal value $0.01 per share, of Aon plc. In connection with the Redomestication, we have incurred costs related to the headquarters relocation of $3 million in the three months ended March 31, 2013 . We anticipate that we will incur an additional $1 million of costs, which are expected to be incurred in 2013, related to the headquarters relocation. We believe the Redomestication will strengthen our long term strategy by:

•	Enabling Risk Solutions to deliver superior value to our clients by executing our Aon Broking strategy;	
		
•	Expanding the HR Solutions portfolio penetration, especially within consulting, which already has a significant presence in the UK and EMEA;	
		
•	Enhancing our Risk Solutions’ relationship with, and integration into, London markets;	
		
•	Increasing our connection to emerging markets, accelerating our ability to grow there, and further aligning our strategy with underwriters and carriers who are also targeting these high growth markets;	
		
•	Strengthening our international brand awareness and positioning as a global firm;	
		
•	Advancing our talent strategy through better development, retention and acquisition of professional talent, with a special focus on London’s insurance talent;	
		
•	Optimizing our fiscal planning and capital allocation and reducing our global tax rate in a manner that provides us with the increased financial flexibility to properly invest in our growth.	
 
During the first three months of 2013 , we continued to face certain headwinds impacting our business. In our Risk Solutions segment, these included economic weakness in continental Europe. In our HR Solutions segment, these included price compression in our benefits administration business and a decline in discretionary demand for retirement consulting services internationally.
 
The following is a summary of our first quarter 2013 financial results:

•	For the quarter, revenue increased $ 74 million , or 3% , to $2.9 billion when compared to the prior year quarter of $2.8 billion . This was the result of 2% organic revenue growth and a 1% increase in commissions and fees resulting from acquisitions, net of divestitures, partially offset by a $5 million, or 42%, decline in investment income due to lower average interest rates globally. Organic revenue grew 3% in the Risk Solutions segment and 1% in the HR Solutions segment during the quarter.	

•	Operating expenses for the quarter were $2.5 billion , an increase of $66 million , or 3% , when compared to the prior year quarter of $2.4 billion. The increase is primarily the result of a 2% organic revenue growth, the inclusion of $10 million of expenses from acquisitions, and a $6 million increase in restructuring costs, partially offset by an $18 million favorable impact from foreign currency translation, a $5 million decrease in intangible asset amortization expense, and savings related to the formal restructuring programs.	

•	Operating margin was flat in the first quarter 2013 at 14.1% as compared to the prior year quarter. 	

•	Net income attributable to Aon shareholders increased $23 million , or 10% , to $261 million for the first quarter 2013 as compared to the first quarter 2012 . 	

•	Cash flow provided by operating activities was $54 million for the first quarter 2013 , an improvement of $69 million from a use of cash of $15 million in the first quarter 2012 .	

We focus on four key metrics each quarter that we communicate to shareholders: grow organically, expand margins, increase earnings per share, and increase free cash flow.  The following is our measure of performance against these four metrics for the first quarter of 2013 :

•	Organic revenue growth, a non-GAAP measure as defined under the caption “Review of Consolidated Results — General” below, was 2% in the first quarter 2013 as compared to the prior year first quarter organic revenue growth of 4%. Organic revenue growth was primarily driven by strong management of the renewal book portfolio across all regions and solid new business growth across Asia, the Americas, and emerging markets. Modest growth across our reinsurance business and our HR Solutions segment also contributed to organic growth.	

33

 
		
•	Adjusted operating margin, a non-GAAP measure as defined under the caption “Review of Consolidated Results — General” below, for the first quarter 2013 was 18.5% for Aon overall, 22.5% for the Risk Solutions segment, and 14.3% for the HR Solutions segment.  Adjusted operating margin was 18.6% for Aon overall, 21.4% for the Risk Solutions segment, and 16.5% for the HR Solutions segment for the first quarter 2012 .  The increase in adjusted operating margin for the Risk Solutions segment reflects strong organic revenue growth and restructuring savings, partially offset by lower investment income. The decrease in adjusted operating margin for the HR Solutions segment reflects a $10 million unfavorable impact from expenses related to legacy litigation and timing of certain expenses as well as an investment in long-term growth opportunities and an unfavorable revenue mix shift in our benefits administration business.	

•	Adjusted diluted earnings per share attributable to Aon’s shareholders, a non-GAAP measure as defined under the caption “Review of Consolidated Results — General” below, was $1.11 per share in the first quarter of 2013 as compared to $0.98 per share in the first quarter 2012 .	

•	Free cash flow, a non-GAAP measure as defined under the "Review of Consolidated Results - General" below, was a use of cash of $6 million in the first quarter of 2013 , an improvement of $80 million from a use of cash of $86 million in the first quarter 2012 . The increase in free cash flow from the prior year was driven by improved cash flow from operations and a decrease of $11 million , or 15% , in capital expenditures from the prior year period.	

REVIEW OF CONSOLIDATED RESULTS
 
General
 
In our discussion of operating results, we sometimes refer to supplemental information derived from consolidated financial information specifically related to organic revenue growth, adjusted operating margin, adjusted diluted earnings per share, free cash flow, and the impact of foreign exchange rate fluctuations on operating results.
 
Organic Revenue
 
We use supplemental information related to organic revenue to help us and our investors evaluate business growth from existing operations.  Organic revenue excludes the impact of foreign exchange rate changes, acquisitions, divestitures, transfers between business units, fiduciary investment income, reimbursable expenses, and certain unusual items.  Supplemental information related to organic revenue growth represents a measure not in accordance with U.S. GAAP, and should be viewed in addition to, not instead of, our Condensed Consolidated Financial Statements and Notes thereto.  Industry peers provide similar supplemental information about their revenue performance, although they may not make identical adjustments.  Reconciliation of this non-GAAP measure, organic revenue growth percentages, to the reported Commissions, fees and other revenue growth percentages, has been provided in the “Review by Segment” caption, below.
 
Adjusted Operating Margins
 
We use adjusted operating margin as a measure of core operating performance of our Risk Solutions and HR Solutions segments.  Adjusted operating margin excludes the impact of certain items, including restructuring charges, intangible asset amortization and headquarters relocation costs. This supplemental information related to adjusted operating margin represents a measure not in accordance with U.S. GAAP, and should be viewed in addition to, not instead of, our Condensed Consolidated Financial Statements and Notes thereto.

34

A reconciliation of this non-GAAP measure to the reported operating margin is as follows (in millions):

	
												
 	Three months ended March 31, 2013	
 	Total Aon (1)	 	Risk Solutions	 	HR Solutions	
Revenue — U.S. GAAP	$	2,915		 	$	1,971		 	$	954		
Operating income — U.S. GAAP	410		 	403		 	$	51		
Restructuring charges	26		 	11		 	15		
Intangible asset amortization	99		 	29		 	70		
Headquarters relocation costs	3		 	—		 	—		
Operating income — as adjusted	$	538		 	$	443		 	$	136		
Operating margins — U.S. GAAP	14.1	%	 	20.4	%	 	5.3	%	
Operating margins — as adjusted	18.5	%	 	22.5	%	 	14.3	%	

	
												
 	Three months ended March 31, 2012	
 	Total Aon (1)	 	Risk Solutions	 	HR Solutions	
Revenue — U.S. GAAP	$	2,841		 	$	1,905		 	$	945		
Operating income — U.S. GAAP	402		 	366		 	73		
Restructuring charges	20		 	11		 	9		
Intangible asset amortization	104		 	30		 	74		
Headquarters relocation costs	3		 	—		 	—		
Operating income — as adjusted	$	529		 	$	407		 	$	156		
Operating margins — U.S. GAAP	14.1	%	 	19.2	%	 	7.7	%	
Operating margins — as adjusted	18.6	%	 	21.4	%	 	16.5	%	
  ______________________________________________

(1) Includes unallocated expenses and the elimination of inter-segment revenue.

Adjusted Diluted Earnings per Share
 
We also use adjusted diluted earnings per share as a non-GAAP measure of our core operating performance. Adjusted diluted earnings per share excludes the impact of restructuring charges, intangible asset amortization, and headquarters relocation costs, along with related income taxes. This supplemental information related to adjusted diluted earnings per share represents a measure not in accordance with U.S. GAAP and should be viewed in addition to, not instead of, our Condensed Consolidated Financial Statements and Notes thereto. Reconciliations of this non-GAAP measure to the reported diluted earnings per share are as follows (in millions except per share data):

	
												
 	Three months ended March 31, 2013	
 	U.S. GAAP	 	Adjustments	 	As Adjusted	
Operating Income	410		 	128		 	538		
Interest income	1		 	—		 	1		
Interest expense	(52	)	 	—		 	(52	)	
Other income	9		 	—		 	9		
Income before income taxes	368		 	128		 	496		
Income taxes	96		 	33		 	129		
Net income	272		 	95		 	367		
Less: Net income attributable to noncontrolling interests	11		 	—		 	11		
Income attributable to Aon stockholders	$	261		 	$	95		 	$	356		
Diluted earnings per share	$	0.82		 	$	0.29		 	$	1.11		
Weighted average common shares outstanding — diluted	320.0		 	320.0		 	320.0		

35

	
												
 	Three months ended March 31, 2012	
 	U.S. GAAP	 	Adjustments	 	As Adjusted	
Operating Income	$	402		 	$	127		 	$	529		
Interest income	3		 	—		 	3		
Interest expense	(59	)	 	—		 	(59	)	
Other (expense) income	—		 	—		 	—		
Income before income taxes	346		 	127		 	473		
Income taxes	97		 	35		 	132		
Net income	249		 	92		 	341		
Less: Net income attributable to noncontrolling interests	11		 	—		 	11		
Income attributable to Aon stockholders	$	238		 	$	92		 	$	330		
Diluted earnings per share	$	0.71		 	$	0.27		 	$	0.98		
Weighted average common shares outstanding — diluted	336.6		 	336.6		 	336.6		
 
Free Cash Flow

We use free cash flow, defined as cash flow provided by operations minus capital expenditures, as a measure of our core operating performance. This supplemental information related to free cash flow represents a measure not in accordance with U.S. GAAP and should be viewed in addition to, not instead of, our Consolidated Financial Statements and Notes thereto. The use of this non-GAAP measure does not imply or represent the residual cash flow for discretionary expenditures.

	
								
 	Three months ended March 31,	
 	2013	 	2012	
Cash flow provided by (used for) operations - U.S. GAAP	$	54		 	$	(15	)	
Less: Capital expenditures	(60	)	 	(71	)	
Free cash flow	$	(6	)	 	$	(86	)	

Impact of Foreign Exchange Rate Fluctuations
 
Because we conduct business in more than 120 countries, foreign exchange rate fluctuations have a significant impact on our business.  In comparison to the U.S. dollar, foreign exchange rate movements may be significant and may distort true period-to-period comparisons of changes in revenue or pretax income.  Therefore, to give financial statement users more meaningful information about our operations, we have provided a discussion of the impact of foreign currency exchange rates on our financial results.  The methodology used to calculate this impact isolates the impact of the change in currencies between periods by translating last year’s revenue, expenses and net income at this year’s foreign exchange rates.  Currency fluctuations had a favorable impact of $0.02 during the three months ended March 31, 2013 and no impact during the three months ended March 31, 2012, on adjusted net income per diluted share when we translate prior year quarter results at current quarter foreign exchange rates.

36

Summary of Results
 
Our consolidated results of operations follow (in millions):

	
								
 	Three months ended March 31,	
 	2013	 	2012	
Revenue:	 		 	 		
Commissions, fees and other	$	2,908		 	$	2,829		
Fiduciary investment income	7		 	12		
Total revenue	2,915		 	2,841		
Expenses:	 		 	 		
Compensation and benefits	1,725		 	1,661		
Other general expenses	780		 	778		
Total operating expenses	2,505		 	2,439		
Operating income	410		 	402		
Interest income	1		 	3		
Interest expense	(52	)	 	(59	)	
Other (expense) income	9		 	—		
Income before income taxes	368		 	346		
Income taxes	96		 	97		
Net income	272		 	249		
Less: Net income attributable to noncontrolling interests	11		 	11		
Net income attributable to Aon stockholders	$	261		 	$	238		
 
Revenue
 
Revenue increased by $74 million , or 3% , in the first quarter 2013 when compared to the first quarter 2012 .  This increase consists of a $9 million , or 1% , increase in the HR Solutions segment and a $66 million , or 3% , increase in the Risk Solutions segment. Organic revenue growth in the HR Solutions segment for the quarter was 1% .  The increase in the HR Solutions segment compared to the prior year quarter was primarily driven by new client wins and demand for discretionary services in HR BPO and healthcare exchanges and modest growth in certain consulting businesses.  The results of the Risk Solutions segment reflect 3% organic revenue growth, and a 1% increase in commissions and fees resulting from acquisitions, net of divestitures, partially offset by a decline in Fiduciary investment income. The increase in the Risk Solutions segment compared to the prior year quarter was primarily driven by improved growth across Americas, including strong new business generation and management of the renewal book portfolio in U.S. Retail and Latin America and strong growth across Asia, New Zealand and emerging markets, as well as strong management of the renewal book portfolio in Europe.

Compensation and Benefits
 
Compensation and benefits increased $64 million , or 4% , in the first quarter 2013 when compared to first quarter 2012 .  The increase in Compensation and benefits was primarily driven by organic revenue growth, an $8 million increase in formal restructuring costs, investments in key talent and additional costs related to acquisitions, partially offset by $11 million favorable impact from foreign currency translation and restructuring savings.
 
Other General Expenses
 
Other general expenses increased $2 million in the first quarter 2013 when compared to first quarter 2012. The increase was due to organic revenue growth of 2% partially offset by a $7 million favorable impact from foreign currency translation, intangible amortization expense decrease of $5 million, decreased restructuring charges of $2 million, and savings from formal restructuring plans.

37

Interest income
 
Interest income represents income earned on operating cash balances and other income-producing investments.  It does not include interest earned on funds held on behalf of clients, which is included in Fiduciary investment income. For the first quarter 2013 , Interest income decreased $2 million  from the first quarter 2012 due to lower average interest rates globally.
 
Interest expense
 
Interest expense, which represents the cost of our worldwide debt obligations, decreased $7 million from the first quarter 2012 . The decrease in interest expense reflects a decline in the average rate on total debt outstanding.
 
Other income
 
Other income was $9 million for the first quarter 2013 , as compared to no Other income for the first quarter 2012 .  The first quarter 2013 includes a $24 million gain on foreign currency remeasurement and additional income from equity method investments of $2 million , partially offset by an $18 million loss from derivatives. The first quarter 2012 includes an $18 million loss on foreign currency remeasurement, offset by by $10 million gain on sale of investments, additional income from equity method investments of $5 million , and derivative gains of $2 million .
 
Income before Income Taxes
 
Income before income taxes for the first quarter was $368 million , a 6% increase from $346 million in 2012 .  The increase in income was driven by the 2% increase in organic growth, expense discipline, and increased benefits from restructuring initiatives.
 
Income Taxes
 
The effective tax rate on income was 26.1% and 28.0% for the first quarter 2013 and 2012 , respectively. The decrease in the effective tax rate is due primarily to changes in the geographical distribution of income. The estimated tax rate for operations for 2013 is expected to be approximately 26.0%.

Income Attributable to Aon Shareholders
 
Income attributable to Aon shareholders for the first quarter increased to $261 million , or $0.82 diluted net income per share, from $238 million , or $0.71 diluted net income per share, in 2012 . 

Restructuring Initiatives
 
Aon Hewitt Restructuring Plan
 
On October 14, 2010, we announced a global restructuring plan in connection with the acquisition of Hewitt.  The Aon Hewitt Plan is intended to streamline operations across the combined Aon Hewitt organization and includes approximately 2,200 job eliminations. We expect these restructuring activities and related expenses to affect operations into 2013.  The Aon Hewitt Plan is expected to result in cumulative costs of approximately $325 million through the end of the plan, consisting of approximately $213 million in employee termination costs and approximately $112 million in real estate rationalization across the Company.
 
From the inception of the Aon Hewitt Plan through March 31, 2013, approximately 2,180 jobs have been eliminated and total expenses of $281 million have been incurred.  We recorded $26 million and $12 million of restructuring and related charges in the three months ended March 31, 2013 and 2012 , respectively.  Charges related to the restructuring are included in Compensation and benefits and Other general expenses in the accompanying Condensed Consolidated Statements of Income.

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The following summarizes the restructuring and related costs, by type, that have been incurred and are estimated to be incurred through the end of the restructuring initiative related to the Aon Hewitt Plan (in millions):

	
																								
 	2010	 	2011	 	2012	 	First Quarter 2013	 	Total
Inception to
Date	 	Estimated
Total Cost for
Restructuring
Plan (1)	
Workforce reduction	$	49		 	$	64		 	$	74		 	$	24		 	$	211		 	$	213		
Lease consolidation	3		 	32		 	18		 	2		 	55		 	86		
Asset impairments	—		 	7		 	4		 	—		 	11		 	21		
Other costs associated with restructuring (2)	—		 	2		 	2		 	—		 	4		 	5		
Total restructuring and related expenses	$	52		 	$	105		 	$	98		 	$	26		 	$	281		 	$	325		
 ______________________________________________

(1) Actual costs, when incurred, will vary due to changes in the assumptions built into this plan.  Significant assumptions likely to change when plans are finalized and implemented include, but are not limited to, changes in severance calculations, changes in the assumptions underlying sublease loss calculations due to changing market conditions, and changes in the overall analysis that might cause us to add or cancel component initiatives.
 
(2) Other costs associated with restructuring initiatives, including moving costs and consulting and legal fees, are recognized when incurred.
 
The following summarizes the restructuring and related expenses, by segment, that have been incurred and are estimated to be incurred through the end of the restructuring initiative related to the Aon Hewitt Plan (in millions):

	
																								
 	2010	 	2011	 	2012	 	First Quarter
2013	 	Total
Inception to
Date	 	Estimated
Total Cost for
Restructuring
Plan (1)	
HR Solutions	$	52		 	$	49		 	$	66		 	$	15		 	$	182		 	$	213		
Risk Solutions	—		 	56		 	32		 	11		 	99		 	112		
Total restructuring and related expenses	$	52		 	$	105		 	$	98		 	$	26		 	$	281		 	$	325		
 
(1) Costs included in the Risk Solutions segment are associated with the transfer of the the health and benefits consulting business from HR Solutions to Risk Solutions effective January 1, 2012. Costs incurred in 2011 in the HR Solutions segment of $41 million related to the health and benefits consulting business have been reclassified and presented in the Risk Solutions segment.

The restructuring plan, before any potential reinvestment of savings, is expected to deliver approximately $280 million of annual savings in 2013.  The HR Solutions segment is expected to deliver $228 million of annual savings, with the remaining $52 million to be delivered by the Risk Solutions segment. We estimate that we realized approximately $69 million in restructuring cost savings in the first quarter of 2013 .  With other integration savings, we expect to achieve approximately $355 million in annual cost savings in 2013, which includes the approximately $280 million of annual savings related to the restructuring plan, and additional savings in areas such as information technology, procurement and public company costs.  All of the components of the restructuring and integration plan are not finalized and actual total savings, costs and timing may vary from those estimated due to changes in the scope or assumptions underlying the plan.
 
LIQUIDITY AND FINANCIAL CONDITION
 
Liquidity
 
Executive Summary
 
We believe that our balance sheet and strong cash flow provide us with financial flexibility to create long-term value for our shareholders.  Our primary sources of liquidity are cash flow from operations, available cash reserves and debt capacity available under various credit facilities.  Our primary uses of liquidity are operating expenses, capital expenditures, acquisitions, share repurchases, restructuring initiatives, funding pension obligations and shareholder dividends.

39

 
Cash on our balance sheet includes funds available for general corporate purposes.  Funds held on behalf of clients in a fiduciary capacity are segregated and shown together with uncollected insurance premiums in Fiduciary assets in the Condensed Consolidated Statement of Financial Position, with a corresponding amount in Fiduciary liabilities. Fiduciary funds cannot be used for general corporate purposes, and should not be considered as a source of liquidity for us.
 
Operating Activities
 
Net cash provided by operating activities during the three months ended March 31, 2013 was $54 million as compared to net cash used for operating activities during the three months ended March 31, 2012 of $15 million , an increase of $69 million . The primary driver of the cash provided by operating activities was net income, adjusted for non-cash expenses, of $512 million and a decrease in accounts receivable of $174 million , partially offset by a decrease in accounts payable and accrued liabilities of $417 million , and pension contributions of $196 million . Pension contributions were $196 million and $110 million for the three months ended March 31, 2013 and 2012 , respectively. For the remainder of 2013 , we expect to contribute approximately $348 million to our pension plans, with the majority attributable to non-U.S. pension plans, which are subject to changes in foreign exchange rates.
 
During the first quarter 2013 , we continued to progress with elevated levels of invoicing and cash collections related to a delay in invoicing HR Solutions’ customers. We expect to reduce the level of unbilled receivables and accounts receivable to a normalized level in 2013, which may differ from historical levels.
 
