EXHIBIT INDEX

Listed and indexed below are all Exhibits filed as part of this Report. Certain Exhibits are incorporated by reference to documents previously filed by the Company with the Securities and Exchange Commission pursuant to Rule 12b-32 under the Securities Exchange Act of 1934, as amended.

Exhibit No.                                  Description

   3.1      Restated Certificate of Incorporation, as amended. (13)
   3.2      Amended and Restated By-Laws. (1)
   9.1      Horne Family Voting Trust Agreement-1991 dated as of
            October 31, 1991. (2)
   9.2      Amendment dated as of December 18, 1995 to the Horne Family
            Voting Trust Agreement-1991 dated as of  October 31, 1991.*
  10.1      Employment Agreement effective as of September 1, 1996
            between the Registrant and Timothy P. Horne. *
  10.2      Supplemental Compensation Agreement effective as of
            September 1, 1996 between the Registrant and Timothy P. Horne. *
  10.3      Deferred Compensation Agreement between the Registrant and
            Timothy P. Horne, as amended. (4)
  10.4      1986 Incentive Stock Option Plan, as amended, including form of
            Option Agreement. (3)
  10.5      1989 Nonqualified Stock Option Plan, including form of Option
            Agreement.(3)
  10.6      Watts Industries, Inc. Retirement Plan for Salaried Employees
            dated December 30, 1994, as amended and restated effective as of
            January 1, 1994. (13)

10.6(i) Amendment Number 1 to the Watts Industries, Inc. Retirement Plan for Salaried Employees dated April 16, 1996, effective as of January 1, 1994.*
10.6(ii) Amendment Number 2 to the Watts Industries, Inc. Retirement Plan for Salaried Employees dated October 17, 1995, effective as of September 30, 1995. *
10.6(iii) Amendment Number 3 to the Watts Industries, Inc. Retirement Plan

           for Salaried Employees dated April 16, 1996, effective as of
           January 1, 1996. *
 10.7      Registration Rights Agreement dated as of July 25, 1986. (5)
 10.8      Executive Incentive Bonus Plan, as amended. (13)
 10.9      Indenture dated as of December 1, 1991 between the  Registrant
           and The First National Bank of Boston, as Trustee, including
           form of 8-3/8% Note Due 2003. (8)
10.10      Loan Agreement and Mortgage among The Industrial Development
           Authority of the State of New Hampshire, Watts Regulator Co. and
           Arlington Trust Company dated as of August 1, 1985. (4)
10.11      Amendment Agreement relating to Watts Regulator Co. (Canaan and
           Franklin, New Hampshire, facilities) financing dated as of
           December 31, 1985. (4)
10.12      Sale Agreement between Village of Walden Industrial Development
           Agency and Spence Engineering  Company, Inc. dated as of June 1,
           1994. (12)
10.13      Letter of Credit, Reimbursement and Guaranty Agreement dated
           June 1, 1994 by and among the Registrant, Spence Engineering
           Company, Inc and First Union National Bank of North Carolina.(12)
10.13(i)   Amendment Number 1 to the Letter of Credit, Reimbursement and
           Guaranty Agreement dated June 1, 1994 by and among the
           Registrant, Spence Engineering Company, Inc. and First Union
           National Bank of North Carolina.*
10.14      Trust Indenture from Village of Walden Industrial Development
           Agency to The First National Bank of Boston, as Trustee, dated
           as of June 1, 1994. (12)
10.15      Loan Agreement between Hillsborough County Industrial Development
           Authority and Leslie Controls, Inc. dated as of July 1, 1994.(12)
10.16      Letter of Credit, Reimbursement and Guaranty Agreement dated
           July 1, 1994 by and among the Registrant, Leslie Controls, Inc.
           and First Union National Bank of North Carolina. (12)
10.16(i)   Amendment Number 1 to the Letter of Credit, Reimbursement and
           Guaranty Agreement dated July 1, 1994 by and among the
           Registrant, Leslie Controls, Inc. and First Union National Bank
           of North Carolina. *
10.17      Trust Indenture from Hillsborough County Industrial Development
           Authority to The First National Bank of Boston, as Trustee,
           dated as of July 1, 1994.(12)
10.18      Loan Agreement between The Rutherford County Industrial
           Facilities and Pollution Control Financing Authority and Watts
           Regulator Company dated as of September 1, 1994. (13)
10.19      Letter of Credit, Reimbursement and Guaranty Agreement dated
           September 1, 1994 by and among the Registrant, Watts Regulator
           Company and The First Union National Bank of North Carolina. (13)
10.19(i)   Amendment No. 1 to the Letter of Credit, Reimbursement and
           Guaranty Agreement dated September 1, 1994 by and among the
           Registrant, Watts Regulator Company and The First Union National
           Bank of North Carolina.*
10.20      Trust Indenture from The Rutherford County Industrial Facilities
           and Pollution Control Financing Authority to The First National
           Bank of Boston, as Trustee, dated as of September 1, 1994. (13)
10.21      Amended and Restated Stock Restriction Agreement dated as of
           October 30, 1991. (2)
10.22      Watts Industries, Inc. 1991 Non-Employee Directors' Nonqualified
           Stock OptionPlan. (7)
10.22(i)   Amendment No. 1 to the Watts Industries, Inc. 1991 Non-Employee
           Directors' Nonqualified Stock Option Plan. *
10.23      Letters of Credit relating to retrospective paid loss insurance
           programs. (11)
10.24      Form of Stock Restriction Agreement for management
           stockholders. (5)
10.25      Revolving Credit Agreement dated December 23, 1987 between
           Nederlandse Creditbank NV and Watts Regulator (Nederland) B.V.
           and related Guaranty of Watts Industries, Inc. and Watts
           Regulator Co. dated December 14, 1987. (6)
10.26      Loan Agreement dated September 1987 with, and  related Mortgage
           to, N.V. Sallandsche Bank. (6)
10.27      Agreement and Plan of Merger dated as of August 22, 1991 relating
           to the acquisition by the Registrant of Henry Pratt Company. (9)
10.28      Agreement of the sale of shares of Intermes, S.p.A., RIAF Holding
           A.G. and the participations in Multiscope Due S.R.L. dated as of
           November 6, 1992. (10)
10.29      Revolving Credit Agreement dated August 30, 1994 between and
           among Watts Investment Company, certain financial institutions,
           the First National Bank of Boston, as Agent, and the Registrant,
           as Guarantor. (12)

10.29(i) Amendment Number 1 dated June 30, 1995, to the Revolving Credit Agreement dated August 30, 1994. *
10.29(ii) Amendment Number 2 dated April 15, 1996, to the Revolving Credit

           Agreement dated August 30, 1994. *
10.30      Watts Industries, Inc. Management Stock Purchase Plan dated
           October 17, 1995. (14)
   11      Statement Regarding Computation of Earnings per Common Share. *
   21      Subsidiaries. *
 23.1      Consent of Ernst & Young LLP, Independent Auditors. *
 23.2      Consent of Deloitte & Touche, Independent Auditors. *
   27      Financial Data Schedule. *

(1) Incorporated by reference to the relevant exhibit to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 15, 1992.

