Document:

Exhibit 10.11

 

WATSON WYATT WORLDWIDE, INC.

AMENDED 2001
DEFERRED STOCK UNIT PLAN FOR SELECTED EMPLOYEES

 

Article 1 -      General

 

Section 1.1.            Purposes.

 

The purposes of the Watson
Wyatt Worldwide, Inc. Amended 2001 Deferred Stock Unit Plan for Selected
Employees (the “Plan”) are (a) to provide an incentive to certain highly
qualified individuals to serve as Selected Employees (as defined below) of
Watson Wyatt Worldwide, Inc. (“WWW”) and its Affiliates (together, the “Company”)
and (b) to further align the interests of Selected Employees with the
stockholders of WWW.

 

Section 1.2.            Definitions.

 

For the purpose of the Plan,
the following terms shall have the meanings indicated.

 

(a) “Account” means the unfunded and
unsecured journal entry account established on the books and records of WWW to
record an Account Balance.

 

(b) “Account
Balance” means, the Deferred Stock Units credited to a Participant’s Account,
as adjusted in accordance with Article 4 to reflect the addition of
dividend equivalents and any changes in capitalization and as adjusted in
accordance with Section 2.7.

 

(c) “Affiliate”
means any corporation, partnership, or other organization of which WWW owns or
controls, directly or indirectly, not less than 50% of the total combined
voting power of all classes of stock or other equity interests.

 

(d) “Annual
Meeting” means the Annual Meeting of Stockholders of WWW.

 

(e) “Board
of Directors” or “Board” shall mean the Board of Directors of WWW

 

(f) “Business
Day” shall mean any day on which the New York Stock Exchange is open for
business.

 

 

                (g) “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;

 

                (ii)           any “person” or “group” (as
such terms are used in Sections 13(d)(3) and 14(d)(2) of the Exchange
Act, as defined below) 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 is subject to other conditions,
directly or indirectly, of more than 50% of the total voting power of the
voting stock of WWW, including by way of merger, consolidation or otherwise;

 

                (iii)          satisfaction or waiver of
all conditions precedent (including receipt of any approval by the stockholders
of WWW) under any agreement or plan of merger, consolidation or reorganization
involving WWW, if as a result of such merger, consolidation or reorganization
the stockholders of WWW immediately before such transaction will not own,
directly or indirectly immediately following such merger, consolidation or
reorganization, more than 50% of the combined voting power of the company(ies)
resulting from such merger, consolidation or reorganization in substantially
the same proportion as their ownership immediately before such merger,
consolidation or reorganization; or

 

                (iv)          during any period of two
consecutive years, individuals who at the beginning of such period served on
the Board of Directors (any such individual, an “Incumbent Director”) cease for
any reason to constitute a majority of the Board of Directors; provided that
any new director whose election to the Board or whose nomination for election
to the Board was approved by a majority of the Incumbent Directors then in
office shall be considered an “Incumbent Director” unless the director was elected
or nominated for election to the Board of Directors to avoid or settle a
threatened or actual proxy contest.

 

(h) “Code”
means the Internal Revenue Code of 1986 of the United States 

 

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of America, as amended from
time to time.

 

(i) “Committee”
shall have the meaning provided in Section 7.1.

 

(j) “Common
Stock” means the Class A common stock, par value $.01 per share, of WWW.

 

(k) “Company”
means WWW and all of its Affiliates.

 

(l) “Current
Market Value” per share of Common Stock for 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 high bid and low 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.

 

(m) “Deferred
Stock Unit” or “Unit” means a unit representing WWW’s obligation to deliver or
issue to a Participant one share of Common Stock for each such unit in accordance
with the terms of the Plan.

 

(n) “Disability”
means any physical or mental condition of a Selected Employee that in the
opinion of the Committee renders the Selected Employee incapable of continuing
to be an employee of the Company.

 

(o) “Exchange
Act” means the Securities Exchange Act of 1934 of the United States of America,
as amended.

 

(p) “Grant”
means the crediting of units to a Participant’s Account pursuant to Section 2.1.

 

(q) “Grant
Date” shall mean the date that Deferred Stock Units are credited to a
Participant’s Account pursuant to Section 2.1.

 

(r) “Participant”
means each Selected Employee to whom a Grant of Deferred Stock Units has been
made under the Plan.

 

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(s) “Payment” means the distribution of
Common Stock to a Participant in accordance with Sections 2.4 and 2.6(b), and
it shall also include any Payment made pursuant to Article 6 or Section 7.4.