We expect cash generated by operations for 2013 to be sufficient to service our debt and contractual obligations, fund the cash requirements of our restructuring programs, finance capital expenditures, continue acquisitions of shares under our share repurchase program, and continue to pay dividends to our shareholders.  Although cash from operations is expected to be sufficient to service these obligations, we have the ability to borrow under our credit facilities to accommodate any timing differences in cash flows.  We have committed credit facilities of approximately $1.2 billion, of which all but $30 million was available at March 31, 2013 .  We can access these facilities on a same day or next day basis.  Additionally, we believe that we could access capital markets to obtain debt financing for longer-term funding, under current market conditions, if needed.
 
Investing Activities
 
Cash flow used for investing activities was $62 million during the three months ended March 31, 2013 . The primary drivers of the cash flow used for investing activities were $60 million for capital expenditures, $16 million for net purchases of short term investments, and $3 million for purchases of long-term investments, partially offset by $18 million for sales of long term investments.
 
Cash flow provided by investing activities was $222 million during the three months ended March 31, 2012 . The primary drivers of the cash flow provided by investing activities were $283 million in net sales of short-term investments and $36 million in net sales of long-term investment, partially offset by $71 million for capital expenditures and $23 million for acquisitions.
 
Financing Activities
 
Cash flow provided by financing activities during the three months ended March 31, 2013 was $120 million . The primary drivers of cash flow provided by financing activities were issuances of debt, net of repayments, of $435 million and proceeds from the exercise of share options and issuance of shares purchased through the employee stock purchase plan of $36 million , partially offset by share repurchases of $300 million and dividends paid to shareholders of $50 million .
 
Cash flow used for financing activities during the three months ended March 31, 2012 was $166 million . The primary drivers of cash flow used for financing activities were share repurchases of $100 million , dividends paid to shareholders of $49 million , and repayment of debt, net of issuances of $65 million , partially offset by proceeds from the exercise of share options and issuance of shares purchased through the employee stock purchase plan of $49 million .
 
As of March 31, 2013 , we had distributable reserves in excess of $6.6 billion. We believe that we will have sufficient distributable reserves to fund shareholder dividends for the foreseeable future.

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Cash and Investments
 
At March 31, 2013 , our cash and cash equivalents and short-term investments were $760 million , an increase of $123 million from December 31, 2012 .  Of the total balance as of March 31, 2013 , $270 million was restricted as to its use, which was comprised of $117 million of operating funds in the U.K. as required by the Financial Conduct Authority and $153 million held as collateral for various business purposes.  At March 31, 2013 , $636 million of cash and cash equivalents and short-term investments were held in the U.S. and $124 million was held in other countries. Of the total balance as of December 31, 2012, $200 million was restricted as to its use, which was comprised of $124 million of operating funds in the U.K. as required by the Financial Services Authority and $76 million held as collateral for various business purposes. At December 31, 2012, $138 million of cash and cash equivalents and short-term investments were held in the U.S. and $499 million was held in other countries.
 
In our capacity as an insurance broker or agent, we collect premiums from insureds and, after deducting our commission, remit the premiums to the respective insurance underwriter.  We also collect claims or refunds from underwriters on behalf of insureds, which are then returned to the insureds.  Unremitted insurance premiums and claims are held by us in a fiduciary capacity.  In addition, some of our outsourcing agreements require us to hold funds on behalf of clients to pay obligations on their behalf.  The levels of fiduciary assets and liabilities can fluctuate significantly, depending on when we collect the premiums, claims and refunds, make payments to underwriters and insureds, collect funds from clients and make payments on their behalf, and foreign currency movements.  Fiduciary assets, because of their nature, are required to be invested in very liquid securities with highly-rated, credit-worthy financial institutions.  In our Condensed Consolidated Statements of Financial Position, the amount we report for Fiduciary assets and Fiduciary liabilities are equal.  Our Fiduciary assets included cash and investments of $4.3 billion and $4.0 billion and fiduciary receivables of $8.0 billion and $8.2 billion at March 31, 2013 and December 31, 2012, respectively.  While we earn investment income on the fiduciary assets held in cash and investments, the cash and investments are not owned by us, and cannot be used for general corporate purposes.
 
As disclosed in Note 14 “Fair Value and Financial Instruments,” of the Notes to the Condensed Consolidated Financial Statements, the majority of our investments carried at fair value are money market funds.  Money market funds are carried at cost as an approximation of fair value.  Consistent with market convention, we consider cost a practical and expedient measure of fair value.  These money market funds are held throughout the world with various financial institutions.  We do not believe that there are any market liquidity issues that would materially impact the fair value of these investments.
 
As of March 31, 2013 and December 31, 2012, our investments in money market funds and highly liquid debt instruments had a fair value of $2.1 billion and are reported as Short-term investments or Fiduciary assets in the Condensed Consolidated Statements of Financial Position depending on their nature and initial maturity.

The following table summarizes our Fiduciary assets and non-fiduciary Cash and cash equivalents, and Short-term investments as of March 31, 2013 (in millions):

	
																	
 	 	Statement of Financial Position Classification	 	 	
Asset Type	 	Cash and Cash
Equivalents	 	Short-term
Investments	 	Fiduciary
Assets	 	Total	
Certificates of deposit, bank deposits or time deposits	 	$	408		 	$	—		 	$	2,486		 	$	2,894		
Money market funds	 	—		 	351		 	1,742		 	2,093		
Highly liquid debt instruments	 	—		 	—		 	25		 	25		
Other investments due within one year	 	—		 	1		 	—		 	1		
Cash and investments	 	408		 	352		 	4,253		 	5,013		
Fiduciary receivables	 	—		 	—		 	7,971		 	7,971		
Total	 	$	408		 	$	352		 	$	12,224		 	$	12,984		
 
Share Repurchase Program
 
In April 2012, our Board of Directors therefore authorized a share repurchase program under which up to $5 billion of Class A Ordinary Shares may be repurchased. Under this program, shares may be repurchased through the open market or in privately negotiated transactions, from time to time, based on prevailing market conditions, and will be funded from available capital.

During the first quarter of 2013 , we repurchased 5.0 million shares at an average price per share of $59.82 for a total cost of $300 million under the 2012 Share Repurchase Program. During the first quarter 2012 , we repurchased 2.1 million shares at an

41

average price per share of $48.32 for a total cost of $100 million under the 2010 Share Repurchase Program. Since the inception of the 2012 Share Repurchase Program, we repurchased a total of 24.5 million shares for an aggregate cost of $1.3 billion. The remaining authorized amount for share repurchase under the 2012 Share Repurchase Program is approximately $3.7 billion .
 
For information regarding share repurchases made during the first quarter of 2013 , see Part II, Item 2 — “Unregistered Sales of Equity Securities and Use of Proceeds” below.

Borrowings
 
Total debt at March 31, 2013 was $4.6 billion , which represents an increase of $407 million when compared to December 31, 2012 . This increase is primarily due to an increase in commercial paper outstanding of $333 million when compared to December 31, 2012 , and the issuance of $90 million aggregate principal amount of 4.250% Notes Due 2042. Additionally, during the quarter ended March 31, 2013, we had borrowings on our Euro Facility of $230 million with partial repayment resulting in outstanding borrowings of $30 million as of March 31, 2013.

During the quarter, our level of debt returned to a more historical level of $4.6 billion following a temporary reduction in the level of debt at December 31, 2012. We have increased levels of commercial paper activity during the quarter ended March 31, 2013 with total issuances of $883 million as compared to $75 million for the quarter ended March 31, 2012.

We currently expect that for the remainder of 2013, debt will continue to remain at historical and current levels. We also expect to continue to access the commercial paper markets at levels similar to those in the quarter ended March 31, 2013.
 
Our total debt as a percentage of total capital attributable to Aon shareholders was 37.6% and 34.9% at March 31, 2013 and December 31, 2012 , respectively.
 
Credit Facilities
 
At March 31, 2013 , we have a five-year $400 million unsecured revolving credit facility in the U.S. (“U.S. Facility”) that expires in 2017. The U.S. facility is for general corporate purposes, including commercial paper support.  Additionally, we have the five-year €650 million ($836 million at March 31, 2013 exchange rates) Euro Facility available, which expires in October 2015.  At March 31, 2013 , we had $30 million in borrowings on these credit facilities as compared to no borrowings as of December 31, 2012.

On April 29, 2013, we amended our Euro Facility agreement to add Aon plc as an additional borrower.
 
For both our U.S. Facility and Euro Facility, the two most significant covenants require us to maintain a ratio of consolidated EBITDA (earnings before interest, taxes, depreciation and amortization), adjusted for Hewitt related transaction costs and up to $50 million in non-recurring cash charges (“Adjusted EBITDA”) to consolidated interest expense and a ratio of consolidated debt to Adjusted EBITDA. For both facilities, the ratio of Adjusted EBITDA to consolidated interest expense must be at least 4 to 1.  For the Euro Facility, the ratio of consolidated debt to Adjusted EBITDA must not exceed 3 to 1.  For the U.S. Facility, the ratio of consolidated debt to Adjusted EBITDA must not exceed the lower of (a) 3.25 to 1.00 or (b) the greater of (i) 3.00 to 1.00 or (ii) the lowest ratio of consolidated debt to Adjusted EBITDA then set forth in the Euro Facility or Aon’s $450,000,000 Term Loan Facility. We were in compliance with these and all other covenants during the three months ended March 31, 2013 . 

Shelf Registration Statement
 
On August 31, 2012, we filed a shelf registration statement with the SEC, registering the offer and sale from time to time of an indeterminate amount of, among other securities, debt, securities, preference shares, Class A Ordinary Shares and convertible securities. The availability of any potential liquidity for these types of securities is dependent on investor demand, market conditions and other factors.

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Rating Agency Ratings
 
The major rating agencies’ ratings of our debt at May 1, 2013 appear in the table below.

	
						
 	Ratings	 	 	
 	Senior Long-	 	Commercial	 	 	
 	term Debt	 	Paper	 	Outlook	
Standard & Poor’s	BBB+	 	A-2	 	Stable	
Moody’s Investor Services	Baa2	 	P-2	 	Stable	
Fitch, Inc.	BBB+	 	F-2	 	Stable	
 
A downgrade in the credit ratings of our senior debt and commercial paper would increase our borrowing costs, reduce or eliminate our access to capital, reduce our financial flexibility, increase our commercial paper interest rates or possibly restrict our access to the commercial paper market altogether, or may impact future pension contribution requirements.
 
Letters of Credit and Other Guarantees
 
We had total letters of credit ("LOCs") outstanding for approximately $71 million at March 31, 2013, as compared to $74 million at December 31, 2012 . These letters of credit cover the beneficiaries related to certain of our U.S. and Canadian non-qualified pension plan schemes and secure deductible retentions for our own workers compensation program. We also have issued LOCs to cover contingent payments for taxes and other business obligations to third parties, and other guarantees for miscellaneous purposes at our international subsidiaries.
 
We have certain contractual contingent guarantees for premium payments owed by clients to certain insurance companies.  Costs associated with these guarantees, to the extent estimable and probable, are provided in our allowance for doubtful accounts.  The maximum exposure with respect to such contractual contingent guarantees was approximately $71 million at March 31, 2013 as compared to $104 million at December 31, 2012.
 
We have provided commitments to fund certain limited partnerships in which we have an interest in the event that the general partners request funding.  Some of these commitments have specific expiration dates and the maximum potential funding under these commitments was $45 million and $51 million at March 31, 2013 and December 31, 2012, respectively.  During the three months ended March 31, 2013, we funded $3 million of these commitments.

Adequacy of Liquidity Sources
 
We believe that cash flows from operations and available credit facilities will be sufficient to meet our liquidity needs, including principal and interest payments on debt obligations, capital expenditures, pension contributions, cash restructuring costs, and anticipated working capital requirements, for the foreseeable future. Our cash flows from operations, borrowing availability and overall liquidity are subject to risks and uncertainties. See “Information Concerning Forward-Looking Statements” below.
 
Financial Condition
 
At March 31, 2013 , our net assets of $7.6 billion , representing total assets minus total liabilities, decreased from $7.8 billion at December 31, 2012 . The decrease was due primarily an increase in Accumulated other comprehensive loss of $165 million related primarily to foreign currency translation adjustment, dividends of $50 million and share repurchases of $300 million , partially offset by to Net income of $272 million for the three months ended March 31, 2013 .  Working capital decreased by $36 million to $1.0 billion from December 31, 2012 .
 
Equity
 
Equity at March 31, 2013 was $7.6 billion , a decrease of $172 million from December 31, 2012 .  The decrease resulted primarily from an increase in Accumulated other comprehensive loss of $165 million , share repurchases of $300 million and $50 million of dividends to shareholders, partially offset by Net income of $272 million .
  
The $165 million decrease in Accumulated other comprehensive loss from December 31, 2012 , primarily reflects the following:

43

 
		
•	negative net foreign currency translation adjustments of $174 million , which are attributable to the strengthening of the U.S. dollar against certain foreign currencies,	
		
•	a decrease of $23 million in net post-retirement benefit obligations, and	
		
•	net derivative losses of $14 million .	

REVIEW BY SEGMENT
 
General
 
We serve clients through the following segments:

•	Risk Solutions acts as an advisor and insurance and reinsurance broker, helping clients manage their risks, via consultation, as well as negotiation and placement of insurance risk with insurance carriers through our global distribution network.	

•	HR Solutions partners with organizations to solve their most complex benefits, talent and related financial challenges, and improve business performance by designing, implementing, communicating and administering a wide range of human capital, retirement, investment management, health care, compensation and talent management strategies.	
 
Risk Solutions

	
								
 	Three months ended March 31,	
 	2013	 	2012	
Revenue	$	1,971		 	$	1,905		
Operating income	403		 	366		
Operating margin	20.4	%	 	19.2	%	
 
The demand for property and casualty insurance generally rises as the overall level of economic activity increases and generally falls as such activity decreases, affecting both the commissions and fees generated by our brokerage business. The economic activity that impacts property and casualty insurance is described as exposure units, and is most closely correlated with employment levels, corporate revenue and asset values.  During the first three months of 2013 , we began to see improvement in pricing on average globally; however, we would still consider this to be a “soft market”, which began in 2007.  In a soft market, premium rates flatten or decrease, along with commission revenues, due to increased competition for market share among insurance carriers or increased underwriting capacity.  Changes in premiums have a direct and potentially material impact on the insurance brokerage industry, as commission revenues are generally based on a percentage of the premiums paid by insureds. In the first three months of 2013 , pricing showed signs of stabilization and improvement in our retail brokerage product lines.
 
Additionally, beginning in late 2008 and continuing into first quarter 2013 , we faced difficult conditions as a result of unprecedented disruptions in the global economy, the repricing of credit risk and the deterioration of the financial markets.  Weak global economic conditions have reduced our customers’ demand for our retail brokerage and reinsurance brokerage products, which have had a negative impact on our operational results.
 
Risk Solutions generated approximately 68% of our consolidated total revenues in the first quarter of 2013 .  Revenues are generated primarily through fees paid by clients, commissions and fees paid by insurance and reinsurance companies, and investment income on funds held on behalf of clients.  Our revenues vary from quarter to quarter throughout the year as a result of the timing of our clients’ policy renewals, the net effect of new and lost business, the timing of services provided to our clients, and the income we earn on investments, which is heavily influenced by short-term interest rates.
 
We operate in a highly competitive industry and compete with many retail insurance brokerage and agency firms, as well as with individual brokers, agents, and direct writers of insurance coverage.  Specifically, we address the highly specialized product development and risk management needs of commercial enterprises, professional groups, insurance companies, governments, health care providers, and non-profit groups, among others; provide affinity products for professional liability, life, disability income, and personal lines for individuals, associations, and businesses; provide products and services via GRIP Solutions; provide reinsurance services to insurance and reinsurance companies and other risk assumption entities by acting as

44

brokers or intermediaries on all classes of reinsurance; provide capital management transaction and advisory products and services, including mergers and acquisitions and other financial advisory services, capital raising, contingent capital financing, insurance-linked securitizations and derivative applications; provide managing underwriting to independent agents and brokers as well as corporate clients; provide risk consulting, actuarial, loss prevention, and administrative services to businesses and consumers; and manage captive insurance companies.

Revenue
 
Commissions, fees and other revenue for Risk Solutions were as follows (in millions):

	
								
 	Three months ended March 31,	
 	2013	 	2012	
Retail brokerage:	 		 	 		
Americas	$	686		 	$	651		
International (1)	876		 	843		
Total retail brokerage	1,562		 	1,494		
Reinsurance brokerage	402		 	399		
Total	$	1,964		 	$	1,893		
  ______________________________________________
 
(1) Includes the U.K., Europe, Middle East, Africa and Asia Pacific.
 
In the first quarter 2013 , commissions, fees and other revenue increased $71 million , or 4% , versus the first quarter of 2012 , due to 3% organic revenue growth and 1% growth related to acquisitions, partially offset by a decline in investment income. 
 
Reconciliation of organic revenue growth to reported commissions, fees and other revenue growth for 2013 versus 2012 is as follows:

	
													
Three months ended March 31, 2013	 	Percent
Change	 	Less: Currency
Impact	 	Less: Acquisitions,
Divestitures &
Other	 	Organic
Revenue	
Retail brokerage:	 	 		 	 		 	 		 	 		
Americas	 	5	%	 	(1	)%	 	—	%	 	6	%	
International (1)	 	4		 	—		 	1		 	3		
Total retail brokerage	 	5		 	—		 	1		 	4		
Reinsurance brokerage	 	1		 	—		 	—		 	1		
Total	 	4	%	 	—	 %	 	1	%	 	3	%	
  ______________________________________________

(1) Includes the U.K., Europe, Middle East, Africa and Asia Pacific.
 
Retail brokerage Commissions, fees and other revenue increased 5% in the first quarter driven by a 6% and 3% growth related to organic revenue in the Americas and International operations, respectively, and a 1% increase related to acquisitions, net of dispositions in the International operations, partially offset by a decline in investment income.
 
Americas Commissions, fees and other revenue increased 5% in the first quarter reflecting 6% growth in organic revenue due to improved growth across all regions, including strong new business generation and management of the renewal book portfolio in U.S. Retail and Latin America, partially offset by a 1% unfavorable impact from foreign currency.
 
International Commissions, fees and other revenue increased 4% in the first quarter driven by a 3% increase in organic revenue growth and 1% impact from acquisitions, net of divestitures. Strong growth across Asia, New Zealand and emerging markets, as well as strong management of the renewal book portfolio in Europe contributed to organic growth.
 
Reinsurance brokerage Commissions, fees and other revenue increased 1% in the first quarter driven by a 1% increase in organic revenue growth. The increase in organic revenue growth is due primarily to growth in capital market transactions and advisory business and modest growth in global facultative placements.

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Operating Income
 
Operating income for the first quarter 2013 increased $37 million , or 10% , from 2012 to $403 million in 2013 , and operating income margins increased to 20.4% from 19.2% in 2012 .  Operating margin improvement was driven by revenue growth, reduced costs of restructuring initiatives and realization of the benefits of those restructuring plans, which was partially offset by the negative impact of expense increase related to investment in the business and a decline in fiduciary investment income.
 
HR Solutions

	
								
 	Three months ended March 31,	
 	2013	 	2012	
Revenue	$	954		 	$	945		
Operating income	51		 	73		
Operating margin	5.3	%	 	7.7	%	
 
Our HR Solutions segment generated approximately 33% of our consolidated total revenues in the first quarter 2013 , and provides a broad range of human capital services, as follows:

·	Retirement specializes in global actuarial services, defined contribution consulting, investment consulting, tax and ERISA consulting, and pension administration.	
		
·	Compensation focuses on compensatory advisory/counsel including: compensation planning design, executive reward strategies, salary survey and benchmarking, market share studies and sales force effectiveness, with special expertise in the financial services and technology industries.	
		
·	Strategic Human Capital delivers advice to complex global organizations on talent, change and organizational effectiveness issues, including talent strategy and acquisition, executive on-boarding, performance management, leadership assessment and development, communication strategy, workforce training and change management.	
		
·	Benefits Administration applies our HR expertise primarily through defined benefit (pension), defined contribution (401(k)), and health and welfare administrative services. Our model replaces the resource-intensive processes once required to administer benefit plans with more efficient, effective, and less costly solutions.	
		
·	Human Resource Business Processing Outsourcing (“HR BPO”) provides market-leading solutions to manage employee data; administer benefits, payroll and other human resources processes; and record and manage talent, workforce and other core HR process transactions as well as other complementary services such as flexible spending, dependent audit and participant advocacy.	
 
Beginning in late 2008, the disruption in the global credit markets and the deterioration of the financial markets created significant uncertainty in the marketplace.  Weak economic conditions globally continued into first quarter 2013 .  The prolonged economic downturn is adversely impacting our clients’ financial condition and therefore the levels of business activities in the industries and geographies where we operate.  While we believe that the majority of our practices are well positioned to manage through this time, these challenges are reducing demand for some of our services and putting continued pressure on the pricing of those services, which is having an adverse effect on our new business and results of operations.
 
Revenue
 
Commissions, fees and other revenue for HR Solutions increased $9 million , or 1% , in the first quarter 2013 from 2012 . The increase in revenue was driven by 1% organic growth in commissions and fees.
 