(2) Incorporated by reference to the relevant exhibit to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on November 14, 1991.

(3) Incorporated by reference to the relevant exhibit to the Registrant's Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 28, 1989.

(4) Incorporated by reference to the relevant exhibit to the Registrant's Registration Statement on Form S-1 (No. 33-6515) filed with the Securities and Exchange Commission on June 17, 1986.

(5) Incorporated by reference to the relevant exhibit to the Registrant's Registration Statement on Form S-1 (No. 33-6515) filed with the Securities and Exchange Commission as part of the Second Amendment to such Registration Statement on August 21, 1986.

(6) Incorporated by reference to the relevant exhibit to the Registrant's Registration Statement on Form S-1 (No. 33-27101) filed with the Securities and Exchange Commission on February 16, 1989.

(7) Incorporated by reference to the relevant exhibit to the Registrant's Amendment No. 1 to Form 10-K for fiscal 1992 filed with the Securities and Exchange Commission on March 11, 1993.

(8) Incorporated by reference to the relevant exhibit to the Registrant's Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 16, 1992.

(9) Incorporated by reference to Exhibit 10.33 to the Registrant's Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 24, 1991.

(10) Incorporated by reference to the relevant exhibit to the Registrant's Amendment No. 2 to Form 8-K dated November 6, 1992 filed with the Securities and Exchange Commission on February 22, 1993.

(11) Incorporated by reference to the relevant exhibit to the Registrant's Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 24, 1993.

(12) Incorporated by reference to the relevant exhibit to the Registrant's Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 26, 1994.

(13) Incorporated by reference to the relevant exhibit to the Registrant's Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 28, 1995.

(14) Incorporated by reference to the relevant exhibit to the Registrant's Registration Statement on Form S-8 (No. 33-64627) filed with the Securities and Exchange Commission on November 29, 1995.

* Filed as an exhibit to this Report with the Securities and Exchange Commission

EXHIBIT 9.2

AMENDMENT TO VOTING TRUST AGREEMENT

WHEREAS, Timothy P. Horne and Frederic B. Horne are trustees (the "Trustees") under the Horne Family Voting Trust Agreement - 1991 dated as of October 31, 1991 (the "Agreement"); and

WHEREAS, Timothy P. Horne and George B. Horne as Trustees of The George B. Horne Trust - 1982 have, effective as of the date hereof, deposited with the Trustees a stock certificate representing 80,000 shares of the Class B Common Stock of Watts Industries, Inc. and pursuant to the Agreement such Trustees have issued and delivered to Timothy P. Horne and George B. Horne as Trustees of The George B. Horne Trust - 1982 a Voting Trust Certificate representing their interests in such deposited stock.

WHEREAS, Timothy P. Horne and George B. Horne as Trustees of The George B. Horne Trust - 1982 have, effective as of the date hereof, gifted to each of (i) Timothy P. Horne and George B. Horne, trustees of The George B. Horne Grandchildren's 1995 Irrevocable Trust f/b/o Tara V. Horne, (ii) Timothy P. Horne and George B. Horne, trustees of The George B. Horne Grandchildren's 1995 Irrevocable Trust f/b/o Tiffany R. Horne, and (iii) Frederic B. Horne and George B. Horne, trustees of The George B. Horne Grandchildren's 1995 Irrevocable Trust f/b/o Kristina M. Horne, a portion of their Voting Trust Certificates issued under the Agreement; and

WHEREAS, the Trustees desire to amend Schedule A to the Agreement to reflect such gifts.

NOW, THEREFORE, the parties do hereby agree as follows:

1. Schedule A to the Agreement is hereby amended and restated in its entirety to read as follows:

Stockholder                    No. of Shares*            Class B Cert. No.
- - -----------                    --------------            -----------------

Timothy P. Horne ("TPH")          2,751,220                     126,161

Frederic B. Horne ("FBH")         1,355,166                     129,159

Timothy P. Horne
and George B. Horne ("GBH")
as trustees of The
George B. Horne Trust - 1982      2,004,600                 132,158,184

Frederic B. Horne,
as Trustee of The
Peter W. Horne Trust - 1976       1,285,840                    156, 175

Stockholder                    No. of Shares*            Class B Cert. No.
- - -----------                    --------------            -----------------

FBH and GBH, trustees of
The GBH Grandchildren's 1995
Irrevocable Trust f/b/o
Kristina M. Horne                    22,600                        184

TPH and GBH, trustees of
The GBH Grandchildren's 1995
Irrevocable Trust f/b/o
Tara V. Horne                        30,200                        184

TPH and GBH, trustees of
The GBH Grandchildren's 1995
Irrevocable Trust f/b/o
Tiffany R. Horne                     22,600                        184

Timothy P. Horne,
as Trustee of The Deborah
Horne Trust - 1976                1,335,840                    138,157

Timothy P. Horne,
as Trustee of The Daniel
W. Horne Trust - 1980             1,335,840                    134,155

Tara V. Horne                        50,000                        126

Judith Rae Horne,
as Trustee of The Tiffany
Rae Horne Trust - 1984               50,000                        126

* As adjusted to reflect the two-for-one stock split effected by means of a stock dividend payable on March 15, 1994.

2. Except as hereinabove provided, the parties ratify and confirm the Agreement in all respects.

The parties hereto have executed this Amendment to the Agreement in one or more counterparts under seal as of December 18, 1995.

