Slide 1: Aon Stock Conversion Webcast
Aon Stock Conversion Webcast March 1, 2012 Filed by Aon Global Limited Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934 Subject Company: Aon Corporation Commission File No.: 001-07933 Commission File No. for Regi
Slide 2: Disclaimer
Disclaimer This webcast has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this webcast without obtaining specific professional advice. No representation or warranty (express or implied
Slide 3: Disclaimer (continued)
Disclaimer (continued) To ensure compliance with Treasury Department Circular 230, PricewaterhouseCoopers LLP ("PwC" or "we" or "us") informs you that this document was not intended or written to be used, and it cannot be used by any taxpayer (including, but not limited to employees and shareholders
Slide 4: Disclaimer (continued)
Disclaimer (continued) The information contained herein is intended to summarize some tax and financial planning concepts and is written for educational purposes only. The information provided by PwC and its personnel is not, and should not be taken as legal, tax, investment, or any other profession
Slide 5: Agenda
Agenda Tax consequences for UK shareholders Capital gains Company equity programs Additional information Obtaining transaction information from Fidelity and Computershare UK Aon Stock Conversion Assistance Program
Slide 6: Objectives
Objectives Understand the tax consequences for UK shareholders Understand the capital gains that may result Locate and determine the base cost of shares held Become familiar with the available resources to assist with the transaction implications
Slide 7: Definitions and glossary of terms
Definitions and glossary of terms Share holders – shares are held and owned outright. Award holders – where shares are not yet owned but the award holder has (or may have) the right to acquire shares in the future. For example: - unvested restricted stock units (RSUs) - unexercised options - unconve
Slide 8: Tax consequences for UK share and award holders
Tax consequences for UK share and award holders
Slide 9: Tax consequences for UK share and award holders
Tax consequences for UK share and award holders Shareholders will receive one Class A ordinary share in Aon UK for every one share of Aon Corporation common stock owned outright. This exchange of shares at the date of the transaction is treated as a deemed disposal for UK Capital gains tax (CGT) pur
Slide 10: Capital gains
Capital gains
Slide 11: Definition – Capital gains
Definition – Capital gains A capital gain is the increase in the value of a capital asset (i.e. stock/shares) - Recognised and taxable when the capital asset is sold or exchanged. The gain is the difference between the proceeds, or deemed proceeds (see later in the slides), and the base cost. - Gain
Slide 12: Deemed proceeds
Deemed proceeds = Deemed proceeds will be based on the Fair Market Value (FMV) at the date of the transaction. = FMV is determined by the value of Aon UK shares received. = Sources for obtaining FMV values after the transaction close: - Aon Investor Relations www.ir.aon.com - Shares held with Fideli
Slide 13: Deemed proceeds – example
Deemed proceeds – example FMV at the date of transaction close $2 Average exchange rate at date of transaction close 0.5 FMV for UK CGT purposes £1
Slide 14: Definition – base cost
Definition – base cost For UK CGT purposes the base cost of the Aon Corporation stock will be: - Price paid for the stock; plus - Any fees or commissions paid on acquisition Typically tracked in the brokerage account where the stock was initially purchased or acquired. For stock purchased prior to t
Slide 15: Definition – base cost (continued)
Definition – base cost (continued) As the stock is expressed in US Dollars the base cost will need to be converted to Sterling using the average exchange rate at each date of acquisition. Shareholders may hold stock which was acquired in various different tranches and over various dates. For UK CGT
Slide 16: Base cost – example
Base cost – example Acquisition Date of Stock $ price per Exchange rate* £ price Acquisition Acquired stock* per stock 01/03/2009 1 $1.00 0.6 £0.60 01/03/2010 1 $1.00 0.5 £0.50 01/03/2011 1 $1.00 0.4 £0.40 The shareholders “pool” contains 3 stocks with a combined base cost for UK CGT purposes of £1.
Slide 17: Share matching rules – as of April 2008
Share matching rules – as of 6 April 2008 When shares are sold, there are matching rules to determine which shares have been sold. Matching rules apply to all shares of the same class in the same company. For many individuals who have not previously made any disposals, the matching rules will not be
Slide 18: Share matching rules (continued)
Share matching rules (continued) For disposals since 6 April 2008, the order of matching is: - Firstly Shares acquired on the same day as the disposal; - Secondly Any shares acquired in the following 30 days; Then All other share acquisitions which form the “pool” (which shows the total number of sh
Slide 19: CGT rates
CGT rates Most individuals will have a UK CGT annual exemption for the tax year (£10,600 for 2011/12 and 2012/13). If gains realised during the tax year do not exceed this amount then no CGT will be payable. Any losses, either incurred in year, or brought forward from prior years can be offset again
Slide 20: Example – Calculating capital gains and losses
Example – Calculating capital gains and losses Assume a shareholder makes total gains in a tax year of £20,000 and losses of £1,000 in the same tax year. The CGT calculation will be as follows: Total gains realised £20,000 Less: total losses realized (£1,000) Net gain £19,000 Less: Annual exemption
Slide 21: Aon UK shares
Aon UK shares Shareholders will be treated as having acquired Aon UK shares at the date of transaction. The base cost of the Aon UK shares will be equal to the deemed proceeds figure used in the CGT calculation.