Commissions, fees and other revenue were as follows (in millions):

	
								
 	Three months ended March 31,	
 	2013	 	2012	
Consulting services	$	382		 	$	380		
Outsourcing	581		 	568		
Intrasegment	(9	)	 	(3	)	
Total	$	954		 	$	945		

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Organic revenue growth for the first quarter 2013 is detailed in the following reconciliation:

	
													
Three months ended March 31, 2013	 	Percent
Change	 	Less: Currency
Impact	 	Less:
Acquisitions,
Divestitures &
Other	 	Organic
Revenue	
Consulting services	 	1	%	 	—	%	 	—	%	 	1	%	
Outsourcing	 	2		 	—		 	1		 	1		
Intrasegment	 	N/A		 	N/A		 	N/A		 	N/A		
Total	 	1	%	 	—	%	 	—	%	 	1	%	
 
Consulting services revenue increased $2 million , or 1% for the first quarter due primarily to 1% organic revenue growth driven by modest growth in communications and investment consulting, partially offset by a decline in continental Europe.
 
Outsourcing revenue increased $13 million , or 2% , for the first quarter due to organic revenue growth of 1% due primarily to solid growth in net new client wins and demand for discretionary services in HR BPO and healthcare exchanges, partially offset by a modest decline in benefits administration.

Operating Income
 
Operating income was $51 million , a decrease of $22 million , or 30% , from first quarter 2012 primarily due to an unfavorable impact from expenses related to legacy litigation and timing of certain expenses, as well as an unfavorable reveue mix shift, and investments in long-term growth opportunities that more than offset the savings related to the Aon Hewitt restructuring program in the quarter. Operating margin for this segment was 5.3% in the first quarter, which is a decrease from 7.7% in 2012 . 
 
Unallocated Income and Expense
 
A reconciliation of our operating income to income before income taxes is as follows (in millions):

	
								
 	Three months ended March 31,	
 	2013	 	2012	
Operating income (loss):	 		 	 		
Risk Solutions	$	403		 	$	366		
HR Solutions	51		 	73		
Unallocated	(44	)	 	(37	)	
Operating income	410		 	402		
Interest income	1		 	3		
Interest expense	(52	)	 	(59	)	
Other (expense) income	9		 	—		
Income before income taxes	$	368		 	$	346		
 
Unallocated operating expense
 
Unallocated operating expense includes corporate governance costs not allocated to the operating segments.  Net unallocated expenses increased $7 million to $44 million in the first quarter 2013 due primarily to an increase in run-rate expenses related to the Company's redomicile to the U.K.  
 
Interest income
 
Interest income represents income earned on operating cash balances and other income-producing investments.  It does not include interest earned on funds held on behalf of clients.  For the first quarter 2013 , Interest income decreased $2 million from the first quarter 2012 , due to lower average interest rates globally.

47

Interest expense
 
Interest expense, which represents the cost of our worldwide debt obligations, decreased $7 million from the first quarter 2012 . The decrease in interest expense reflects a decline in the average rate on total debt outstanding.
 
Other income
 
Other income was $9 million for the first quarter 2013 , as compared to no Other income for the first quarter 2012 .  The first quarter 2013 includes an $24 million gain on foreign currency remeasurement and additional income from equity method investments of $2 million , partially offset by an $18 million loss on derivatives. The first quarter 2012 includes an $18 million loss on foreign currency remeasurement, offset by by $10 million gain on sale of investments, additional income from equity method investments of $5 million , and derivative gains of $2 million .
 
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
 
There have been no changes in our critical accounting policies, which include revenue recognition, restructuring, pensions, goodwill and other intangible assets, contingencies, share-based payments, and income taxes, as discussed in our 2012 Annual Report on Form 10-K.

NEW ACCOUNTING PRONOUNCEMENTS
 
Note 2 “Accounting Principles and Practices” of the Notes to the Condensed Consolidated Financial Statements contains a discussion of recently issued accounting pronouncements and their impact or future potential impact on our financial results, if determinable.
 
INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
 
This report contains certain statements related to future results, or states our intentions, beliefs and expectations or predictions for the future which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995.  Forward-looking statements relate to expectations or forecasts of future events.  They use words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “project,” “intend,” “plan,” “potential,” and other similar terms, and future or conditional tense verbs like “could,” “may,” “might,” “should,” “will” and “would.”  You can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts.  For example, we may use forward-looking statements when addressing topics such as:  market and industry conditions, including competitive and pricing trends; changes in our business strategies and methods of generating revenue; the development and performance of our services and products; changes in the composition or level of our revenues; our cost structure and the outcome of cost-saving or restructuring initiatives; the outcome of contingencies; dividend policy; the expected impact of acquisitions and dispositions; pension obligations; cash flow and liquidity; future actions by regulators; and the impact of changes in accounting rules.  These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results depending on a variety of factors. Potential factors that could impact results include:

·	general economic conditions in different countries in which Aon does business around the world, including conditions in the European Union relating to sovereign debt and the continued viability of the Euro;	
		
·	changes in the competitive environment;	
		
·	changes in global equity and fixed income markets that could influence the return on invested assets;	
		
·	changes in the funding status of our various defined benefit pension plans and the impact of any increased pension funding resulting from those changes;	
		
·	rating agency actions that could affect our ability to borrow funds;	
		
·	fluctuations in exchange and interest rates that could impact revenue and expense;	
		
·	the impact of class actions and individual lawsuits including client class actions, securities class actions, derivative actions and ERISA class actions;	
		
·	the impact of any investigations brought by regulatory authorities in the U.S., U.K. and other countries;	
		
·	the cost of resolution of other contingent liabilities and loss contingencies, including potential liabilities arising from errors and omission claims against us;	
		
·	failure to retain and attract qualified personnel;	
		
·	the impact of, and potential challenges in complying with, legislation and regulation in the jurisdictions in which we operate, particularly given the global scope of our business and the possibility of conflicting regulatory requirements across jurisdictions in which we do business;	

48

		
·	the effect of the Redomestication on our operations and financial results, including the reaction of our clients, employees and other constituents, the effect of compliance with applicable U.K. regulatory regimes or the failure to realize some or all of the anticipated benefits;	
		
·	the extent to which we retain existing clients and attract new businesses and our ability to incentivize and retain key employees;	
		
·	the extent to which we manage certain risks created in connection with the various services, including fiduciary and advisory services, among others, that we currently provide, or will provide in the future, to clients;	
		
·	the possibility that the expected efficiencies and cost savings from the acquisition of Hewitt will not be realized, or will not be realized within the expected time period;	
		
·	the risk that the Hewitt businesses will not be integrated successfully;	
		
·	our ability to implement restructuring initiatives and other initiatives intended to yield cost savings, and the ability to achieve those cost savings;	
		
·	the potential of a system or network disruption resulting in operational interruption or improper disclosure of personal data;	
		
·	any inquiries relating to compliance with the U.S. Foreign Corrupt Practices Act and non-U.S. anti-corruption laws and with U.S. and non-U.S. trade sanctions regimes; and	
		
·	our ability to grow and develop companies that we acquire or new lines of business.	

Any or all of our forward-looking statements may turn out to be inaccurate, and there are no guarantees about our performance.  The factors identified above are not exhaustive.  Aon and its subsidiaries operate in a dynamic business environment in which new risks may emerge frequently.  Accordingly, readers should not place undue reliance on forward-looking statements, which speak only as of the dates on which they are made.  We are under no obligation (and expressly disclaim any obligation) to update or alter any forward-looking statement that we may make from time to time, whether as a result of new information, future events or otherwise.  Further information about factors that could materially affect Aon, including our results of operations and financial condition, is contained in the “Risk Factors” sections in each of Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012 and Part II Item 1A of this report below.
 
ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
We are exposed to potential fluctuations in earnings, cash flows and the fair value of certain of our assets and liabilities due to changes in interest and foreign exchange rates.  To manage the risk from these exposures, we enter into a variety of derivative instruments.  We do not enter into derivatives or financial instruments for trading or speculative purposes.
 
We are subject to foreign exchange rate risk. Our primary exposures include exchange rates between the U.S. Dollar and the British pound, the Euro, the Canadian dollar, and the Australian dollar.  We use over-the-counter (“OTC”) options and forward contracts to reduce the impact of foreign currency risk to our financial statements.
 
Additionally, some of our foreign brokerage subsidiaries receive revenues in currencies that differ from their functional currencies.  Our U.K. subsidiary earns a portion of its revenue in U.S. dollars and Euros, but the majority of its expenses are incurred in Pounds Sterling.  Our policy is to convert into Pounds Sterling sufficient U.S. dollar and Euro revenue to fund the subsidiary’s Pound Sterling expenses using OTC options and forward exchange contracts. At March 31, 2013 , we have hedged approximately 81% of our U.K. subsidiaries’ expected U.S. dollar and Euro transaction exposures for the next twelve months, respectively.  We do not generally hedge these exposures beyond three years.

We also use forward contracts to economically hedge foreign exchange risk associated with monetary balance sheet exposures such as inter-company notes and short-term assets and liabilities which are subject to remeasurement.
 
The translated value of revenue and expense from our international brokerage operations are subject to fluctuations in foreign exchange rates.  Diluted earnings per share were favorably impacted by approximately $0.02 during the first quarter 2013 , related to net translation losses.  Adjusted diluted earnings per share, a non-GAAP measure as defined under the caption “Review of Consolidated Results’, were favorably impacted by approximately $0.02 during the first quarter related to translation losses.
 
Our fiduciary investment income is affected by changes in international and domestic short-term interest rates.  We monitor our net exposure to short-term interest rates and, as appropriate, hedge our exposure with various derivative financial instruments.  This activity primarily relates to brokerage funds held on behalf of clients in the U.S. and continental Europe. A decrease in global short-term interest rates adversely affects our fiduciary investment income.

49

ITEM 4.   CONTROLS AND PROCEDURES
 
Evaluation of disclosure controls and procedures.  We have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this quarterly report of March 31, 2013.  Based on this evaluation, our chief executive officer and chief financial officer concluded as of March 31, 2013 that our disclosure controls and procedures were effective such that the information relating to Aon, including our consolidated subsidiaries, required to be disclosed in our Securities and Exchange Commission (“SEC”) reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to Aon’s management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
 
Changes in internal control over financial reporting.  During 2011, the Company upgraded its financial systems relating to the Order-To-Cash PeopleSoft platform used by the HR Solutions North America operations. In connection with this upgrade, the Company has implemented additional compensating controls to mitigate internal control risks and performed testing to ensure data integrity. Other than this change, no changes in Aon's internal control over financial reporting (as defined in Rule 13a - 15(f) of the Exchange Act) occurred during the quarter ended March 31, 2013 that have materially affected, or are reasonably likely to materially affect, Aon's internal control over financial reporting.

50

PART II
 
OTHER INFORMATION
 
ITEM 1.                              LEGAL PROCEEDINGS
 
See Note 15 "Commitments and Contingencies" to the Condensed Consolidated Financial Statements contained in Part I, Item 1, which is incorporated by reference herein.
 
ITEM 1A.                     RISK FACTORS.
 
The risk factors set forth in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2012 reflect certain risks associated with existing and potential lines of business and contain “forward-looking statements” as discussed in Part I, Item 2 of this report.  Readers should consider them in addition to the other information contained in this report as our business, financial condition or results of operations could be adversely affected if any of these risks actually occur.

ITEM 2.                              UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
(a)  None.
(b)  None.
(c)  Issuer Purchases of Equity Securities.
 
The following information relates to the repurchase of equity securities by Aon or any affiliated purchaser during each month within the first quarter of 2013 :

	
															
Period	 	Total Number of
Shares Purchased	 	Average Price Paid
per Share (1)	 	Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs	 	Maximum Dollar
Value of Shares that
May Yet Be
Purchased Under the
Plans or Programs
(1)  (2)	
1/1/13 — 1/31/13	 	—		 	$	—		 	—		 	$	3,975,190,707		
2/1/13 — 2/28/13	 	3,775,870		 	59.57		 	3,775,870		 	3,750,256,113		
3/1/13 — 3/31/13	 	1,237,870		 	60.57		 	1,237,870		 	3,675,283,746		
Total	 	5,013,740		 	$	59.82		 	5,013,740		 	3,675,283,746		
  ______________________________________________

(1)          Does not include commissions paid to repurchase shares.
 
(2)   In April 2012, our Board of Directors authorized a share repurchase program under which up to $5 billion of Class A Ordinary Shares were authorized to be repurchased from time to time depending on market conditions or other factors through open market or privately negotiated transactions, and will be funded from available capital. During the first quarter of 2013 , we repurchased 5.0 million shares at an average price per share of $59.82 for a total cost of $300 million. The remaining authorized amount for share repurchase under the 2012 Share Repurchase Program is $3.7 billion.
 
ITEM 5.                              OTHER INFORMATION

Amendment of Euro Facility
On April 29, 2013, Aon amended the Euro Facility to add Aon plc as a borrower. A copy of the waiver and amendment request letter is attached hereto as Exhibit 10.1 and incorporated herein by reference.
ITRA Disclosure
Set forth below is a description of a matter reported pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 (the “ITRA”) and Section 13(r) of the Exchange Act.  Concurrently with this quarterly report, we are filing a notice pursuant to Section 13(r) of the Exchange Act that the matter has been disclosed in this quarterly report.
In January 2013, the reinsurance brokerage business of a U.K.-based Aon subsidiary handled payment transactions associated with a quota share treaty retrocession reinsurance policy covering the underwriting year of 2009 (the “Retrocession Policy”) for a multinational cedant (the “Cedant”). One of the risks that was ceded in the Retrocession Policy was for, or related to, a

51

company that Aon has been advised is the Iranian Offshore Oil Company (“IOOC”), which is believed to be a subsidiary of the National Iranian Oil Company. The risk was originally insured by an Iranian insurance company. The Retrocession Policy containing the IOOC risk was placed by the Aon subsidiary in 2009. Aon does not believe that applicable laws prohibited the placement of the Retrocession Policy.
In late 2012, the Cedant requested that the reinsurers with whom the Aon subsidiary placed the Retrocession Policy return a balance of approximately $456,000, representing amounts owed by reinsurers to the Cedant (such as return premiums, claims payments and associated deductions) netted against amounts owed by the Cedant to the reinsurers (such as additional premiums) for the relevant policy year. This balance covered both Iranian and non-Iranian risks. In January 2013, two of the reinsurers paid the Aon subsidiary their share of the requested return payment- approximately $158,000 in total - and the Aon subsidiary remitted those funds net of approximately $1,500, which represented the net brokerage commission still owing to the Aon subsidiary on the associated premium.
Approximately $20,000 of the remitted $156,500 was returned premium and associated commission relating to the IOOC risk. The Aon subsidiary's handling of those payments was authorized pursuant to a general license for wind-down activities, issued by the U.S. Treasury Department's Office of Foreign Assets Control on December 26, 2012, but is subject to reporting under Section 13(r)(1)(D)(ii) of the Exchange Act due to the involvement of IOOC. The balance of requested return payment (approximately $300,000) has not been paid by the other reinsurers with whom the policies were placed but approximately $30,000 is believed to relate to the underlying IOOC risk and therefore subject to reporting under the ITRA and the Exchange Act. The Aon subsidiary intends to continue to hold any additional amounts currently unpaid by the reinsurers along with any associated commission in accordance with company policy and applicable laws.

ITEM 6.                              EXHIBITS
 
Exhibits — The exhibits filed with this report are listed on the attached Exhibit Index.

52

SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	
			
 	Aon plc	
 	(Registrant)	
 	 	
May 1, 2013	By:	/s/ Laurel Meissner	
 	LAUREL MEISSNER	
 	SENIOR VICE PRESIDENT AND	
 	GLOBAL CONTROLLER	
 	(Principal Accounting Officer and duly authorized officer of Registrant)	

53

Exhibit Index

	
			
Exhibit
  Number	 	Description of Exhibit	
4.1	 	Indenture, dated as of December 12, 2012—incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on December 13, 2012.	
4.2	 	Form of 4.250% Rule 144A Global Note Due 2042—incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed on March 8, 2013.	
4.3	 	Form of 4.250% Regulation S Global Note Due 2042—incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed on March 8, 2013.	
4.4	 	Registration Rights Agreement, dated as of March 8, 2013—incorporated by reference to Exhibit 4.4 to the Current Report on Form 8-K filed on March 8, 2013.	
4.5	 	Form of 4.250% Senior Note Due 2042—incorporated by reference to Exhibit 4.6 to the Registration Statement on Form S-4 (File No. 333-187637) filed on March 29, 2013.	
10.1	 	Letter of Amendment and Waiver between Aon plc and Citibank International PLC (as agent) dated April 29, 2013 amending €650,000,000 Facility Agreement dated October 15, 2010, as amended July 18, 2011 and as amended and restated March 30, 2012	
10.2#	 	Employment Agreement, dated and effective as of March 29, 2013, between Aon Corporation and Michael J. O'Connor.	
10.3#	 	Change in Control Agreement, entered into as of March 29, 2013, between Aon Corporation and Michael J. O'Connor.	
10.4#	 	Aon plc Leadership Performance Program for 2013-2015.	
10.5#	 	Senior Executive Incentive Compensation Plan.	
12.1	 	Statement regarding Computation of Ratio of Earnings to Fixed Charges.	
31.1	 	Certification of CEO.	
31.2	 	Certification of CFO.	
32.1	 	Certification of CEO Pursuant to section 1350 of Title 18 of the United States Code.	
32.2	 	Certification of CFO Pursuant to section 1350 of Title 18 of the United States Code.	
101	 	Interactive Data Files. The following materials are filed electronically with this Quarterly Report on Form 10-Q:	
 	 	101.INS XBRL Report Instance Document	
 	 	101.SCH XBRL Taxonomy Extension Schema Document	
 	 	101.CAL XBRL Taxonomy Calculation Linkbase Document	
 	 	101.DEF XBRL Taxonomy Definition Linkbase Document	
 	 	101.PRE XBRL Taxonomy Presentation Linkbase Document	
 	 	101.LAB XBRL Taxonomy Calculation Linkbase Document	
______________________________
# Indicates a management contract or compensatory plan or arrangement.

54

 plc        

	
			
 	 	Aon plc	
 	 	200 East Randolph Street	
 	 	Chicago, IL 60601	

		
To:	Citibank International PLC 
 Citi Group Centre, Maildrop 0565, 5th Floor, 25 Canada Square, Canary Wharf, London E14 5LB	
as Agent under the Facility Agreement
(as defined below) and on behalf of the
Finance Parties under the Facility Agreement
11 April 2013
Dear Sirs,
Aon PLC Waiver and Amendment Request Letter
1. BACKGROUND
1.1      We refer to the facility agreement dated 15 October 2010 (as amended on 18 July 2011 and as further amended and restated pursuant to the Amendment and Restatement Agreement dated 30 March 2012, and as further amended from time to time) between, among others, Aon PLC and certain of its Subsidiaries, Citigroup Global Markets Limited, ING Bank N.V. and Barclays Capital as the Arrangers and Citibank International plc as agent (the Agent ) (the Facility Agreement ).
1.2      Terms defined in the Facility Agreement have the same meanings in this letter, unless the context otherwise requires. The provisions of Clause 1.2 ( Construction ) of the Facility Agreement apply to this letter as though they were set out in full in this letter except that references to the Agreement are to be construed as references to this letter.
1.3      We are writing to you in our capacity as the Company under the Facility Agreement to apply for the consent of the Agent (acting on the instructions of all the Lenders) to the following request.
2. WAIVER AND AMENDMENT REQUEST
2.1      Accordingly, in accordance with Clause 35 ( Amendments and waivers ) of the Facility Agreement, we request that you seek the consent of all the Lenders to the amendment of the following provisions of the Facility Agreement as soon as possible and in any event by no later than 5.00 p.m. on 22 April 2013:

(a)	Clause 25.2 ( Additional Borrowers ) shall be amended so that it reads:	
“(a) Subject to compliance with the provisions of paragraphs (c) and (d) of Clause 20.10 (" Know your customer" checks ), the Company may request that itself or any

	
					
Aon plc	 	 	 	 	
Registered office:	8 Devonshire Square	London EC2M 4PL	 	 	
Registered in England and Wales, No. 7876075	

of its wholly-owned Subsidiaries becomes an Additional Borrower. The Company or that Subsidiary (as applicable) shall become an Additional Borrower if:
(i) in relation to any Subsidiary not incorporated in England and Wales, France, Italy, the Netherlands, Germany or the Grand Duchy of Luxembourg, all the Lenders approve the addition of that Subsidiary (such approval not to be unreasonably withheld);
(ii) the Company delivers to the Agent a duly completed and executed Accession Letter;
(iii) the Company confirms that no Default is continuing or would occur as a result of that Subsidiary becoming an Additional Borrower; and
(iv) the Agent has received all of the documents and other evidence listed in Part II of Schedule 2 ( Conditions precedent ) in relation to that Additional Borrower, each in form and substance satisfactory to the Agent.
(b) The Agent shall notify the Company and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) all the documents and other evidence listed in Part II of Schedule 2 ( Conditions precedent ).
(c) Upon becoming an Additional Borrower the Company or that Subsidiary (as applicable) shall make any filings (and provide copies of such filings) as required by paragraphs (n)(ii) and (p) of Clause 13.2 ( Tax gross-up ) and paragraph (b) of Clause 13.7 ( HMRC DT Treaty Passport scheme confirmation ) in accordance with those paragraphs.”
3. CONSENT
By your countersignature of this letter, you confirm that the waivers and amendment requested in this letter have been given by all the Lenders.
4. MISCELLANEOUS
4.1      Save as expressly set out in this letter:

(a)	the Finance Documents remain in full force and effect; and	

(b)	nothing in this letter shall constitute or be construed as a waiver or compromise of any other term or condition of the Finance Documents or any of the Finance Parties rights in relation to them which for the avoidance of doubt shall continue to apply in full force and effect.	
4.2      This letter is a Finance Document for the purposes of the Facility Agreement. With effect from the date hereof, this letter and the Facility Agreement shall be read and construed as one document.
4.3      This letter may be executed in any number of counterparts and all those counterparts taken together shall be deemed to constitute one and the same letter. Delivery of a counterpart of this letter by e-mail attachment or telecopy shall be an effective mode of delivery.
4.4      This letter and any non-contractual obligations arising out of or in relation to this letter are governed by English law.

