Exhibit 10.1

 

TOWERS WATSON & CO.

COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS

EFFECTIVE JANUARY 1, 2010

 

1.     Purpose.  The purpose of the Towers Watson & Co. Compensation Plan for
Non-Employee Directors (the “Plan”) is to advance the interests of Towers
Watson & Co. (the “Company”) and its stockholders by closely aligning the
interests of members of the Board of Directors of the Company (the “Board”) who
are not employees of the Company or any subsidiary with the interests of the
Company and its stockholders.  Accordingly, this Plan provides for the payment
of a substantial portion of the annually established compensation payable to
Non-Employee Directors for their service to be in the form of equity-based
compensation consisting of restricted stock units (RSUs).  Each RSU represents a
notional unit interest equal in value to a share of the Company’s Class A common
stock (the “Common Stock”).  All RSUs payable to Non-Employee Directors under
this Plan shall be issued pursuant to the terms of the Towers Watson & Co. 2009
Long Term Incentive Plan (the “LTIP”).  All capitalized terms used but not
defined herein shall have the meaning assigned to them in the LTIP.  The maximum
number of shares of Class A common stock that may be subject to awards made
under this Plan in total or to any one individual shall be as specified in the
LTIP.

 

2.     Administration.  The Compensation Committee of the Board (the
“Committee”) shall administer the Plan.  The Committee shall, subject to the
provisions of the Plan, have the power to construe the Plan, to determine all
questions arising thereunder, and to adopt and amend such rules and regulations
for the administration of the Plan, as it may deem desirable.  Any decisions of
the Committee in the administration of the Plan, as described herein, shall be
final and conclusive.  The Committee may authorize any one or more of its
members or any officer of the Company to execute and deliver documents on behalf
of the Committee.

 

3.     Amount of Non-Employee Director Compensation.  Effective January 1, 2010,
the schedule of fees payable to Non-Employee Directors pursuant to this Plan is
as follows:

 

a.     Annual Cash Retainer:  $45,000 per year, paid quarterly

 

b.     Annual RSU Grant:  Annual RSUs, equivalent to $120,000 ($60,000 for the
period beginning January 1, 2010 and ending June 30, 2010), granted at the
beginning of each fiscal year (with the number of shares underlying the RSUs
based on the closing price per share of the Common Stock on the last business
day of the just completed fiscal year) for services to be provided during the
current fiscal year.  Annual RSUs vest in equal quarterly installments over a
12-month period beginning on the date of grant, and unless deferred shall be
paid upon vesting as provided in Section 6 of this Plan.

 

c.     Initial RSU Grant:  Initial RSUs, equivalent to $135,000 granted on the
second business day following the Company’s first earnings announcement after
the date that the Non-Employee Director is initially elected to the Board
(whether elected by stockholders or the Board) with the number of shares
underlying the RSUs based on the closing price per share of the Common Stock on
the date of grant.  Initial RSUs will vest in equal annual installments over a
three-year period beginning on the date of grant.  With respect to Non-Employee
Directors serving on the date this Plan is adopted by the Board, Initial RSUs
equivalent to $135,000 shall be granted upon the date of such approval,  based
on the closing price per share of the Common Stock on the date of grant, and
shall vest in equal annual installments on January 1, 2011, January 1, 2012 and
January 1, 2013.  Any director who is an employee of the Company shall not be
entitled to an Initial RSU grant if he or she becomes a Non-Employee Director. 
Unless deferred, Initial RSUs shall be paid upon vesting as provided in
Section 6 of this Plan.

 

d.     Board Meetings:  $1,000 per meeting

 

e.     Committee Member Fees:

 

i.         Audit Committee:  $7,500 annual retainer, paid quarterly, and $1,000
per meeting

 

--------------------------------------------------------------------------------

 

ii.        Compensation Committee:  $5,000 annual retainer, paid quarterly, and
$500 per meeting

iii.       Nominating and Governance Committee:  $2,500 annual retainer, paid
quarterly, and $500 per meeting

iv.       Risk Committee: $2,500 annual retainer, paid quarterly, and $500 per
meeting

 

f.      Committee Chair Fees (paid in lieu of Committee Member Fees):

 

i.         Audit Committee Chair:  $15,000 annual retainer, paid quarterly, and
$2,000 per meeting

ii.        Compensation Committee Chair:  $10,000 annual retainer, paid
quarterly, and $1,000 per meeting

iii.       Nominating and Governance Committee Chair:  $5,000 annual retainer,
paid quarterly, and $1,000 per meeting

iv.       Risk Committee Chair:  $5,000 annual retainer, paid quarterly, and
$1,000 per meeting

 

g.     Lead Director Annual Retainer (paid in addition to regular Board and
Committee Fees):  $20,000 per year, paid quarterly

 

4.     Dividend Equivalent Rights.  RSUs granted hereunder shall be granted
together with a Dividend Equivalent Right with respect to the shares of Common
Stock subject to the award.  Dividend Equivalent Rights shall be accumulated and
deemed to be reinvested in additional RSUs and will be paid at the time the
underlying RSU is payable.  Dividend Equivalent Rights shall be subject to
forfeiture under the same conditions as apply to the underlying RSUs.

 

5.     Vesting of RSUs.  Vesting of RSUs granted under this Plan shall be
conditioned upon continued service as a director of the Company, provided that
vesting shall be accelerated upon the director’s death or disability or upon a
Change in Control.

 

6.     Settlement of RSUs.  RSUs will be paid out in shares of Common Stock on
the date of vesting to an account established for each Non-Employee Director at
a brokerage firm designated by the Company.  Notwithstanding the foregoing, a
Non-Employee Director can elect to defer all or any portion of his/her director
compensation pursuant to the terms of the Towers Watson & Co. Voluntary Deferred
Compensation Plan for Non-Employee Directors and in accordance with deferral
procedures established by the Company, in which case shares of Common Stock
issuable under RSUs (and under any associated Dividend Equivalent Rights) will
be paid out at the time and in the manner provided for pursuant to such
deferral.

 

7.     Director Ownership Requirements.   Non-Employee Directors are required to
accumulate shares of Common Stock at least equal to three times the annual cash
retainer (i.e., $135,000), valued as of the last day of the Company’s fiscal
year.  Each Non-Employee Director has three years from the date of appointment
to achieve compliance with such ownership guidelines.  Until the ownership level
is reached, Non-Employee Directors should not sell shares of Common Stock in
excess of the amount needed to pay state and Federal taxes associated with the
equity granted.  Once a Non-Employee Director accumulates sufficient shares to
meet the $135,000 requirement, he/she is not required to retain shares of Common
Stock.  If as a result of a stock price decline subsequent to a Non-Employee
Director meeting the ownership requirements the Non-Employee Director does not
satisfy the requirements as of the Company’s fiscal year-end, he/she is not
required to “buy up” to a new number of shares needed to meet the ownership
requirements.  However, he/she is required to retain the number of shares that
originally were acquired to reach the share ownership threshold.

 

8.     The Plan may be amended from time to time by the Board of Directors.

 

 

--------------------------------------------------------------------------------