 

(t) “Plan”
means this Watson Wyatt & Company Holdings 2001 Deferred Stock Unit
Plan for Selected Employees.

 

(u) “Selected
Employee” shall mean those highly compensated and/or highly qualified employees
of the Company as are eligible to be selected by the Committee for awards under
this Plan, as determined by the Committee from time to time.

 

(v) “Unit
Portion of the Bonus” means the portion of any Participant’s bonus that is to
be allocated and paid by crediting Deferred Stock Units to the Participant’s
Account, as determined or approved by the Committee, and done in accordance
with Section 2.1.

 

(w) “Units”
has the meaning specified in the definition of “Deferred Stock Units”.

 

(x) “Vested”
means, with respect to a Deferred Stock Unit credited to a Participant’s
Account, that such Unit is no longer subject to forfeiture in accordance with
any notice given by the Company to the Participant at the time of the Grant, or
any agreement between the Company and the Participant, in accordance with Section 2.2.

 

(z) “WWW”
has the meaning specified in Section 1.1.

 

(aa) “Section 409A” means Section 409A of
the Code and any regulations and other guidance issued by the Internal Revenue
Service thereunder.

 

(bb) “Separation
from Service” means the cessation of a
Participant’s service as an employee of the Company and its Affiliates, whether
voluntary or involuntary, for any reason determined consistent with guidance
issued by the Department of the Treasury regarding what constitutes a “separation
from service” under Section 409A.

 

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Section 1.3.            Shares Subject to the Plan.

 

(a)   Reservation
of Shares.  The total number of shares of
Common Stock that shall be reserved for issuance in payment of Deferred Stock
Units under the Plan shall be 1,500,000 subject to adjustment for changes in
capitalization of WWW as provided in subparagraph (b) below.  Shares of Common Stock issued under the Plan
may be authorized but unissued shares of Common Stock, issued shares held in or
acquired for WWW’s treasury or shares reacquired by WWW upon purchase in the
open market.

 

(b)   Changes
in Common Stock.  If any change is made
in the terms or provisions of the Common Stock then subject to the Plan
(whether by reason of reorganization, merger, consolidation, recapitalization,
stock dividend, stock split, combination of shares, exchange of shares, change
in corporate structure, or otherwise), then the Committee may make appropriate
adjustments to the maximum number of shares of Common Stock subject to and
reserved under the Plan and to the Units allocated to Accounts as it in its
sole discretion determines to be appropriate.

 

Article 2 -                Deferred Stock Units; Optional Deferral of Payment

 

Section 2.1.            Grants of Deferred Stock Units.

 

The
Committee shall select and/or approve the Selected Employees who shall be
Participants in the Plan and shall authorize each Grant under the Plan by
determining or approving the portion or amount of any bonus otherwise payable
to any such Participant which shall equal the Unit Portion of the Bonus made to
the Participant.  Each Participant shall
have an Account established in his or her name. 
In connection with any Grant, there shall be credited to the Participant’s
Account as of the Grant Date, the number of Deferred Stock Units obtained by
dividing the amount of the Unit Portion of the Bonus made to the Participant by
the Current Market Value per share of Common Stock as of the Grant Date, and
rounding the result upwards to the nearest whole Deferred Stock Unit.  Upon a Grant being made in the name of a
Participant, the Participant’s rights with respect to the Unit Portion of the
Bonus for the Participant shall consist solely of any benefits provided
pursuant to the Plan.

 

Section 2.2.            Vesting of Deferred Stock Units.

 

The
Company may provide, in a notice given by the Company to the Participant at the
time of the Grant, or in an agreement between the Company and the Participant,
a vesting schedule for the Deferred Stock Units being credited to the
Participant’s Account, such that some or all of the Deferred Stock Units
credited to the Participant’s Account shall be forfeited if the Participant
does not continue in employment with the Company until the vesting of such
Units as specified in such notice or agreement.

 

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Section 2.3.            Termination of Employment.

 

                Notwithstanding any
provision herein to the contrary, in the event that a Participant’s employment
is terminated before any (or all) of his or her Deferred Stock Units have
become Vested, as provided in the notice or agreement described in Section 2.2,
then all such Deferred Stock Units in the Participant’s Account which are not
then Vested (including any Units attributable to such Units pursuant to Section 4.1,
as determined by the Company) shall be forfeited, and no amount or Common Stock
shall be payable with respect to such Units under any provision of this Plan,
including any provision of this Article 2.

