exv10w23






Exhibit 10.23




WATSON WYATT & COMPANY HOLDINGS

WATSON WYATT & COMPANY HOLDINGS

2000 LONG-TERM INCENTIVE PLAN



1. Purpose. The purpose of the Watson Wyatt & Company Holdings 2000 Long-Term Incentive
Plan (the “Plan”) is to secure for Watson Wyatt & Company Holdings and its successors and assigns
(the “Company”) and its stockholders the benefits of the additional incentive inherent in the
ownership of the Company’s class A common stock, par value $ .01 per share (the “Common Stock”), by
selected employees of the Company and its subsidiaries who are important to the success and growth
of the business of the Company and its subsidiaries and to help the Company and its subsidiaries
secure and retain the services of such persons. Compensation awarded under the Plan is intended to
qualify for tax deductibility pursuant to the requirements of Section 162(m) of the Internal
Revenue Code of 1986, as amended from time to time or any successor statute or statutes (the
“Code”), to the extent deemed appropriate by the Committee (as defined in Paragraph 2.1).



Pursuant to the Plan, such employees will be offered the opportunity to acquire Common Stock
through the grant of options, or to receive similar economic benefit through the grant of stock
appreciation rights (such options and stock appreciation rights collectively referred to as
“Awards”). Options granted under the Plan will be “nonqualified stock options” for purposes of the
Code. For purposes of the Plan, the terms “parent” and “subsidiary” shall mean “parent
corporation” and “subsidiary corporation,” respectively, as such terms are defined in Sections
424(e) and (f) of the Code; provided, however, that with respect to any jurisdiction where the
Company is prohibited by law from owning 50% of the voting shares of an entity, any entity formed
in such jurisdiction shall be deemed a “subsidiary” if the Company holds the maximum percentage of
voting shares permitted to be held under the laws of such jurisdiction.




     2. Committee.


2.1 Administration. The Plan shall be administered by a Committee appointed by the Board of
Directors of the Company (the “Committee”). The Committee shall consist of two or more directors
who are “non-employee directors”, within the meaning of Rule 16b-3 under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and “outside directors” within the meaning of Section
162(m) of the Code. Any vacancy on the Committee, whether due to action of the Board of Directors
or due to any other cause, may be filled, and shall be filled if required to maintain a Committee
of at least two such persons, by resolution adopted by the Board of Directors.



2.2 Procedures. The Committee shall select one of its members as Chairman and shall adopt
such rules and regulations as it shall deem appropriate concerning the holding of its meetings and
the administration of the Plan. A majority of the whole Committee shall constitute a quorum, and
the acts of a majority of the members of the Committee present at a meeting at which a quorum is
present, or acts approved in writing by all of the members of the Committee, shall be the acts of
the Committee.



2.3 Interpretation. The Committee shall have full power and authority to interpret the
provisions of the Plan and any agreement evidencing options granted under the Plan, and to
determine any and all questions arising under the Plan, and its decisions shall be final and
binding on all participants in the Plan.



2.4 Delegation. The Committee may delegate, to the chief executive officer of the Company,
the authority to grant Awards under this Plan in such circumstances as the Committee shall deem
appropriate.




 









 








     3. Shares Subject to Grants.


3.1 Number of Shares. Subject to the provisions of Paragraph 16 (relating to adjustments
upon changes in capitalization), the number of shares of Common Stock with respect to which Awards
may be granted under the Plan shall be 4,500,000 shares. If and to the extent that (i) Awards
granted under the Plan terminate, expire or are cancelled without having been exercised, or (ii)
shares of Common Stock are tendered or delivered by a Participant to pay the option price of an
option upon exercise thereof or to satisfy the tax withholding requirement relating to such
exercise, the number of shares of Common Stock covered by such terminated, expired or cancelled
Awards or tendered or delivered by the Participant shall be added to the number of authorized
shares remaining.



3.2 Character of Shares. Shares of Common Stock delivered under the Plan may be authorized
and unissued Common Stock, issued Common Stock held in the Company’s treasury, or both.



