Exhibit 10.2
Watson Wyatt Worldwide,
Inc.
Performance Share Bonus Incentive
Program
FY07
Summary
The Performance Share Bonus
Incentive Program (the Program) is a long-term bonus program for
senior executives, designed to strengthen incentives and align
behaviors to grow the business in a way that is consistent with the
strategic goals of 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 bonus program does not replace the Fiscal
Year End Bonus (FYEB).
Eligibility
Associates of Watson Wyatt &
Company and its Affiliates 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 high performing, senior-level executives that
have direct impact or responsibility for driving strategy
throughout the organization.
Performance Period
The performance period is a 3-year
period that begins on July 1, 20xx and ends on June 30,
20xx+3. For example, the performance period that began on
July 1, 2006 will end on June 30, 2009. Baseline metrics are
established at the beginning of the performance period. At
the end of the performance period, performance metrics will then be
measured. The Company will follow its standard process for
financial reporting following the close of the fiscal year.
Once Company financial results are finalized (August following end
of fiscal year) the final performance metric results for the most
recent performance period can be determined.
Grants
Grants of stock (performance shares)
are made under the 2001 Deferred Stock Unit Plan for Selected
Employees . Grants are based on the value of the cash
portion of the Fiscal Year End Bonus target. 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 fiscal
year prior to the grant. For calculation purposes, band and
salary information will be based on what is in effect as of October
1 of the first fiscal year of the performance period.
All performance share grants will be
made by the Committee at the beginning of each performance period
(following the fiscal year end close process). Final grant
amounts will generally be determined by the method outlined
here. However, the Committee, at its discretion, may adjust
final grant amounts.
Vesting
The performance shares will vest 3
years from the date of grant based on the achievement of certain
performance metrics and subject to the participant’s
continued employment on the vesting date unless waived in
accordance with the Termination Provisions herein. Company
performance goals are established by the Committee at the beginning
of each performance period. At the conclusion of each
performance period, Company performance metrics are measured
against goals over the same period to determine the percentage of
the grant to be awarded. The actual award is det