 

Section 2.4.            Payment of Shares on Account of Deferred Stock Units.

 

Unless
deferred at the option of the Participant in accordance with Section 2.5(a),
or if otherwise modified pursuant to the provisions of this Plan, the Account
Balance with respect to a particular Grant will become payable and shall be
paid on the date that the Units become Vested in accordance with Section 2.2,
and one share of Common Stock will be delivered in full satisfaction of each
Deferred Stock Unit to be paid, after rounding any fractional Deferred Stock
Unit upwards to the nearest whole share.

 

Section 2.5.            Optional Deferral of Payment of Shares.

 

(a)   Optional
Deferral of Payment.  As to each Grant,
the Committee may allow a Participant the option to defer the payment of all or
a portion of any Deferred Stock Units for later payment in accordance with Section 2.6
by submitting to the Committee or its designee such forms as the Committee
shall prescribe by such date as the Committee may establish. Any such election shall become
irrevocable as of the last date that is permissible under Section 409A.  With respect to Deferred Stock Units that
vest at least 12 months after the date of Grant, to the extent permitted by the
Committee, a Participant may irrevocably elect to defer payment of such
Deferred Stock Units at any time within 30 days of the date of Grant, provided
that such election shall apply only to the extent the applicable Deferred Stock
Units do not vest earlier than the 12-month anniversary of such election. In no
event may any deferral be made to the extent such deferral would result in the
acceleration of any tax or the imposition of any additional tax or interest
charge pursuant to Section 409A.

 

(b)   Irrevocability
of Deferral Election.   An election to
defer the payment of all or a portion of a Participant’s Account Balance made
pursuant to Section 2.5(a) shall be irrevocable once submitted to the
Committee or his or her designee.

 

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Section 2.6.            Payment of Shares Optionally Deferred.

 

(a)   Deferral
Election.  If a Participant elects, then
his or her Account Balance will be paid by the Company, at the time elected by
the Participant in accordance with this Section 2.6.  The Account Balance shall be
paid in a lump sum at the time specified in this Section 2.6 or, if
authorized by the Committee and elected by the Participant on the deferral
election form, in annual payments over a period of years.  If the Account Balance is to be paid in
annual payments, then each payment will be calculated as a number of Deferred
Stock Units equal to (i) the number determined by dividing the number of
Units allocated to the Participant’s Account as of the date of the first
payment by the total number of annual payments, plus (ii) the number of
any additional Units allocated pursuant to Section 4.1 after the date of
the first payment to the Units then payable. 
The election shall specify the timing
of the lump sum payment or (in the case of annual payments) of the first payment, as one of the
following:  (i) the first day of the
month following the month that the Participant experiences a Separation from
Service or that the Participant dies;  (ii) the
first day of the month which is any number of whole years selected by the
Participant after the date on which the Participant’s Deferred Stock Units
become Vested (i.e., without taking into account the possibility of a
Participant’s Separation from Service, death or Disability); or (iii) in
any month in the calendar year following the date on which the Participant
experiences a Separation from Service.  Notwithstanding the foregoing, if the
Participant is a “specified employee” within the meaning of Section 409A
and the event resulting in distribution of benefits is the Participant’s
Separation from Service, any distribution scheduled to be made within six
months of such Separation from Service shall be made on the six-month
anniversary of such Separation from Service.

 

(b)   Form of
Payment.  One share of Common Stock will
be delivered in full satisfaction of each Deferred Stock Unit to be paid, after
rounding any fractional Deferred Stock Unit upwards to the nearest whole share.

 

(c)   Death
Prior to Payment.  If the Participant
dies prior to payment of any or all amounts optionally deferred pursuant to
this Section 2.6, then the Account Balance will be paid to the Participant’s
beneficiary in accordance with the Participant’s election.

 

Section 2.7.            Debiting of Deferred Stock Account.

 

                     If and when shares
of Common Stock are distributed to a Participant, the Participant’s Account
shall be debited with the number of Units equivalent to the number of shares of
Common Stock that have been distributed.

 

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                Section 2.8.            Mandatory Deferral if Section 162(m) Applies.

