SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

  [X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

          FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997

  [ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
          EXCHANGE ACT OF 1934


                         Commission File Number: 0-20724

                             WATSON WYATT & COMPANY
             (Exact name of registrant as specified in its charter)

         DELAWARE                                           53-0181291
      (State or other                                    (I.R.S. Employer
      jurisdiction of                                   Identification No.)
     incorporation or
       organization)


                            6707 Democracy Boulevard
                                    Suite 800
                          Bethesda, Maryland 20817-1129
          (Address of principal executive offices, including zip code)

                         TELEPHONE NUMBER (301) 581-4600
              (Registrant's telephone number, including area code)


-------------------------------------------------------------------------------


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days:

          Yes   [X]                                    No   [ ]

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of May 9, 1997.

Common Stock, $1.00 par value                                   18,307,632
-----------------------------                                   ----------
                Class                                        Number of Shares




<PAGE>
PART I.   FINANCIAL INFORMATION
ITEM 1.   FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                             WATSON WYATT & COMPANY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              (Thousands of U.S. Dollars, Except Per Share Amounts)

                                                                     Quarters Ended March 31,        Nine Months Ended March 31,
                                                                    --------------------------       --------------------------
                                                                       1997            1996              1997           1996
                                                                    -----------    -----------       -----------    -----------
                                                                            (Unaudited)                      (Unaudited)
<S>                                                                      <C>            <C>                <C>           <C>
Fees                                                               $   126,009    $   126,080        $   378,520   $   361,871

Costs of providing services:
     Salaries and employee benefits                                     63,715         62,105            187,848       182,950
     Occupancy and communications                                       15,493         16,533             55,956        48,746
     Professional and subcontracted services                            18,280         17,619             56,943        51,141
     Other                                                               6,243          6,381             18,287        18,335
                                                                     ----------     ----------         ----------    ----------
                                                                       103,731        102,638            319,034       301,172

General and administrative expenses                                     12,472          9,567             33,005        28,547
Depreciation and amortization                                            6,327          7,680             17,553        19,258
                                                                     ----------     ----------         ----------    ----------
                                                                       122,530        119,885            369,592       348,977

Income from operations                                                   3,479          6,195              8,928        12,894


Other:
     Interest income                                                       701            210              1,158           975
     Interest expense                                                     (573)          (243)            (1,340)         (733)

Income (loss) from affiliates                                           (1,959)           390             (5,076)          107
                                                                     ----------     ----------         ----------    ----------

Income before income taxes and minority interest                         1,648          6,552              3,670        13,243

Provision for income taxes                                                 890          2,918              1,982         7,495
                                                                     ----------     ----------         ----------    ----------

Income before minority interest                                            758          3,634              1,688         5,748

Minority interest in net (income) loss of consolidated subsidiaries         (2)            54                (86)          (71)
                                                                     ----------     ----------         ----------    ----------

Net income                                                          $       756    $     3,688        $     1,602   $     5,677
                                                                     ==========     ==========         ==========    ==========


Earnings per share                                                  $      0.04    $      0.20        $      0.09   $     0.31
                                                                     ==========    ===========         ==========    ==========
</TABLE>





                             See accompanying notes
                                      -2-


<PAGE>


<TABLE>
<CAPTION>

                             WATSON WYATT & COMPANY
                           CONSOLIDATED BALANCE SHEETS
                           (Thousands of U.S. Dollars)

                                                                                    March 31,           June 30,
                                                                                      1997                1996
                                                                                  -------------       ------------
                               ASSETS                                              (unaudited)
<S>                                                                                      <C>                 <C>

Cash and cash equivalents                                                         $      8,124        $     21,694
Receivables from clients:
     Billed, net of allowances                                                          66,001              71,431
     Unbilled                                                                           64,944              53,122
                                                                                    -----------         -----------
                                                                                       130,945             124,553

Other current assets                                                                     7,245               6,936
                                                                                    -----------         -----------
     Total current assets                                                              146,314             153,183

Investment in affiliates                                                                46,881              41,195
Fixed assets                                                                            36,492              36,466
Deferred income taxes                                                                   41,983              41,983
Deferred software and development costs                                                 35,054              35,746
Other intangible assets                                                                  3,345               3,820
Other assets                                                                            10,462               8,426
                                                                                    -----------         -----------

