UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange
Act of 1934
Date of Report (Date of earliest event reported):
January 1, 2010
Towers Watson
Delaware Inc.
(Exact name of
registrant as specified in its charter)
Delaware
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001-16159
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52-2211537
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(State or other
jurisdiction
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(Commission
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(IRS Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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901
N. Glebe Road
Arlington, Virginia
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22203
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(Address of
principal executive offices)
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(Zip Code)
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Registrants telephone number, including area code
(703)
258-8000
Watson
Wyatt Worldwide, Inc.
(Former name or
former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o
Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under
the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
Item 2.01 Completion
of Acquisition or Disposition of Assets
On January 1, 2010, pursuant to the Agreement and Plan of Merger
(the Merger Agreement), dated as of June 26, 2009, as amended by
Amendment No. 1 on October 19, 2009, by and among Watson Wyatt
Worldwide, Inc., now known as Towers Watson Delaware Inc. (Watson Wyatt),
Towers, Perrin, Forster & Crosby, Inc., now known as Towers
Watson Pennsylvania Inc. (Towers Perrin), Jupiter Saturn Holding Company,
now known as Towers Watson & Co. (Towers Watson), Jupiter Saturn
Delaware Inc. and Jupiter Saturn Pennsylvania Inc., Watson Wyatt and Towers
Perrin combined their businesses through two simultaneous mergers and became
wholly-owned subsidiaries of Towers Watson (the Merger). Entry into the Merger Agreement was announced
by Watson Wyatt and Towers Perrin on June 28, 2009, and the Merger
Agreement was approved by the shareholders of both companies at their
respective special meetings held on December 18, 2009.
The consummation of the Merger resulted in the following:
·
Each
share of Watson Wyatt Class A common stock, par value $0.01 per share (Watson
Wyatt Common Stock) issued and outstanding immediately prior to the effective
time of the Merger was converted into the right to receive one (1) share
of Towers Watson Class A common stock, par value $0.01 per share (Towers
Watson Class A Common Stock) (the Watson Wyatt Merger Consideration).
In addition, outstanding deferred rights to receive Watson Wyatt Common Stock
were converted into the right to receive an equal number of shares of Towers
Watson Class A Common Stock, and outstanding options to purchase Watson
Wyatt Common Stock were assumed by Towers Watson and converted on a one-for-one
basis into fully-vested options to purchase shares of Towers Watson Class A
Common Stock, with the same exercise price as the underlying Watson Wyatt
options.
·
Each share of Towers Perrin common stock,
par value $0.50 per share (Towers Perrin Common Stock) issued and outstanding
immediately prior to the effective time of the Merger was converted into the
right to receive 545.627600377 (the Exchange Ratio) fully-paid and
nonassessable shares of Towers Watson common stock, which ratio was determined
at the effective time of the Merger in accordance with the Merger Agreement (collectively,
the Towers Perrin Merger Consideration and together with the Watson Wyatt
Merger Consideration, the Merger Consideration). Shares of Towers Watson common stock issued
to Towers Perrin shareholders (other than shares issued to Towers Perrin
shareholders located in certain countries (as detailed below) and other than
shares issued to Towers Perrin shareholders who have elected to receive a
portion of their Merger Consideration as shares of Towers Watsons Class R
common stock, par value $0.01 per share (Towers Watson Class R Common
Stock), which is described below) have been divided among four series of
non-transferable Towers Watson common stock, Classes B-1, B-2, B-3 and B-4,
each with a par value of $0.01 per share (together, the Towers Watson Class B
Common Stock and together with the Towers Watson Class A Common Stock and
Towers Watson Class R Common Stock, Towers Watson Common Stock).
Outstanding shares of Towers Watson Class B Common Stock will
automatically convert on a one-for-one basis into shares of freely transferable
shares of Towers Watson Class A Common Stock on the following timetable:
Towers
Watson Class B Common Stock
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Conversion Date
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Class B-1
Common Stock
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January 1,
2011
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Class B-2
Common Stock
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January 1,
2012
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Class B-3
Common Stock
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January 1,
2013
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Class B-4
Common Stock
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January 1,
2014
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2
·
In
accordance with the Merger Agreement, to provide immediate liquidity to certain
Towers Perrin shareholders located in countries where the Merger Consideration
may be subject to current tax, such Towers Perrin shareholders received a
portion of their Merger Consideration in the form of unrestricted Towers Watson
Class A shares instead of Towers Watson Class B shares, with the
number of such Towers Watson Class A shares received by each holder offset
by an equal reduction in Towers Watson Class B shares, allocated 25% each
to Class B-1, B-2, B-3 and B-4.