 

(a)           Mandatory Deferral.  Notwithstanding any other provision of the
Plan to the contrary, to the extent the Company reasonably anticipates that
payment of a Participant’s Account at the time elected by the Participant or
otherwise provided under the Plan would be nondeductible to the Company due to
the application of Section 162(m) of the Code, payment of that
portion of the Account shall be delayed until the Participant’s separation from
service (as determined pursuant to Section 409A of the Code) or, if
earlier, in the calendar year in which the Company first reasonably anticipates
that payment of the deferred amount will not be nondeductible as a result of
the application of Section 162(m) of the Code.  Notwithstanding the preceding sentence, where
any scheduled payment to the Participant is delayed in accordance with this Section 2.8(a),
the delay in all events will be for at least five (5) years from the date
the payment otherwise was scheduled to be made pursuant to the Participant’s
election or as otherwise provided under the Plan unless all scheduled payments
to the Participant by the Company that could be delayed consistent with Section 409A
of the Code as a result of the application of Section 162(m) of the
Code are also delayed.  In addition, to
the extent that the Participant is a “specified employee” (as determined
pursuant to Section 409A of the Code) and payment is made in connection
with the Participant’s separation from service, payment of the amount described
in this Section 2.8 shall in no event be made earlier than the six-month
anniversary of the Participant’s separation from service (unless the
Participant’s separation from service results from the Participant’s death, in
which case the deferred amount shall be paid to the Participant’s beneficiary
as soon as reasonably practicable following the Participant’s death).

 

                (b)           Form of Payment. During
any deferral period required by Section 2.8(a), the Participant’s Account
shall continue to be deemed invested in Deferred Stock Units.  At time of payment specified in Section 2.8(a),
one share of Common Stock will be delivered in full satisfaction of each such
Deferred Stock Unit to be paid, after rounding any fractional Deferred Stock
Unit upwards to the nearest whole share.

 

Article 3 -      Beneficiary; Tax

 

Section 3.1.            Beneficiary.

 

(a)   Designation
of Beneficiary.  The Participant may
designate, in writing delivered to the Committee or its designee before the
Participant’s death, a beneficiary to receive payments under the Plan in the
event of the Participant’s death.  The
Participant may also designate a contingent beneficiary to receive payments
under the Plan if the primary beneficiary does not survive the
Participant.  The Participant may
designate more than one person as the Participant’s beneficiary or contingent
beneficiary, in which case (i) no contingent beneficiary would receive any
payment unless all of the primary beneficiaries predeceased the Participant,
and (ii) the surviving beneficiaries in any class 

 

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shall
share in any payments in proportion to the percentages of interest assigned to
them by the Participant relative to the percentage of interests held by all
survivors in that class.

 

(b)   Change
in Beneficiary.  The Participant may
change his or her beneficiary or contingent beneficiary (without the consent of
any prior beneficiary) in a writing delivered to the Committee or its designee
before the Participant’s death.  Unless
the Participant states otherwise in such writing, any change in beneficiary or
contingent beneficiary will automatically revoke such prior designations of the
Participant’s beneficiary or of the Participant’s contingent beneficiary, as
the case may be, under this Plan only; any designations under other deferral
agreements or plans of the Company will remain unaffected.

 

(c)   Default
Beneficiary.  In the event a Participant
does not designate a beneficiary, or no designated beneficiary survives the
Participant, the Participant’s beneficiary shall be the Participant’s surviving
spouse, if the Participant is married at the time of his or her death and not
subject to a court-approved agreement or court decree of separation, or
otherwise the person or persons designated to receive benefits on account of
the Participant’s death under the Company’s pre-retirement death benefit for
Selected Employees, if any, unless the rights to such benefit have been
assigned, in which case any amounts payable to the Participant’s beneficiary
under the Plan will be paid to the Participant’s estate.

 

(d)   If the
Beneficiary Dies During Payment.  If a
beneficiary who is receiving or is entitled to receive payments hereunder dies
after the Participant’s death but before all the payments have been made, the
portion of the Account Balance which that beneficiary otherwise would have
received will be paid as soon as practicable in a single payment to such
beneficiary’s estate and not to any contingent beneficiary the Participant may
have designated.

 

Section 3.2.            Domestic Relations Orders.

 

Notwithstanding the
Participant’s elections hereunder, at the time any Units become payable under
Sections 2.4 and 2.6, the Company will pay to, or to the Participant for the
benefit of, the Participant’s spouse or former spouse the portion of the
Participant’s Account Balance specified in a valid court order entered in a
domestic relations proceeding involving the Participant’s divorce or legal
separation.  Any such payment will be
made net of any amounts the Company may be required to withhold under
applicable U.S. federal, foreign, state or local law.