Slide 22: Company equity programs
Company equity programs
Slide 23: Effect of transaction on equity programs
Effect of transaction on equity programs Unvested Restricted Stock Units (RSUs) - Converted to Aon UK RSUs* Unexercised Options - Converted to Aon UK options* Undistributed Performance Shares (PSUs) - Converted to Aon UK PSUs* *Same terms and conditions apply for Aon plans post-transaction. Subject
Slide 24: Summary
Summary Company plan Acquisition cost Acquisition date Gain on shares held at date of transaction Gain on unexercised options Aon UK Sharesave Scheme (SAYE) Option price fixed at the start of the contract Date option exercised and shares acquired Deemed proceeds less CGT base cost No gain realised U
Slide 25: Summary (continued)
Summary (continued) Company plan Acquisition cost Acquisition date Gain on shares held at date of transaction Gain on unvested RSUs /undistributed PSUs Restricted Stock Units (RSUs) under the Aon Incentive Stock Programme (ISP) or Special Stock Programme (SSP) FMV at the date of vesting Date of vest
Slide 26: Additional Information
Additional Information
Slide 27: UK reporting
UK reporting Generally, shareholders will be required to complete a self-assessment tax return (and capital gains supplementary pages) if: - total proceeds (and deemed proceeds) from all transactions during the tax year exceed £42,400; and/or - chargeable gains (before the deduction of any losses) e
Slide 28: UK reporting (continued)
UK reporting (continued) The tax year in which the conversion will happen is not yet known. - If the transaction date is before 6 April 2012, it will fall into the 2011/12 tax year. - If the transaction date is on or after 6 April 2012, it will fall into the 2012/13 tax year. UK tax returns are due
Slide 29: Payment of CGT
Payment of CGT Payment due to HMRC by 31 January following the end of the tax year. - 31 January 2013 for the 2011/12 tax year - 31 January 2014 for the 2012/13 tax year If payment is not made to HMRC by this date interest will apply. Capital gains do not trigger UK “payments on account”.
Slide 30: Obtaining transaction information from Fidelity
Obtaining transaction information from Fidelity
Slide 31: Participant Trust account
Participant Trust account *for illustrative purposes only
Slide 32: Base cost – summary
Base cost – summary *for illustrative purposes only
Slide 33: Detailed summary of stock held
Detailed summary of stock held *for illustrative purposes only
Slide 34: Stock History
Stock History Formatting to be corrected
Slide 35: Aon Stock Conversion Assistance Program
Aon Stock Conversion Assistance Program
Slide 36: Overview
Overview Who is eligible? - All UK colleagues who own shares of Aon Corporation common stock Resources - Live webcast - PwC telephone helpline and e-mail (free to Aon colleagues) - CGT projections Key transaction data on Aon KE post transaction Assistance from PwC will be available for an additional
Slide 37: PwC contact information
PwC contact information Telephone - Number: 020 7212 1415 - Hours: Monday – Friday from 9am – 5pm E-mail - eaaonsupport@uk.pwc.com
Slide 38: About PwC
About PwC PwC have been providing broad-based employee tax and financial education services for over 25 years. From teams of tax and wealth advisory experts in offices throughout the United Kingdom. With experience in delivering tax and financial education to employees of multi-national companies. P
Slide 39: Disclaimer
Disclaimer To ensure compliance with Treasury Department Circular 230, PricewaterhouseCoopers LLP ("PwC" or "we" or "us") informs you that this document was not intended or written to be used, and it cannot be used by any taxpayer (including, but not limited to employees and shareholders of Aon Corp
Slide 40: Disclaimer (continued)
Disclaimer (continued) The conclusions reached in this webcast represent and are based upon our best judgment regarding the application of U.S. federal income tax laws arising under the Internal Revenue Code, judicial decisions, administrative regulations, published rulings and other tax authorities
Slide 41: Disclaimer (continued)
Disclaimer (continued) This webcast supersedes and replaces any and all prior written or oral advice (including, without limitation, electronic communications) and all such prior communications, if any, should not be relied upon by any party to the transaction or matters described herein for any pur
Slide 42: Disclaimer (continued)
Disclaimer (continued) Aon and Aon UK and their respective directors and executive officers and certain other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. You can find information about Aon’s directors and
Slide 43: Q&A
Q&A