                                                                                  $    320,531        $    320,819
                                                                                    ===========         ===========

    LIABILITIES, REDEEMABLE COMMON STOCK, AND PERMANENT SHAREHOLDERS' EQUITY


Accounts payable and accrued liabilities                                          $     80,879        $     88,203
Note payable                                                                             5,700                -
Income taxes payable                                                                       690              11,362
Deferred income taxes                                                                   34,830              34,830
                                                                                    -----------         -----------
     Total current liabilities                                                         122,099             134,395

Accrued retirement benefits                                                             86,076              81,141
Deferred rent and accrued lease losses                                                  15,839               9,904
Other noncurrent liabilities                                                             9,787              10,635

Minority interest in subsidiaries                                                          281                 362

Redeemable Common Stock - $1 par value:
     25,000,000 shares authorized;
     18,454,179 and 18,261,963 issued
     and outstanding; at redemption value                                               91,164              90,214

Permanent shareholders' equity:
Adjustment for redemption value greater than amounts paid in by shareholders           (31,814)            (37,549)
Retained earnings                                                                       26,003              30,677
Cumulative translation gain                                                              1,096               1,040

Commitments and contingencies
                                                                                    -----------         -----------

                                                                                  $    320,531        $    320,819
                                                                                    ===========         ===========

</TABLE>

                             See accompanying notes
                                       -3-



<PAGE>

<TABLE>
<CAPTION>
                             WATSON WYATT & COMPANY
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (Thousands of U.S. Dollars)


                                                                                    Nine Months Ended March 31,
                                                                                  ------------------------------
                                                                                     1997               1996
                                                                                   ----------        ----------
                                                                                            (Unaudited)
<S>                                                                                     <C>                <C>
Cash flows from operating activities:
     Net income                                                                   $     1,602        $     5,677
     Adjustments to reconcile net income to net cash
     provided by operating activities:
         Provision for doubtful receivables from clients                                6,800              4,133
         Depreciation                                                                  10,181             11,126
         Amortization of deferred software and development costs
             and other intangible assets                                                7,372              8,132
         Change in deferred income taxes                                                 -                  (491)
         Loss (income) from affiliates                                                  5,076               (107)
         Minority interest in net income of consolidated subsidiaries                      86                 71
         (Increase) decrease in assets:
             Receivables from clients                                                 (13,192)             6,709
             Income taxes receivable                                                     -                   (63)
             Other current assets                                                        (309)               365
             Other assets                                                              (2,017)            (1,901)
         Increase (decrease) in liabilities:
             Accounts payable and accrued liabilities                                  (5,091)             3,747
             Income taxes payable                                                     (10,672)             4,983
             Accrued retirement benefits                                                4,935              8,475
             Deferred rent                                                              5,935               (997)
             Other noncurrent liabilities                                                (848)              (387)
         Other                                                                           (210)                72
                                                                                    ----------         ----------
         Net cash provided by operating activities                                      9,648             49,544
                                                                                    ----------         ----------

Cash flows from investing activities:
     Purchases of fixed assets                                                        (10,649)           (17,059)
     Proceeds from sales of fixed assets                                                  436              4,714
     Acquisitions                                                                      (1,176)            (1,945)
     Investment in software and development costs                                      (5,535)           (25,883)
     Investment in affiliates                                                         (11,570)            (4,054)
                                                                                    ----------         ----------
         Net cash used in investing activities                                        (28,494)           (44,227)
                                                                                    ----------         ----------

Cash flows from financing activities:
     Net borrowings                                                                     5,700               -
     Issuances of Redeemable Common Stock                                              15,098             10,013
     Repurchases of Redeemable Common Stock                                           (14,689)            (9,881)
                                                                                    ----------         ----------
         Net cash provided by financing activities                                      6,109                132
                                                                                    ----------         ----------

Effect of exchange rate changes on cash                                                  (833)              (478)
                                                                                    ----------         ----------

Decrease in cash and cash equivalents                                                 (13,570)             4,971

Cash and cash equivalents at beginning of period                                       21,694             11,860
                                                                                    ----------         ----------

Cash and cash equivalents at end of period                                        $     8,124        $    16,831
                                                                                    ==========         ==========
</TABLE>