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

Employment Agreement entered into as of the 1st day of "September 1996, by and between WATTS INDUSTRIES, INC., a Delaware corporation with its principal place of business in North Andover, Massachusetts (the "Company"), and TIMOTHY P. HORNE, an individual residing in Andover, Massachusetts ("Mr. Horne").

WITNESSETH:

WHEREAS, the Company and Mr. Horne are parties to an existing Employment Agreement, dated as of May 1, 1993 (hereinafter referred to as the "Existing Employment Agreement");

WHEREAS, the Company and Mr. Horne mutually desire to enter into a new Employment Agreement which will set forth the terms and conditions of the Company's subsequent employment of Mr. Horne; and

WHEREAS, the Company desires to arrange for the employment of Mr. Horne on the terms and conditions set forth below and Mr. Horne desires such employment.

NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth above, and other good and valuable consideration the receipt of which is hereby acknowledged by each party to the other, the parties hereto agree as follows:

1. Employment and Term of Employment.

1.1 Revocation of Existing Employment Agreement. The Company and Mr. Horne hereby agree that effective as of September 1, 1996, the Existing Employment Agreement between the parties shall terminate and be of no further force and effect and that the terms and conditions of this Agreement set forth below shall control the employment of Mr. Horne by the Company during the term of this Agreement.

1.2 Position. Commencing with September 1, 1996 (hereinafter referred to as the "Effective Date" of this Agreement), the Company will employ Mr. Horne as its Chairman of the Board of Directors and Chief Executive Officer (and/or in such other capacity or capacities as may be mutually agreed upon in writing by the Company and Mr. Horne) and Mr. Horne will accept such employment.

1.3 Duties. As Chairman of the Board of Directors and Chief Executive Officer of the Company, Mr. Horne will have general charge and supervisory control over the Company's business and financial affairs, subject to the authority of the Board of Directors of the Company. During the term of his employment pursuant to this Agreement, Mr. Horne shall perform such additional or other duties as shall be assigned to him by or under the authority of the Board of Directors of the Company, consistent with his position and title.

1.4 Vacation. During the term of his employment pursuant to this Agreement, Mr. Horne shall be entitled to not less than three (3) months vacation each year.

1.5 Indemnification. In the absence of proof of bad faith, it is expressly agreed that Mr. Horne shall not be liable for any of his actions, or omissions to act, as an officer, employee or director of the Company or any of its affiliated business organizations, and the Company shall indemnify and hold him harmless against any and all claims of whatever kind by any person arising out of or in any way related to his activities on behalf of, or his position or positions with, the Company or any of its affiliated business organizations. The Company shall also promptly reimburse Mr. Horne for any and all reasonable business expenses incurred by him in connection with any such claim or proceeding (including without limitation reasonable fees and expenses of counsel) provided that Mr. Horne hereby undertakes to repay any such advance made with respect to any claim upon final determination by a court of competent jurisdiction that no indemnification may be paid with respect to such claim under the terms of this Agreement. The foregoing shall be in addition to and not in lieu of any other indemnification or expense reimbursement to which Mr. Horne is entitled.

1.6 Location. Notwithstanding anything contained in this Agreement to the contrary, Mr. Horne shall not be required, in connection with the performance of his obligations under this Agreement, to relocate permanently from or to any area of the world other than the greater Boston area, provided, however, at Mr. Horne's sole discretion, Mr. Horne shall be entitled to perform his obligations under this Agreement from any geographical location which is in proximity to a major facility of the Company.

1.7 Term of Employment. The term of Mr. Horne's employment under this Agreement shall be for a period of three (3) years from September 1, 1996 (which is the Effective Date of this Agreement), to and including August 31, 1999, and thereafter shall be automatically renewed for consecutive one-year periods (such three-year period and any subsequent one-year periods or portions thereof during which this Agreement is in effect being referred to hereinafter as the "Term"); provided, however, that if the employment of Mr. Horne is earlier terminated pursuant to the provisions hereof, by Mr. Horne or by the Board of Directors of the Company, the term of his employment under this Agreement shall end with such termination of employment.

2. Compensation and Benefits.

2.1 Compensation. The Company shall pay to Mr. Horne, as compensation for services rendered to the Company, a base salary of Six Hundred Sixty Thousand Dollars ($660,000) (U.S.) per year (such salary, as from time to time increased as hereinafter provided, being referred to hereinafter as the "Base Salary") so long as he is employed by the Company; provided, however, that such Base Salary shall be automatically subject to a percentage increase on each anniversary date of the Effective Date of this Agreement, based on the amount applicable with respect to the year then ended, with such percentage increase determined with reference to the aggregate percentage increase for the preceding twelve months of the Consumer Price Index For All Urban Consumers as published by the United States Department of Labor; and provided further, however, that the Board of Directors may from time to time increase such Base Salary or pay such additional bonuses or other compensation to Mr. Horne as it may in its sole discretion deem appropriate. The Base Salary shall be payable in equal installments at such periodic intervals, not less than monthly, as from time to time are applicable with respect to salaried executive personnel of the Company, and such Base Salary shall be inclusive of all applicable income, social security and other taxes and charges required by law to be withheld by the Company or requested to be withheld by Mr. Horne.

2.2 Travel and Business Expenses. In addition to the compensation described in Section 2.1, Mr. Horne shall be reimbursed by the Company for all reasonable and necessary travel and other business expenses incurred by him in connection with the performance of his duties hereunder.

2.3 Additional Benefits. Mr. Horne shall also be entitled to receive all other benefits, for which he is otherwise eligible and qualified, made available from time to time by the Company to its employees having responsibilities similar to those assigned to Mr. Horne and shall be entitled to those additional benefits as are customarily provided to a senior executive employee holding the position or positions held by Mr. Horne (all costs and expenses of which shall be paid by the Company). In addition, the Company hereby acknowledges its obligation to pay to Mr. Horne upon his retirement from the Company an amount equal to Two Hundred Thirty Three Thousand Dollars ($233,000.00), which represents compensation which Mr. Horne deferred prior to the registration of the Company's common stock with the Securities and Exchange Commission.

3. Termination of Employment.

3.1 Termination by the Company. The Board of Directors, acting on behalf of the Company, shall have the right to terminate Mr. Horne's employment with the Company at any time during the Term of this Agreement only upon the occurrence of his willful illegal acts directly relating to the performance of his duties on behalf of the Company hereunder.