 

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Section 3.3.            Payment of Cash Where Distribution of Common Stock is Prohibited or
Impractical Under Applicable Law.

 

Notwithstanding
any other provision of this Plan, in any jurisdiction or country where the
Committee determines that the distribution of Common Stock in such jurisdiction
or country is prohibited or impractical (including as a result of costs or
administrative procedures) under the law of such jurisdiction or country, the
Company may pay cash (rather than Common Stock) to a Participant in an amount
equal to the Current Market Value, as of the date the shares otherwise would
have been payable, of the Common Stock that the Participant otherwise would
have received.

 

Section 3.4.            Withholding of Taxes

 

Whenever under the Plan payments are to be made,
whether in shares of stock or in cash, the Company, in its sole discretion,
shall be entitled to withhold therefrom the amount it determines necessary to
satisfy any United States federal, state, local, foreign or other withholding
tax requirements relating to such amount, or 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, local, foreign, or other
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 pursuant to this Plan), by the Company’s withholding of shares of
Common Stock, or any combination thereof.

 

Article 4
-      Adjustment of Accounts

 

Section 4.1.            Dividend Equivalents.

 

Whenever
a cash dividend is paid on a share of Common Stock, a Participant’s Account
will be adjusted by adding to the Account Balance the number of Deferred Stock
Units determined by multiplying the per share amount of the cash dividend by
the number of Units credited to the Account Balance on the record date for the
cash dividend, dividing the result by the Current Market Value of a share of
Common Stock on the date the cash dividend is paid, and rounding the result to
the nearest 1/100th of a Deferred Stock Unit as the case may be (with .005
being rounded upwards); provided that, if a Participant’s Account Balance is
reduced to zero in accordance with the Plan between the record date and the
payment date for such cash dividend, then, in lieu of such adjustment to the
Participant’s Account, the dividend equivalent amount with respect to such
record date will be determined by multiplying the per share amount of the cash
dividend by the portion of the Participant’s Account Balance that is payable on
the record date for the cash dividend 

 

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and rounding the result
to the nearest whole cent, which amount shall be paid to the Participant in
cash.  Any adjustment with respect to a
Participant’s Account pursuant to this Section 4.1 which is made with
respect to any Deferred Stock Units which are not then Vested shall become
Vested at the same time as such Deferred Stock Units.

 

Section 4.2.            Changes in Capitalization.

 

Notwithstanding any other
provision of the Plan to the contrary, if any change shall occur in or affect
shares of Common Stock on account of a merger, consolidation, reorganization,
stock dividend, stock split or combination, reclassification, recapitalization,
or distribution to holders of shares of Common Stock (other than cash
dividends), including, without limitation, a merger or other reorganization
event in which the shares of Common Stock cease to exist, then the Committee
may make an appropriate adjustment to the Deferred Stock Units, as it
determines necessary to maintain the proportionate interest of the Participants
and to preserve, without increasing, the value of their Account Balance.  In the event of a change in the presently authorized
shares of Common Stock that is limited to a change in the designation thereof
or a change of authorized shares with par value into the same number of shares
with a different par value or into the same number of shares without par value,
the shares resulting from any such change shall be deemed to be shares of
Common Stock within the meaning of the Plan.

 

Article 5
-      Status of Accounts

 

Section 5.1.            No Trust or Fund Created; General Creditor Status.

 

Nothing contained herein and
no action taken pursuant hereto will be construed to create a trust or separate
fund of any kind or a fiduciary relationship between the Company and any
Participant, the Participant’s beneficiary or estate, or any other person.  Title to and beneficial ownership of any
Common Stock or funds represented by the Account Balance will at all times
remain with the Company; such Common Stock or funds will continue for all
purposes to be a part of the general assets of the Company and may be used for
any corporate purpose. No person will, by virtue of the provisions of this
Plan, have any interest whatsoever in any specific assets of the Company.  TO THE EXTENT THAT ANY PERSON ACQUIRES A
RIGHT TO RECEIVE PAYMENTS FROM THE COMPANY UNDER THIS PLAN, SUCH RIGHT WILL BE
NO GREATER THAN THE RIGHT OF ANY UNSECURED GENERAL CREDITOR OF THE COMPANY

 

Section 5.2.            Non-Assignability.

 

The Participant’s right, or
the right of any other person, to the Participant’s 

 

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Account Balance or any other benefits hereunder cannot
be assigned, alienated, sold, garnished, transferred, pledged, or encumbered
except by a written designation of beneficiary under this Plan, by written
will, or by the laws of descent and distribution.