3.3 Reservation of Shares. There shall be reserved at all times for sale or award under the
Plan a number of shares of Common Stock (authorized and unissued Common Stock, issued Common Stock
held in the Company’s treasury, or both) equal to the number of shares provided in Paragraph 3.1
from time to time.



4. Employees Eligible. Awards may be granted under the Plan to any employee of the Company
or any of its subsidiaries (each an “eligible employee”), or to any prospective employee of the
Company or any of its subsidiaries, conditioned upon, and effective not earlier than, such person’s
becoming an eligible employee. Members of the Board of Directors of the Company who are not
employees of the Company or any of its subsidiaries shall also be eligible to receive grants under
the Plan. Notwithstanding the foregoing, in each calendar year during any part of which the Plan is
in effect, no Participant (as defined below) may be granted Awards relating in the aggregate to
more than 200,000 shares of Common Stock, subject to adjustment as provided in Paragraph 16.



An individual receiving a grant of an Award under the Plan is hereinafter referred to as a
“Participant.” Any reference herein to the “employment” of a Participant by the Company shall
include (i) his or her employment by the Company or any of its subsidiaries, and (ii) with respect to a
Participant who was not an employee of the Company or any of its subsidiaries at the time of grant
of his or her Award, his or her period of service in the capacity for which the Award was granted.
For all purposes of this Plan, the time at which an Award is granted shall be deemed to be the
effective date of such grant.



5. Grant of Options. The Committee shall determine, within the limitations of the Plan, the
persons to whom options are to be granted, the number of shares that may be purchased under each
option, and the option price. In determining the persons to whom options shall be granted and the
number of shares to be covered by each option, the Committee shall take into consideration the
person’s present and potential contribution to the success of the Company and its subsidiaries and
such other factors as the Committee may deem proper and relevant. Each option granted under the
Plan shall be evidenced by a written agreement (“Award Agreement”) between the Company and the
Participant containing such terms and conditions and in such form, not inconsistent with the
provisions of the Plan, as the Committee shall provide.



6. Option Price. Subject to Paragraph 16, the option price of each share of Common Stock
purchasable under any option granted under the Plan shall not be less than the fair market value of
such share of Common Stock at the time the option is granted, and may not be changed while such
option is outstanding. The option price of an option issued in a transaction described in Section
424(a) of the Code shall be an amount which conforms to the requirements of that Section and the
regulations thereunder.



For purposes of this Plan, the “fair market value” of the Common Stock on any date means (i) if the
Common Stock is listed on a national securities exchange or quotation system, the closing sales


 









 






price on such exchange or quotation system on such date or, in the absence of reported sales on
such date, the closing sales price on the immediately preceding date on which sales were reported,
(ii) if the Common Stock is not listed on a national securities exchange or quotation system, the
mean between the bid and offered prices as quoted by the National Association of Securities
Dealers, Inc. Automated Quotation System (“NASDAQ”) for such date or (iii) if the Common Stock is
neither listed on a national securities exchange or quotation system nor quoted by NASDAQ, the fair
value as determined by such other method as the Committee determines in good faith to be
reasonable.



7. Stock Appreciation Rights. The Committee, in its sole discretion, may grant to an
eligible employee a stock appreciation right with respect to a stated number of shares of Common
Stock. Each stock appreciation right granted under the Plan shall be evidenced by an Award
Agreement between the Company and the Participant containing such terms and conditions and in such
form, not inconsistent with the provisions of the Plan, as the Committee shall provide. A stock
appreciation right shall be exercised in the manner provided in Paragraph 9, and, upon such
exercise, the Company shall pay to the Participant an amount equal to the excess of (i) the fair
market value, as of the exercise date, of the number of shares with respect to which the stock
appreciation right is being exercised over (ii) the fair market value of such shares determined on
the date of grant of such stock appreciation right. Payment upon the exercise of stock appreciation
rights shall be made by the Company in cash to the Participant as soon as practicable following
exercise; provided, however, that in the discretion of the Committee, such payment may be made by
distributing to the Participant a number of shares of Common Stock having a fair market value, as
of the date of exercise, equal to the amount otherwise payable, with the value of any fractional
shares paid in cash.