·
Certain Towers Perrin shareholders who
met defined age and service criteria elected to terminate their employment no
later than January 31, 2010 (except as extended by Towers Watsons
executive committee) and receive a portion of their Merger Consideration in
shares of Towers Watson Class R Common Stock, which will be automatically
redeemed today for equal amounts of cash and subordinated one-year promissory
notes (Towers Watson Notes) (such election, a Class R Election). The
amount of cash and principal amount of Towers Watson Notes issued in exchange
for each share of Towers Watson Class R Common Stock was determined based
on the Exchange Ratio and the average closing price per share of Watson Wyatt
Common Stock for the 10 trading days ending on December 28, 2009, the
second trading day immediately prior to the closing of the Merger, which was
$46.79. Class R Elections were prorated so that the amount of cash and
notes payable on the automatic conversion of the shares of Towers Watson Class R
Common Stock would not exceed $400 million, which amount was agreed to by
Towers Perrin and Watson Wyatt prior to the closing of the Merger. Towers Perrin shareholders who made valid Class R
Elections received shares of Towers Watson Class B-1 Common Stock in exchange
for their shares of Towers Perrin Common Stock that were not exchanged for
shares of Towers Watson Class R Common Stock due to proration or because
the Towers Perrin shareholder elected to receive less than 100% of his or her
Merger Consideration in the form of Towers Watson Class R Common
Stock. As noted above, Towers Watson Class B-1
Common Stock will automatically convert into freely tradable shares of Towers
Watson Class A Common Stock on January 1, 2011.
·
Prior to the Merger, Towers Perrin issued
awards of restricted stock units to certain Towers Perrin employees, which were
exchanged in the Merger for shares of Towers Watson Class A Common Stock,
generally subject to a three-year contractual vesting schedule and other
restrictions (Restricted Towers Watson Class A Common Stock).
In summary, as a
result of the Mergers completion, all outstanding Towers Perrin and Watson
Wyatt common stock, restricted stock units and derivative securities have been
converted into the right to receive the following forms of consideration:
·
46,911,275 shares of Towers Watson Class A
Common Stock
(less a
number of shares that will be withheld for tax purposes in respect of Watson
Wyatt deferred stock units and deferred shares)
, including 4,248,984 shares
of Restricted Towers Watson Class A Common Stock;
·
29,483,008 shares of Towers Watson Class B
Common Stock, including:
·
12,798,118 shares of Class B-1 Common
Stock;
·
5,561,630 shares of Class B-2 Common
Stock;
·
5,561,630 shares of Class B-3 Common
Stock; and
·
5,561,630 shares of Class B-4 Common
Stock;
·
8,548,835 shares of Towers Watson Class R
Common Stock, which will be redeemed automatically in exchange for the right to
receive:
·
$200 million in cash (subject to applicable tax
withholding and gross-up adjustments); and
·
Towers Watson Notes in an aggregate principal
amount of $200 million.
3
In
addition, on January 1, 2010, Towers Watson issued shares of Class F
stock, no par value (Class F Stock), pro rata to all holders of Towers Perrin
Common Stock, which shares represent only the contingent right to receive a pro
rata portion of a number of shares of Towers Watson Class A Common Stock
equal to the number of shares of Restricted Towers Watson Class A Common
Stock forfeited by former Towers Perrin employees
plus a number of shares of Towers Watson Class A
Common Stock with a value equivalent to the amount of dividends attributed to
such forfeited shares
. Shares of Class F
Stock are non-transferable, except for transfers to permitted family members,
Towers Watson, or a deceased holders executors, administrators, testamentary
trustees, legatees and beneficiaries.
The foregoing description of the Merger Agreement, including Amendment No. 1,
and the Merger is not complete and is qualified in its entirety by reference to
the Merger Agreement and Amendment No. 1 thereto, filed as Exhibit 2.1
to Watson Wyatts Current Report on Form 8-K filed with the Securities and
Exchange Commission (the SEC) on June 29, 2009, and Exhibit 2.1 to
Watson Wyatts Current Report on Form 8-K filed with the SEC on October 19,
2009, respectively, each of which is incorporated herein by reference.