                             See accompanying notes
                                       -4-
<PAGE>

<TABLE>
<CAPTION>


                             WATSON WYATT & COMPANY
      CONSOLIDATED STATEMENTS OF CHANGES IN PERMANENT SHAREHOLDERS' EQUITY
                           (Thousands of U.S. Dollars)

                                                                                              Adjustment For Redemption
                                                                                Cumulative    Value Greater Than Amounts
                                                              Retained          Translation           Paid In By
                                                              Earnings             Gain              Shareholders
                                                            -----------         -----------           -----------
<S>                                                              <C>                 <C>                    <C>
Balance at June 30, 1996                                  $     30,677        $      1,040           $    (37,549)

Net income                                                       1,602

Effect of repurchases of 2,870,700 shares of
     common stock (various prices per share)                    (6,276)                                     6,276

Foreign currency translation adjustment                                                 56

Adjustment of redemption value for change
      in formula book value per share                                                                        (541)
                                                            -----------         -----------            -----------

Balance at March 31, 1997 (unaudited)                     $     26,003        $      1,096           $    (31,814)
                                                            ===========         ===========            ===========
</TABLE>




                             See accompanying notes
                                       -5-
<PAGE>




                             WATSON WYATT & COMPANY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.   The  accompanying  unaudited  consolidated  financial  statements of Watson
     Wyatt & Company and its subsidiaries, (collectively, "Watson Wyatt" or "the
     Company"),  are presented in accordance  with the rules and  regulations of
     the  Securities  and  Exchange  Commission  and do not  include  all of the
     disclosures normally required by generally accepted accounting  principles.
     In the opinion of management,  these  statements  reflect all  adjustments,
     consisting only of normal recurring adjustments,  which are necessary for a
     fair presentation of the consolidated  financial statements for the interim
     periods.   The  consolidated   financial   statements  should  be  read  in
     conjunction with the audited  consolidated  financial  statements and notes
     thereto contained in the Company's Form 10-K for the fiscal year ended June
     30, 1996.

     The results of operations  for the nine months ended March 31, 1997 are not
     necessarily  indicative  of the results that can be expected for the entire
     fiscal year ending June 30,  1997.  Certain  prior year  amounts  have been
     reclassified to conform to the current year presentation.

2.   On March 31,  1996,  the  Company  and State  Street  Bank & Trust  Company
     ("State  Street"),  formed  Wellspring  Resources,  LLC  ("Wellspring"),  a
     limited  liability  company  established  to  provide  benefits  and  human
     resources administration  outsourcing services. The Company contributed its
     existing  employee  outsourced  benefits  operations and deferred  software
     development  costs with a book  value of $15.4  million  to  Wellspring  in
     exchange for a 50%  interest,  and State Street  contributed  cash of $15.4
     million for the remaining 50% interest.  The Company and State Street share
     equally in the future funding requirements of Wellspring.

     In  connection  with the  formation of  Wellspring,  Watson Wyatt  retained
     certain client contracts for administrative and recordkeeping  services and
     entered  into an  agreement  whereby  Wellspring  will provide the services
     required  by the  contracts  on behalf  of the  Company  at cost.  Expenses
     charged to the  Company by  Wellspring  for such  services  during the nine
     months  ended  March 31,  1997 were $30.2  million.  The  client  contracts
     provide for the receipt of fees  during an  implementation  period in which
     the Company develops custom software platforms and systems and performs the
     related   activities   necessary   to  commence  the   administrative   and
     recordkeeping  services.  The  Company  defers  all fees  received  and all
     directly  related  software  and  systems   development  costs  during  the
     implementation  period,  and recognizes  such fees and costs in income over
     the remaining  lives of the contracts upon  commencement  of services under
     such contracts.  Deferred  software and development  costs related to these
     contracts  totaled $26.9 million and $25.3 million and the related deferred
     contract  revenues  totaled $9.3 million and $7.3 million at March 31, 1997
     and June 30, 1996, respectively.


3.   Under the  Company's  bylaws,  the Company is obligated to  repurchase  its
     Redeemable Common Stock, except in certain circumstances.  Accordingly, the
     redemption value of outstanding  shares is classified as Redeemable  Common
     Stock and not as permanent shareholders' equity. Redeemable Common Stock is
     equal to the number of shares  outstanding  multiplied  by the Formula Book
     Value per share,  which was $4.94 per share at March 31,  1997 and June 30,
     1996.  Permanent  shareholders'  equity  includes  an  adjustment  for  the
     difference  between the redemption value of the Redeemable Common Stock and
     the amounts actually paid by shareholders for the shares.