3.2 Termination by Mr. Horne.

3.2.1 If, as a result of any action by the Board of Directors, acting on behalf of the Company and without the consent of Mr. Horne, Mr. Horne shall cease to be, or cease to have the responsibilities and duties of, Chairman of the Board of Directors and Chief Executive Officer of the Company without his employment having been terminated pursuant to Section 3.1 above, or if Mr. Horne shall be assigned duties which are inconsistent with those previously performed by him hereunder, Mr. Horne shall have the right to terminate his employment with the Company at any time during the Term of this Agreement (including any renewal year as contemplated by Section 1.7) upon thirty (30) days' written notice to the Board of Directors. If and when Mr. Horne terminates his employment pursuant to this Section 3.2.1, the Company shall pay to Mr. Horne a lump sum payment in an amount equal to the greater of (i) the compensation which would have been payable hereunder from the date of termination through the third anniversary hereof had this Agreement been in effect though such date at the rate in effect as of the date of termination or (ii) two years' compensation hereunder at such rate.

3.2.2 Mr. Horne shall also have the right to terminate his employment with the Company at any time during the Term of this Agreement upon thirty (30) days' written notice to the Company.

4. Rights on Termination.

In addition to the Company's other obligations to Mr. Horne hereunder, at the termination of Mr. Horne's employment pursuant to this Agreement, whether by Mr. Horne or by the Board of Directors acting on behalf of the Company, the Company shall pay to Mr. Horne or, if he is not then living, to his beneficiary
(i) any salary accrued to the date of termination and (ii) any additional compensation or benefits to which Mr. Horne or his beneficiary may be entitled. For purposes of this Section 4, the term "beneficiary" shall mean such person or persons as Mr. Horne may from time to time designate in writing to the Company or, in the absence of any such effective designation, the executor or administrator of his estate.

5. Miscellaneous Provisions.

5.1 Entire Agreement. This Agreement constitutes the entire understanding of Mr. Horne and the Company with respect to its subject matter and supersedes any prior agreement or arrangement relative to the terms of Mr. Horne's employment by the Company, including, without limitation, the Existing Employment Agreement dated as of May 1, 1993. No modification or waiver of any provision hereof shall be valid unless made in a writing signed by Mr. Horne and the Company.

5.2 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Massachusetts and shall be deemed to have been made in Massachusetts.

5.3 Notices All notices and other communications relative to this Agreement shall be deemed to have been duly given if delivered or mailed by U.S. certified mail, postage prepaid, return receipt requested, to the address of the applicable party set forth at the foot of this Agreement or to such other address of which either party may, by U.S. certified mail, postage prepaid, return receipt requested, notify the other party hereto.

5.4 Assignment; Binding Effect. Neither the Company nor Mr. Horne may make any assignment of this Agreement or any interest therein, by operation of law or otherwise, without the prior written consent of the other party. This Agreement shall inure to the benefit of and be binding upon the Company and Mr. Horne and their respective successors, executors, administrators, heirs and/or permitted assigns.

5.5 Headings. The headings set forth in this Agreement are for convenience only and shall not be considered part of this Agreement or in any way to limit or amplify the terms and provisions hereof.

5.6 Payment of Salary. It is expressly agreed by the parties hereto that Mr. Horne's compensation hereunder may be paid by the Company and/or any affiliated business organization of the Company.

5.7 Waiver. The failure of either party to require the performance of any term or obligation of this Agreement, or the waiver by either party of any breach of this Agreement, shall not prevent subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

5.8 Counterparts. More than one counterpart of this Agreement may be executed by the parties hereto, but all of such counterparts taken together shall be deemed to constitute one and the same Agreement.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and delivered and Mr. Horne has duly executed and delivered this Agreement as a sealed instrument as of the date first written above.

                                    By:
Secretary                           Title:      Compensation Committee Chairman
[Corporate Seal]                    Address:    815 Chestnut Street
                                                North Andover, Mass.  01845

TIMOTHY P. HORNE
Address: 94 Porter Road
Andover, Mass. 01810

EXHIBIT 10.2

SUPPLEMENTAL COMPENSATION AGREEMENT

Supplemental Compensation Agreement made as of the 1st day of September 1996, by and between WATTS INDUSTRIES, INC., a Delaware corporation with its principal place of business in North Andover, Massachusetts (the "Company"), and Timothy P. Horne, an individual residing in Andover, Massachusetts ("Mr. Horne").

WITNESSETH:

WHEREAS, Mr. Horne has been in the employ of the Company and is now serving the Company as its Chairman of the Board of Directors and Chief Executive Officer;

WHEREAS, because of Mr. Horne's experience, knowledge of the affairs of the Company, and reputation and contacts in the industry, the Company deems Mr. Horne's continued employment with the Company important for its future growth; and

WHEREAS, in order to induce Mr. Horne to continue in the employ of the Company pursuant to the terms of an Employment Agreement of even date (the "Employment Agreement"), the Company desires to provide Mr. Horne certain compensation rights to commence following termination of his status as a full time employee of the Company and its subsidiaries.

NOW, THEREFORE, in consideration of the premises and the mutual promises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Supplemental Compensation. Commencing on the date on which Mr. Horne shall have ceased to be a full time employee of the Company or any subsidiary thereof (the "Termination Date"), regardless of the reason of such termination (other than a termination of Mr. Horne's employment by reason of death), and continuing until the date of Mr. Horne's death, Mr. Horne shall receive Supplemental Compensation equal on an annual basis to the greater of (a) one-half of the average of Mr. Horne's annual base salary as an employee of the Company during the three years immediately prior to the Termination Date or (b) $400,000; provided, however, that the amount applicable under this clause (b) shall be automatically subject to a percentage increase as of each anniversary of the date hereof, based on the amount applicable under this clause (b) with respect to the year then ended, with such percentage increase determined with reference to the aggregate percentage increase for the preceding twelve months of the Consumer Price Index For All Urban Consumers as published by the United States Department of Labor. Such Supplemental Compensation shall be paid in equal monthly installments payable on the first day of each month, with the first such payment due on the first day of the month following the Termination Date. In the event of Mr. Horne's death, the Company shall make a Supplemental Compensation payment as provided above to Mr. Horne's estate on the first day of the month following the date of Mr. Horne's death, thereby terminating this Agreement and its obligation to make further payments hereunder.