Page 2

4.5      The provisions of Clauses 31 ( Notices ), 33 ( Partial Invalidity ), 39 ( Governing law ) and 40 ( Enforcement ) of the Facility Agreement apply to this letter as though they were set out in full in this letter except that references to the Agreement are to be construed as references to this letter.
Please sign and return to us a counterpart of this letter in order to indicate your agreement to its terms.
Yours faithfully

/s/ Paul Hagy
__________________________________
for and on behalf of
Aon PLC 

We acknowledge and agree to the terms of this letter

/s/ Jeremy Hayes
__________________________________
for and on behalf of 
 Citibank International PLC
as Agent and on behalf of the
Finance Parties (each as defined in the Facility Agreement)
(acting on the instructions of all the Lenders
pursuant to Clause 35 ( Amendments and waivers ) of the Facility Agreement)

Page 3

Exhibit 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement (this “Agreement”) is dated and effective as of March29, 2013 (the “Effective Date”) between Aon Corporation, a Delaware corporation (the “Company”), and Michael J. O’Connor (the “Executive”).

WHEREAS, the Company desires to continue to employ the Executive, and the Executive desires to continue to serve and to be employed by the Company, upon the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties hereby agree as follows:

1. Employment Term; Title; Responsibilities; Outside Activities .

(a)     Employment Term; Title. The Company, through its subsidiary, Aon Services Corporation (“ASC”), has employed the Executive since February 25, 2008 as Executive Vice President and Chief Operating Officer of the Company’s Aon Risk Solutions business unit. The Company will continue to employ the Executive under the title of Executive Vice President and Chief Operating Officer of Aon Risk, the Company’s risk solutions businesses, including Aon Risk Solutions and Aon Benfield, or in a comparable senior executive capacity for an extended term (the "Term of Employment") beginning on the Effective Date and ending on March 1, 2018, unless renewed pursuant to Section 4 hereof, or terminated during the Term of Employment as fully set forth in Section 4. For purposes of this Agreement, a “comparable senior executive capacity” means a level 1A position with the Company.

(b)     Responsibilities. The Executive will report to the Group President of Aon plc (the “Group President”) or, if such title is no longer in use, the senior-most officer of Aon Risk, but it will not be a breach of this Agreement if the reporting structure is changed by the Company. The Executive will have the authority and responsibility typically held by a senior executive of a global, publicly-traded company (e.g., CHRO, CAO, COO, etc.) or such other Level 1A senior executive position. The Executive will also perform other duties on behalf of the Company and its subsidiaries as may from time to time be authorized or directed by the Company’s Chief Executive Officer (“Aon’s CEO”).

(c)     Outside Activities.  The Executive may engage in charitable, civic or community activities and, with the prior approval of the Company’s General Counsel, may serve as a director of any other business corporation, provided that (i) such activities or service do not interfere with the Executive’s duties hereunder or violate the terms of any of the covenants contained in Sections 5 or 7 hereof, (ii) such activities are consistent with the Aon Code of Conduct and reviewed and approved by the Company’s General Counsel, and (iii) such other business corporation provides the Executive with director and officer insurance coverage which, in the opinion of the Company, is adequate under the circumstances.

2. Compensation during Term of Employment .

(a)     Base Salary.  During the Term of Employment, the Company will pay to the Executive a base salary at the rate of $800,000 per year (“Base Salary”), payable semi-monthly in accordance with the Company’s executive payroll policy. Such Base Salary will be reviewed annually on the Company’s regular executive salary review schedule, and will be subject to increase (but not decrease) at the discretion of Aon’s CEO and the Organization and Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”), which increased amount will be thereafter the Executive’s “Base Salary” for all purposes hereunder.

- 1 -

(b)     Annual Incentive Compensation.  The Executive will be eligible to participate in the annual incentive compensation program for the Company’s senior executives in accordance with the provisions of such program, as amended from time to time. The Executive’s target bonus will be 100% of the Executive’s Base Salary in effect at the end of such year and the maximum bonus will be 300% of the Executive’s Base Salary. The Executive acknowledges and agrees that the annual incentive compensation awards earned hereunder will be subject to payment pursuant to and in accordance with the Aon Incentive Stock Program, payable in a combination of cash and an Aon equity-based award, if applicable.

(c) Long-Term Incentive Compensation; Additional Award under Leadership Performance Program. The Executive will be eligible to participate in the long-term incentive compensation programs for the Company’s senior executives in accordance with the provisions of such programs, as amended from time to time. Notwithstanding the foregoing, in consideration of the Executive’s agreement to enter into this Agreement and in recognition of his past service, the Company will, subject to the approval of the Organization and Compensation Committee of the Aon plc board of directors, provide the Executive with an additional award under its Leadership Performance Program for the performance period beginning January 1, 2013 and ending December 31, 2015, and the grant date value of such additional award will be $2,500,000. The additional award will be granted in addition to the regular award under such program for which the Executive is eligible, and the additional award will be subject to the terms and conditions set forth in the program document and award agreement.
 
(d)     Employee Benefits.  During the course of employment, the Executive will be entitled to participate in the Company’s employee benefit plans generally available to senior executives of the Company. Nothing in this Agreement will require the Company to establish, maintain or continue any of the benefits already in existence or hereafter adopted for executives of the Company and nothing in this Agreement will restrict the right of the Company to amend, modify or terminate such programs.

(e)     Vacation Time. The Executive will be entitled to paid vacation time in accordance with usual Company policies and procedures. The Company will not pay the Executive any additional compensation for any vacation time not used by the Executive except as required by law.

(f)     Expense Reimbursement. In accordance with Company policies and procedures and on prescribed Company forms, the Company will reimburse the Executive for all proper expenses incurred by the Executive in the performance of his duties hereunder.

(g)     Change in Control Protection.  As soon as practicable following the Effective Date, the Executive will execute an agreement accepting eligibility for the Company’s “Tier 1” change-in-control severance protection (the “CIC Agreement”), which agreement does not provide for gross-up protection for excise tax incurred by the Executive under Section 4999 of the Internal Revenue Code of 1986, as amended. The parties agree and acknowledge that such CIC Agreement will supersede the Severance Agreement entered into by the parties as of February 25, 2008, and all amendments thereto, and any other prior or contemporaneous agreement providing severance protection in the event of a change-in-control of the Company or its parent.

3.       International Assignment .

As of and prior to the Effective Date, the Executive is serving an international assignment to the Company’s parent, Aon plc, a public limited company incorporated under English law (“Parent”) pursuant to the Company’s letter to the Executive dated January 12, 2012 (the “International Assignment Letter”). Pursuant to the International Assignment Letter, the Executive is entitled to additional compensation and protections related to his temporary relocation. The parties do not intend for this Agreement to supersede or modify in any way the International Assignment Letter.

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4.     Renewal; Termination .

(a)     Renewal. This Agreement may be renewed upon (i) the issuance by the Company of a notice of renewal ("Notice of Renewal") to the Executive at least six (6) months prior to the end date of the Term of Employment or any renewal period thereof and (ii) the written acceptance of the Notice of Renewal by the Executive within (60) days thereafter.

(b)     Termination.

(i) Death or Disability.  This Agreement will be terminated immediately upon the death or total disability of the Executive (as defined under the Aon Long Term Disability Plan or its successor plan) or in the event that the Executive becomes otherwise disabled through any illness, injury, accident or condition of either a physical or psychological nature so as to be unable to perform substantially all of the Executive’s duties and responsibilities for one hundred eighty (180) consecutive calendar days.

(ii)     Without Cause or for Good Reason.  This Agreement may be terminated by the Company without cause on no less than three hundred sixty-five (365) days advance notice by the Company or by the Executive without cause on no less than forty-five (45) days, but no more than 365 days, advance notice to the Company or by the Executive for Good Reason. The notice from either party will specify the effective date of the Executive’s employment termination (the “Termination Date”). If terminated without cause by the Company or for Good Reason by the Executive, the Company will pay a lump sum cash payment to the Executive equal to all accrued but unpaid Base Salary and benefits as of the date such notice of termination is delivered (the “Notice Date”). In addition, if this Agreement is terminated without cause by the Company or for Good Reason by the Executive, so long as the Executive continues to abide by the provisions of Sections 5(b), 5(c) and 7 herein and further provided that the Executive signs and returns an agreement containing a release of claims in a form typically used by or otherwise acceptable to the Company within the period of time set forth therein (without revoking it, if applicable), the Company will continue to pay to the Executive an amount equal to the Base Salary as and when it would be paid to its executives generally through the Termination Date. On the Termination Date, the Company will provide the Executive with a lump sum cash payment equal to the Executive’s annual Base Salary as of the Notice Date.

As used herein, “Good Reason” will mean any of the following which remains uncured by the Company for twenty (20) days after the Notice Date: (a) a substantial adverse alteration in the then-current responsibilities of the Executive; (b) any material breach of this Agreement by the Company, including any purported termination of the Executive’s employment which breaches this Agreement; or (c) the failure of the Company to obtain from any successor an express written and unconditional assumption of the Company’s obligations under this Agreement.

Notwithstanding anything to the contrary in this Section 4(b)(ii), the Company may require the Executive to leave Company premises immediately on the Notice Date. Such a requirement will not relieve the Company of its obligations herein, including its obligation to continue Base Salary and benefits through the Termination Date.

In the event the Executive terminates this Agreement without cause or Good Reason, the Company will only be required to pay or provide to the Executive all accrued but unpaid Base Salary and benefits as of the date of such termination.

(iii)     For Cause.  The Company may at any time during the initial Term of Employment and during any renewals thereof, terminate this Agreement for “cause”, effective immediately by written notice of termination given to the Executive setting forth the basis for such termination. For the purposes of this Agreement, “cause” will mean the Executive’s: (A) performing an act of

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dishonesty, fraud, theft, embezzlement, or misappropriation involving the Executive’s employment with the Company, or breach of the duty of loyalty to the Company; (B) performing an act of race, sex, national origin, religion, disability, or age-based discrimination, or sexual harassment, which after investigation, counsel to the Company reasonably concludes will result in liability being imposed on the Company and/or the Executive; (C) material violation of the Company’s written policies and procedures including, but not limited to, the Aon Code of Business Conduct; (D) material non‑compliance with the terms of this Agreement, including but not limited to Sections 5 and 7; or (E) admission or conviction of, or a plea of nolo contendere, to a felony or any crime involving moral turpitude or misrepresentation.

In the event of a termination for “cause,” the Company will only be required to pay or provide to the Executive all accrued but unpaid Base Salary and benefits as of the date of such termination.

(iv) As of the effective date of termination, the Executive agrees that the Secretary of the Company may, as an irrevocable proxy and in the Executive’s name and stead, execute all documents and things which the Company deems necessary and desirable to effect the Executive’s resignation as an officer or director of the Company, the Parent and their subsidiaries and affiliates.

(v) Upon the effective date of termination, or other expiration of this Agreement, the obligations of the parties under this Agreement, other than the Executive’s obligations under Sections 4(c), 5, 6, 7, and 9(e) and the Company’s obligations under Sections 2(b) and 4(b), will cease; provided further that any other provision which contemplates performance or observance by either or both parties subsequent to any termination of this Agreement will survive any termination of this Agreement and continue in full force and effect.

(vi) Any agreement herein by the Company to continue to pay Base Salary or any other benefits after the termination of employment will be reduced by any benefits provided by the Aon Severance Plan.

(vii) For purposes of this Agreement, the terms “retirement,” “termination of employment,” “terminated,” “termination,” “this Agreement will be terminated” and variations thereof, as used in this Agreement, are intended to mean a termination of employment that constitutes a “separation from service” under Section 409A of the Internal Revenue Code of 1986, as amended (“Code Section 409A”).

(c)    The Executive agrees that, prior to the commencement of any new employment in the insurance brokerage, reinsurance brokerage or human capital consulting business, the Executive will furnish the prospective new employer with a copy of this Agreement. The Executive also agrees that the Company may advise any prospective new employer of the Executive of the existence and terms of this Agreement and furnish the prospective new employer with a copy of this Agreement.

5.  Noncompetition; Nonsolicitation .

(a)     General.  The Executive acknowledges that in the course of his employment with the Company, and any predecessor company or affiliated company, the Executive has and will become familiar with trade secrets and other confidential information concerning the Company, the Parent and their subsidiaries and that the Executive’s services will be of special, unique and extraordinary value to the Company and its affiliates.

(b)     Noncompetition.  The Executive hereby covenants and agrees that, except with the prior written consent of the Company, the Executive (on the Executive’s own behalf or on behalf of any other person or entity) will not, during the course of employment and for two (2) years after the end of employment, directly or indirectly, call upon, solicit, accept, engage in, service or perform, other than on behalf of the Company, any business of the same type or kind as the business performed by the Company from or with respect to (i) clients of the Company

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with respect to whom the Executive provided services, either alone or with others, or had a business relationship, or on whose account he worked or became familiar, or supervised directly or indirectly the servicing activities related to such clients, during the twenty-four (24) months prior to the termination of the Executive’s employment with the Company and, further provided, such clients were clients of the Company either on the date of termination of the Executive’s employment with the Company or within twelve (12) months prior to such termination and (ii) prospective clients of the Company which the Executive alone, in combination with others, or in a supervisory capacity, solicited during the six (6) months prior to the end of employment and to which a proposal for services was rendered by the Company during the six (6) months prior to the end of the Employee’s employment with the Company. “Client” means any person or entity listed on the books of the Company as such.

The Executive acknowledges that there is no general geographical restriction contained in the preceding paragraph because the restriction applies only to the specified clients of the Company. Nothing in this Agreement will prohibit the Executive from obtaining a livelihood for himself or his family. The intent of the parties is that the Executive’s restrictive covenant is limited only to those clients as above specified.

(c)     Nonsolicitation.  The Executive further agrees that during the Noncompetition Period the Executive will not in any manner, directly or indirectly, induce or attempt to induce any employee of the Company or any of its subsidiaries to terminate or abandon his employment with the Company for any purpose whatsoever.

(d)     Exceptions.  Nothing in this Section 5 will prohibit the Executive from being (i) a stockholder in a mutual fund or a diversified investment company or (ii) a passive owner of not more than two percent of the outstanding stock of any class of a corporation, any securities of which are publicly traded, so long as the Executive has no active participation in the business of such corporation.

(e)     Reformation.  If, at any time of enforcement of this Section 5, a court holds that the restrictions stated herein are unreasonable under circumstances then existing, the parties hereto agree that the maximum period, scope or geographical area reasonable under such circumstances will be substituted for the stated period, scope or area and that the court will be allowed to revise the restrictions contained herein to cover the maximum period, scope and area permitted by law. This Agreement will not authorize a court to increase or broaden any of the restrictions in this Section 5.

(f)     Consideration; Breach.  The Company and the Executive agree that the payments to be made, and the benefits to be provided, by the Company to the Executive pursuant to Section 4 hereof will be made and provided in consideration of the Executive’s agreements contained in Section 5 hereof. In the event that the Company determines that the Executive has committed a material breach of any provision of Section 5 hereof, on written notice to the Executive setting forth the basis for such determination, the Company will be entitled immediately to terminate making all remaining payments and providing all remaining benefits pursuant to Section 4 hereof and upon such termination the Company will have no further liability to the Executive under this Agreement; provided, however, that if a court of law determines that no such material breach occurred, the Company will be obligated to make such payments in a timely manner.

6. Company's Right to Injunctive Relief .

The Executive acknowledges that the Executive's services to the Company are of a unique character which gives them a special value to the Company, the loss of which cannot reasonably or adequately be compensated in damages in an action at law, and that a breach of Section 5 and 7 of this Agreement will result in irreparable and continuing harm to the Company and that therefore, in addition to any other remedy which the Company may have at law or in equity, the Company will be entitled to injunctive relief for a breach of this Agreement by the Executive.

7. Trade Secrets and Confidential Information; Inventions .

(a)     Trade Secrets and Confidential Information. The Executive acknowledges that the Company's business depends to a significant degree upon the possession of information which is not generally known to

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others, and that the profitability of the business of the Company requires that this information remain proprietary to the Company.

The Executive will not, except as required in the course of employment by the Company, disclose or use during or subsequent to the course of employment, any trade secrets or confidential or proprietary information relating to the business of the Company or Parent of which the Executive becomes aware by reason of being employed by the Company or to which the Executive gains access during his employment by the Company and which has not been publicly disclosed (other than by the Executive in breach of this provision). Such information includes client and customer lists, data, records, computer programs, manuals, processes, methods and intangible rights which are either developed by the Executive during the course of employment or to which the Executive has access. All records and equipment and other materials relating in any way to any confidential information relating to clients or to the business of the Company or Aon Group will be and remain the sole property of the Company during and after the end of employment.

Upon termination of employment, the Executive will promptly return to the Company all materials and all copies or tangible embodiments of materials involving any confidential information in the Executive's possession or control.

(b)     Inventions. The Executive hereby assigns to the Company his entire right, title and interest in and to all discoveries and improvements, patentable or otherwise, trade secrets and ideas writings and copyrightable material, which may be conceived by the Executive or developed or acquired by the Executive during the Term of Employment, which may pertain directly or indirectly to the business of the Company or any of its affiliates, parent companies, or subsidiaries. The Executive agrees to disclose fully all such developments to the Company upon its request, which disclosure will be made in writing promptly following any such request. The Executive will upon the Company’s request, execute, acknowledge and deliver to the Company all instruments and do all other acts which are necessary or desirable to enable the Company or any of its affiliates, parent companies, or subsidiaries to file and prosecute applications for, and to acquire, maintain and enforce, all patents, trademarks, and copyrights in all countries.

8. Mergers and Consolidations; Assignability .

The rights and obligations under this Agreement will inure to the benefit of and be binding upon the Company and its successors and assigns so long as any assignee, successor or transferee of the Company has provided an express written and unconditional assumption of the Company’s obligations under this Agreement. This Agreement will not be assignable by the Executive, but in the event of the Executive’s death it will be binding upon and inure to the benefit of the Executive's legal representatives to the extent required to effectuate its terms.

9. Miscellaneous .

(a)     Integration; Amendment; Counterparts. Except as is otherwise provided herein, this Agreement contains all of the terms and conditions agreed upon by the parties relating to the subject matter of this Agreement and supersedes all prior and contemporaneous agreements, negotiations, correspondence, undertakings and communications of the parties, whether oral or written, respecting the subject matter of this Agreement. Notwithstanding the foregoing, the Company’s letter to the Executive dated January 12, 2012 regarding the Executive’s international assignment shall survive the Effective Date hereof and is not hereby modified or superseded.

This Agreement may not be amended, altered or modified without the prior written consent of both parties and such instrument must acknowledge that it is an amendment or modification of this Agreement.

This Agreement may be executed in two counterparts, each of which will be deemed an original and both of which together will constitute one and the same instrument.

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(b)     Waiver.  Waiver of any term or condition of this Agreement by any party will not be construed as a waiver of a subsequent breach or failure of the same term or condition, or a waiver of any other term or condition of this Agreement. Any waiver must be in writing.

(c)     Captions. The captions in this Agreement are not part of its provisions, are merely for reference and have no force or effect. If any caption is inconsistent with any provision of this Agreement, such provision will govern.

(d)     Governing Law. The validity, interpretation, construction, performance, enforcement and remedies of, or relating to, this Agreement, and the rights and obligations of the parties hereunder, will be governed by and construed in accordance with the substantive laws of the State of Illinois, without regard to the conflict of law principles, rules or statutes of any jurisdiction.

(e)     Agreement To Be Available In Future Proceedings.  During the period of employment, and after employment termination (and subject to the Executive’s then-current employment obligations), the Executive agrees, subject to the advice of legal counsel, to voluntarily make himself available to the Company and its legal counsel, at the Company’s request, without the necessity of obtaining a subpoena or court order, in the Company’s investigation, preparation, prosecution and/or defense of any actual or potential legal proceeding, regulatory action, or internal matter. Subject to the advice of legal counsel, the Executive agrees to provide any information reasonably within the Executive’s recollection. Payment or reimbursement of the Executive’s expenses will be made promptly and in no event later than December 31 of the year following the year in which such expenses were incurred, and the amount of such expenses eligible for payment or reimbursement, or in-kind benefits provided, in any year will not affect the amount of such expenses eligible for payment or reimbursement, or in-kind benefits to be provided, in any other year. Additionally, any right to expense reimbursement or in-kind benefits will not be subject to liquidation or exchange for another benefit.