                                      -6-
<PAGE>


4.   During the nine  months  ended  March 31,  1997,  the  Company  repurchased
     2,870,700  shares of  common  stock,  at  various  prices  per  share.  The
     computation of earnings per share is based upon the weighted average number
     of shares of common  stock  outstanding  during the  period.  The number of
     shares used in the  computation  is 16,841,000 and 18,130,000 for the three
     months  ended March 31, 1997 and 1996,  respectively,  and  17,197,000  and
     18,501,000 for the nine months ended March 31, 1997 and 1996, respectively.

5.   During  fiscal  year  1997,  the  Company   recorded   sublease  and  lease
     termination losses of $12.1 million,  of which $10.3 million related to the
     relocation of the corporate office space.  The corporate office  relocation
     to a less  expensive  suburban  location  will  result  in a  reduction  of
     occupancy expense in future years.

6.   The Company guarantees certain leases for office premises and equipment for
     its affiliate,  Wellspring.  Minimum rentals  guaranteed under these leases
     are $3.1 million in fiscal year 1997 and  aggregate  $74.5  million for the
     remaining  lease terms,  which expire at various dates through 2007.  These
     leases are also jointly and severally guaranteed by State Street.


                                      -7-

<PAGE>



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
     OF OPERATIONS

GENERAL

Watson  Wyatt  &  Company,   together  with  its  affiliates  and   consolidated
subsidiaries,  (collectively,  "Watson Wyatt" or "the Company"),  provides human
resource  and  employee  benefits  consulting  and  administrative/recordkeeping
services. The Company also provides a broad range of services in risk management
and general insurance and investment consulting,  and derives fees from sales of
surveys.  The Company works with  organizations  of all sizes,  from the largest
multinationals to public employers and nonprofit institutions.

Watson Wyatt's fiscal year ends June 30. The financial  statements  contained in
this quarterly report reflect  consolidated  balance sheets as of the end of the
third  quarter of fiscal  year 1997  (March  31,  1997) and as of the end of the
prior  fiscal  year  1996  (June  30,  1996),  and  consolidated  statements  of
operations,  of cash flows and of changes in permanent  shareholders' equity for
the three and nine months ended March 31, 1997 and 1996.

RESULTS OF  OPERATIONS - THREE AND NINE MONTHS ENDED MARCH 31, 1997  COMPARED TO
THREE AND NINE MONTHS ENDED MARCH 31, 1996.

For the first nine months of fiscal year 1997 the Company produced net income of
$1.6 million, a decrease of $4.1 million from net income of $5.7 million for the
first  nine  months of fiscal  year 1996.  Fiscal  year 1997  results  include a
sublease loss of $10.3 million  associated  with the relocation of the corporate
offices in  Washington,  D.C. to a less  expensive  suburban  facility  and $1.8
million in other  lease  losses.  Excluding  the  effect of the lease  losses in
fiscal year 1997,  the  Company's  net income of $1.6 million for the first nine
months  would have been $7.2  million,  an increase of $1.5  million over fiscal
year 1996 net income for the first nine months.

Fees for the first nine months of fiscal year 1997 total $378.5 million compared
to $361.9  million for the first nine months of fiscal year 1996, an increase of
$16.6 million,  or 5%.  Principal  areas of significant  revenue growth were the
Asia Pacific and Latin America  consulting  regions and the outsourcing  clients
retained by the Company.  While  year-to-date fees have increased over the prior
year, fees in the third quarter of fiscal year 1997 compared to fiscal year 1996
were flat in North America and up in Asia Pacific,  offset by the reduction from
businesses which were sold in fiscal year 1996.

Salaries and employee benefit expenses for the third quarter of fiscal year 1997
were $63.7  million,  an increase of $1.6 million or 3%, from $62.1  million for
the third  quarter of fiscal  year  1996.  The  Company  incurred  salaries  and
employee  benefit  expenses of $187.8 million in the first nine months of fiscal
year 1997,  an increase of $4.8  million,  or 3%, from $183.0  million the prior
fiscal year. The increase is due to normal annual salary increases.

