Exhibit 10.20

TOWERS WATSON & CO.

INCENTIVE COMPENSATION PLAN

Towers Watson & Co. (the “Company”), a Delaware corporation, hereby establishes
and adopts the following Incentive Compensation Plan (the “Plan”) to provide
incentive awards that are intended to qualify as “performance-based
compensation” within the meaning of Section 162(m) of the Internal Revenue Code
of 1986, as amended.

 

1. PURPOSES OF THE PLAN

The purposes of the Plan are to provide incentive and financial rewards to
executive officers of the Company and its Affiliates who, because of the extent
of their responsibilities, can make significant contributions to the Company’s
success by their ability, industry, loyalty and exceptional services.

 

2. DEFINITIONS

“Affiliate” shall mean any corporation, partnership or other organization of
which the Company 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.

“Award” shall mean any amount granted to a Participant under the Plan.

“Board” shall mean the board of directors of the Company.

“Certification” shall have the meaning set forth in Section 4.2.

“Code” shall mean the Internal Revenue Code of 1986 of the United States of
America, as amended from time to time, and any successor thereto.

“Committee” shall mean the Compensation Committee of the Board or any
subcommittee thereof formed by the Compensation Committee for the purpose of
acting as the Committee hereunder. For purposes of satisfying the requirements
of Section 162(m) of the Code and the regulations thereunder, the Committee is
intended to consist solely of “outside directors” as such term is defined in
Section 162(m) of the Code.

“Disability” means any physical or mental condition of a Participant that in the
opinion of the Committee renders the Participant incapable of continuing to be
an employee of the Company and its Affiliates.

“Maximum Incentive Award” shall mean a payment in an amount equal to 2.5%, in
the case of the Company’s Chief Executive Officer and any other Participant who
is a member of the Board, or 1.5%, in the case of each other Participant, of the
Company’s Net Income for a given Performance Period.

“Net Income” shall mean the Company’s after-tax income on a consolidated basis
as reported in the Company’s income statement for the applicable Performance
Period, prior to accrual of any amounts for payment under this Plan for the
Performance Period, adjusted to eliminate the effects of charges for
restructurings, discontinued operations, extraordinary items and all items of
gain, loss or expense determined to be extraordinary or unusual in nature or
infrequent in occurrence or related to the disposal of a segment of a business
or related to a change in accounting principle all as determined in accordance
with standards established by opinion No. 30 of the Accounting Principles Board
(APB Opinion No. 30) or other applicable or successor accounting provisions, as
well as the cumulative effect of accounting changes, in each case as determined
in accordance with generally accepted accounting principles or identified in the
Company’s financial statements or notes to the financial statements.

“Participant” shall mean each executive officer of the Company who is employed
by the Company or an Affiliate as of the last day of a Performance Period.

“Performance Period” shall mean the Company’s fiscal year or such other period
that the Committee, in its sole discretion, may establish, provided any such
Performance Period shall not be less than one year or more than five years in
length.

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3. ELIGIBILITY AND ADMINISTRATION

3.1. Eligibility. The individuals eligible to participate in the Plan shall be
the Company’s Chief Executive Officer and any other executive officer of the
Company or an Affiliate selected by the Committee to participate in the Plan
(each, a “Participant”).

3.2. Administration.

(a) The Plan shall be administered by the Committee. The Committee shall have
full power and authority, subject to the provisions of the Plan and subject to
such orders or resolutions not inconsistent with the provisions of the Plan as
may from time to time be adopted by the Board, to: (i) select the Participants
to whom Awards may from time to time be paid hereunder; (ii) determine the terms
and conditions, not inconsistent with the provisions of the Plan, of each Award;
(iii) determine the time when Awards will be granted and paid and the
Performance Period to which they relate; (iv) affirm the formula for determining
the Maximum Incentive Award payable for each Participant in respect of
Performance Periods and certify as to the calculation of Net Income and the
amount of the Maximum Incentive Award payable for each Participant in respect of
Performance Periods; (v) determine whether payment of Incentive Awards may be
deferred by Participants as provided in Section 4.3; (vi) interpret and
administer the Plan and any instrument or agreement entered into in connection
with the Plan; (vii) correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent that the
Committee shall deem desirable to carry it into effect; (viii) establish such
rules and regulations and appoint such agents as it shall deem appropriate for
the proper administration of the Plan; and (ix) make any other determination and
take any other action that the Committee deems necessary or desirable for
administration of the Plan.