     8. Exercisability and Duration of Awards.


8.1 Determination of Committee; Acceleration. Each Award granted under the Plan shall be
exercisable at such time or times, or upon the occurrence of such event or events, and in such
amounts, as the Committee shall specify in the Award Agreement. Subsequent to the grant of an
Award which is not immediately exercisable in full, the Committee, at any time before complete
termination of such option, may accelerate the time or times at which such Award may be exercised
in whole or in part. Notwithstanding the foregoing, unless provided otherwise in the Award
Agreement, an Award shall become exercisable in full upon the death or disability of the
Participant to whom the Award was granted while he or she is an employee of the Company or any of
its subsidiaries.




     8.2 Automatic Termination.




(a) An Award shall terminate and become null and void upon the expiration of seven years from the
date on which such Award was granted (or upon such later date as may be prescribed by clause
(c)(iii), below);




(b) An unexercised Award shall terminate and become null and void upon a Participant’s failure to
comply with the requirements of Paragraph 17;




(c) Upon termination of the Participant’s employment, an Award shall automatically and without
notice terminate and become null and void to the extent that the Award is not then exercisable (and
has not become exercisable by reason of such termination). The unexercised portion of any Award
granted under the Plan which is then exercisable (or which has become exercisable by reason of the
termination of employment) shall automatically and without notice terminate and become null and
void upon the earliest to occur of the following:




(i) The date prescribed in clause (a), above;



 









 






(ii) The expiration of three years from the date of termination of the Participant’s employment by
reason of retirement, disability, or other reason specified by the Committee in the Award
Agreement;




(iii) The expiration of one year following the death of a Participant, if the Participant’s death
occurs during his or her employment by the Company or any of its subsidiaries;




(iv) Subject to (vi) below, the expiration of one year following the involuntary termination of the
Participant’s employment;




(v) The voluntary termination of the Participant’s employment;




(vi) The termination of the Participant’s employment if such termination constitutes or is
attributable to a breach by the Participant of an employment or consulting agreement with the
Company or any of its subsidiaries, or if the Participant is discharged or his or her services are
terminated for cause; or




(vii) The expiration of such period of time or the occurrence of such event as the Committee in its
discretion may provide upon the granting thereof.


The Committee shall have the right to determine what constitutes cause for discharge or termination
of services, whether the Participant has been discharged or his or her services terminated for
cause and the date of such discharge or termination of services, and such determination of the
Committee shall be final and conclusive.



9. Exercise of Awards. Awards granted under the Plan shall be exercised by the Participant
(or by his or her executors or administrators, as provided in Paragraph 10) as to all or part of
the shares covered thereby, by the giving of written notice of exercise to the Company, specifying
the number of shares to be purchased or the number of shares with respect to which stock
appreciation rights are being exercised, accompanied, in the case of an option, by payment of the
full purchase price for the shares being purchased. Payment of such purchase price shall be made
(a) by check payable to the Company,
(b) with the consent of the Committee, by delivery of shares of Common Stock already owned by the
Participant for at least six months (which may include shares received as the result of a prior
exercise of an option) having a fair market value (determined as of the date such option is
exercised) equal to all or part of the aggregate purchase price, (c) in accordance with a
“cashless exercise” program established by the Committee in its sole discretion under which if so
instructed by the Participant, shares may be issued directly to the Participant’s broker or dealer
upon receipt of the purchase price in cash from the broker or dealer, (d) by any combination of
(a), (b), or (c) above, or (e) by other means that the Committee deems appropriate. Such notice of
exercise, accompanied by such payment, if applicable, shall be delivered to the Company at its
principal business office or such other office as the Committee may from time to time direct, and
shall be in such form, containing such further provisions consistent with the provisions of the
Plan, as the Committee may from time to time prescribe. The date of exercise shall be the date of
the Company’s receipt of such notice. Upon exercise of an option, the Company shall effect the
transfer of the shares so purchased to the Participant (or such other person exercising the option
pursuant to Paragraph 10 hereof) as soon as practicable. No Participant or other person exercising
an option shall have any of the rights of a stockholder of the Company with respect to shares
subject to an option granted under the Plan until due exercise and full payment has been made as
provided above. No adjustment shall be made for cash dividends or other rights for which the
record date is prior to the date of such due exercise and full payment. In no event may any Award
granted hereunder be exercised for a fraction of a share.