2. Services of Mr. Horne. Following termination of Mr. Horne's status as an employee of the Company and its subsidiaries (whether full or part time), Mr. Horne hereby agrees to make himself available to serve the Company and its subsidiaries so long as he is physically able to do so, upon request of the Board of Directors, as a consultant and as Chairman of the Board of Directors for a minimum of 300 hours per year commencing on the Termination Date; provided, however, that in no event shall Mr. Horne be required to devote more than 500 hours per year to the performance of services hereunder; and provided further, however, that Mr. Horne's physical inability to perform services hereunder shall not affect or limit the Company's obligation under
Section 1.

3. Funding. Nothing contained herein and no action taken pursuant to the provisions hereof shall create or be construed to create a trust of any kind, a fiduciary relationship between the Company and Mr. Horne or any other person, or a security interest of any kind in any property of the Company in favor of Mr. Horne or any other person. The Company shall not be required to purchase, hold or dispose of any investments in order to provide for its obligations hereunder. However, if the Company elects to purchase any such investments, the same shall continue for all purposes to be a part of the general assets of the Company, subject to the claims of its creditors, and no person other than the Company shall by virtue of the provisions of this Agreement or otherwise have any interest in such assets other than an interest as a general creditor. Title to and beneficial ownership of any assets which the Company may acquire to provide for its obligations hereunder shall at all times remain in the Company, and the terms of this Agreement shall not provide Mr. Horne, his estate or any other person any direct proprietary interest therein. Neither Mr. Horne nor any other person shall have the right, by action for specific performance or otherwise, to compel the Company to set aside or actually invest any funds in satisfaction of its obligations hereunder. The sole right of Mr. Horne shall be to receive payments at the times and in the amounts set forth herein.

4. Alienability. Mr. Horne shall not have any power or right to transfer, assign, anticipate, hypothecate, mortgage, commute, modify or otherwise encumber in advance any rights to payment hereunder, nor shall any of said rights be subject to seizure for the payment of any debts, judgments, alimony or separate maintenance owed by Mr. Horne or any beneficiary, or be transferable by operation of law in the event of bankruptcy or insolvency or for any other reason.

5. Participation in Other Plans; Prior Agreement. Nothing contained in this Agreement shall be construed to alter, abridge or in any manner affect the rights and privileges of Mr. Horne to participate in and be covered by any pension, profit-sharing, group insurance, bonus or other employee benefit plan which the Company may now or hereafter maintain. The Company hereby agrees that Mr. Horne shall also be entitled to receive all other benefits, for which he is otherwise eligible and qualified, made available from time to time by the Company to its employees, including by way of illustration and not by way of limitation, health, dental, life and disability insurance benefits, so long as he serves as an employee of the Company or any of its subsidiaries.

6. Miscellaneous.

(a) Nothing herein shall affect the rights Mr. Horne has under the Employment Agreement nor restrict the right of Mr. Horne to enter into an agreement or agreements with the Company concerning other terms and conditions of his employment.

(b) The payments contemplated by this Agreement are not part of any salary reduction plan or any arrangement deferring a lot bonus or salary increase and are being provided in addition to any salary, bonus, or other remuneration provided to Mr. Horne from time to time by the Company. Mr. Horne has no option to take any current payment or bonus in lieu of such payments.

(c) All notices and other communications relative to this Agreement shall be deemed to have been duly given if delivered or mailed by U.S. certified mail, postage prepaid, return receipt requested, to the address of the applicable party as set forth below or to such other address of which either party may, by U.S. certified mail, postage prepaid, return receipt requested, notify the other party hereto.

(d) This Agreement shall inure to the benefit of and be binding upon the Company and Mr. Horne and their respective successors, executors, administrators, heirs and/or permitted assigns. This Agreement supersedes and replaces the Supplemental Compensation Agreements between the Company and Mr. Horne dated as of May 1, 1993.

(e) The headings set forth in this Agreement are for convenience only and shall not be considered part of this Agreement or in any way limit or amplify the terms and provisions hereof.

(f) Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated other than by an instrument in writing signed by the party against whom enforcement of such change, waiver, discharge or termination is sought.

(g) More than one counterpart of this Agreement may be executed by the parties hereto, but all of such counterparts taken together shall be deemed to constitute one and the same Agreement.

(h) This Agreement shall be construed in accordance with and governed by the laws of the Commonwealth of Massachusetts.

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and its corporate seal affixed, duly attested by its Secretary, and Mr. Horne has hereunto set his hand and seal, as of the date and year first above written.

                                   By:
Secretary                          Title:      Compensation Committee Chairman
[Corporate Seal]                   Address:    815 Chestnut Street
                                               North Andover, Mass. 01845

TIMOTHY P. HORNE
Address: 94 Porter Road
Andover, Mass. 01810

EXHIBIT10.6 (i)

AMENDMENT NUMBER ONE

WATTS INDUSTRIES, INC.
RETIREMENT PLAN FOR SALARIED EMPLOYEES

WHEREAS, Watts Industries, Inc. (the "Sponsoring Employer") established the Watts Industries, Inc. Retirement Plan for Salaried Employees (the "Plan") for the benefit of its employees which was most recently amended and restated effective as of January 1, 1994;

WHEREAS, pursuant to Section 13.01 of the Plan, the Sponsoring Employer reserved the right to amend the Plan; and

WHEREAS, the Sponsoring Employer desires to amend the Plan at the request of the Internal Revenue Service in order to receive a determination letter.

NOW, THEREFORE, the Plan is hereby amended as follows:

1. Section 1.09 is deleted in its entirety and the following inserted in its place:

1.09 "Compensation" shall mean the total compensation payable to an Employee by the Employer and reportable to the Federal Government for income tax purposes on Form W-2, or any form prescribed by the Internal Revenue Service to take its place, excluding stock option rights.

Compensation also includes contributions made on behalf of an Employee by the Employer pursuant to a salary deferral agreement under Section 401(k) of the Code and/or a salary reduction agreement pursuant to a cafeteria plan established under Section 125 of the Code.