(b) Decisions of the Committee shall be final, conclusive and binding on all
persons or entities, including the Company, any Affiliate, any Participant and
any person claiming any benefit or right under an Award or under the Plan.

(c) To the extent not inconsistent with applicable law or the rules and
regulations of the New York Stock Exchange, any other national securities
exchange or the NASDAQ National Market on which the Company’s securities are
listed or qualified for trading, including the applicable provisions of
Section 162(m) of the Code, the Committee may delegate to one or more officers
of the Company or a committee of officers the authority to take actions on its
behalf pursuant to the Plan.

 

4. AWARDS

4.1. Performance Period. Not later than the earlier of (i) 90 days after the
commencement of each fiscal year of the Company and (ii) the expiration of 25%
of the Performance Period, the Committee shall, in writing, designate one or
more Performance Periods and shall affirm the applicability of the Plan’s
formula for determining the Maximum Incentive Award for each Participant for
such Performance Period(s).

4.2. Certification. At such time as it shall determine appropriate following the
conclusion of each Performance Period, the Committee shall certify, in writing,
the amount of the Maximum Incentive Award for each Participant for such
Performance Period (the “Certification”).

4.3. Payment of Awards. The selection of Participants to whom Awards shall
actually be paid and the amount of the Award actually paid to a Participant
shall be such amount as determined by the Committee in its sole discretion,
including zero, provided that the actual Award shall not exceed the Maximum
Incentive Award with respect to such Participant. The actual amount of the Award
determined by the Committee for a Performance Period shall be paid in cash or,
to the extent provided in such plan, share awards under a shareholder-approved
stock plan of the Company to each Participant at such time as determined by the
Committee in its sole discretion following the end of the applicable Performance
Period, and may be deferred under a program or plan approved by the Committee
subject to the terms and conditions of such program or plan.

4.4. Commencement or Termination of Employment. If a Participant obtains such
status during a Performance Period (whether through promotion or commencement of
employment) or if a person who otherwise would have been a Participant dies,
retires or is Disabled, or if the person’s employment is otherwise terminated,
during a Performance Period (except for cause, as determined by the Committee in
its sole discretion), the Award payable to such a Participant may, in the
discretion of the Committee, be proportionately reduced based on the period of
actual employment during the applicable Performance Period.

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5. MISCELLANEOUS

5.1. Amendment and Termination of the Plan. The Board may, from time to time,
alter, amend, suspend or terminate the Plan as it shall deem advisable, subject
to any requirement for stockholder approval imposed by applicable law, including
Section 162(m) of the Code. No amendments to, or termination of, the Plan shall
in any way impair the rights of a Participant under any Award previously granted
without such Participant’s consent.

5.2. Section 162(m) of the Code. Unless otherwise determined by the Committee,
the provisions of this Plan shall be administered and interpreted in accordance
with Section 162(m) of the Code to ensure the deductibility by the Company of
the payment of Awards. Subject to shareholder approval of the Plan, the failure
of any aspect of the Plan to satisfy Section 162(m) shall not void any action
taken by the Committee under the Plan.

5.3. Tax Withholding. The Company or an Affiliate shall have the right to make
all payments or distributions pursuant to the Plan to a Participant, net of any
applicable federal, state and local taxes required to be paid or withheld. The
Company or an Affiliate shall have the right to withhold from wages, Awards or
other amounts otherwise payable to such Participant such withholding taxes as
may be required by law, or to otherwise require the Participant to pay such
withholding taxes. If the Participant shall fail to make such tax payments as
are required, the Company or an Affiliate shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to such Participant or to take such other action as may be necessary to
satisfy such withholding obligations.

5.4. Right of Discharge Reserved; Claims to Awards. Absent action by the
Committee, nothing in this Plan shall provide any Participant a right to receive
any Award or payment under the Plan with respect to a Performance Period.
Nothing in the Plan nor the grant of an Award hereunder shall confer upon any
Participant the right to continue in the employment of the Company or an
Affiliate or affect any right that the Company or an Affiliate may have to
terminate the employment of (or to demote or to exclude from future Awards under
the Plan) any such Participant at any time for any reason. Except as
specifically provided by the Committee, the Company shall not be liable for the
loss of existing or potential profit from an Award granted in the event of the
termination of employment of any Participant. No Participant shall have any
claim to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of Participants under the Plan.