 









 






Exercise of an Award shall be deemed to be certification by the Participant that he or she complies
with the terms and conditions of the Plan, including Paragraph 17. Failure to comply with the
provisions of Paragraph 17 prior to, or during the twenty-four (24) months immediately following,
exercise of an Award shall cause such Award to be cancelled and such exercise to be rescinded. The
Company shall notify the Participant, in writing, within thirty (30) months after such exercise, of
any such rescission. Within sixty days after receiving such a notification, the Participant shall
pay to the Company the amount of any compensation received, or any gain realized, upon the
rescinded exercise, either in cash or by returning to the Company shares of Common Stock received
by the Participant upon such exercise.



10. Non-Transferability of Awards. Except as provided herein, no Award granted under the
Plan or any right evidenced thereby shall be transferable by the Participant other than by will or
by the laws of descent and distribution, and an Award may be exercised, during the lifetime of a
Participant, only by such Participant. Notwithstanding the preceding sentence: (a) in the event
of a Participant’s death during his or her employment by the Company, its parent, if any, or any of
its subsidiaries, his or her Awards shall thereafter be exercisable, during the period specified in
Paragraph 8.2(c), by his or her executors or administrators; and (b) the Participant, with the
approval of the Committee, may transfer Awards for no consideration to or for the benefit of the
Participant’s spouse, parents, children (including stepchildren or adoptive children),
grandchildren, or siblings, or to a trust for the benefit of any of such persons.



11. Withholding Tax. Whenever under the Plan shares of stock are to be delivered upon
exercise of an option, the Company shall be entitled to require as a condition of delivery that the
Participant remit or, in appropriate cases, agree to remit when due the amount necessary to satisfy
all federal, state and local withholding tax requirements relating thereto. At the option of the
Company, such amount may be remitted by check payable to the Company, in shares of Common Stock
(which may include shares received as the result of a prior exercise of an option), by the
Company’s withholding of shares of Common Stock issuable upon the exercise of the option, or any
combination thereof. Whenever an amount shall become payable to a Participant in connection with
the exercise of a stock appreciation right, the Company shall be entitled to withhold therefrom the
amount necessary to satisfy any federal, state and local withholding tax requirements relating to
such amount.



12. Restrictions on Delivery and Sale of Shares. Each option granted under the Plan is
subject to the condition that if at any time the Committee, in its discretion, shall determine that
the listing, registration or qualification of the shares covered by such option upon any securities
exchange or under any state or federal law is necessary or desirable as a condition of or in
connection with the granting of such option or the purchase or delivery of shares thereunder, the
delivery of any or all shares pursuant to exercise of the option may be withheld unless and until
such listing, registration or qualification shall have been effected. The Committee may require, as
a condition of exercise of any option that the Participant represent, in writing, that the shares
received are being acquired for investment and not with a view to distribution and agree that the
shares will not be disposed of except pursuant to an effective registration statement, unless the
Company shall have received an opinion of counsel satisfactory to the Company that such disposition
is exempt from such requirement under the Securities Act of 1933 (the “Securities Act”). The
Committee may require that the sale or other disposition of any shares acquired upon exercise of an
option hereunder shall be subject to a right of first refusal in favor of the Company, which right
shall permit the Company to repurchase such shares from the Participant or his or her
representative prior to their sale or other disposition at their then current fair market value in
accordance with such terms and conditions as shall be specified in the agreement evidencing the
grant of the option. The Company may endorse on certificates representing shares issued upon the
exercise of an option such legends referring to the foregoing representations or restrictions or
any other applicable restrictions on resale as the Company, in its discretion, shall deem
appropriate.