(f)     Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held by a court of competent jurisdiction to be prohibited or unenforceable for any reason, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

(g)     Notice.  All notices given hereunder will be in writing and will be sent by registered or certified mail or delivered by hand and, if intended for the Company, will be addressed to it or delivered to it at its principal office for the attention of the Secretary of the Company. If intended for the Executive, notices will be delivered personally or will be addressed (if sent by mail) to the Executive's then current residence address as shown on the Company's records, or to such other address as the Executive directs in a notice to the Company. All notices will be deemed to be given on the date received at the address of the addressee or, if delivered personally, on the date delivered.

(h)     Prohibition on Acceleration of Payments. The time or schedule of any payment or amount scheduled to be paid pursuant to the terms of this Agreement, including but not limited to any restricted stock unit or other equity-based award, payment or amount that provides for the ‘deferral of compensation’ (as such term is described under Code Section 409A), may not be accelerated except as otherwise permitted under Code Section 409A and the guidance and Treasury regulations issued thereunder.

(i)     Code Section 409A. The parties intend that this Agreement and the benefits provided hereunder be interpreted and construed to comply with Code Section 409A to the extent applicable thereto. The time and form of payment of incentive compensation, disability benefits, severance payments, expense reimbursements and payments of in-kind benefits described herein will be made in accordance with the applicable sections of this Agreement, provided that with respect to termination of employment for reasons other than death, the payment at such time can be characterized as a “short-term deferral” for purposes of Code Section 409A or as otherwise exempt from the provisions of Code Section 409A, or if any portion of the payment cannot be so characterized, and the Executive is a “specified employee” under Code Section 409A, such portion of the payment will be delayed until the earlier to occur of the Executive’s death or the date that is six months and one day following

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the Executive’s termination of employment (the “Delay Period”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this section will be paid or reimbursed to the Executive in a lump sum, and any remaining payments due under this Agreement will be payable at the same time and in the same form as such amounts would have been paid. Further, if the Executive is a “specified employee” and if any equity-based awards granted to the Executive by the Company, pursuant to this Agreement or otherwise, continue to vest upon the Executive’s termination of employment, and are deemed a “deferral of compensation” (as such term is described under Code Section 409A), the equity-based awards will not be settled or released until the expiration of the Delay Period. For purposes of applying the provisions of Code Section 409A, each separately identifiable amount to which the Executive is entitled will be treated as a separate payment. In addition, the disability benefits and severance payments will be treated as a series of separate payments.

Although the Company intends to administer the Agreement so that it will comply with the requirements of Code Section 409A, the Company does not represent or warrant that the Agreement will comply with Code Section 409A or any other provision of federal, state, local, or non-United States law. Provided that the Company administers this Agreement in a manner consistent with the terms of this Agreement, neither the Company, its subsidiaries, nor their respective directors, officers, employees or advisers will be liable to the Executive (or any other individual claiming a benefit through the Executive) for any tax, interest, or penalties the Executive may owe as a result of compensation paid under the Agreement, and the Company and its subsidiaries will have no obligation to indemnify or otherwise protect the Executive from the obligation to pay any taxes pursuant to Code Section 409A.
The provisions of this Agreement will be construed in a manner in favor of complying with any applicable requirements of Code Section 409A to avoid taxation under Code Section 409A. If any compensation or benefits provided by this Agreement result in the application of Code Section 409A, the Company will modify this Agreement in the least restrictive manner necessary in order to comply with the provisions of Code Section 409A, other applicable provisions of the Code and/or any rules, regulations or other regulatory guidance issued under such statutory provisions and, in each case, without material diminution in the value of the payments or benefits to the Executive.

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IN WITNESS WHEREOF , the parties hereto have executed this Agreement as of the date first above written.

	
			
 	 	AON CORPORATION	
 	 	 	
 	By:	/s/ Gregory Besio	
 	 	Its: Executive Vice President and Chief Human Resources Officer	

I have read the above Agreement and understand and agree to be bound by its terms.

		
 	  /s/ Michael J. O'Connor	
 	Michael J. O'Connor	

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Exhibit 10.3
CHANGE IN CONTROL AGREEMENT
This Agreement is entered into as of   March 29, 2013 between Aon plc, a public limited company incorporated under English law, Aon Corporation, a Delaware corporation, and Michael J. O’Connor (the “Executive”).
WHEREAS, the Executive currently serves as a key employee of the Company or another subsidiary of the Parent (as defined in Section 1), and the Executive’s services and knowledge are valuable to the Parent in connection with the management of one or more of the Parent’s principal operating facilities, divisions, departments or subsidiaries; and
WHEREAS, the Board (as defined in Section 1) has determined that it is in the best interests of the Parent and its stockholders to secure the Executive’s continued services and to ensure the Executive’s continued dedication and objectivity in the event of any threat or occurrence of, or negotiation or other action that could lead to, or create the possibility of, a Change in Control (as defined in Section 1) of the Parent, without concern as to whether the Executive might be hindered or distracted by personal uncertainties and risks created by any such possible Change in Control, and to encourage the Executive’s full attention and dedication to the Company, the Board has authorized the Parent to enter into this Agreement; and
WHEREAS, the Executive and the Company entered into a Severance Agreement effective as of February 25, 2008, which agreement was subsequently assigned to and assumed by the Parent effective April 2, 2012 (the “2008 Change in Control Agreement”), providing certain financial protection to the Executive in connection with a change-in-control of the Company, and the parties desire to make certain changes to the 2008 Change in Control Agreement as provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto hereby agree as follows:
1.     Definitions . As used in this Agreement, the following terms shall have the respective meanings set forth below:
(a)    “Board” means the Board of Directors of the Parent.
(b)    “Cause” means:
(1)    a material breach by the Executive of those duties and responsibilities of the Executive which do not differ in any material respect from the duties and responsibilities of the Executive during the 90-day period immediately prior to a Change in Control (other than as a result of incapacity due to physical or mental illness) which is demonstrably willful and deliberate on the Executive’s part, which is committed in bad faith or without reasonable belief that such breach is in the best interests of the Company and which is not remedied in a reasonable period of time after receipt of written notice from the Company specifying such breach;
(2)    gross misconduct, theft, fraud, breach of trust or any act of dishonesty by the Executive which results in material harm to the Parent or any of its subsidiaries; or
(3)    the commission by the Executive of a felony involving moral turpitude.

(c)    “Change in Control” means:
(1)    the acquisition by any individual, entity or group (a “Person”), including any “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (i) the then outstanding ordinary shares of the Parent (the “Outstanding Ordinary Shares”) or (ii) the combined voting power of the then outstanding securities of the Parent entitled to vote generally in the election of directors (the “Outstanding Voting Securities”); excluding, however, the following: (A) any acquisition directly from the Parent (excluding any acquisition resulting from the exercise of an exercise, conversion or exchange privilege unless the security being so exercised, converted or exchanged was acquired directly from the Parent), (B) any acquisition by the Parent, (C) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Parent or any corporation controlled by the Parent, or (D) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (3) of this Section 1(c); provided further, that for purposes of clause (B), if any Person (other than the Parent or any employee benefit plan (or related trust) sponsored or maintained by the Parent or any corporation controlled by the Parent) shall become the beneficial owner of 30% or more of the Outstanding Ordinary Shares or 30% or more of the Outstanding Voting Securities by reason of an acquisition by the Parent, and such Person shall, after such acquisition by the Parent, become the beneficial owner of any additional shares of the Outstanding Ordinary Shares or any additional Outstanding Voting Securities and such beneficial ownership is publicly announced, such additional beneficial ownership shall constitute a Change in Control;
(2)    individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of such Board; provided that any individual who becomes a director of the Parent subsequent to the date hereof whose election, or nomination for election by the Parent’s stockholders, was approved by the vote of at least a majority of the directors then comprising the Incumbent Board shall be deemed a member of the Incumbent Board; and provided further, that any individual who was initially elected as a director of the Parent as a result of an actual or threatened solicitation by a Person other than the Board for the purpose of opposing a solicitation by any other Person with respect to the election or removal of directors, or any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board shall not be deemed a member of the Incumbent Board;
(3)    the consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Parent (a “Corporate Transaction”); excluding, however, a Corporate Transaction pursuant to which (i) all or substantially all of the individuals or entities who are the beneficial owners, respectively, of the Outstanding Ordinary Shares and the Outstanding Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than 60% of, respectively, the outstanding shares of common stock, and the combined voting power of the outstanding securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Corporate Transaction (including, without limitation, a corporation which as a result of such transaction owns the Parent or all or substantially all of the Parent’s assets either directly or indirectly) in substantially the same proportions relative to each other as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Ordinary Shares and the Outstanding Voting Securities, as the case may be, (ii) no Person (other than: the Parent; any employee benefit plan (or related trust) sponsored or maintained by the Parent or any corporation controlled by the Parent; the corporation resulting from such Corporate Transaction; and any Person which beneficially owned, immediately prior to such Corporate Transaction, directly or indirectly, 30% or more of the Outstanding Ordinary Shares or the Outstanding Voting Securities, as the case may be) will beneficially own, directly or indirectly, 30% or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate Transaction or the combined voting power of the outstanding securities of such corporation entitled to vote generally in the election of directors and (iii) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the corporation resulting from such Corporate Transaction; or

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(4)    the consummation of a plan of complete liquidation or dissolution of the Parent.

(d)    “Code” means the Internal Revenue Code of 1986, as amended.
(e)    “Company” means Aon Corporation, a Delaware corporation or, where applicable, the other subsidiary of the Parent that employs the Executive.
(f)    “Good Reason” means, without the Executive’s express written consent, the occurrence of any of the following events after a Change in Control:
(1)    a material adverse change in the nature or scope of the Executive’s authority, powers, functions, duties or responsibilities as in effect immediately prior to such Change in Control;

(2)    a material reduction by the Company in the Executive’s rate of annual base salary or bonus opportunity as in effect immediately prior to such Change in Control or as the same may be increased from time to time thereafter;

(3)    the failure of the Company to continue in effect any material employee benefit plan or compensation plan in which the Executive is participating immediately prior to such Change in Control, unless the Executive is permitted to participate in other plans providing the Executive with substantially comparable benefits, or the taking of any action by the Company which would adversely affect the Executive’s participation in or materially reduce the Executive’s benefits under any such plan;

(4)    a change in the Executive’s primary employment location to a location that is more than 50 miles from the primary location of the Executive’s employment at the time of such Change in Control; or

(5)    the failure of the Parent to obtain from any successor or transferee of the Parent an express written and unconditional assumption of the Parent’s obligations under this Agreement, as further described in Section 12(b) of this Agreement.

For purposes of this Agreement, any good faith determination of Good Reason made by the Executive shall be conclusive; provided , however , that an isolated, insubstantial and inadvertent action taken in good faith and which is remedied by the Parent promptly after receipt of notice thereof given by the Executive shall not constitute Good Reason.
The Executive’s employment may be terminated by the Executive for Good Reason if (x) an event or circumstance set forth in this Section 1(f) shall have occurred and the Executive provides the Parent with written notice thereof within 90 days after the Executive has knowledge of the occurrence or existence of such event or circumstance, which notice shall specifically identify the event or circumstance that the Executive believes constitutes Good Reason, (y) the Parent fails to correct the circumstance or event so identified within 30 days after the receipt of such notice, and (z) the Executive resigns during the Termination Period and after the date of delivery of the notice referred to in clause (x) above.
(g)    “Nonqualifying Termination” means a termination of the Executive’s employment (1) by the Company for Cause, (2) by the Executive for any reason other than a Good Reason, (3) as a result of the Executive’s death or (4) by the Company due to the Executive’s absence from the Executive’s duties with the Company on a full-time basis for at least 180 consecutive days as a result of the Executive’s incapacity due to physical or mental illness.
(h)    “Termination Date” means the date during the Termination Period on which the Executive’s employment is terminated other than by reason of a Nonqualifying Termination.

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(i)    “Termination Period” means the period of time beginning with a Change in Control and ending on the earlier to occur of (1) the date which is two (2) years following such Change in Control and (2) the Executive’s death; provided, however, that, anything in this Agreement to the contrary notwithstanding, if a Change in Control occurs and if the Executive’s employment with the Company was terminated prior to the date on which the Change in Control occurs, and if it is reasonably demonstrated by the Executive that such termination of employment (a) was at the request of a third party who was taking steps reasonably calculated to effect a Change in Control or (b) otherwise arose in connection with or in anticipation of a Change in Control, then for purposes of this Agreement, “Termination Period” means the period of time commencing upon the date immediately prior to the date of such termination of employment and ending on the earlier to occur of (x) two (2) years following such Change in Control and (y) the Executive’s death.
2.     Obligations of the Executive . The Executive agrees that in the event any person or group attempts a Change in Control, he shall not voluntarily leave the employ of the Company without Good Reason (a) until such attempted Change in Control terminates or (b) if a Change in Control shall occur, until 90 days following such Change in Control.
3.     Payments and Benefits Upon Termination of Employment . If during the Termination Period the employment of the Executive shall terminate, other than by reason of a Nonqualifying Termination, and the Executive (or the Executive’s executor or other legal representative in the case of the Executive’s death or disability following such termination) executes a noncompetition, nonsolicitation and confidentiality agreement and release of claims substantially in the form of Exhibit A hereto (the “Noncompetition Agreement and Release”) within 45 days following the Termination Date, on behalf of the Parent the Company shall provide to the Executive, as compensation for services rendered to the Company, and in consideration of the covenants set forth in the Noncompetition Agreement and Release, the payments and benefits described in this Section 3. The Executive shall forfeit the payments and benefits described in this Section 3 in the event that the Executive fails to execute and deliver the Noncompetition Agreement and Release to the Parent in accordance with the timing and other provisions of the preceding sentence or revokes such Noncompetition Agreement and Release prior to the date the release of claims contained therein becomes effective. For purposes of this Agreement, the Executive shall be considered to have a termination of employment with the Company and its subsidiaries on the date the Executive has a “separation from service” as described under Section 409A of the Code and the guidance and Treasury Regulations issued thereunder. Any amount paid pursuant to this Section 3 shall be paid in lieu of any other severance payments and benefits, which benefits may, without limitation, include pay in lieu of notice, salary continuation through a contractual notice period or enhanced supplemental pension benefits conferred, in any event as a result of termination of employment, from the Parent, the Company or any of its subsidiaries which are not payable pursuant to this Agreement, but are payable pursuant to an employment agreement or other compensation arrangement entered into between such Employee and the Company or any of its subsidiaries.

(a)    Except as otherwise provided in Section 6, and conditioned upon the Executive’s execution of the Noncompetition Agreement and Release without revocation within the time period described in the preceding provisions of this Section 3, on behalf of the Parent the Company shall pay to the Executive (or the Executive’s beneficiary or estate, as the case may be) on the 60 th day following the later to occur of the Termination Date or the Change in Control:

(1)    a cash amount (subject to any applicable payroll or other taxes required to be withheld pursuant to Section 7 and any deductions authorized by the Executive) equal to the sum of (i) the Executive’s full annual base salary from the Company and its affiliated companies through the Termination Date, to the extent not theretofore paid, (ii) the average of the Executive’s annual cash incentive for each of the three fiscal years immediately preceding the fiscal year in which the Termination Date occurs, multiplied by a fraction, the numerator of which is the number of days in the fiscal year in which the Termination Date occurs and the denominator of which is 365 or 366, as applicable, and (iii) any accrued vacation pay, in each case to the extent not theretofore paid; plus

(2)    a lump sum cash amount (subject to any applicable payroll or other taxes required to be withheld pursuant to Section 7 and any deductions authorized by the Executive) in an

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amount equal to two (2) times the sum of (a) Executive’s annual base salary from the Company and its affiliated companies in effect on the Termination Date and (b) the average incentive compensation paid to the Executive by the Company for the previous two years; plus

(3)    a lump sum cash amount (subject to any applicable payroll or other taxes required to be withheld pursuant to Section 7 and any deductions authorized by the Executive) in an amount equal to the amount forfeited by the Executive under any qualified defined contribution plan maintained by the Company or any of its subsidiaries as a result of the Executive’s termination of employment.

(b)    The Executive shall become fully (100%) vested in the Executive’s accrued benefits under the Aon Corporation Excess Benefit Plan, the Aon Corporation Supplemental Savings Plan and the Aon Corporation Supplemental Employee Stock Ownership Plan, or successor plans in effect on the date of the Executive’s termination of employment (the “Nonqualified Plans”). The Executive’s accrued benefits under the Aon Corporation Excess Benefit Plan or the Aon Corporation Supplemental Savings Plan, whichever plan is applicable to the Executive on the date of the Executive’s termination of employment, shall be determined by crediting the Executive with two (2) additional years of age and service credits and, in the case of the Aon Corporation Supplemental Savings Plan, two (2) additional years of Retirement Plan Contributions.

(c)    For the period commencing on the Termination Date and ending on the earlier of (i) the date which is two (2) years following the Termination Date and (ii) the date on which the Executive becomes eligible to participate in and receive medical, dental and life insurance benefits under a plan or arrangement sponsored by another employer having benefits substantially equivalent to the benefits provided pursuant to this Section 3(c), the Company shall continue the Executive’s medical, dental and life insurance coverage, under the Company-sponsored plans or otherwise, upon the same terms and otherwise to the same extent as such coverage shall have been in effect immediately prior to the Executive’s Termination Date, and the Company and the Executive shall share the costs of the continuation of such medical, dental and life insurance coverage in the same proportion as such costs were shared immediately prior to the Termination Date; provided, the Company’s share of the cost of the continuation of coverage under any self-insured medical reimbursement plan that is subject to Section 105(h) of the Code shall be included in the Executive’s taxable income from the Company. Such continuation of medical and dental coverage shall be in satisfaction of the Company’s obligations under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). Payment or reimbursement of expenses incurred by the Executive pursuant to this Section 3(c) shall be made promptly and in no event later than December 31 of the year following the year in which such expenses were incurred, and the amount of expenses eligible for reimbursement, or in-kind benefits provided, in any year shall not affect the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, in any other year, except for any limit on the amount of expenses that may be reimbursed under an arrangement described in Section 105(b) of the Code. Additionally, such right to payment or reimbursement, or in-kind benefits to be provided, shall not be subject to liquidation or exchange for another benefit. If the Executive is a “specified employee” under Section 409A of the Code, the full cost of the continuation or provision of employee benefits described under this Section 3(c) (other than any cost of medical or dental benefit plans or programs or the cost of any other plan or program that is exempt from Section 409A of the Code) shall be paid by the Executive until the earlier to occur of the Executive’s death or the date that is six months and one day following the Executive’s termination of employment, and such cost shall be reimbursed on behalf of the Parent by the Company or the applicable subsidiary to, or on behalf of, the Executive in a lump sum cash payment on the earlier to occur of the Executive’s death or the date that is six months and one day following the Executive’s termination of employment.

4.     Vesting of Equity Awards Upon Termination Date; Exercise Period . Immediately upon the Executive’s Termination Date, all stock options and other equity awards, if any, granted by the Parent or the Company to the Executive (or stock options and other equity awards granted in substitution therefor by an acquiror of, or successor to, either of the Parent or the Company) that are not otherwise exercisable or vested shall become exercisable and vested in full. Notwithstanding the foregoing, the time or schedule of any payment or amount scheduled to be paid pursuant to the terms of this Section 4, including but not limited to any restricted stock unit or other equity-based award, payment or amount that provides for the “deferral of compensation” (as such term is defined under Section 409A of the Code), may not be accelerated except as otherwise permitted under Section 409A

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of the Code and the guidance and Treasury regulations issued thereunder. With respect to any and all outstanding stock options granted by the Parent or the Company to the Executive, each such option shall remain exercisable following the Executive’s termination of employment until and including the expiration date of the term of the option (as set forth in the written agreement relating to such option).