The issuance of Towers Watson Common Stock and Towers Watson Notes in
the Merger was registered under the Securities Act of 1933, as amended,
pursuant to Towers Watsons Registration Statement on Form S-4/A (File No. 333-161705)
filed with the SEC and declared effective on November 9, 2009 (the Registration
Statement). The joint proxy statement/prospectus of Watson Wyatt and Towers
Perrin included in the Registration Statement contains additional information
about the Merger and is incorporated herein by reference.
The Towers Watson Class A Common Stock has been approved for
listing on The New York Stock Exchange, LLC (the NYSE) and The NASDAQ Stock
Market, LLC (NASDAQ) under the ticker symbol TW and will begin trading
today.
On January 3, 2010, Towers Watson issued a press release
announcing the consummation of the Merger, which is attached as Exhibit 99.1
hereto and incorporated herein by reference.
The information set forth in Item 2.03 is incorporated by reference
into this Item 1.01.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant
On January 1, 2010,
in connection with the Merger, Towers Watson and certain subsidiaries entered
into a three-year, $500 million revolving credit facility as borrowers pursuant
to a Credit Agreement with Bank of America, N.A., as Administrative Agent, and
the other lenders party thereto (the Senior Credit Facility).
Borrowings under the Senior
Credit Facility will bear interest, at Towers Watsons option, at either a
Eurocurrency rate plus a spread ranging from 2.500% to 3.250%, or at a base
rate plus a spread ranging from 1.500% to 2.250%, with such spread in each case
dependent upon Towers Watsons Consolidated Leverage Ratio (as defined in the
Senior Credit Facility).
Towers Watson and certain
wholly-owned subsidiaries designated by Towers Watson, initially
Watson Wyatt and Towers Perrin,
are the
borrowers under the Senior Credit Facility (collectively, the Borrowers), and
the Borrowers obligations under the Senior Credit Facility are guaranteed by
Towers Watson and all of its domestic subsidiaries (other than Professional
4
Consultants
Insurance Company, Inc., a Vermont corporation
) pursuant to separate
guaranty agreements. The Borrowers obligations under the Senior Credit
Facility are secured by a pledge of 65% of the voting stock and 100% of the
non-voting stock of Towers Perrin Luxembourg Holdings S.A.R.L., currently held
by Towers Perrin.
The Senior Credit Facility
contains customary representations and warranties and affirmative and negative
covenants. The Senior Credit Facility requires Towers Watson to maintain
certain financial covenants that include a minimum Consolidated Interest
Coverage Ratio and a maximum Consolidated Leverage Ratio (which terms in each
case are defined in the Senior Credit Facility). In addition, the Senior Credit
Facility contains restrictions on the ability of Towers Watson and its
subsidiaries to, among other things, incur additional indebtedness; pay
dividends; make distributions; create liens on assets; make investments, loans
or advances; make acquisitions; dispose of property; engage in sale-leaseback
transactions; engage in mergers or consolidations, liquidations and
dissolutions; engage in certain transactions with affiliates; and make changes
in lines of businesses.
The Senior Credit Facility
contains customary events of default, including nonpayment of principal when
due; nonpayment of interest, fees or other amounts after a stated grace period;
inaccuracy of representations and warranties; certain bankruptcy events and
cross-defaults to other material indebtedness; certain change of control
events; material judgments; actual or asserted invalidity of any Loan Document
(as defined in the Senior Credit Facility); and certain ERISA-related
events. If an event of default occurs and is continuing, Towers Watson
may be required to repay all amounts outstanding under the Senior Credit
Facility. Lenders holding more than 50% of the loans and commitments
under the Senior Credit Facility may elect to accelerate the maturity of
amounts due thereunder upon the occurrence and during the continuation of an
event of default.
The foregoing description
of the Senior Credit Facility is not intended to be complete and is qualified
in its entirety by reference to the full text of the Senior Credit Facility, a
copy of which is filed as Exhibit 10.1 hereto and incorporated herein by
reference.