Effective January 1, 1989, in no event shall a Participant's Compensation taken into account under the Plan for any Plan Year exceed $200,000 ($150,000 for Plan Years commencing on or after January 1, 1994) or such other amount as the Secretary of the Treasury may determine for such Plan Year in accordance with Section 401(a)(17) of the Code. Any change in the dollar amount set forth above as adjusted by the Secretary of the Treasury in accordance with Section 401(a)(17) of the Code shall apply only to Compensation taken into account for Plan Years beginning with the Plan Year in which such change is effective (with the first such adjustment being effective January 1, 1990).

In determining the Compensation of a Participant for purposes of this dollar limitation, the rules of Section 414(q)(6) of the Code shall apply, except that in applying such rules, the term "family" shall include only the Spouse of the Participant and any lineal descendants of the Participant who have not attained age 19 before the close of such year. If, as a result of applying such rules, the dollar limitation is exceeded, the limitation shall be prorated among the affected family members in proportion to each such individual's Compensation as determined under this Section before application of the dollar limitation.

Effective January 1, 1989, if Compensation for any Plan Year prior to January 1, 1989 is taken into account in determining an employee's benefit accruing in a Plan Year beginning on or after January 1, 1989, the Compensation for such prior Plan Year is subject to an annual compensation limit of $200,000.

Effective January 1, 1994, if Compensation for any Plan Year prior to January 1, 1994 is taken into account in determining an employee's benefits accruing in a Plan Year beginning on or after January 1, 1994, the Compensation for such prior Plan Year is subject to an annual compensation limit of $150,000.

2. Section 2.03 is amended by adding the following subparagraph to the end thereof:

(f) Solely for purposes of determining whether a Break-in-Service has occurred with respect to Section 2.021, each non-compensated hour during a period of absence from the Employer (i) by reason of the Employee's pregnancy, (ii) by reason of the birth of the Employee's child, (iii) by reason of the placement of a child with the Employee in connection with the adoption of such child by the Employee, or (iv) for purposes of caring for such child for a period beginning immediately following such birth or placement shall be credited to the Employee. For purposes of this subsection (f) the following special rules will apply:

(i) any Hour of Service credited hereunder with respect to an absence shall be credited (A) only in the Plan Year in which the absence begins, if the Employee would be prevented from incurring a Break-in-Service in such year solely because of Hours of Service credited hereunder for such absence, or (B) in any other case in the immediately following Plan Year;

(ii) no Hours of Service shall be credited hereunder unless the Employee furnishes the Committee with such information as the Committee may reasonably require (in such form and at such time as the Committee may reasonably require) establishing (A) that the absence from work is an absence described hereunder, and (B) the number of days for which the absence lasted;

(iii)in no event shall more than 501 Hours of Service be credited to an Employee hereunder for any absence by reason of any one pregnancy or the placement of any one child.

Hours of Service to be credited to an individual during an absence described in this Section 2.03(f) above will be determined by the Committee with reference to the individual's most recent normal work schedule; provided that if the Committee cannot so determine the number of Hours to be credited, there shall instead be credited eight (8) Hours of Service for each day of absence.

3. The last sentence of Section 3.03(b)(ii)(b)(2) is deleted and the following is inserted in its place:

If such Terminated Participant does not repay such amount, upon his subsequent retirement or other termination of employment his benefit shall be calculated using Benefit Service as defined in
Section 2.05 provided, however, that Benefit Service prior to January 1, 1987 shall not be included.

4. Section 4.02 is deleted in its entirety and the following inserted in its place:

Except as provided below, a Participant who has reached his fifth-fifth birthday and who has completed at least ten years of Service may elect upon written notice to the Committee on an Early Retirement Date which may be the first day of any month subsequent to the date of such election and prior to his Normal Retirement Date.

Notwithstanding the foregoing, in the case of a Participant who was hired prior to January 1, 1992 (excluding a former participant of the Spence Plan or the Henry Pratt Plan) who has reached his fifty-fifth birthday and who has completed at least five years of Service may elect upon written notice to the Committee an Early Retirement Date which may be the first day of any month subsequent to the date of such election and prior to his Normal Retirement Date.

5. Section 5.03(c) is deleted in its entirety and the following inserted in its place:

(c) Subject to the provisions of paragraphs (d) and (e) and Sections 5.031 and 5.04, the annual Normal Retirement Benefit payable to a Participant who retires under the Plan on or after January 1, 1989 and on or after his Normal Retirement Date shall be an amount equal to the greater of (i), (ii), (iii) or (iv) below:

(i) 1.67% times the Participant's Final Average Compensation less the Maximum Offset Allowance, the result of which is multiplied by his years of Benefit Service (maximum of 25 years);

(ii) 1.00% times the Participant's Final Average Compensation multiplied by his years of Benefit Service (maximum of 25 years);

(iii)the Participant's accrued benefit as of March 15, 1990 (or December 31, 1988 if the Participant is a highly compensated employee as defined in Section 414(q)(1)(A) or (B) of the Code);

(iv) the Participant's accrued benefit under the Plan determined as of the December 31 preceding the date of determination.

6. Section 5.03(d) is deleted in its entirety and the following inserted in its place:

(d) For Participants Who Participated in the Spence Plan on December 31, 1991

(i) Notwithstanding the foregoing provisions of this Section, with respect to a Participant who participated in the Spence Plan on December 31, 1991 and who retires under this Plan on or after January 1, 1994 and on or after his annual Normal Retirement Date, his annual Normal Retirement Benefit shall equal the sum of (A) and (B) but in no event less than (C) where:

(A) is equal to the sum of (1), (2), (3), and (4) below:

(1) 5/8 of 1% of the Participant's Final Average Compensation multiplied by his years of benefit service earned prior to June 1, 1975 under the Spence Plan.

(2) 3/4 of 1% of the Participant's Final Average Compensation multiplied by his years of benefit service earned on and after June 1, 1975 through May 31, 1980 under the Spence Plan.

(3) 7/8 of 1% of the Participant's Final Average Compensation multiplied by his years of benefit service earned on and after June 1, 1980 through May 31, 1985 under the Spence Plan.

(4) 1% of the Participant's Final Average Compensation multiplied by his years of benefit service earned on and after June 1, 1985 through December 31, 1986 under the Spence Plan.

The amount of the benefit calculated in accordance with this paragraph (d) (i) (A) shall be actuarially increased to reflect the change in the normal form of benefit payment from a 5 year certain and continuous annuity to a single life annuity.