5.5. Nature of Payments. All Awards made pursuant to the Plan are in
consideration of services performed or to be performed for the Company or an
Affiliate, division or business unit of the Company. Any income or gain realized
pursuant to Awards under the Plan constitute a special incentive payment to the
Participant and shall not be taken into account, to the extent permissible under
applicable law, as compensation for purposes of any of the employee benefit
plans of the Company or an Affiliate except as may be determined by the
Committee or by the Board or board of directors of the applicable Affiliate.

5.6. Other Plans. Nothing contained in the Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to stockholder
approval if such approval is required; and such arrangements may be either
generally applicable or applicable only in specific cases.

5.7. Severability. If any provision of the Plan shall be held unlawful or
otherwise invalid or unenforceable in whole or in part by a court of competent
jurisdiction, such provision shall (a) be deemed limited to the extent that such
court of competent jurisdiction deems it lawful, valid and/or enforceable and as
so limited shall remain in full force and effect, and (b) not affect any other
provision of the Plan or part thereof, each of which shall remain in full force
and effect. If the making of any payment or the provision of any other benefit
required under the Plan shall be held unlawful or otherwise invalid or
unenforceable by a court of competent jurisdiction, such unlawfulness,
invalidity or unenforceability shall not prevent any other payment or benefit
from being made or provided under the Plan, and if the making of any payment in
full or the provision of any other benefit required under the Plan in full would
be unlawful or otherwise invalid or unenforceable, then such unlawfulness,
invalidity or unenforceability shall not prevent such payment or benefit from
being made or provided in part, to the extent that it would not be unlawful,
invalid or unenforceable, and the maximum payment or benefit that would not be
unlawful, invalid or unenforceable shall be made or provided under the Plan.

5.8. Construction. As used in the Plan, the words “include” and “including,” and
variations thereof, shall not be deemed to be terms of limitation, but rather
shall be deemed to be followed by the words “without limitation.”

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5.9. Unfunded Status of the Plan. The Plan is intended to constitute an
“unfunded” plan for incentive compensation and deferred compensation if
permitted by the Committee. With respect to any payments not yet made to a
Participant by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general creditor of the
Company.

5.10. Governing Law. The Plan and all determinations made and actions taken
thereunder, to the extent not otherwise governed by the Code or the laws of the
United States, shall be governed by the laws of the State of Delaware, without
reference to principles of conflict of laws that might result in the application
of the laws of another jurisdiction, and shall be construed accordingly.

5.11. Resolution of Disputes. In the event a Participant or person claiming a
right under an Award or the Plan believes that a decision by the Committee with
respect to such person or Award was arbitrary or capricious, the person may
request arbitration with respect to such decision. The review by the arbitrator
shall be limited to determining whether the Participant or other person has
proven that the Committee’s decision was arbitrary or capricious. This
arbitration shall be the sole and exclusive review permitted of the Committee’s
decision. Participants and persons claiming rights under an Award or the Plan
explicitly waive any right to judicial review. Notice of demand for arbitration
shall be made in writing to the Committee within thirty (30) days after the
applicable decision by the Committee. The arbitrator shall be selected by those
members of the Board of Directors who are neither members of the Compensation
Committee of the Board of Directors nor employees of the Company or any
Affiliate. If there are no such members of the Board of Directors, the
arbitrator shall be selected by the Board of Directors. Such arbitrator shall be
neutral within the meaning of the Commercial Rules of Dispute Resolution of the
American Arbitration Association; provided, however, that the arbitration shall
not be administered by the American Arbitration Association. Any challenge to
the neutrality of the arbitrator shall be resolved by the arbitrator whose
decision shall be final and conclusive. The arbitration shall be administered
and conducted by the arbitrator pursuant to the Commercial Rules of Dispute
Resolution of the American Arbitration Association. Each side shall bear its own
fees and expenses, including its own attorney’s fees, and each side shall bear
one half of the arbitrator’s fees and expenses. The decision of the arbitrator
on the issue(s) presented for arbitration shall be final and conclusive and may
be enforced in any court of competent jurisdiction.

5.12. Effective Date of Plan. The Plan shall be effective on the date of the
approval of the Plan by the holders of the then outstanding securities of the
Company entitled to vote generally in the election of directors. The Plan shall
be null and void and of no effect if the foregoing condition is not fulfilled.

5.13. Captions. The captions in the Plan are for convenience of reference only,
and are not intended to narrow, limit or affect the substance or interpretation
of the provisions contained herein.