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.