Item 3.01 Notice of Delisting
or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of
Listing
As a result of the Merger described in Item 2.01 above, Watson Wyatt
notified the NYSE and NASDAQ on December 30, 2009 and December 31,
2009, respectively, that each share of Watson Wyatt Common Stock issued and
outstanding immediately prior to the effective time of the Merger would be
converted into the right to receive one share of Towers Watson Class A
Common Stock and requested that the NYSE and NASDAQ each file with the SEC an
application on Form 25 to strike all shares of Watson Wyatt Common Stock
from listing on the respective exchange. Trading of Watson Wyatt Common Stock
on each of the NYSE and NASDAQ was suspended today prior to market open, and
both exchanges are expected to file a Form 25 with the SEC later today.
Watson Wyatt will file a Certification and Notice of Termination of
Registration on Form 15 with the SEC to deregister its common stock under Section 12(g) of
the Exchange Act, and to suspend the reporting obligations of Watson Wyatt
under Sections 13 and 15(d) of the Exchange Act.
Item 3.03 Material Modifications
to Rights of Security Holders
.
The information set forth in Item 2.01 is incorporated by reference
into this Item 3.03.
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Item 5.01 Changes in Control of
Registrant.
The information set forth in Item 2.01 is incorporated by reference
into this Item 5.01.
Item
5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
In
connection with the closing of the Merger described in Item 2.01 above, John J.
Gabarro, R. Michael McCullough, Brendan R. ONeill, Linda D. Rabbitt, Gilbert
T. Ray and John C. Wright resigned as directors of Watson Wyatt
(which has become a wholly-owned
subsidiary of Towers Watson as a result of the Merger)
effective as of
January 1, 2010. On the same date,
the remaining sole director of Watson Wyatt, John J. Haley, appointed Walter W.
Bardenwerper to the board of directors.
Item 5.03 Amendments to Articles
of Incorporation or Bylaws; Change in Fiscal Year
In connection with the
consummation of the Merger and in accordance with the terms of the Merger
Agreement as described in Item 2.01, effective as of January 1, 2010,
Watson Wyatts certificate of incorporation and bylaws were restated. Copies of
the Watson Wyatt amended and restated certificate of incorporation and bylaws
are attached hereto as Exhibits 3.1 and 3.2 and are incorporated herein by
reference.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits.
The following exhibits are filed
with this report:
Exhibit No.
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Description
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Exhibit 2.1
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Agreement
and Plan of Merger, dated June 26, 2009, by and among Watson Wyatt
Worldwide, Inc., Towers, Perrin, Forster & Crosby, Inc.,
Jupiter Saturn Holding Company, Jupiter Saturn Delaware Inc. and Jupiter
Saturn Pennsylvania Inc. (incorporated herein by reference to
Exhibit 2.1 to the Current Report filed on Form 8-K by Watson Wyatt
Worldwide, Inc. on June 26, 2009).
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Exhibit 2.2
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Amendment
No. 1, dated October 19, 2009, to Agreement and Plan of Merger, by
and among Watson Wyatt Worldwide, Inc., Towers, Perrin,
Forster & Crosby, Inc., Jupiter Saturn Holding Company, Jupiter
Saturn Delaware Inc. and Jupiter Saturn Pennsylvania Inc. (incorporated
herein by reference to Exhibit 2.1 to the Current Report filed on
Form 8-K by Watson Wyatt Worldwide, Inc. on October 19, 2009).
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Exhibit 3.1
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Amended
and Restated Certificate of Incorporation of Towers Watson Delaware Inc.
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Exhibit 3.2
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Bylaws
of Towers Watson Delaware Inc.
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6
Exhibit 10.1
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Credit Agreement, dated as of January 1,
2010, among Towers Watson & Co. and certain subsidiaries, as
borrowers, each lender from time to time party thereto and Bank of America,
N.A., as administrative agent, swing line lender and L/C issuer.
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Exhibit 99.1
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Press
release, dated January 3, 2010.
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Exhibit 99.2
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Registration
Statement filed on Form S-4/A by Jupiter Saturn Holding Company on November 9,
2009 (incorporated herein by reference to the Registration Statement filed on
Form S-4/A by Jupiter Saturn Holding Company on November 9, 2009
(File No. 333-161705) (the Registration Statement)).
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7
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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TOWERS WATSON & CO.
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(Registrant)
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Date: January 4, 2010
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By:
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/s/
Walter W. Bardenwerper
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Name:
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Walter
W. Bardenwerper
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Title:
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General
Counsel and Secretary
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