 

Article 6 -      Change in Control

 

(a)                                  With respect to
the portion of the Participant’s Account that was “earned and vested” as of December 31,
2004 and earnings thereon (each as determined pursuant to applicable Internal
Revenue Service guidance), in the event of a Change in Control of the Company,
the Committee may, in its sole discretion, provide that any or none 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 Vesting of
Deferred Stock Units, or provide for the Payment of Stock or cash pursuant to
this Plan;

 

(ii)           make adjustments or
modifications to any award of Units, Participant’s Account or election with
respect to an Account, any Payment or right to Payment, or any other right of a
Participant hereunder, as the Committee deems appropriate to maintain and
protect the rights and interests of the Participants following such Change in
Control.

 

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

 

(b)           With respect to the portion
of the Participant’s Account that was not “earned and vested” as of December 31,
2004 and earnings thereon, in the event of a Change in Control of the Company,
the Committee shall accelerate the Vesting of Deferred Stock Units and provide
for the immediate Payment of Stock or cash pursuant to this Plan.  For purposes of this paragraph (b), an event
shall be a Change in Control only if it also qualifies as a change in change in
ownership of the Company or a change in the effective control of the Company,
each as determined pursuant to Section 409A of the Code.

 

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Article 7
-      Administration of the Plan

 

Section 7.1.            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 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.

 

Section 7.2.            Procedures.

 

                (a)           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.

 

(b)           Subject to the provisions of
the Plan and the specific duties delegated by the Board to the Committee, the
Committee may delegate, to any executive or other delegate of the Company, the
following authority:

 

(i)                                     to construe and interpret
the terms of the Plan;

 

(ii)                                  to prescribe, amend and
rescind rules and regulations relating to the Plan; and

 

(iii)                               to make all other
determinations deemed necessary or advisable for administering the Plan.

 

Section 7.3.             Interpretation.

 

                The Committee shall have full power and
authority to interpret the provisions of the Plan and any agreement or notice
made or provided under this Plan, to administer the Plan in all jurisdictions
in which this Plan is effective or where there are Participants who are
participating in this Plan, to determine how and as of what date any currencies
other than United States dollars will be converted into United States Dollars,
and to determine any and all questions arising under the Plan.  The Committee’s decisions shall be final and
binding on all Participants in or other persons claiming under the Plan.

 

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Section 7.4.            Payments
on Behalf of an Incompetent.

 

If the Committee finds that
any person who is at the time entitled to any payment hereunder is a minor or
is unable to care for his or her affairs because of disability or incompetency,
payment of the Account Balance may be made to anyone found by the Committee to
be the authorized representative of such person, or to be otherwise entitled to
such payment, in the manner and under the conditions that the Committee
determines.  Such payment will be a
complete discharge of the liabilities of the Company hereunder with respect to
the amounts so paid.

 

Section 7.5.            Corporate Books and
Records Controlling.

 

The books and records of the
Company will be controlling in the event a question arises hereunder concerning
any Account Balance, deferral elections, beneficiary designations, or any other
matters.

 

Section 7.6.            Indemnity.

 

No member of the Board of Directors or the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any option granted under it. 
The Company shall indemnify each member of the Board of Directors and
the Committee to the fullest extent permitted by law with respect to any claim,
loss, damage or expense (including counsel fees) arising in connection with
their responsibilities under this Plan.

 

Article 8
- Miscellaneous Provisions

 

Section 8.1.            Litigation.

 

The
Company shall have the right to contest, at its expense, any ruling or
decision, administrative or judicial, on an issue that is related to the Plan
and that the Committee believes to be important to Participants, and to conduct
any such contest or any litigation arising therefrom to a final decision.

 

Section 8.2.            Headings Are Not Controlling.

 

The headings contained in this
Plan are for convenience only and will not control or affect the meaning or
construction of any of the terms or provisions of this Plan.

 

Section 8.3.            Right to
Terminate Employment.

 

Nothing in this Plan or in any notice or agreement
evidencing any Grant under the Plan shall confer upon any Participant the right
to continue as an employee or a director of 

 

14

 

the
Company or affect the right of the Company 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.

 

Section 8.4.            Transfer; Leave
of Absence.