5.     Code Section 4999 Excise Tax.  (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that (i) any payment, award, benefit or distribution (or any acceleration of any payment, award, benefit or distribution) by the Parent or the Company (or any of its affiliated entities) or any entity which effectuates a Change in Control (or any of its affiliated entities) to or for the benefit of the Executive (whether pursuant to the terms of this Agreement or otherwise) (the “Payments”) would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), and (ii) the reduction of the amounts payable to the Executive under this Agreement to the maximum amount that could be paid to the Executive without giving rise to the Excise Tax (the “Safe Harbor Cap”) would provide the Executive with a greater after-tax amount than if such amounts were not reduced, then the amounts payable to the Executive under this Agreement shall be reduced (but not below zero) to the Safe Harbor Cap. The reduction of the amounts payable hereunder, if applicable, shall be made to the extent necessary in the following order: (i) the acceleration of vesting of stock options with an exercise price that exceeds the then fair market value of the stock subject to the award and of other equity awards, provided that such stock options and of other equity awards are not permitted to be valued under Treasury Regulation Section 1.280G-1 Q/A – 24(c); (ii) the payments under Section 3(a); (iii) the acceleration of vesting of stock options with an exercise price that exceeds the then fair market value of the stock subject to the award and other equity awards, provided that such stock options and other equity awards are permitted to be valued under Treasury Regulation Section 1.280G-1 Q/A – 24(c); (iv) the payments and benefits under Section 3(b); (v) the payments and benefits under Section 3(c); and (v) the acceleration of vesting of all other stock options and equity awards. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder would not result in a greater after-tax result to the Executive, no amounts payable under this Agreement shall be reduced pursuant to this provision.
(b)    All determinations required to be made under this Section shall be made by the public accounting firm that is retained by the Parent as of the date immediately prior to the Change in Control (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Parent and the Executive within fifteen (15) business days of the receipt of notice from the Parent or the Executive that there has been a Payment, or such earlier time as is requested by the Parent. Notwithstanding the foregoing, in the event (i) the Board shall determine prior to the Change in Control that the Accounting Firm is precluded from performing such services under applicable auditor independence rules or (ii) the Audit Committee of the Board determines that it does not want the Accounting Firm to perform such services because of auditor independence concerns or (iii) the Accounting Firm is serving as accountant or auditor for the person(s) effecting the Change in Control, the Board shall appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees, costs and expenses (including, but not limited to, the costs of retaining experts) of the Accounting Firm shall be borne by the Parent. If payments are reduced to the Safe Harbor Cap or the Accounting Firm determines that no Excise Tax is payable by the Executive without a reduction in payments, the Accounting Firm shall provide a written opinion to the Executive to the effect that the Executive is not required to report any Excise Tax on the Executive’s federal income tax return, and that the failure to report the Excise Tax, if any, on the Executive’s applicable federal income tax return will not result in the imposition of a negligence or similar penalty. The determination by the Accounting Firm shall be binding upon the Parent and the Executive (except as provided in Section 5(c) below).
(c)    If it is established pursuant to a final determination of a court or an Internal Revenue Service (the “IRS”) proceeding which has been finally and conclusively resolved, that Payments have been made to, or provided for the benefit of, the Executive on behalf of the Parent by the Company which are in excess of the limitations provided in this Section (referred to hereinafter as an “Excess Payment”), the Executive shall repay the Excess Payment to the Company on demand, together with interest on the Excess Payment at the applicable federal rate (as defined in Section 1274(d) of the Code) from the date of the Executive’s receipt of such Excess Payment until the date of such repayment. As a result of the uncertainty in the application of Section 4999 of the Code at the

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time of the determination, it is possible that Payments which will not have been made by the Company on behalf of the Parent should have been made (an “Underpayment”), consistent with the calculations required to be made under this Section. In the event that it is determined (i) by the Accounting Firm, the Parent (which shall include the position taken by the Parent, or together with its consolidated group, on its federal income tax return) or the IRS or (ii) pursuant to a determination by a court, that an Underpayment has occurred, on behalf of the Parent the Company shall pay an amount equal to such Underpayment to the Executive within 10 days of such determination together with interest on such amount at the applicable federal rate from the date such amount would have been paid to the Executive until the date of payment. The Executive shall cooperate, to the extent the Executive’s expenses are reimbursed by the Company on behalf of the Parent, with any reasonable requests by the Parent in connection with any contests or disputes with the IRS in connection with the Excise Tax or the determination of the Excess Payment. Notwithstanding the foregoing, in the event that amounts payable under this Agreement were reduced pursuant to Section 5(a) and the present value of any Payment is subsequently re-determined by the Accounting Firm within the context of Treasury Regulation Section 1 280G-1 Q/A 33 that reduces the value of the Payment, the Company on behalf of the Parent shall promptly pay to Executive any amounts payable under this Agreement that were not previously paid solely as a result of Section 5(a), subject to the Safe Harbor Cap.

(d)    A payment or reimbursement of expenses described in this Section 5 shall be made promptly and in no event later than December 31 of the year following the year in which such expenses were incurred, and the amount of such expenses eligible for payment or reimbursement in any year shall not affect the amount of such expenses eligible for payment or reimbursement in any other year nor shall such right to payment or reimbursement be subject to liquidation or exchange for another benefit.

6.     Delay of Payments . (a) Except as otherwise provided in Section 6(b) below, in the event that any payment or distribution or portion of any payment or distribution to be made to the Executive under Section 3(a) of this Agreement cannot be characterized as a “short term deferral” for purposes of Section 409A of the Code or is not otherwise exempt from the provisions of Section 409A of the Code, and “Change in Control” as defined for purposes of this Agreement does not satisfy the requirements of a change in control event as described in Section 409A of the Code and the guidance and regulations issued thereunder or, if “Change in Control” does satisfy such requirements under Code Section 409A, the Termination Date is not within two years following the Change in Control in accordance with Treasury Regulation Section 1.409A-3(c)(1), then an amount equal to the aggregate severance payments that would otherwise be payable to the Executive upon an involuntary termination of employment under any other employment agreement or other compensation arrangement entered into between the Executive and the Company or any of its subsidiaries shall be paid to the Executive at the same time and in the same form of payment as such other severance payments would otherwise be paid and the remainder of the payment or distribution, or portion thereof, under Section 3(a) of this Agreement shall be paid in accordance with Section 3(a).
(b)    In the event that any payment or distribution or portion of any payment or distribution to be made to the Executive hereunder cannot be characterized as a “short term deferral” for purposes of Section 409A of the Code or is not otherwise exempt from the provisions of Section 409A of the Code, and the Executive is determined to be a “specified employee” under Section 409A of the Code, such portion of the payment shall be delayed until the earlier to occur of the Executive’s death or the date that is six months and one day following the Executive’s termination of employment with the Company and its subsidiaries (the “Delay Period”). Upon the expiration of the Delay Period, the payments delayed pursuant to this Section 6 shall be paid to the Executive or his beneficiary in a lump sum, and any remaining payments due under this Agreement shall be payable in accordance with their original payment schedule.
7.     Withholding Taxes . The Company may withhold from all payments due to the Executive (or the Executive’s beneficiary or estate) hereunder all taxes which, by applicable federal, state, local or other law, the Company is required to withhold therefrom.
8.     Reimbursement of Expenses . If any contest or dispute shall arise under this Agreement involving termination of the Executive’s employment with the Company or involving the failure or refusal of the Parent or the Company to perform fully in accordance with the terms hereof, on behalf of the Parent the Company shall reimburse the Executive, on a current basis, for all legal fees and expenses, if any, incurred by the Executive in

7

connection with such contest or dispute; provided, however, that in the event the resolution of any such contest or dispute includes a finding denying, in total, the Executive’s claims in such contest or dispute, the Executive shall be required to reimburse the Company, over a period of 12 months from the date of such resolution, for all sums advanced to the Executive pursuant to this Section 8. Payment or reimbursement of expenses described in this Section 8 shall be made promptly and in no event later than December 31 of the year following the year in which such expenses were incurred, and the amount of such expenses eligible for payment or reimbursement in any year shall not affect the amount of such expenses eligible for payment or reimbursement in any other year nor shall the right to payment or reimbursement be subject to liquidation or exchange for another benefit.    
9.     Operative Event . No amounts shall be payable hereunder unless and until there is a Change in Control.
10.     Termination of Agreement . (a) This Agreement shall be effective on the date hereof and shall continue until terminated by the Parent as provided in Section 10(b); provided , however , that this Agreement shall terminate in any event upon the earlier to occur of (1) termination of the Executive’s employment with the Company prior to a Change in Control and (2) the Executive’s death.
(b) The Parent shall have the right prior to a Change in Control, in its sole discretion, pursuant to action by the Board, to approve the termination of this Agreement, which termination shall not become effective until the date fixed by the Board for such termination, which date shall be at least 120 days after notice thereof is given by the Parent to the Executive in accordance with Section 13; provided , however , that no such action shall be taken by the Board during any period of time when the Board has knowledge that any person has taken steps reasonably calculated to effect a Change in Control until, in the opinion of the Board, such person has abandoned or terminated its efforts to effect a Change in Control; and provided further , that in no event shall this Agreement be terminated in the event of a Change in Control.
11.     Scope of Agreement . Nothing in this Agreement shall be deemed to entitle the Executive to continued employment with the Company or its subsidiaries and, subject to Section 2 hereof, if the Executive’s employment with the Company shall terminate prior to a Change in Control, then the Executive shall have no further rights under this Agreement; provided , however , that any termination of the Executive’s employment following a Change in Control shall be subject to all of the provisions of this Agreement.
12.     Successors; Binding Agreement .
(a) This Agreement shall not be terminated by any merger or consolidation of the Parent whereby the Parent is or is not the surviving or resulting corporation or as a result of any transfer of all or substantially all of the assets of the Parent. In the event of any such merger, consolidation or transfer of assets, the provisions of this Agreement shall be binding upon the surviving or resulting corporation or the person or entity to which such assets are transferred.
(b) The Parent agrees that concurrently with any merger, consolidation or transfer of assets referred to in Section 12(a), it will cause any successor or transferee unconditionally to assume, by written instrument delivered to the Executive (or the Executive’s beneficiary or estate), all of the obligations of the Parent hereunder. Failure of the Parent to obtain such assumption prior to the effectiveness of any such merger, consolidation or transfer of assets shall be a breach of this Agreement and shall entitle the Executive to compensation and other benefits from the Parent in the same amount and on the same terms as the Executive would be entitled hereunder if the Executive’s employment were terminated following a Change in Control other than by reason of a Nonqualifying Termination during the Termination Period. For purposes of implementing the foregoing, the date on which any such merger, consolidation or transfer becomes effective shall be deemed the Date of Termination.
(c) This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amounts would be payable to the Executive hereunder had the Executive continued to

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live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by the Executive to receive such amounts or, if no person is so appointed, to the Executive’s estate.
13.     Notices . (a) For purposes of this Agreement, all notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered or five days after deposit in the United States mail, certified and return receipt requested, postage prepaid, addressed (1) if to the Executive, to the last known residential address on file for the Executive with the Company, and if to the Parent and/or to the Company, to Aon Corporation, 200 East Randolph Drive, Chicago, Illinois 60602, 3d Floor, attention General Counsel, with a copy to the Secretary, or (2) to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
(b)    A written notice of the Executive’s Termination Date by the Parent and the Company, or the Executive, as the case may be, to the other, shall (1) indicate the specific termination provision in this Agreement relied upon, (2) to the extent applicable, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated and (3) specify the termination date (which date shall be not less than 15 days after the giving of such notice). The failure by the Executive or the Company and the Parent to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company and the Parent hereunder or preclude the Executive or the Company and the Parent from asserting such fact or circumstance in enforcing the Executive’s or the Company’s and the Parent’s rights hereunder.
14.     Full Settlement; Resolution of Disputes . (a) The Company’s obligation to make any payments on behalf of the Parent provided for in this Agreement and the Company’s or the Parent’s other obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company or the Parent may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and, subject to Section 3(c) hereof, such amounts shall not be reduced whether or not the Executive obtains other employment.
(b)    If there shall be any dispute between the Company or the Parent and the Executive in the event of any termination of the Executive’s employment, then, unless and until there is a final, nonappealable judgment by a court of competent jurisdiction declaring that such termination was for Cause, that the determination by the Executive of the existence of Good Reason was not made in good faith, or that the Company is not otherwise obligated to pay any amount or provide any benefit to the Executive and the Executive’s dependents or other beneficiaries, as the case may be, under Sections 3 and 4 hereof, the Company shall pay all amounts, and provide all benefits, to the Executive and the Executive’s dependents or other beneficiaries, as the case may be, that the Company would be required to pay or provide pursuant to Sections 3 and 4 hereof as though such termination were by the Company without Cause or by the Executive with Good Reason; provided , however , that the Company shall not be required to pay any disputed amounts pursuant to this Section 14(b) except upon receipt of an undertaking by or on behalf of the Executive to repay all such amounts to which the Executive is ultimately adjudged by such court not to be entitled.
15.     Employment with, and Action by, Subsidiaries . For purposes of this Agreement, employment with the Company or actions taken by the Parent or the Company with respect to the Executive shall include employment with or actions taken by any corporation or other entity in which the Parent has a direct or indirect ownership interest of 50% or more of the total combined voting power of the then outstanding securities of such corporation or other entity entitled to vote generally in the election of directors.

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16.     Governing Law; Validity . The interpretation, construction and performance of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Illinois without regard to the principle of conflicts of laws. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, which other provisions shall remain in full force and effect.
17.     Counterparts . This Agreement may be executed in two counterparts, each of which shall be deemed to be an original and both of which together shall constitute one and the same instrument.
18.     Miscellaneous . No provision of this Agreement may be modified or waived unless such modification or waiver is agreed to in writing and signed by the Executive and by a duly authorized officer of the Parent. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. Failure by the Executive or the Company and/or the Parent to insist upon strict compliance with any provision of this Agreement or to assert any right the Executive or the Company and/or the Parent may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.
19.     Prohibition on Acceleration of Payments . The time or schedule of any payment or amount scheduled to be paid pursuant to the terms of this Agreement, or pursuant to the terms of any other employment agreement or compensation arrangement entered into between the Executive and the Company or any of its subsidiaries, may not be accelerated hereunder, or under any such other employment agreement or other compensation arrangement, except as otherwise permitted under Section 409A of the Code and the guidance and Treasury Regulations issued thereunder.
20.     Code Section 409A . The parties intend that this Agreement and the benefits provided hereunder be interpreted and construed to comply with Section 409A of the Code to the extent applicable thereto. Notwithstanding any provision of the Agreement to the contrary, the Agreement shall be interpreted and construed consistent with this intent, provided that the Parent or the Company shall not be required to assume any increased economic burden in connection therewith. Although the Parent and the Company intend to administer the Agreement so that it will comply with the requirements of Section 409A of the Code, neither the Parent nor the Company represents or warrants that the Agreement will comply with Section 409A of the Code or any other provision of federal, state, local or non-United States law. Neither the Parent, the Company, any of their subsidiaries, nor their respective directors, officers, employees or advisers shall be liable to the Executive (or any other individual claiming a benefit through the Executive) for any tax, interest, or penalties the Executive may owe as a result of compensation paid under the Agreement, and the Parent or the Company and any of their subsidiaries shall have no obligation to indemnify or otherwise protect the Executive from the obligation to pay any taxes pursuant to Section 409A of the Code.
21.     Entire Agreement . This Agreement supersedes the Severance Agreement (or Change in Control Agreement) between the Executive and the Company, entered into, and approved by the Board for execution by the parties, as of February 25, 2008 and any and all similar agreements entered into by the parties prior to the date hereof. This Agreement constitutes the entire understanding between the parties with respect to the Executive’s severance pay in the event of a termination of the Executive’s employment with the Company in connection with a Change in Control; provided, however, that except as otherwise expressly set forth in this Agreement, the rights of, and benefits payable to, the Executive, the Executive’s estate or the Executive’s beneficiaries pursuant to this Agreement are in addition to any rights of, or benefits payable to, the Executive, the Executive’s estate or the Executive’s beneficiaries under any other employee benefit plan or broad-based compensation program of the Company.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by duly authorized officers of the Parent and the Company and the Executive has executed this Agreement as of the day and year first above written.

			
 	AON PLC	
 	 	 	
 	By:	/s/ Ram Padmanabhan	
 	Its:	Vice President	
 	 	 	
 	AON CORPORATION	
 	 	 	
 	By:	/s/ Gregory J. Besio	
 	Its:	Executive Vice President and Chief Human Resources Officer	
 	 	 	
 	EXECUTIVE	
 	 	 	
 	 	/s/ Michael J. O’Connor	
 	 	Michael J. O’Connor	

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EXHIBIT A TO
AGREEMENT
NONCOMPETITION, NONSOLICITATION,
CONFIDENTIALITY AGREEMENT AND RELEASE OF CLAIMS

This Noncompetition, Nonsolicitation, Confidentiality Agreement and Release of Claims (this “Noncompetition Agreement”) is executed by Aon plc, a public limited company incorporated under English law (the “Parent”), Aon Corporation, a Delaware corporation (the “Company”), and ________________(the “Executive”) pursuant to the Change in Control Agreement dated as of _______________, 20__ between the Parent, the Company and the Executive (the “Agreement”).
WHEREAS, the Executive’s employment with the Company and its subsidiaries is terminating;
WHEREAS, the Executive acknowledges that the benefits to be provided to the Executive under the Agreement are in consideration of, and are sufficient to support, the covenants set forth in this Noncompetition Agreement; and
WHEREAS, the Executive understands that the Parent and the Company regard the representations and covenants by the Executive in this Noncompetition Agreement as material and that the Parent and the Company are relying on such representations and covenants in paying amounts to the Executive pursuant to the Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
1.     Severance Benefits . The Executive’s employment with the Company and its subsidiaries shall terminate on ________, and the Executive shall receive the severance benefits set forth in the Agreement in accordance with the terms and subject to the conditions thereof.
2.     Noncompetition; Nonsolicitation . (a) General . The Executive acknowledges that in the course of the Executive’s employment with the Company the Executive has become familiar with trade secrets and other confidential information concerning the Parent, the Company, and their subsidiaries, including Aon Group, Inc., a Maryland corporation (“Aon Group”), and that the Executive’s services were of special, unique and extraordinary value to the Parent, the Company and their affiliates.
(b)     Noncompetition . The Executive agrees that during the period commencing on the Executive’s Termination Date (as defined in the Agreement) and ending on the date which is two years following the Executive’s Termination Date (the “Noncompetition Period”), the Executive shall not in any manner engage in Competitive Activity in any Restricted Area. For purposes of this Agreement, “Competitive Activity” means engaging (directly or indirectly, through any person, firm, corporation or enterprise, either alone or as a member of a partnership or as an officer, director, stockholder, investor or employee of or consultant to any other firm, corporation or enterprise or otherwise) or assisting any other person, firm, corporation or enterprise in engaging in any Business of the Parent, the Company, or any of their subsidiaries, including Aon Group (collectively, the “Protected Parties”), if the Business was being conducted by or contemplated by any of the Protected Parties as of the Executive’s Termination Date. For purposes of this Agreement, “Business” includes, but is not limited to, the following: the provision of conventional and alternative risk management products; the performance of services in the businesses of insurance brokerage, reinsurance brokerage, benefits consulting, compensation consulting, human resources consulting and management underwriting; the performance of other insurance services, such as accounting, claims management and handling, contract wording, information systems and actuarial; the solicitation and servicing of the insurance and reinsurance needs of individual and commercial clients; and other similar enterprises in which any of the Protected Parties may be engaged. For purposes of this Agreement, “Restricted Area” means any country in which a Business is or was conducted or contemplated by any of the Protected Parties.

