Exhibit 10.1
Watson Wyatt
Worldwide, Inc.
2008 Long-Term Incentive Program
for Selected Associates
Summary
The Long-Term Incentive Program for Selected
Associates (the Program) is a long-term stock bonus program for key
associates designed to meet specific retention needs in certain
parts of Watson Wyatt & Company, Watson Wyatt Limited and
their Affiliates (collectively, the “Company”).
Incentives are provided through grants of deferred stock units tied
to a 3-year performance period with vesting contingent upon meeting
certain Company goal thresholds. This incentive program does
not replace the Fiscal Year End Bonus (FYEB) program.
Eligibility
Associates of the Company will be eligible for
nomination to participate in the Program. Eligible
participants will be nominated and approved by the Compensation
Committee of the Board (the Committee). Generally, associates
eligible for nomination will be associates who are critical to the
long-term success of the Company and whom the Company seeks to
retain due to various factors, including but not limited to their
ability to win major new projects or clients, their ability to
build strong and profitable relationships with our most important
clients, their exceptional technical competence and thought
leadership, or their critical role in the management of the
Company. A list of participants nominated and approved by the
Committee for the performance period beginning January 1, 2008
and ending December 31, 2010 is attached hereto as Attachment
1.
Performance Period
The performance period is a 3-year period that
begins on January 1, 20xx and ends on December 31,
20xx+3. For example, the performance period that began on
January 1, 2008 will end on December 31, 2010.
Baseline metrics are established at the beginning of the
performance period (except that metrics for the first performance
period may be established after January 1, 2008). At the
end of the performance period, performance metrics will then be
measured. The Company will follow its standard process for
financial reporting in conjunction with the close of the calendar
year (i.e., following the second quarter of the fiscal year).
Once Company financial results are finalized and the Company has
filed its second quarter 10-Q (February following end of the
calendar year) the final performance metric results for the most
recent performance period can be determined. The Chief
Financial Officer will certify the final performance metric results
to the Committee, which will then determine the earnout for the
performance period.
Grants
Grants of stock (performance shares)
are made under the 2001 Deferred Stock Unit Plan for Selected
Employees . Grants are determined using base salary at
the start of the performance period as the starting point. A
multiplier, which varies by participation tier, is then applied to
that value to determine the cash value of the performance
shares. The cash value is then converted to a number of
shares of stock based on the stock market closing price on the last
day of the first quarter of the performance period (i.e.,
March 31). For calculation purposes, salary information
will be based on what is in effect as of January 1 of the
first calendar year of the performance period.
All performance share grants will be made by the
Committee as of April 1 of the first year of the performance
period. Final grant amounts will generally be determined by
the method outlined here. However, the Committee, at its
discretion, may adjust final grant amounts.