 

For purposes of this Plan, neither (i) a
transfer of an employee from WWW to an Affiliate, or vice versa, or from one
Affiliate of the Company to another, nor (ii) a duly authorized leave of
absence, shall be deemed a termination of employment.

 

Section 8.5.            Governmental
Regulation.

 

The Company’s obligation to deliver shares of the
Company’s Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization and
issuance of such stock.  In this regard,
the Board of Directors may, in its discretion, require as a condition to the
issuance of any shares pursuant to this Plan that a registration statement
under the Securities Act of 1933, as amended, with respect to such shares be
effective.

 

Section 8.6.            Governing Law.

 

To the extent not preempted by
applicable U.S. Federal law, this Plan will be construed in accordance with and
governed by the laws of the State of Delaware, USA, as to all matters,
including, but not limited to, matters of validity, construction and
performance.

 

Section 8.7.            Amendment and Termination.

 

The Board of Directors, or, if
permitted pursuant to Rule 16b-3 under the Exchange Act, the executive
committee of the Board, if applicable, may amend or terminate this Plan at any
time, provided that (i) no amendment or termination may be made that would
adversely affect the right of a Participant to his or her Account Balance as of
the date of such amendment or termination, and (ii) unless approved by WWW’s
stockholders, no such amendment may materially increase the number of shares
that may be issued under the Plan.

 

Article 9
-  Effective Date

 

The Amended Plan shall be
effective as of July 1, 2008.

 

15Exhibit
10.12

 

Watson
Wyatt Worldwide, Inc.

 

Amended Voluntary
Deferred Compensation Plan

 

1.             Purpose

 

The purpose of the
Watson Wyatt Worldwide, Inc. Voluntary Deferred Compensation Plan is to
provide non-employee directors of Watson Wyatt Worldwide an opportunity to
defer compensation from the Company.

 

2.             Definitions

 

(a) ““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 over any 12-month period, of all or substantially all of the
assets of the Company by any one person or “group” of persons (as determined
pursuant to Section 409A);

 

(ii)           any person or
group acquires ownership of stock of the Company that, together with stock held
by such person or group, constitutes more than 50% of the total voting power of
the Company, including by way or merger, consolidation, reorganization or
otherwise; or

 

(iii)          during any
12-month period, individuals who had at the beginning such period served on the
Board of Directors (any such individual, an “Incumbent Director”) cease for any
reason to constitute a majority of the Board of Directors; provided that any
new director whose nomination for election to the Board was approved by a
majority of the Incumbent Directors then in office shall be considered an “Incumbent
Director.”

 

(b)           The term “Committee” shall mean the Compensation
Committee of the Board of Directors of the Company.

 

(c)           The “Company” shall mean Watson Wyatt Worldwide, Inc.

 

(d)           The term “Compensation” shall mean
retainers, meeting fees, and any other fees for assignments arising out of the
Participant’s capacity as a non-employee director.

 

(e)           The term “Deferred Compensation Account”
shall mean a memorandum account established by the Company on its books.

 

(f)            The term “Participant” shall mean a non-employee
director of the Company.

 

 

(g)           The term “Plan” shall mean the Watson
Wyatt Worldwide, Inc. Amended Voluntary Deferred Compensation Plan.

 

(h)           “Section 409A” means Section 409A of the
Internal Revenue Code of 1986, as amended, and any regulations and other
guidance issued by the Internal Revenue Service thereunder.

 

3.             Administration

 

The Plan shall be
administered by the Compensation Committee of the Board of Directors of the
Company.  The Company shall have sole and
complete authority to interpret the terms and provisions of the Plan and to
delegate various administrative tasks to appropriate officers and employees of
the Company.

 

4.             Eligibility

 

Non-employee
directors  who have acquired at least 5,000
shares of Watson Wyatt & Company Holdings common stock shall be
eligible to participate in the Plan.

 

5.             Election to Defer

 

(a)           A Participant
may elect in writing delivered to the Committee to defer receipt of all or a
specified portion of his/her Compensation. 
Once received by the Committee, an election to defer for a particular
year may not be revoked except in the event the Participant experiences an
unforeseeable emergency (as determined pursuant to Section 409A).

 

(b)           The election must be made prior to the beginning of
the calendar year to which the Compensation relates.  A new Participant in the Plan shall have 15
days following his/her selection by the Committee to make an election with
respect to Compensation to be earned for the balance of the year.

 

(c)           The period of deferral shall be until the Participant
ceases to be a director of the Company.