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(c)     Nonsolicitation . The Executive further agrees that during the Noncompetition Period the Executive shall not (i) in any manner, directly or indirectly, induce or attempt to induce any employee of the Parent, the Company or any of their subsidiaries, including Aon Group, to terminate or abandon his or her employment for any purpose whatsoever or (ii) in connection with any business to which Section 2(b) of this Noncompetition Agreement applies, call on, service, solicit or otherwise do business with any customer of the Parent, the Company, or any of their subsidiaries, including Aon Group.
(d)     Exceptions . Nothing in this Section 2 shall prohibit the Executive from being (i) a stockholder in a mutual fund or a diversified investment company or (ii) an owner of not more than two percent (2%) of the outstanding stock of any class of a corporation, any securities of which are publicly traded, so long as the Executive has no active participation in the business of such corporation.
(e)     Reformation . If, at any time of enforcement of this Section 2 a court holds that the restrictions stated herein are unreasonable under circumstances then existing, the Executive agrees that the maximum period, scope or geographical area reasonable under such circumstances shall be substituted for the stated period, scope or area and that the court shall be allowed to revise the restrictions contained herein to cover the maximum period, scope and area permitted by law. This Noncompetition Agreement shall not authorize a court to increase or broaden any of the restrictions in this Section 2.
3.     Confidentiality . The Executive agrees that the Executive shall not, at any time after the termination of the Executive’s employment, make use of or disclose, directly or indirectly, any (i) trade secret or other confidential or secret information of the Parent, the Company, or any of their subsidiaries, including Aon Group, or (ii) other technical, business, proprietary or financial information of the Parent, the Company, or any of their subsidiaries, including Aon Group, not available to the public generally or to the competitors of the Parent or the Company, or to the competitors of any of their subsidiaries, including Aon Group (“Confidential Information”), except to the extent that such Confidential Information (a) becomes a matter of public record or is published in a newspaper, magazine or other periodical or on electronic or other media available to the general public, other than as a result of any act or omission of the Executive or (b) is required to be disclosed by any law, regulation or order of any court or regulatory commission, department or agency, provided that the Executive gives prompt notice of such requirement to the Parent to enable the Parent or the Company to seek an appropriate protective order. Promptly following the termination of the Executive’s employment, the Executive shall surrender to the Company all records, memoranda, notes, plans, reports, computer disks and software and other documents and data which constitute Confidential Information which the Executive may then possess or have under the Executive’s control (together with all copies thereof).
4.     Enforcement . The Executive acknowledges that the Parent, the Company, and their subsidiaries, including Aon Group, would be damaged irreparably in the event that any provision of Section 2 or 3 of this Noncompetition Agreement were not performed in accordance with its terms or were otherwise breached and that money damages would be an inadequate remedy for any such nonperformance or breach. Accordingly, the Executive agrees that the Parent, the Company, and their successors and permitted assigns shall be entitled, in addition to other rights and remedies existing in their favor, to an injunction or injunctions to prevent any breach or threatened breach of any of such provisions and to enforce such provisions specifically (without posting a bond or other security). The Executive agrees that the Executive will submit to the personal jurisdiction of the courts of the State of Illinois in any action by the Parent and/or the Company to obtain injunctive or other relief contemplated by this Section 4.
5.     General Release of All Claims . (a) For valuable consideration, the adequacy of which is hereby acknowledged, the undersigned Executive, on his own behalf and on behalf of his heirs, executors, administrators, successors, representatives and assigns, does herein knowingly and voluntarily unconditionally release, waive, and fully discharge the Parent, the Company and each of their subsidiaries (including successors and assigns thereof) and all of their respective past, present and future employees, officers, directors, agents, affiliates, parents, predecessors, administrators, representatives, attorneys, and shareholders, and employee benefit plans, from any and all legal claims, liabilities, suits, causes of action (whether before a court or an administrative agency), damages, costs, attorneys’ fees, interest, injuries, expenses, debts, or demands of any nature whatsoever, known or

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unknown, liquidated or unliquidated, absolute or contingent, at law or in equity, which were or could have been filed with any Federal, state or local court, agency, arbitrator or any other entity, based directly on indirectly on the Executive’s employment with and separation from the Company or based on any other alleged act or omission by or on behalf of the Parent, or the Company prior to the Executive’s signing this Noncompetition Agreement. Without limiting the generality of the foregoing terms, this Noncompetition Agreement and this Section providing a general release of all claims specifically includes all claims based on the terms, conditions, and privileges of employment, and those based on breach of contract (express or implied), tort, harassment, intentional infliction of emotional distress, defamation, negligence, privacy, employment discrimination, retaliation, discharge not for just cause, constructive discharge, wrongful discharge, the Age Discrimination in Employment Act of 1967, as amended (the “ADEA”), the Older Workers Benefit Protection Act of 1990, the Worker Adjustment and Retraining Notification Act, as amended, Executive Order 11,141 (age discrimination), Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Civil Rights Act of 1866 and 1871, Section 1981 through 1988 of Title 42 of the United States Code, as amended, 41 U.S.C. Section 1981 (discrimination), 29 U.S.C. Section 206(d)(1) (equal pay), Executive Order 11,246 (race, color, religion, sex and national origin discrimination), the National Labor Relations Act, the Equal Pay Act of 1993, the Americans with Disabilities Act of 1990, the Occupational Safety and Health Act, as amended, the Family Medical Leave Act, the Immigration Reforn and Control Act, as amended, the Vietnam Era Veterans Readjustment Assistance Act, Sections 503-504 of the Rehabilitation Act of 1973 (handicap rehabilitation), the Employee Retirement Income Security Act of 1974, as amended, any federal, state or local fair employment, civil or human rights, wage and hour laws and wage payment laws, and any other Federal, state, local or other governmental statutes, laws, ordinances, regulations and orders, under common law, and under any Company policy, procedure, bylaw or rule. This Section 5 of the Noncompetition Agreement shall not waive or release any rights or claims that the Executive may have which arise after the date of this Noncompetition Agreement or that arise under or are preserved by the Agreement, and shall not waive any claims for benefits required by applicable law (including post-termination health-continuation insurance benefits required by state or Federal law) or claims arising under the terms of any applicable plan, program or other arrangement of the Company.
(b) The Executive intends this Section 5 of the Noncompetition Agreement to be binding on his successors, and the Executive specifically agrees not to file or continue any claim in respect of matters covered herein. The Executive further agrees never to institute any suit, complaint, proceeding, grievance or action of any kind at law, in equity, or otherwise in any court of the United States or in any state, or in any administrative agency of the United States or any state, county or municipality, or before any other tribunal, public or private, against the Company arising from or relating to his employment with or his termination of employment from the Company and/or any other occurrences to the date of this Noncompetition Agreement, other than a claim challenging the validity of this Section 5 of the Noncompetition Agreement under the ADEA or respecting any matters not covered herein.
(c) The Executive is further waiving his right to receive money or other relief in any action instituted by him or on his behalf by any person, entity or governmental agency in respect of matters covered by this Section 5. Nothing in this Section 5 shall limit the rights of any governmental agency or his right of access to, cooperation or participation with any governmental agency, including without limitation, the United States Equal Employment Opportunity Commission. The Executive further agrees to waive his rights under any other statute or regulation, state or federal, with provides that a general release does not extend to claims which the Executive does not know or suspect to exist in his favor at the time of executive this Noncompetition Agreement, which if known to him must have materially affected his settlement with the Company and/or the Parent.
(d) The Executive agrees that he shall not be eligible and shall not seek or apply for reinstatement or re-employment with the Company, and he agrees that any application for re-employment may be rejected without explanation or liability pursuant to this provision.
(e) In further consideration of the promises made by the Company and the Parent in this Noncompetition Agreement, the Executive specifically waives and releases such parties, to the extent set forth in this Section 5, from all claims the Executive may have as of the date of this Noncompetition Agreement, whether known or unknown, arising under the ADEA. The Executive further agrees that:

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(1) the Executive’s waiver of rights under Section 5 of this Noncompetition Agreement is knowing and voluntary and in compliance with the Older Workers Benefit Protection Act of 1990 (“OWBPA”);
(2) the Executive understands the terms of this Section 5 of the Noncompetition Agreement;
(3) the consideration offered by the Company on its behalf and on behalf of the Parent under this Noncompetition Agreement and the Agreement in exchange for the general release of all claims in this Section 5 represents consideration over and above that to which the Executive would otherwise be entitled, and that the consideration would not have been provided had the Executive no agreed to sign this Noncompetition Agreement and did not sign it;
(4) the Company is hereby advising the Executive in writing to consult with an attorney prior to executing this Noncompetition Agreement;
(5) the Company is giving the Executive a period of twenty-one (21) days within which to consider this Noncompetition Agreement;
(6) following the Executive’s execution of this Noncompetition Agreement, the Executive has seen (7) days in which to revoke this Noncompetition Agreement by written notice. An attempted revocation not actually received by the Company prior to the revocation deadline will not be effective; and
(7) this Noncompetition Agreement, the Agreement, and all payments and benefits under either or both of them shall be void and of no force and effect if the Executive chooses to so revoke, and if the Executive chooses not to so revoke this Noncompetition Agreement and the Agreement then become effective and enforceable.
(f) This Section 5 does not waive rights or claims that may arise under the ADEA after the date the Executive signs this Noncompetition Agreement. To the extent barred by the OWBPA, the covenant not to sue contained herein does not apply to claims under the ADEA that challenge the validity of this Section 5 of the Noncompetition Agreement.
(g) To revoke this Noncompetition Agreement, the Executive must send a written statement of revocation to: Aon Corporation, 200 East Randolph Drive, Chicago, Illinois 60602, 3d Floor, attention General Counsel, with a copy to the Secretary. The revocation must be received no later than 5:00 pm on the seventh day following the Executive’s execution of this Noncompetition Agreement. If the Executive does not revoke, the eighth day following the Executive’s acceptance will be the “effective date” of this Noncompetition Agreement.
6.     Entire Agreement . The Agreement and this Noncompetition Agreement constitute the entire understanding between the parties. The Executive has not relied on any oral statements that are not included in the Agreement or this Noncompetition Agreement.
7.     Severability . If any provision of this Noncompetition Agreement shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision hereof, and this Noncompetition Agreement shall be construed and enforced as if such provision had not been included.
8.     Governing Law . This Noncompetition Agreement shall be construed, interpreted and applied in accordance with the internal laws of the State of Illinois without regard to the principles of conflicts of laws.
IN WITNESS WHEREOF, the Parent and the Company have caused this Noncompetition Agreement to be executed by their duly authorized officers and the Executive has executed this Noncompetition Agreement as of the day and year first above written.

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AON PLC
By:___________________________
Its: __________________________
AON CORPORATION
By:___________________________
Its: __________________________
EXECUTIVE
______________________________

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Exhibit 10.4

AON PLC
LEADERSHIP PERFORMANCE PROGRAM
For 2013-2015

Overview
The Program has been adopted by the Committee as a sub-plan to the Stock Plan, effective as of January 1, 2013. The Program is the eighth layer of multi-year performance programs implemented by the Company. Earlier programs covered the three-year performance periods beginning on January 1 in each of 2006 through 2012 and ending on December 31 of 2008 through 2014, respectively.
Performance Cycle
The Program covers a multi-year performance cycle that begins on January 1, 2013 and ends on December 31, 2015 (“Performance Cycle”).
Eligibility
As recommended by the CEO and approved by the Committee, key members of the Company’s senior leadership team are eligible to participate in the Program. The CEO is also eligible to participate in the Program as approved by the Committee.
Participation
The Committee will approve in writing no later than May 31, 2013 the identity of the participants eligible to participate in the Program and each participant’s Award, denominated as described herein either in total number of LPP units or US dollars. Those participants so identified by May 31, 2013 shall be eligible to participate in the full Performance Cycle, retroactive to January 1, 2013.  
If a participant is no longer considered a member of the Company’s senior leadership team, but the participant’s employment with the Company has not terminated, the participant’s Award under the Program shall be unaffected by the change in status.
Award Components – Performance Share Units
At the outset of participation in the Program, each participant will receive 100% of his or her Award “value” as target Performance Share Units of the Company’s ordinary shares. If the Award is denominated by the Committee in US dollars, the number of such target units will be derived by dividing the Award by the Fair Market Value of an ordinary share of the Company on the Grant Date.
Rules Applicable to Performance Share Units

1.	The Performance Share Units will be earned and will vest as of the Settlement Date, subject to the satisfaction of the performance criteria set forth herein.	
		
2.	The payout resulting from the vesting of the Performance Share Units will be determined based on the Company’s cumulative adjusted Earnings per Share over the Performance Cycle as compared to the Target Earnings per Share.	
		
3.	Payouts will range from 0% to 200% of the targeted number of Performance Share Units awarded.	
		
4.	The Performance Share Units will pay out in ordinary shares of the Company issued under, and subject to, the limitations of the Stock Plan, provided that the pay out in ordinary shares shall take place in the calendar year following the end of the Performance Cycle.	
		
5.	The Company shall have the right to satisfy all federal, state and local withholding tax requirements with respect to the award earned by reducing the number of earned shares by the number of shares determined by dividing the amount of withholding required by the Fair Market Value of an ordinary share of the Company on the Settlement Date.	
		
6.	The Performance Share Units are not transferable and may not be sold, assigned, pledged, hypothecated or otherwise encumbered.	

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7.	Until the Settlement Date, the participant will not be treated as a shareholder as to those ordinary shares of the Company relating to the Performance Share Units. No cash payments will be provided for dividend equivalents or other distributions.	
		
8.	The participant will be granted a Performance Award Certificate at the outset of his or her participation in the Program. The certificate will set forth the target number of Performance Share Units granted to the participant. The participant must sign and return to the Company the certificate to indicate that he or she agrees to be bound by the provisions of the Program, including the restrictive covenants described herein. Failure to return a signed certificate to the Company will result in forfeiture of the Performance Share Units.	
		
9.	If a participant’s employment with the Company terminates before the last day of the Performance Cycle, the following rules will apply to the vesting of the Performance Share Units:	

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Reason for Employment Termination	Impact on Vesting of Performance Share Units	
Retirement or termination by Company without Cause	Performance Share Units will vest pro rata through the date of termination or Retirement, and the vested Performance Share Units will pay out in accordance with rule 4 above. The Committee’s determination regarding the vested portion and payout will occur after the close of the Performance Cycle. The number of units earned will be calculated based on the actual achievement of the Target Earnings Per Share for the performance period, and then the result will be prorated as of the last full calendar quarter preceding the participant’s termination or Retirement date, as follows:

Target Shares X (Adjusted EPS at end of quarter preceding date of termination/ Adjusted   EPS at end of performance period) X Performance Factor = Number of Pro-Rata Shares

In the event a participant has an employment agreement with the Company or any of its subsidiaries providing for “good reason” termination, a termination of the participant’s employment for good reason will be treated in the same manner for purposes of this Program only as a termination by the Company without cause.	
Death or Total and Permanent Disability	If death or permanent disability occurs in the first or second calendar years of the Performance Cycle, the Performance Share Units will become immediately vested at the target award level and the vested Performance Share Units will pay out as soon as administratively feasible following such death or disability. If death or permanent disability occurs in the third calendar year of the Performance Cycle, the Performance Share Units will become vested at the greater of (i) the target award level or (ii) the number of units earned based on the actual achievement of the Adjusted Earnings Per Share for the entire Performance Cycle, and the vested Performance Share Units will pay out in accordance with rule 4 above.	
Voluntary Resignation	Performance Share Units will be forfeited in their entirety	
Termination by Company for Cause	Performance Share Units will be forfeited in their entirety	
Termination due to Change in Control	If a successor to the Company assumes and continues this Program substantially in its current form after a Change in Control, the Performance Share Units will be subject to the following rules: (1) if the participant’s employment is terminated by the Company without Cause after the Change in Control but prior to the end of the Performance Cycle, the participant will become immediately vested in the greater of the target Performance Share Units or the number of units that would be earned based on the proportion of achievement of the Target Earnings Per Share as of the last full calendar quarter preceding the participant’s termination date, and the vested Performance Share Units will pay out in accordance with rule 4 above; and (2) if the participant’s employment is terminated by the Company for Cause, by the participant in a voluntary resignation, or by reason of the participant’s death or Total and Permanent Disability, or if the participant’s employment is continued through the end of the Performance Cycle, the rules of the Program shall continue to apply to the Performance Share Units as if the Change in Control had not occurred.

If the successor to the Company does not assume and continue this Program substantially in its current form, the Performance Share Units shall become immediately vested at the greater of the target Performance Share Units or the number of units that would have been earned based on the proportion of achievement of the Target Earnings Per Share as of the last full calendar quarter preceding the effective date of the Change in Control, and the vested Performance Share Units will pay out in accordance with rule 4 above.	

10.	Notwithstanding the rules set forth in paragraph 9 above, in the event an employment agreement or other binding arrangement between a participant and the Company provides (a) for more	

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favorable vesting of performance share units upon termination of employment, (b) an alternate definition (such as “cause” or “retirement”), and/or (c) an alternate restrictive covenant that is specifically intended to apply to awards under this Plan, the provisions of such employment agreement or arrangement will control if such provisions are approved by the Committee on or before the Grant Date.

11.	The time and form of payment of Performance Share Units shall be made in accordance with rule 4 above, provided that with respect to any payment upon the participant’s “separation from service” (as such term is defined under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)), the payment at such time can be characterized as a “short-term deferral” for purposes of Code Section 409A or as otherwise exempt from the provisions of Code Section 409A, or if any portion of the payment cannot be so characterized, and the participant is a “specified employee” under Code Section 409A, such portion of the payment shall be delayed until the earlier to occur of the participant’s death or the date that is six months and one day following the participant’s termination of employment (the “Delay Period”). Upon the expiration of the Delay Period, all payments delayed pursuant to this section shall be paid to the participant in accordance with rule 4 above. For purposes of the Program, the terms “retirement,” “termination of employment,” “terminated,” “termination,” and variations thereof, as used in this Program, are intended to mean a termination of employment that constitutes a “separation from service” under Code Section 409A.	

12.	The time or schedule of any payout of Performance Share Units pursuant to the terms of the Program may not be accelerated except as otherwise permitted under Code Section 409A and the guidance and Treasury regulations issued thereunder.	
Performance Measure for Performance Share Units
The performance measure for the Performance Share Units will be cumulative adjusted Earnings per Share for the Performance Cycle, for which the Committee has established a target of $13.51 (the “Target Earnings Per Share” or “Target EPS”).
Following the end of the Performance Cycle, the Committee will determine in its sole discretion the payout, which determination shall be final and binding. Performance Share Units will be subject to complete forfeiture if the Company’s performance for the Performance Cycle does not meet or exceed a minimum cumulative adjusted Earnings per Share of $13.01, and the payout for performance at or above that level will be calculated as follows:

			
2013-2015 Cumulative Adjusted EPS	 	% of Targeted Units Earned	
$13.01	 	50%	
$13.40	 	75%	
$13.80	 	100%	
$13.98	 	125%	
$14.15	 	150%	
$14.33	 	175%	
$14.51 or higher	 	200%	

The Performance Share Units will pay out linearly between each set of data points based on relative penetration within the range and rounded to one decimal place using standard rounding rules. Any fractional Performance Share Units that result from the application of the resulting payout percent will be truncated, not rounded or otherwise paid. For example, where cumulative adjusted EPS is $13.85, the calculation would be:

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[ ($13.85 - $13.80 )	/	( $13.98 – $13.80) ]	X 25%	+ 100%	= 106.9%	
The actual cumulative adjusted   EPS less next lowest defined data point	 	To calculate basis for penetration in the full range above the actual lowest data point achieved.	Multiplied by the full spread of the corresponding range (125% - 100% in this case)	The achievement for the next lowest defined data point	Resulting calculation, standard rounding to one decimal place	

Adjustments to Performance Measures or Results
The Committee will make appropriate adjustments to the Target Earnings per Share or the Company’s actual adjusted Earnings Per Share from continuing operations as publicly reported in the Company’s earnings release and annual Form 10-K on account of material (significant): change in accounting policy; gain/loss on disposition of assets or business; extraordinary legal/regulatory settlements; extraordinary market conditions; effects of natural or man-made disasters (e.g. Word Trade Center); hyperinflation (e.g. >15%); or other extraordinary, unusual or infrequently occurring items – as defined by GAAP. The form and manner of any such adjustment shall be at the sole discretion of the Committee who will consider the long-term impact of such items. By way of example, the following events will not require adjustment: change in accounting estimate; gained/lost pre-tax income from sold/acquired businesses that represent less than 5% of total pre-tax income; inflation; general tax developments; litigation costs; effects of repaying or issuing debt; effects of share buyback/issue; effects of pension plan funding; changes in benefit/incentive plans; or normal currency/interest rate fluctuations.
Nominal Value
As required under the U.K. Companies Act 2006, at the time of settlement of Awards under this Program, the Awards are subject to the Participant’s payment of a Nominal Value (as determined in the sole discretion of the Company and in accordance with such law, as amended from time to time), and such obligation may be satisfied by the Participant in any manner to be established by the Company in its sole discretion.
Restrictive Covenants
The following restrictive covenants will apply to all awards under this Program; provided, however, that if such restrictions are modified to comply with local (non-U.S.) law and are set forth in the performance award certificate issued in connection with this Program to, and accepted by, the Participant, the provisions in the performance award certificate will govern.
The Company is in the business of providing insurance brokerage, reinsurance brokerage, benefits consulting, compensation consulting, human resources consulting, managing underwriting and related services including accounting, claims management and handling, contract wording, information systems and actuarial services. An essential element of its business is the development and maintenance of personal contacts and relationships with clients. Because of these contacts and relationships, it is common for the Company’s clients to develop identification with the employee who services its insurance needs, rather than with the Company itself. The personal identification of clients of the Company with a Company employee creates potential for the employee’s appropriation of the benefits of the relationships developed with clients on behalf of and at the expense of the Company. Since the Company would suffer irreparable harm if the employee left its employ and solicited the insurance or other related business of clients of the Company, it is reasonable to protect the Company against solicitation activities by the employee for a limited period of time after the employee leaves the Company so that the Company may renew or restore its business relationship with its clients. Therefore, as consideration for participation in this Program, each participant will be bound by the following restrictive covenants:
Covenant Not to Solicit

