SECOND AMENDMENT
                                       TO
                           THIRD AMENDED AND RESTATED
                          CREDIT AND SECURITY AGREEMENT


      THIS SECOND  AMENDMENT TO THIRD  AMENDED AND RESTATED  CREDIT AND SECURITY
AGREEMENT (this "Second Amendment"), dated as of April 30, 1997, is entered into
among Watson Wyatt & Company (formerly known as The Wyatt Company) (d/b/a Watson
Wyatt Worldwide) ("Wyatt"),  Watson Wyatt Investment Consulting,  Inc. (formerly
known as Wyatt Investment  Consulting,  Inc.) ("WWIC" and,  together with Wyatt,
the "Companies"), NationsBank, N.A. ("NationsBank"), as a Bank and as Agent (the
"Agent") for the Banks,  and the Banks identified as such on the signature pages
hereto (the "Banks"). Terms used but not otherwise defined herein shall have the
meanings provided in the Credit Agreement (as defined below).

                                    RECITALS

      A. The Companies, as Borrowers,  the Banks and the Agent entered into that
certain Third Amended and Restated Credit  Agreement dated as of January 5, 1996
(as amended and supplemented from time to time, the "Credit Agreement") and that
certain  Consent and  Agreement  dated as of March 6, 1996 (the  "Consent"  and,
together with the Credit Agreement, the "Agreements").

      B.    Effective March 31, 1996, Wyatt entered into the Wellspring Joint
Venture.

      C.  Wellspring  Joint Venture is in the final stages of negotiating a five
year services  agreement with Federal Express  Corporation  ("Federal  Express")
scheduled  to commence  September 1, 1997.  As a condition to entering  into the
agreement, Federal Express is requesting a separate guaranty from Wyatt and from
State  Street  Bank and Trust  Company,  for the  benefit  of  Wellspring  Joint
Venture, in the amount of $5,310,000 each (the "Federal Express Guaranty").

      D. The Companies  have requested that the Banks agree to modify certain of
the covenants  and  agreements  contained in the Credit  Agreement to permit the
Federal Express Guaranty.

      E.    The Banks have agreed to execute and deliver this Second
Amendment on the terms and conditions set forth herein.


<PAGE>


                                    AGREEMENT

      NOW,  THEREFORE,  IN  CONSIDERATION  of the  premises  and other  good and
valuable  consideration,   the  receipt  and  sufficiency  of  which  is  hereby
acknowledged, the parties hereto agree as follows:

      1.    Amendment.

      Section  7.2(a) of the Credit  Agreement  is hereby  amended by  replacing
subsection (iv) thereof in its entirety with the following:

            (iv)   guaranty   and  other   contingent   obligations,   excluding
      contingencies arising out of office and equipment leases and the Guaranty,
      which shall not be greater than  $7,500,000 in the aggregate at the end of
      any fiscal quarter.

      2.    Condition Precedent.  This Second Amendment shall not be
effective until the Agent has received copies of this Second Amendment duly
executed by the Companies and the Majority Banks.

      3. Liens.  The Companies affirm the liens and security  interests  created
and granted in the Credit  Agreement and the other Loan Documents and agree that
this Second  Amendment shall in no manner  adversely affect or impair such liens
and security interests.

      4.  Representations  and  Warranties.  Each Company hereby  represents and
warrants  to the Banks and the Agent that (a) no Event of  Default or  Incipient
Default exists and is continuing  under the Credit  Agreement except as is being
waived  pursuant  to  paragraph  1  above;  (b)  such  Company  has  no  claims,
counterclaims,  offsets,  credits  or  defenses  to the Loan  Documents  and the
performance  of its  obligations  thereunder,  or if such  Company  has any such
claims, counterclaims, offsets, credits or defenses to the Loan Documents or any
transaction  related  to  the  Loan  Documents,  the  same  are  hereby  waived,
relinquished  and released in consideration of the Majority Banks' execution and
delivery of this Second Amendment;  and (c) since the date of the last financial
statements of the Companies  delivered to the Banks, no material  adverse change
has occurred in the business,  financial  condition,  operations or prospects of
such Company other than as previously disclosed to the Banks.

      5.    No Other Changes.  Except as expressly modified and amended in
this Second Amendment, all of the terms, provisions and conditions of the
Credit Agreement and the other Loan Documents shall remain unchanged.

      6.    Counterparts.  This Second Amendment may be executed in any
number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an
original and all of which taken together shall constitute one and the same
instrument.

<PAGE>

      7. ENTIRETY. THIS SECOND AMENDMENT AND THE OTHER LOAN DOCUMENTS EMBODY THE
ENTIRE  AGREEMENT  BETWEEN THE PARTIES AND  SUPERSEDE ALL PRIOR  AGREEMENTS  AND
UNDERSTANDINGS,  IF ANY,  RELATING  TO THE  SUBJECT  MATTER  HEREOF.  THESE LOAN
DOCUMENTS  REPRESENT  THE FINAL  AGREEMENT  BETWEEN  THE  PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.

                 [Remainder of Page Intentionally Left Blank]


<PAGE>


      IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
as of the date first above written.


                                            COMPANIES

                                            WATSON WYATT & COMPANY (f/k/a
                                            The Wyatt Company) (d/b/a Watson
                                            Wyatt Worldwide)


ATTEST:   /S/Eric B. Schweizer              By:   /S/Barbara L. Landes
          Name: Eric B. Schweizer                 Name: Barbara L. Landes
          Title: Treasurer                       Title: V.P. Finance and CFO


                                            WATSON WYATT INVESTMENT
                                            CONSULTING, INC. (f/k/a Wyatt
                                            Investment Consulting, Inc.)

WITNESS:  /S/Elaine S. Wiggins              By:   /S/Walter W. Bardenwerper
          Name: Elaine S. Wiggins                 Name: Walter W. Bardenwerper
          Title: Notary Public                    Title: Secretary



                             [Signatures Continued]


<PAGE>



                                            BANKS

                                            NATIONSBANK, N.A., as Agent
                                            and as a Bank

                                            By: /S/Elizabeth S. Duff
                                            Name: Elizabeth S. Duff
                                            Title: Vice President


                                            THE FIRST NATIONAL BANK OF
                                            CHICAGO (successor in interest to
                                            NBD Bank)

                                            By: /S/Amy L. Golz
                                            Name: Amy L. Golz
                                            Title: Vice President


                                            MELLON BANK, N.A.

                                            By: /S/J. Michael Troutman
                                            Name: J. Michael Troutman
                                            Title: Vice President