(B) is equal to the greater of (1) or (2) below:

(1) 1.67% times the Participant's Final Average Compensation less the Maximum Offset Allowance, the result of which is multiplied by his years of Benefit Service earned under the Spence Plan on or after January 1, 1987 but prior to January 1, 1992, and Benefit Service earned under the Plan on or after January 1, 1992 (maximum of 25 years).

(2) 1.00% of the Participant's Final Average Compensation multiplied by his years of benefit service earned under the Spence Plan on and after January 1, 1987 but prior to January 1, 1992 and his years of Benefit Service earned on and after January 1, 1992 under the Plan (up to a maximum of 25 years).

Notwithstanding the foregoing, a Participant who is credited with a 1,000 Hours of Service under the Spence Plan during the twelve-month period beginning on June 1, 1985 and ending on May 31, 1986 and during the twelve-month period beginning on January 1, 1986 and ending on December 31, 1986 shall be credited with 2 years of Benefit Service for purposes of Section 5.03(d)(i)(A)(4) to reflect the change in the Spence Plan's plan year to a calendar year.

(C) is equal to the greater of (1) or (2) below:

(1) the Actuarial Equivalent of the Participant's Accumulated Contributions Account.

(2) the Participant's accrued benefit determined under the Spence Plan as of December 31, 1991.

7. Section 5.032 is deleted in its entirety and the following inserted in its place:

5.032 ACCRUED BENEFIT

To determine a Participant's accrued benefit under Section 5.03(a) and (b) at any time prior to his Normal Retirement Date, there shall first be determined the amount of Normal Retirement Benefit that the Participant would have received if he had remained in the employ of the Employer to his Normal Retirement Date but based on his Final Average Compensation and Social Security Benefit as of the date such benefit is being determined. Such amount shall be multiplied by a fraction in which the numerator is the number of years of Benefit Service (including fractions thereof) that the Participant has completed and the denominator is the number of years of Benefit Service (including fractions thereof) that the Participant would have completed if he had remained in the employ of the Employer to his Normal Retirement Date.

A Participant's accrued benefit under Section 5.03(c), (d) and (e) is the benefit as defined under Section 5.03(c), (d) or (e) based on Final Average Compensation and Benefit Service as of the date the accrued benefit is being determined.

Notwithstanding the above, in the case of a Participant whose Compensation for a Plan Year beginning prior to January 1, 1994 exceeded $150,000, such Participant's accrued benefit shall not be less than his accrued benefit determined as of December 31, 1993.

8. Section 5.08 is deleted in its entirety and is reserved for future use.

9. Sections 6.021(a) and (b) are deleted in their entirety and the following inserted in their place:

(a) The amount of a deferred vested benefit payable to a Terminated Participant under Section 6.02(a) shall be equal to his accrued benefit as determined under Section 5.032. Notwithstanding the foregoing, the amount of deferred vested benefit payable to a Terminated Participant who was an Employee on January 1, 1979 shall in no event be less than his accrued benefit determined in accordance with the provisions of Section 5.031.

(b) The amount of a deferred vested benefit payable to a Terminated Participant under Section 6.02(b) shall not be less than the Actuarial Equivalent of the balance in his Accumulated Contribution Account, if any.

10. Section 6.022(a) is deleted in its entirety and the following is inserted in its place:

(a) A Terminated Participant entitled to a Vested Benefit under Section 6.02 may elect to have such benefit commence at any time after he is eligible to elect an Early Retirement Date pursuant to Section 4.02. In such case and subject to the provisions of paragraph (b) below, his benefit shall be computed as in Section 6.021, but shall be reduced by 5/9 of 1% for each of the first sixty (60) months by which his Benefit Commencement Date precedes his Normal Retirement Date, and by 5/18 of 1% for each month thereafter, if any, by which his Benefit Commencement Date precedes his Normal Retirement Date.

11. Section 9.021 is deleted in its entirety and the following is inserted in its place:

"If benefits are payable on account of the same period of employment with the Employer or an Affiliated Employer, under this Plan and another qualified defined benefit plan toward which the Employer contributes (or has contributed), the benefits payable under this Plan on account of such period shall be reduced by the Actuarial Equivalent of any benefit payable to him under such other plan calculated in the same form and manner as is the benefit payable under this Plan on account of the same period of Service. However, if such other Plan provides for a similar reduction of benefits, then this Section shall be disregarded with respect to an Eligible Employee whose most recent period of participation in this Plan is earlier than his most recent period of participation in such other plan."

12. The last sentence of Section 9.04 is deleted and the following inserted in its place: "His accrued benefit as determined under Section 5.032 shall be reduced by the Actuarial Equivalent of the benefit payable to him under any Watts Fluidair Co. plan calculated in the same form and manner as the benefit payable under this Plan.

13. Section 15.03 is amended by adding the following subparagraphs to the end thereof:

(d) In any Plan Year in which the Plan is top heavy but not super top heavy (substituting 90% for 60% in subparagraph(a) above), Section 5.041(d)(ii) shall be applied by substituting "100%" for "125%" unless the Sponsoring Employer amends subparagraph (b)(i) above by substituting "3%" for "2%" therein.

(e) In any Plan Year in which the Plan is super top heavy, the factor of "125%" shall be changed to "100%" in Section 5.041(d)(ii).

14. Section 16.02(a) is deleted in its entirety and the following inserted in its place:

(a) In the event that the Commissioner of Internal Revenue(or his or her delegate) determines that the Plan is not initially qualified under the Code, any Employer contributions made to the Plan shall be returned to the Employer within one year after the date the initial qualification is denied, provided application for qualification is made by the time prescribed by law for filing the Employer's return for the fiscal year in which the Plan is adopted, or such later date as the Secretary of the Treasury may prescribe.

IN WITNESS WHEREOF, Watts Industries, Inc. has caused this Amendment to be executed by its authorized officer this day of , 1996.

WATTS INDUSTRIES, INC.

