**Exhibit 10.4**

Amendment Number 1

to

Watson Wyatt & Company

Senior Officers DeferredCompensation Plan

Section 4 is amended as follows:

**4.Requirement to Defer**

If a Participant's Applicable Employee Remuneration exceeds$1,050,000, the amount in excess of $1,000,000 will be deferred. Amountsdeferred under this Paragraph 4 shall be referred to as the "DeferredAmounts."

Section 6 is amended as follows:

**6.Investment Options and Additions to Deferred Amounts**

The Plan shall offer a minimum of three Investment Optionsincluding an interest factor equal to the prime rate of interest as reported byBankAmerica, or the Company's bank if different. A Participant's DeferredCompensation Account shall be deemed to be invested in the Investment Optionsthe Participant has selected and may thereafter be changed in accordance withpolicies and procedures developed by the Committee.

Executed on behalf of Watson Wyatt & Company pursuant toauthorization of its Board of Directors given on December 18, 2000.

 
| /s/ Walter W. Bardenwerper | Vice  President and Secretary |   | 8/17/01 |   |
|----------------------------|-------------------------------|--------|---------|--------|
|                            |                          |   |    |   |
| Walter W. Bardenwerper     |                          |   |    |   |

 

WatsonWyatt & Company

SeniorOfficers Deferred Compensation Plan

**1. Purpose**

The purpose of the Watson Wyatt & Company Voluntary DeferredCompensation Plan (the "Plan") is to preserve Watson Wyatt &Company's tax deduction for compensation in excess of $1,000,000 which isotherwise lost under section 162(m) of the Internal Revenue Code.

**2.Administration**

The Plan shall be administered by the Compensation and Stock Committeeof the Board of Directors of the Company (the "Committee"). TheCommittee shall have sole and complete authority to interpret the terms andprovisions of the Plan and to delegate various administrative tasks toappropriate officers and employees of the Company.

**3.Eligibility**

The chief executive officer and the other four highest compensatedofficers as disclosed in the proxy shall participate in the Plan if theirApplicable Employee Remuneration (as defined in section 162(m)(4) of theInternal Revenue Code) exceeds $1,000,000. Such persons shall be collectivelyreferred to as the "Participant" or "Participants" as thecase may be.

**4.Requirement to Defer**

If a Participant's Applicable Employee Remuneration exceeds$1,000,000, the amount in excess of $1,000,000 will be deferred. Amountsdeferred under this Paragraph 4 shall be referred to as the "DeferredAmounts."

**5.Establishment of Deferred Compensation Account**

At the time of the Participant's initial deferral pursuant toParagraph 4, the Company shall establish a memorandum account (a "DeferredCompensation Account") for such Participant on its books. Deferred Amountsshall be credited to the Deferred Compensation Account at the time the DeferredAmounts would have been paid to the Participant if no deferral were made.Additions as provided in Paragraph 6, below; shall be credited to theParticipant's Deferred Compensation Account as of the last day of each month.

**6. Additionsto Deferred Amounts**

As of the last day of each month, the balance in the Participant'sDeferred Compensation Account at the beginning of that month shall be creditedwith interest using an interest factor equivalent to the prime rate of interestas reported by NationsBank at the beginning of such month.

**7. Paymentof Deferred Amounts**

Except as otherwise provided in subparagraph (b) below, the periodof deferral shall be until the earlier of (i) the Participant is not named inthe Summary Compensation Table of the Watson Wyatt & Company proxy or (ii)payment of the Deferred Amount will be deductible by Watson Wyatt &Company.
Payments made because the Participant is notnamed in the Summary Compensation Table shall be in a lump sum.

In the event of the Participant's death, paymentof the balance in the Participant's Deferred Compensation Account shall be madeto the beneficiary designated by the Participant in writing and delivered tothe 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. The term "Change in Control"  shall mean a Change in Control of a nature that would be required to be  reported, by persons or entities subject to the reporting requirements of Section  14(a) of the Securities and Exchange Act of 1934 (the 1934 Act) in response  to item 6(e) of Schedule 14A of Regulation 14A, or successor provisions  thereto, as in effect on the date hereof; provided that, without limitation,  such a Change in Control shall be deemed to have occurred if (1) any  "person" or "group" (as those terms are used in Sections  13(d) and 14(d) of the 1934 Act) is or becomes the "beneficial  owner" (as defined in Rule 13(d)–3 issued under the 1934 Act),  directly or indirectly, of securities of the Company representing 20 percent  or more of the combined voting power of the Company's then outstanding  securities; or, if, (2) at any time during any period of two consecutive  fiscal years, individuals who at the beginning of such period constitute the  board of directors of the Company cease for any reason to constitute at least  the majority thereof unless the election, or the nomination for election by  the Company's shareholders, of each new director was approved by a vote of at  least two-thirds of the directors still in office who were directors at the  beginning of such two-year period; or if (3) the Company is merged into or  consolidated with another entity, as a result of which the shareholders of  the Company immediately prior to such merger or consolidation own less than  75% of the voting interest in the surviving entity or the parent of the  surviving entity.
**8. Participant Reports**

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

**9.Transferability of Interests**

All Deferred Compensation Accounts shall be merely bookkeepingentries. Any assets which may be reserved to pay benefits hereunder, shall beconsidered as general assets of the Company for use as it deems necessary andshall be subject to the claims of the Company's creditors.

The rights and interests of a Participant shall be solely those ofa general creditor of the Company and such Participant's rights and interestsmay not be anticipated, assigned, pledged, transferred or otherwise encumberedor disposed of except in the event of the death of the Participant, and thenonly by will or the laws of descent and distribution.

**10.Conditions of Employment Not Affected by the Plans**

The establishment and maintenance of the Plans will not beconstrued as conferring any legal rights upon any person to the continuance ofhis/her employment with the Company or any of its subsidiaries, nor will thePlans interfere with the rights of the Company or any of its subsidiaries todischarge any person from its employ.

 

**11.Amendment, Suspension and Termination**

The Company by action of its Board of Directors may amend, suspendor terminate the Plan or any portion thereof in such manner and to such extentas it may deem advisable and in the best interests of the Company. Noamendment, suspension and termination shall alter or impair any DeferredCompensation Accounts without the consent of the Participant affected thereby.

**12. UnfundedObligation**

The Plan shall not be funded, and no trust, escrow or otherprovisions shall be established to secure payments due under the Plan. AParticipant shall be treated as a general, unsecured creditor of the Company atall times under the Plan.

**13.Applicable Law**

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

**14.Severability**

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

**15.Effective Date**

The Plan shall be effective immediately upon approval by the Boardof Directors of the Company.

 

Executed on behalf of Watson Wyatt & Companypursuant to authorization of its Board of Directors given on February 21, 1997.
/s/ Walter W. BardenwerperVice  President and Secretary 8/17/01     Walter W. Bardenwerper