Occupancy  and  communication  expenses  during the third quarter of fiscal year
1997 totaled $15.5  million,  a decrease of $1.0 million,  or 6%, from the third
quarter  of the prior  year.  For the first  nine  months of fiscal  year  1997,
occupancy and communication  expenses totaled $56.0 million, an increase of $7.2
million,  or 15%, from the first nine months of the prior year.  The increase is
due to $12.1 million in sublease and lease termination losses primarily from the
relocation of the corporate office recorded in fiscal year 1997 partially offset
by $5.6  million in lower  expenses  as a result of the sale of the  Minneapolis
outsourcing center and the formation of Wellspring in March 1996.

                                      -8-
<PAGE>


Professional  and  subcontracted  services  relating to consulting  offices were
$18.3  million  during the third quarter of fiscal year 1997, an increase of $.7
million  over the third  quarter of the prior  fiscal  year.  For the first nine
months of fiscal year 1997,  professional and subcontracted  services were $56.9
million,  an increase of $5.8 million,  or 11%, over $51.1 million for the first
nine months of fiscal year 1996.  The increase is primarily due to costs charged
by Wellspring for servicing the retained outsourcing clients.

General and administrative ("G&A") expenses for the third quarter of fiscal year
1997 were $12.5 million, a $2.9 million, or 30%, increase from the third quarter
of fiscal year 1996. For the first nine months of fiscal year 1997, G&A expenses
were $33.0 million, a $4.5 million, or 16% increase from $28.5 million the prior
fiscal  year.  The increase in expense is  primarily  attributable  to strategic
marketing and planning initiatives.

Depreciation and  amortization  expense of $6.3 million for the third quarter of
fiscal year 1997 represents a decrease of $1.4 million over the third quarter of
fiscal year 1996.  For the first nine  months of fiscal year 1997,  depreciation
decreased $1.7 million, or 9%, over the prior year expense of $19.3 million. The
decrease is  attributable  to the disposal of assets in the prior year and lower
levels of capital expenditures in the current fiscal year.

Income  (loss) from  affiliates  for the quarter and nine months ended March 31,
1997 is primarily affected by the results of the Company's Wellspring affiliate.

Income before  income taxes and minority  interest of $3.7 million for the first
nine months of fiscal year 1997  resulted in a tax  provision  of $2.0  million.
This  compares to a provision of $7.5 million on $13.2  million of income before
income  taxes and  minority  interest  for the first nine  months of fiscal year
1996. The effective tax rates for the nine months ended March 31, 1997 and March
31, 1996 were 54% and 57%, respectively.  The somewhat higher effective tax rate
for the nine  months  ended March 31,  1996 was due to the  nondeductibility  of
certain expenses recorded during that period.

LIQUIDITY AND CAPITAL RESOURCES.

The Company relies primarily on funds from operations and short-term  borrowings
as its source of  liquidity.  The Company  believes  that it has access to ample
financial resources to finance its growth as well as support ongoing operations.
The Company's cash and cash  equivalents at March 31, 1997 totaled $8.1 million,
compared  to  $21.7  million  at June  30,  1996.  The  Company  had  borrowings
outstanding  under its line of credit of $5.7  million at March 31,  1997 and no
borrowings at June 30, 1996.

CASH FLOWS FROM  OPERATING  ACTIVITIES  for the first nine months of fiscal year
1997 was an inflow of $9.6  million,  compared to an inflow of $49.5 million for
the first nine months of fiscal year 1996.  The  decrease is due to  accelerated
payments, increased advances to affiliates and reduced client collections.

The Company's  ratio of current assets to current  liabilities  was 1.2 at March
31, 1997 and 1.1 at June 30, 1996.

CASH FLOWS FROM  INVESTING  ACTIVITIES  decreased from outflows of $44.2 million
for the first nine months of fiscal  year 1996 to outflows of $28.5  million for
the nine months of fiscal  year 1997.  The  decrease  is due to lower  levels of
capital expenditures and lower spending on software and development costs offset
by an increase in cash outflow from  investments  in affiliates due to increased
investment in Wellspring.