 

6.             Establishment of Deferred
Compensation Account

 

At the time of the
Participant’s initial deferral pursuant to Paragraph 5, the Company shall
establish a Deferred Compensation Account for such Participant on its
books.  Deferred Amounts 

 

2

 

shall be credited
to the Deferred Compensation Accounts at the time the Compensation would have
been paid to the Participant if no deferral election were made.  Additions as provided in Paragraph 7, below,
shall be credited to the Participant’s Deferred Compensation Account as of the
last day of each quarter.

 

7.             Additions to Deferred Accounts

 

As of the last day of each quarter, the balance in the Participant’s
Deferred Compensation Account at the beginning of that quarter shall be
credited with interest using an interest factor equivalent to the prime rate of
interest reported by the Company’s primary bank as of the beginning of such
quarter..

 

8.             Payment of Deferred Amount

 

(a)           Except as otherwise provided in subparagraph (b) or
(c) below, a participant’s Deferred Compensation Account shall be paid to
the Participant, or the Participant’s beneficiary in a lump sum, as soon as
practical after the participant ceases to be a director of the Company.

 

In the event of
the Participant’s death, payment of the balance in the Participant’s Deferred
Compensation Account shall be made in a lump sum to the Participant’s
beneficiary designated by the Participant in writing and delivered to the
Committee, or if none, to the Participant’s estate.

 

(b)           A Participant shall receive the balance in the
Deferred Compensation Account as soon as practical after the occurrence of a
Change in Control of the Company.

 

(c)           Anything contained in this
Paragraph to the contrary notwithstanding, in the event a Participant incurs an
unforeseeable emergency (as determined pursuant to Section 409A) as
determined by the Committee in its sole discretion, the Committee, in its sole
discretion and upon written application of such Participant, may direct the
immediate payment of all or a portion of the then current value of such
Participant’s Deferred Compensation Account. 
Distributions because of an unforeseeable emergency shall be limited to
the amount reasonably necessary to satisfy the Participant’s emergency need
(which may include amounts necessary to pay any Federal, state, local, or
foreign income taxes or penalties reasonably anticipated to result 

 

3

 

from the distribution).  In all
events, a distribution on account of unforeseeable emergency may not be made to
the extent that such emergency is or may be relieved through reimbursement or
compensation from insurance or otherwise, by liquidation of the Participant’s
assets, to the extent the liquidation of such assets would not cause severe
financial hardship, or by cessation of deferrals under the Plan.

 

9.             Participant Reports

 

The Committee
shall provide a statement to the Participant at least annually concerning the
status of his/her Deferred Compensation Account.

 

10.          Transferability of Interests

 

All Deferred
Compensation Accounts shall be merely bookkeeping entries.  Any assets which may be reserved to pay
benefits hereunder, shall be considered as general assets of the Company for
use as it deems necessary and shall be subject to the claims of the Company’s
creditors.  The rights and interests of a
Participant shall be solely those of a general creditor of the Company and such
Participant’s rights and interests may not be anticipated, assigned, pledged,
transferred or otherwise encumbered or disposed of except in the even of the
death of the Participant, and then only by will or the laws of descent and
distribution.

 

11.          Amendment, Suspension and Termination

 

The Company by
action of its board of Directors may amend, suspend of terminate the Plan or
any portion thereof in such manner and to such extent as it may deem advisable
and in the best interests of the Company. 
No amendment, suspension and termination shall alter or impair any
Deferred Compensation Accounts without the consent of the Participant affected
thereby.

 

12.          Severability

 

If any provision
of this Plan is declared to be invalid or unenforceable, such provision shall
be severed from this Plan and the other provisions hereof shall remain in full
force and effect.

 

4

 

13.          Unfunded Obligation

 

The Plan shall not
be funded, and no trust, escrow or other provisions shall be established to
secure payments due under the Plan.  A
Participant shall be treated as a general, unsecured creditor of the Company at
all times under the Plan.

 

14.          Applicable Law

 

The Plan will be
construed and enforced according to the laws of the District of Columbia and
all provisions of the Plan will be administered accordingly.

 

15.          Effective Date

 

The Amended Plan
shall be effective on July 1, 2008.

 

Amended and executed
on behalf of Watson Wyatt Worldwide, Inc. pursuant to authorization of its
Board of Directors on July 25, 2008

 

 

	
   

  	
  By:

  	
  /s/ Walter W.
  Bardenwerper

  	
   

  
	
   

  	
   

  	
  Secretary

  

 

5

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