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The employee agrees and covenants that, except with the prior written consent of the Company, the employee will not for a period of two years after the end of the employment compete directly or indirectly in any way with the business of the Company. For the purposes of this covenant, “compete directly or indirectly in any way with the business of the Company” means to enter into or attempt to enter into (on the employee’s own behalf or on behalf of any other person or entity) any business relationship of the same type or kind as the business relationship which exists between the Company and its clients or customers, in which the employee was involved or had knowledge, to provide services related to the business of the Company for any individual, partnership, corporation, association or other entity who or which was a client or customer for whom the employee was the producer or on whose account the Employee worked or became familiar during the 24 months prior to the end of employment.
Covenant Not to Hire
The employee also agrees not to induce or attempt to induce, or to cause any person or other entity to induce or attempt to induce, any person who is an employee of the Company to leave the employ of the Company during the term of the covenant set forth above.
If the Company determines that a participant has breached any of the covenants, his or her Performance Share Units will be immediately forfeited. In the event any of the restrictive covenants set forth herein is deemed unenforceable, such as against a non-US employee, the employee agrees that the maximum period, scope or geographic area reasonable under such circumstances shall be substituted for the stated period, scope or area and that the court shall be allowed to revise the restrictions accordingly.
Assignment of IP
The employee also agrees to assign to the Company the employee’s entire right, title and interest in and to all discoveries and improvements, patentable or otherwise, trade secrets and ideas and writings and copyrightable material, which are conceived, developed, reduced to practice, or acquired by the employee (collectively “IP”) during the employee’s employment and which relate to the business of the Company or any of its affiliates, parent companies, or subsidiaries. The employee further acknowledges that all original works of authorship which are made by the employee (solely or jointly with others) within the scope of and during the period of his/her employment with the Company and which are protectable by copyright are “works made for hire”, as that term is defined in the United States Copyright Act. The employee agrees to disclose promptly, fully and in writing all such IP to the Company. The employee will upon the Company’s request, execute, acknowledge and deliver to the Company all instruments and do all other acts which are necessary or desirable to enable the Company or any of its affiliates, parent companies, or subsidiaries to file and prosecute applications for, and to acquire, maintain and enforce, all patents, trademarks, and copyrights in all countries.
Administration
It is expressly understood that the Committee has the discretionary authority to administer, construe, and make all determinations necessary or appropriate to the administration of the Program, all of which will be binding upon the participant. The Committee may delegate its authority to one or more of its members, or to one or more members of the Company’s senior management team, to offer participation in this Program to eligible individuals; provided, however, that the Committee shall not delegate its authority with respect to the participation of any officer of the Company who is subject to Section 16 of the Securities Exchange Act of 1934, as amended. The Company shall, as necessary, adopt conforming amendments to this Program as are necessary to comply with Code Section 409A.
General Provisions
All obligations of the Company under this Program with respect to payout of Awards, and the corresponding rights granted thereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or other acquisition of all or substantially all of the business and/or assets of the Company.
This Program constitutes a legal document which governs all matters involved with its interpretation and administration and superseded any writing or representation inconsistent with its terms.
Reservation and Retention of Company Rights

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The selection of any employee for participation in this Program will not give that participant any right to be retained in the employ of the Company. No employee will at any time have a right to be selected for participation in a future performance-based incentive program despite having been selected for participation in this Program or a previous program.
Stock Plan Controls
Except as specifically provided in this Program, in the event of any inconsistency between this Program and the Stock Plan, the Stock Plan will control, but only to the extent such Stock Plan provisions do not violate the provisions of Code Section 409A.
Code Section 409A
The Company intends that this Program and the Awards granted hereunder be interpreted and construed to comply with Code Section 409A to the extent applicable thereto. Notwithstanding any provision of the Program to the contrary, the Program shall be interpreted and construed consistent with this intent, provided that the Company shall not be required to assume any increased economic burden in connection therewith. Although the Committee intends to administer the Program so that it will comply with the requirements of Code Section 409A, neither the Company nor the Committee represents or warrants that the Program will comply with Code Section 409A or any other provision of federal, state, local, or non-United States law. Neither the Company, its subsidiaries, nor their respective directors, officers, employees or advisers shall be liable to any participant (or any other individual claiming a benefit through any participant) for any tax, interest, or penalties any participant may owe as a result of compensation paid under the Program, and the Company and its subsidiaries shall have no obligation to indemnify or otherwise protect the participant from the obligation to pay any taxes pursuant to Code Section 409A.
Definitions
Adjusted Earnings per Share or Adjusted EPS: the Company’s adjusted earnings per share from continuing operations as publicly reported each quarter, and on an annual basis, in the Company’s earnings release and Form 10-K. The Committee has the sole discretion to approve an adjustment to EPS, in accordance with the adjustment criteria set forth herein.
CEO: the Company’s Chief Executive Officer.
Cause: as determined in the sole discretion of the Committee, means the participant: (A) performing an act of dishonesty, fraud, theft, embezzlement or misappropriation involving the participant’s employment with the Company, or breach of the duty of loyalty to the Company; (B) performing an act of race, sex, national origin, religion, disability, or age-based discrimination which, after investigation, counsel to the Company reasonably concludes will result in liability being imposed on the Company and/or the participant; (C) material violation of Company policies and procedures including, but not limited to, the Aon Code of Business Conduct; or (D) performing an act resulting in a criminal felony charge (or equivalent offense in a non-US jurisdiction) brought against the participant or a criminal conviction of the participant (other than a conviction of a minor traffic violation).
Change in Control: means:
(1) the acquisition by any individual, entity or group (a “Person”), including any “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (i) the then outstanding ordinary shares of Aon plc (the “Outstanding Ordinary Shares”) or (ii) the combined voting power of the then outstanding securities of Aon plc entitled to vote generally in the election of directors (the “Outstanding Voting Securities”); excluding, however, the following: (A) any acquisition directly from Aon plc (excluding any acquisition resulting from the exercise of an exercise, conversion or exchange privilege unless the security being so exercised, converted or exchanged was acquired directly from Aon plc), (B) any acquisition by Aon plc, (C) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by Aon plc or any corporation controlled by Aon plc, or (D) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and

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(iii) of subsection (3) of this Section 1(c); provided further, that for purposes of clause (B), if any Person (other than Aon plc or any employee benefit plan (or related trust) sponsored or maintained by Aon plc or any corporation controlled by Aon plc) shall become the beneficial owner of 30% or more of the Outstanding Ordinary Shares or 30% or more of the Outstanding Voting Securities by reason of an acquisition by Aon plc, and such Person shall, after such acquisition by Aon plc, become the beneficial owner of any additional shares of the Outstanding Ordinary Shares or any additional Outstanding Voting Securities and such beneficial ownership is publicly announced, such additional beneficial ownership shall constitute a Change in Control;
(1)     individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of such Board; provided that any individual who becomes a director of Aon plc subsequent to the date hereof whose election, or nomination for election by the shareholders of Aon plc, was approved by the vote of at least a majority of the directors then comprising the Incumbent Board shall be deemed a member of the Incumbent Board; and provided further, that any individual who was initially elected as a director of Aon plc as a result of an actual or threatened solicitation by a Person other than the Board for the purpose of opposing a solicitation by any other Person with respect to the election or removal of directors, or any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board shall not be deemed a member of the Incumbent Board;
(2)     the consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of Aon plc (a “Corporate Transaction”); excluding, however, a Corporate Transaction pursuant to which (i) all or substantially all of the individuals or entities who are the beneficial owners, respectively, of the Outstanding Ordinary Shares and the Outstanding Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than 60% of, respectively, the outstanding shares of common stock, and the combined voting power of the outstanding securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Corporate Transaction (including, without limitation, a corporation which as a result of such transaction owns Aon plc or all or substantially all of Aon plc’s assets either directly or indirectly) in substantially the same proportions relative to each other as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Ordinary Shares and the Outstanding Voting Securities, as the case may be, (ii) no Person (other than: Aon plc; any employee benefit plan (or related trust) sponsored or maintained by Aon plc or any corporation controlled by Aon plc; the corporation resulting from such Corporate Transaction; and any Person which beneficially owned, immediately prior to such Corporate Transaction, directly or indirectly, 30% or more of the Outstanding Ordinary Shares or the Outstanding Voting Securities, as the case may be) will beneficially own, directly or indirectly, 30% or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate Transaction or the combined voting power of the outstanding securities of such corporation entitled to vote generally in the election of directors and (iii) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the corporation resulting from such Corporate Transaction; or
(3)     the consummation of a plan of complete liquidation or dissolution of Aon plc.
Committee: the Organization and Compensation Committee of the Company’s board of directors.
Company: Aon plc, a public limited company incorporated under English law and its subsidiaries.
Fair Market Value: the per share value of the Company’s ordinary shares as determined by using the closing price of such shares as reported by the New York Stock Exchange on such date (or, if the New York Stock Exchange was not open for trading or the shares were not traded on that day, the next preceding day that the New York Stock Exchange was open for trading and ordinary shares of the Company were traded).
Grant Date: the date an Award to a participant is approved in writing by the Committee.
Program or LPP: the Leadership Performance Program, effective January 1, 2013.
Retire or Retirement: a voluntary termination of employment at or after the participant’s 55 th birthday.

8

Settlement Date: the date that the Committee determines whether the performance criteria applicable to the Performance Share Units has been achieved or exceeded and determines the payout to participants. The Settlement Date shall occur as soon as practicable following the close of the Performance Cycle.
Settlement Date Value: the Fair Market Value of an ordinary share of the Company on the date the Committee determines the amount of the Performance Share Units earned.
Stock Plan:  the Aon Corporation 2011 Incentive Plan, as approved by the Company’s stockholders at the 2011 annual meeting of stockholders and as assumed and adopted by Aon plc.
Total and Permanent Disability: for (a) US employees, entitlement to long-term disability benefits under the Company’s program, as amended from time to time and (b) non-US employees, as established by applicable Company policy or as required by local law or regulations.
If a term is used but not defined, it has the meaning given such term in the Stock Plan.

9

Exhibit 10.5

Aon plc
Senior Executive Incentive Compensation Plan
(Amended and Restated Effective January 1, 2013)
Overview
Since 2001, Aon has maintained its Omnibus Incentive Plan to encourage the highest level of performance of its executives through the establishment of quantifiable performance goals. Awards granted under the Omnibus Incentive Plan are intended to qualify as deductible “performance-based” compensation pursuant to Section 162(m) of the Code.
This Plan is a sub-plan of the Omnibus Incentive Plan and was originally adopted by the Committee effective January 1, 2008, and amended and restated from time to time thereafter. This amendment and restatement of the Plan is effective as of January 1, 2013. This Plan provides a discretionary framework regarding the funding of awards under the Omnibus Incentive Plan and provides certain terms and conditions relating to the form and timing of awards under the Omnibus Incentive Plan.
Performance Period
The Plan is based on successive calendar-year performance periods.
Eligibility
All members of Aon’s Executive Committee are eligible to participate in the Plan, as well as senior executives that are regularly invited to attend meetings of Aon’s Executive Committee but who are not official members, if they: (a) are actively employed by Aon as of the last day of the calendar year; (b) are on an approved leave of absence as of the last day of the calendar year; or (c) terminated employment on account of death or Total and Permanent Disability during the calendar year. The Committee may modify the eligibility criteria as it deems necessary or appropriate.
Award Calculation
At the beginning of each calendar year, the Committee will approve a “target incentive award” for each participant as a percentage of his or her base salary. For those participants serving international assignments, the Committee may include the participant’s foreign service allowance in the calculation of the target incentive award. The Committee will also establish corporate performance metrics applicable to the funding of incentive awards under the Plan, and those metrics may include: (1) the achievement of a specified adjusted pre-tax income from continuing operations; (2) the growth in adjusted pre-tax income from continuing operations as compare to the prior year; and/or (3) any other factors as determined by the Committee in its sole discretion. In addition, business unit, functional and individual performance metrics may be established and assigned weights to guide the Committee in its allocation of awards to participants.
After the close of the calendar year, awards to participants will be determined in the sole discretion of the Committee and paid to participants pursuant to and contingent upon satisfaction of all conditions under the Omnibus Incentive Plan. Awards will be funded in accordance with the corporate performance criteria adopted by the Committee; provided, however, that the CEO, in his sole discretion may elect to (i) reduce funding by up to 20% of the aggregate amount of the Participants’ target incentive awards, which discretion can be exercised at any time without the necessity of Committee approval, or (ii) increase funding by up to 10% of the aggregate amount of the Participants’ target incentive awards, provided that any such increase is subject to approval by the Committee at its next regularly scheduled meeting.
Awards will be allocated in the sole discretion of the Committee taking into account, among other facts, the participants’ target incentive awards and achievement of the assigned metrics. Any resulting awards will be paid pursuant to the terms and conditions of the Omnibus Incentive Plan; provided, however, in no event will an Award be paid later than two and one-half months after the end of the calendar year to which such award relates. In no event may an award to a participant exceed the maximum set forth in the Omnibus Incentive Plan (i.e. $10 million). In no event may an award to a participant fail to qualify as deductible “performance-based” compensation under Section 162(m) of the Code.

1

Payout Process
After the awards are determined by the Committee, they will be paid out partly in cash and partly in restricted stock units of Aon plc ordinary shares pursuant to the Omnibus Incentive Plan, or in such other security as may result from an adjustment to shares pursuant to Section 5.2 of the Omnibus Incentive Plan, unless Aon is contractually obligated to provide a participant’s award fully in cash.
Awards exceeding $100,000 in value will be paid 65% in cash and 35% in restricted stock units awarded pursuant to the Omnibus Incentive Plan.
The restricted stock units will be subject to the terms and conditions established by the Committee; provided, however, that they will vest in three equal installments on each of the first through third anniversaries of the date of grant. The Committee may modify the manner of distribution for an individual participant or one or more groups of participants as it deems necessary or appropriate.
A participant will have no right to an award until it is paid.
Administration
It is expressly understood that the Committee has the discretionary authority to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan, all of which will be binding upon the participant. The Committee has the sole discretion to set the Target Award Percentage for each participant and to determine any final award payment taking into account factors it selects in its sole discretion including, but not limited to, the duration of a participant’s employment with the Company during the year.
Nominal Value
In order to comply with the U.K. Companies Act 2006, at the time of settlement of Awards under this Plan any portion of Awards settled in restricted stock units will be subject to the participant’s payment of a Nominal Value (as determined in the sole discretion of the Company and in accordance with the law, as amended from time to time). Such obligation may be satisfied by the participant in any manner to be established by the Company in its sole discretion.
General Provisions
This Plan constitutes a legal document which governs all matters involved with its interpretation and administration and superseded any writing or representation inconsistent with its terms.
To the extent not preempted by federal law, this Plan will be construed in accordance with, and subject to, the laws of the state of Illinois without regard to any conflict of laws principles. Any legal action related to this Plan must be brought in a federal or state court located in Illinois.
All awards will be subject to applicable withholding taxes and other required deductions.
Participants may not assign, transfer, sell, pledge or otherwise alienate their award opportunities, other than by will or by the laws of descent and distribution. Any award payable on behalf of a deceased participant will be paid to the participant’s estate.
Aon is not required to establish a separate account or fund or to make any other segregation of its assets in connection with awards that could become payable under this Plan. Participants will have rights with regard to earned but unpaid awards that are no greater than the rights of unsecured general creditors.
This Plan and the benefits provided hereunder are intended to comply with Section 409A of the Code and the guidance and Treasury Regulations issued thereunder to the extent applicable thereto. Notwithstanding any provision of the Plan to the contrary, the Plan shall be interpreted and construed consistent with this intent. Notwithstanding the foregoing, Aon shall not be required to assume any increased economic burden in connection therewith. Although Aon intends to administer the Plan so that it will comply with the requirements of Section 409A of the Code, Aon does not represent or warrant that the Plan will comply with Section 409A of the Code or any other provision of federal, state, local, or non-United States law. Neither Aon, nor any subsidiary, nor its or their respective directors, officers, employees or advisers shall be liable to any participant (or any other individual claiming a benefit through the participant) for any tax, interest, or penalties the participant might owe as a result of participation in the Plan, and neither Aon nor any subsidiary shall have

2

any obligation to indemnify or otherwise protect any participant from the obligation to pay any taxes pursuant to Section 409A of the Code.
Reservation and Retention of Company Rights
Participation in this Plan will not give a participant any right to be retained in the employ of Aon. No employee will at any time have a right to be selected for participation in another performance-based incentive program, including any future program, on account of his or her participation in this Plan.
All awards under this Plan are gratuitous in nature and will not become part of any employment condition or contract.
The Committee reserves the right to amend or terminate this Plan, prospectively or retroactively, at any time and for any reason.
Omnibus Incentive Plan Controls
In the event of any inconsistency between this Plan and the Omnibus Incentive Plan, the Omnibus Incentive Plan will control unless otherwise specified herein.
Definitions
“ Adjusted pre-tax income from continuing operations” means such term as publicly reported on an annual basis in the Company’s earnings release and Form 10-K. For purposes of this Plan, the Committee will make appropriate adjustments to the target adjusted pre-tax income from continuing operations or the Company’s actual adjusted pre-tax income from continuing operations as publicly reported in the Company’s earnings release and annual Form 10-K on account of material (significant): change in accounting policy; gain/loss on disposition of assets or business; extraordinary legal/regulatory settlements; extraordinary market conditions; effects of natural or man-made disasters (e.g. Word Trade Center); hyperinflation (e.g. >15%); or other extraordinary, unusual or infrequently occurring items – as defined by GAAP. The form and manner of any such adjustment shall be at the sole discretion of the Committee who will consider the long-term impact of such items. By way of example, the following events will not require adjustment: change in accounting estimate; gained/lost pre-tax income from sold/acquired businesses that represent less than 5% of total pre-tax income; inflation; general tax developments; litigation costs; effects of repaying or issuing debt; effects of share buyback/issue; effects of pension plan funding; changes in benefit/incentive plans; or normal currency/interest rate fluctuations. For purposes of this Plan, adjusted pre-tax income from continuing operations will be measured to one decimal place, and will receive straight-line interpolation between performance targets in the gearing schedule adopted by the Committee.
“ Aon ” means Aon plc, a public limited company incorporated under English law, and its operating subsidiaries and affiliates.
“ Code ” means the U.S. Internal Revenue Code of 1986, as amended.
“ Committee ” means the Organization and Compensation Committee of the Board of Directors of Aon.
“ Executive Committee” means the committee comprised of senior members of Aon’s management team as established from time to time.
“ Omnibus Incentive Plan ” means the Aon Corporation 2011 Incentive Plan, as approved by the Company’s Stockholders on May 20, 2011, and as adopted and assumed by Aon plc effective April 2, 2012.
“Plan” means this Senior Executive Incentive Compensation Plan, as amended and restated effective January 1, 2013, which in prior calendar years was referred to as the “Aon Corporation Executive Committee Incentive Plan”.
“Total and Permanent Disability” means (a) for US employees, entitlement to long-term disability benefits under Aon’s program as amended from time to time, and (b) for non-US employees, as established by applicable company policy or as required by local law or regulations.
If a term is used but not defined, it has the meaning given su ch term in the Omnibus Incentive Plan.

3

Exhibit 12.1
Aon plc and Consolidated Subsidiaries
Combined With Unconsolidated Subsidiaries
Computation of Ratio of Earnings to Fixed Charges

	
																									
 	 	Three Months Ended March 31,	 	Years Ended December 31,	
(millions except ratio)	 	2013	 	2012	 	2012	 	2011	 	2010	 	2009	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from continuing operations before income taxes and noncontrolling interests	 	$	368		 	$	346		 	$	1,381		 	$	1,384		 	$	1,059		 	$	949		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Less: Equity in earnings on less than 50% owned entities	 	2		 	1		 	13		 	7		 	10		 	11		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Add back fixed charges:	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
     Interest on indebtedness	 	52		 	59		 	228		 	245		 	182		 	122		
 	 	 	 	 	 	 	 	 	 	 	 	 	
     Interest on uncertain tax positions	 	—		 	1		 	5		 	—		 	(1	)	 	2		
 	 	 	 	 	 	 	 	 	 	 	 	 	
     Portion of rents representative of interest factor	 	10		 	14		 	42		 	55		 	48		 	48		
 	 	 	 	 	 	 	 	 	 	 	 	 	
          Income as adjusted	 	$	428		 	$	419		 	$	1,643		 	$	1,677		 	$	1,278		 	$	1,110		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Fixed charges:	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
     Interest on indebtedness	 	$	52		 	$	59		 	$	228		 	$	245		 	$	182		 	$	122		
 	 	 	 	 	 	 	 	 	 	 	 	 	
     Interest on uncertain tax positions	 	—		 	1		 	5		 	—		 	(1	)	 	2		
 	 	 	 	 	 	 	 	 	 	 	 	 	
     Portion of rents representative of interest factor	 	10		 	14		 	42		 	55		 	48		 	48		
 	 	 	 	 	 	 	 	 	 	 	 	 	
          Total fixed charges	 	$	62		 	$	74		 	$	275		 	$	300		 	$	229		 	$	172		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Ratio of earnings to fixed charges	 	6.9		 	5.7		 	6.0		 	5.6			5.6		 	6.5		

Exhibit 31.1
CERTIFICATIONS
I, Gregory C. Case, the Chief Executive Officer of Aon plc, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Aon plc;	

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	

3.	Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	

(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	

(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	

(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	

(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	

		
Date: May 1, 2013	/s/ GREGORY C. CASE	
 	Gregory C. Case
Chief Executive Officer	

Exhibit 31.2
CERTIFICATIONS
I, Christa Davies, the Chief Financial Officer of Aon plc, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Aon plc;	

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	

3.	Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	

(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	

(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	

(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	

(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	

		
Date: May 1, 2013	/s/ CHRISTA DAVIES	
 	Christa Davies
Chief Financial Officer	

Exhibit 32.1
Certification Pursuant to Section 1350 of Chapter 63
of Title 18 of the United States Code
I, Gregory C. Case, the Chief Executive Officer of Aon plc (the “ Company ”), certify that (i) the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2013 (the “ Report ”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

		
 	/s/ GREGORY C. CASE	
 	Gregory C. Case
Chief Executive Officer
May 1, 2013	

Exhibit 32.2
Certification Pursuant to Section 1350 of Chapter 63
of Title 18 of the United States Code
I, Christa Davies, the Chief Financial Officer of Aon plc (the “ Company ”), certify that (i) the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2013 (the “ Report ”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

		
 	/s/ CHRISTA DAVIES	
 	Christa Davies
Chief Financial Officer
May 1, 2013