Wellspring has experienced  unanticipated  increases in computer  charges from a
primary vendor as well as software development and system  implementation delays
resulting in additional expense and delayed

                                      -9-
<PAGE>


revenue. In addition to the $15.4 million of initial capital contributed by each
partner at the formation of Wellspring, the Company and State Street have funded
the remaining  initially  agreed-upon  capitalization of $14.6 million each, and
have  committed an additional  $4.0 million each to fund cash  requirements  for
Wellspring through approximately June 30, 1997. The Company anticipates that the
Wellspring business will continue to require additional cash resources in fiscal
year 1998,  although  Wellspring's  fiscal year 1998  forecasts  are still being
developed.

Anticipated  commitments  of funds for the  remainder  of  fiscal  year 1997 are
approximately $16.0 million, which includes expected purchases of capital assets
and investments in affiliates.  Included in anticipated  commitments is the $4.0
million noted above to be invested in  Wellspring.  Operating cash flows should,
in  combination  with  the  line of  credit  described  below,  provide  for the
Company's ongoing cash needs.

The Company  has an $80 million  revolving  credit  line which is  scheduled  to
mature on January  5, 2001.  Fifty-five  million  dollars of the credit  line is
available to the Company as revolving  credit for  operating  needs,  subject to
certain borrowing limitations.  The remaining $25 million is available to secure
loans to associates from financial  institutions  for the purchase of Redeemable
Common Stock made available under the Company's stock purchase program. At March
31,  1997,  $30.0  million of the credit  line is  available  to the  Company as
revolving credit for operating needs.

CASH FLOWS FROM FINANCING ACTIVITIES was an inflow of $6.1 million for the first
nine months of fiscal year 1997,  versus $.1 million in the preceding  year. The
increase is due  primarily  to the  increased  level of borrowing in fiscal year
1997.

                                      -10-

<PAGE>



PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Watson Wyatt is from time to time a defendant in various lawsuits which arise in
the  ordinary  course of  business.  These  disputes  typically  involve  claims
relating to employment  matters or the rendering of professional  services.  The
management  of the Company does not believe that any such  currently  pending or
threatened  litigation  is  likely  to have a  material  adverse  effect  on the
business or financial condition of Watson Wyatt.



ITEM 2.  CHANGES IN SECURITIES

On January 7, 1997, 4,049 unregistered shares of the Company's common stock were
sold to an outside director, in a transaction not involving a public offering in
reliance on Section 4(2) of the Securities  Act of 1933. The aggregate  offering
price was $20,002 (4,049 shares at $4.94 per share).



ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.



ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None



ITEM 5.  OTHER INFORMATION

None.


                                      -11-

<PAGE>


ITEM 6.  EXHIBITS AND REPORTS ON FORMS 8-K

a.   Exhibits

3.1  Restated  Certificate  of  Incorporation  of Watson  Wyatt & Company(1)  
3.2  Restated Bylaws, dated November 22, 1996(4) 
4.1  Form of Certificate Representing Common Stock(2) 
10.1 Third Amended and Restated  Credit and Security  Agreement, dated
     January 5, 1996(3)
10.2 First Amendment to The Third Amended and Restated Credit and Security
     Agreement, dated June 14, 1996(1)


b.   Reports on Form 8-K

         None













------------------

1    Incorporated by reference from the Registrant's  Annual Report on Form 10-K
     for the year ended June 30,  1996 (File No.  0-20724),  filed on  September
     27,1996.

2    Incorporated by reference from Registrant's Initial Registration Statement
     on Form 10 (File No. 0-20724), filed on October 13, 1992.

3    Incorporated by reference from  Registrant's  Quarterly Report on Form 10-Q
     for the quarter ended March 31, 1996 (File No.  0-20724),  filed on May 13,
     1996.

4    Incorporated by reference from  Registrant's  Quarterly Report on Form 10-Q
     for the  quarter  ended  December  31,  1996 (File No.  0-20724),  filed on
     February 12, 1997.

                                      -12-
<PAGE>




Signatures


Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

Dated:  May 12, 1997

Watson Wyatt & Company
(Registrant)




/S/ A. W. Smith, Jr.                           /S/ Barbara L. Landes
-------------------------                      -------------------------
Name:   A. W. Smith, Jr.                       Name:   Barbara L. Landes
Title:  President and Chief                    Title:  Vice President and Chief
        Executive Officer                                Financial Officer



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