 









 








     13. Change in Control.




(a) In the event of a Change in Control of the Company, as defined below, the Committee may, in its
sole discretion, provide that any of the following applicable actions be taken as a result, or in
anticipation, of any such event to assure fair and equitable treatment of Participants:




(i) accelerate the exercisability of any outstanding Awards granted pursuant to this Plan;




(ii) offer to purchase any outstanding options granted pursuant to this Plan from the holder for
its equivalent cash value, as determined by the Committee, as of the date of the Change in Control;
or




(iii) make adjustments or modifications to outstanding Awards as the Committee deems appropriate to
maintain and protect the rights and interests of the Participants following such Change in Control.
In no event, however, may any option be exercised after the date provided in Paragraph 8.2(a).


Any such action approved by the Committee shall be conclusive and binding on the Company, its
subsidiaries and all Participants.





(b) “Change in Control” shall mean the occurrence of any of the following:




(i) the sale, lease, transfer, conveyance or other disposition, in one or a series of related
transactions, of all or substantially all of the assets of the Company to any “person” or “group”
(as such terms are used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act,




(ii) any person or group is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a person shall be deemed to have “beneficial ownership” of all
shares that any such person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of more than 50% of the total voting
power of the voting stock of the Company, including by way of merger, consolidation or otherwise,
or




(iii) during any period of two consecutive years, individuals who at that beginning of such period
constituted the Board of Directors (together with any new directors whose election by such Board or
whose nomination for election by the shareholders of the Company was approved by a majority of the
directors of the Company then still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors;


provided that in no event shall the initial public offering of the Common Stock pursuant to an
effective registration statement under the Securities Act be deemed to constitute a Change in
Control.



14. Right to Terminate Employment. Nothing in the Plan or in the agreement evidencing any
Award granted under the Plan shall confer upon any Participant the right to continue as an
employee or a director of the Company or affect the right of the Company or any of its
subsidiaries, to terminate the Participant’s employment at any time, subject, however, to the
provisions of any agreement of employment between the Participant and the Company, its parent, if
any, or any of its subsidiaries.




 









 







15. Transfer, Leave of Absence. For purposes of this Plan, neither (i) a transfer of an
employee from the Company to a subsidiary or other affiliate of the Company, or vice versa, or
from one subsidiary or affiliate of the Company to another, nor (ii) a duly authorized leave of
absence, shall be deemed a termination of employment.



16. Adjustment Upon Changes in Capitalization, etc. In the event of any stock split, stock
dividend, reclassification or recapitalization which changes the character or amount of the
Company’s outstanding Common Stock while any portion of any Award theretofore granted under the
Plan is outstanding but unexercised, the Committee shall make such adjustments in the character
and number of shares subject to such Award and in the option price, as shall be equitable and
appropriate in order to make the Award, as nearly as may be practicable, equivalent to such Award
immediately prior to such change; provided, however, that no such adjustment shall give any
Participant any additional benefits under his or her Award.



If any transaction (other than a change specified in the preceding paragraph) described in Section
424(a) of the Code affects the Company’s Common Stock subject to any unexercised option theretofore
granted under the Plan (hereinafter for purposes of this Paragraph 16 referred to as the “old
option”), the Board of Directors or any surviving or acquiring corporation may take such action as
it deems appropriate, and in conformity with the requirements of that Section and the regulations
thereunder, to substitute a new option for the old option, in order to make the new option, as
nearly as may be practicable, equivalent to the old option, or to assume the old option.



If any such change or transaction shall occur, the number and kind of shares for which Awards may
thereafter be granted under the Plan shall be adjusted to give effect thereto.



17. Cancellation of Awards. Notwithstanding any other provision of the Plan, unless the
agreement governing an Award specifies otherwise, the Committee may cancel and rescind any
unexercised portion of an Award (whether or not then exercisable) at any time if the Participant is
not in compliance with the following:





(a) For two (2) years after leaving the employ of the Company, a Participant may not solicit from
or perform for any Client (as defined below) any type of business carried on by the Company at the
time his or her employment terminates and during the two-year period thereafter. In addition, for
two years after leaving the employ of the Company, a Participant may not hire any employee of the
Company or solicit or induce any such employee to leave the Company to work for a competitor. For
purposes of this paragraph, the term “Client” shall mean (i) any organization for which the
Participant provided services on behalf of the Company, or (ii) any organization that the
Participant solicited and which subsequently hired the Company (and, in the case of the Company’s
research or survey functions, with which the Participant had a personal working relationship)
during the two-year period preceding the Participant’s termination of service with the Company.




(b) Participants shall not, without the prior written consent of the Company, disclose to anyone
outside the Company, or use in other than the Company’s business, any confidential information or
material relating to the business of the Company or its clients, acquired by the Participant either
during or after his or her employment with the Company.


18. Expiration, Amendment and Termination of the Plan. Awards may be granted under the
Plan at any time and from time to time on or prior to the tenth anniversary of the effective date
of the Plan as set forth in Paragraph 20 (the “Expiration Date”), on which date the Plan will
expire except as to Awards then outstanding under the Plan. Such outstanding Awards shall remain
in effect until they have been exercised, terminated or have expired. The Plan may be terminated,
modified or amended by the Board of Directors at any time on or prior to the Expiration Date,
except with respect to any Awards then


 









 






outstanding under the Plan; provided, however, that the approval of the Company’s stockholders
will be required for any amendment which (i) increases the maximum number of shares subject to
grants, as specified in Paragraph 3 (unless made pursuant to the provisions of Paragraph 16) or
(ii) materially increases the benefits accruing to participants under the Plan, within the meaning
of Rule 16b-3 promulgated under the Exchange Act. By way of illustration, and not limitation, and
subject to the preceding sentence, the Board of Directors is authorized to adopt such
modifications or amendments to the Plan, which may be accomplished by the attachment of schedules
or exhibits to the Plan, or in such other format as it considers appropriate, whenever it
considers such modifications or amendments to be necessary or appropriate to making suitable
awards to any Participant or group of Participants in any particular country or countries.



19. Governing Law. The laws of the State of Delaware will govern all matters relating to
this Plan except to the extent superseded by the laws of the United States.



20. Effective Date of Plan. The Plan shall be effective upon its approval by shareholders
of the Company and further subject to the effectiveness of Watson Wyatt & Company Holdings’
proposed public offering.




     21. Special Provisions Applicable to Awards in Certain Countries. 




(a) With respect to Awards granted under the Plan to employees in Hong Kong SAR or The People’s
Republic of China, the following provisions shall apply:




(i) Notwithstanding the provisions of Paragraph 4 hereof, Awards may be granted only to an employee
of the Company or any of its subsidiaries (each an eligible employee) and not to any prospective
employee.




(ii) Notwithstanding the provisions of Paragraph 10 hereof, the Participant may not make (and the
Committee will not approve) any transfer of an Award for no consideration or otherwise to any
person, including without limitation the Participant’s spouse, parent, children or siblings.




(iii) By accepting an Award under the Plan, and in addition to complying with all other provisions
of the Plan and the applicable Award Agreement, each Participant covenants and warrants that with
respect to any shares acquired through the exercise of an Award, the Participant shall not attempt
to sell such shares to any person within Hong Kong SAR or The People’s Republic of China within six
months following the date of exercise of the Award.




(b) With respect to any Awards granted under the Plan to employees in Brazil, and notwithstanding
any contrary provision in Section 4 of the Plan, the following provisions shall apply:




(i) Officers of the Company or any of its subsidiaries who are not employees shall also be eligible
to receive grants under the Plan.




(ii) Any reference herein to the “employment” of a Participant by the Company shall refer only to
his or her actual (and not prospective) employment by the Company or any of its subsidiaries.