By:

EXHIBIT 10.6 (ii)

AMENDMENT NUMBER TWO

WATTS INDUSTRIES, INC.
RETIREMENT PLAN FOR SALARIED EMPLOYEES

WHEREAS, Watts Industries, Inc. (the "Sponsoring Employer") established the Watts Industries, Inc. Retirement Plan for Salaried Employees (the "Plan") which was amended and restated effective as of January 1, 1994;

WHEREAS, pursuant to Section 13.01 of the Plan, the Sponsoring Employer reserved the right to amend the Plan;

WHEREAS, the Sponsoring Employer desires to amend the Plan effective October 1, 1995 to reflect the merger of the Jameco Industries, Inc. Pension Plan; and

WHEREAS, the Sponsoring Employer desires to amend Section 5.04 and the definition of the term "Actuarial Equivalent" of the Plan effective October 1, 1995 as permitted by the Retirement Protection Act of 1994.

NOW, THEREFORE, the Plan is hereby amended as follows:

1. Section 1.02 is deleted in its entirety and the following is inserted in its place:

"1.02"Actuarial Equivalent" or any term of similar import, wherever used in the Plan, means a benefit of equivalent value determined as follows:

(a) For purposes of Section 15.02(e) and 5.04(e), the Actuarial Equivalent will be determined using a 5% interest rate and the UP-1984 Mortality Table for employees and the UP-1984 Mortality Table set back three years for beneficiaries;

(b) For purposes of Section 5.04, the Actuarial Equivalent will be determined using the interest rate on 30-year Treasury Constant Maturities for November of the Plan Year prior to the Plan Year of distribution and using mortality based on a fixed blend of 50 percent of the male mortality rates and 50 percent of the female mortality rates from the 1983 Group Annuity Mortality Table.

(c) For purposes of Section 5.021, 5.051, 8.02, 8.03, 8.04, and 15.03(b), the Actuarial Equivalent will be determined using a 7% interest rate and the UP-1984 Mortality Table for employees and the UP-1984 Mortality Table set back three years for beneficiaries;

(d) For purposes of Section 8.05, the Actuarial Equivalent will be determined as follows:

(i) prior to October 1, 1995, by using the rates and mortality table described in (c) above, except that the interest rate for immediate annuities set by the Pension Benefit Guaranty Corporation for the month of payment will be used; and

(ii) for distributions made during the period commencing October 1, 1995 and ending December 31, 1995 by using mortality rates based on a fixed blend of 50% of the male mortality rates and 50% of the female mortality rates from the 1983 Group Annuity Mortality Table and by using an interest rate specified in (A) or (B), whichever results in a greater benefit:

(A) the interest rate on 30-year Treasury Constant Maturities for the month of November, 1994 or

(B) the interest rate on 30-year Treasury Constant Maturities for the month which is two months prior to the month in which the Participant's date of termination occurs;

(iii)for distributions made during the period commencing January 1, 1996 and ending September 30, 1996, by using mortality rates based on a fixed blend of 50% of the male mortality rates and 50% of the female mortality rates from the 1983 Group Annuity Mortality Table and by using an interest rate specified in (C) or (D) whichever results in a greater benefit:

(C) the interest rate on 30-year Treasury Constant Maturities for the month of November, 1995 or

(D) the interest rate on 30-year Treasury Constant Maturities for the month in which the Participant's date of termination occurs;

(iv) for distributions made on or after October 1, 1996 by using mortality rates based on a fixed blend of 50% of the male mortality rates and 50% of the female mortality rates from the 1983 Group Annuity Mortality Table and by using the interest rate on 30-year Treasury Constant Maturities for the month of November prior to the Plan Year of distribution.

(e) For purposes of Section 12.01 (except as provided in (g) below), the Actuarial Equivalent will be determined as follows:

(i) for distributions made prior to October 1, 1995, by using the interest rate and mortality table described in (c) above, except for lump sum payments the interest rate for immediate annuities set by the Pension Benefit Guaranty Corporation for the month of payment will be used;

(ii) for distributions made during the period commencing October 1, 1995 and ending December 31, 1995 by using mortality rates based on a fixed blend of 50% of the male mortality rates and 50% of the female mortality rates from the 1983 Group Annuity Mortality Table and by using an interest rate specified in (A) or (B), whichever results in a greater benefit:

(A) the interest rate on 30-year Treasury Constant Maturities for the month of November, 1994 or

(B) the interest rate on 30-year Treasury Constant Maturities for the month which is two months prior to the month in which the Participant's date of termination occurs;

(iii)for distributions made during the period commencing January 1, 1996 and ending September 30, 1996, by using mortality rates based on a fixed blend of 50% of the male mortality rates and 50% of the female mortality rates from the 1983 Group Annuity Mortality Table and by using an interest rate specified in (C) or (D) whichever results in a greater benefit:

(C) the interest rate on 30-year Treasury Constant Maturities for the month of November, 1995 or

(D) the interest rate on 30-year Treasury Constant Maturities for the month in which the Participant's date of termination occurs;

(iv) for distributions made on or after October 1, 1996 by using mortality rates based on a fixed blend of 50% of the male mortality rates and 50% of the female mortality rates from the 1983 Group Annuity Mortality Table and by using the interest rate on 30-year Treasury Constant Maturities for the month of November prior to the Plan Year of distribution.

(f) For purposes of Article 13 and Section 14.02(b), the Actuarial Equivalent will be determined as specified in regulations promulgated by the Pension Benefit Guaranty Corporation."

2. Sections 5.04(e), (f) and (g) are hereby deleted and the following inserted in their place:

"(e) If the benefit payable to a Participant commences prior to the Participant's Social Security Retirement Age, but on or after the date he attains age 62, the maximum annual amount determined under paragraph (a)(i) above shall be reduced as follows:

(i) if the Participant's Social Security Retirement age is 65, by 5/9ths of 1% for each month by which the commencement of payment of his benefits precedes the month in which he attains age 65; or

(ii) if the Participant's Social Security Retirement age is 66 or 67, by 5/9ths of 1% for each of the first 36 months and 5/12ths of 1% for each additional month by which the commencement of payment of his benefits precedes the month in which he attains his Social Security Retirement Age.

If the benefit payable to a Participant commences before age 62, the maximum annual amount determined under paragraph (a)(i) above shall be reduced in accordance with applicable regulations, so that it is the Actuarial Equivalent of such amount as applied to a benefit beginning at age 62. For purposes of this paragraph, the Actuarial Equivalent shall be determined as follows:

(iii)if the benefit payable to a Participant is not in the form of a single life annuity or a Spouse Joint and Survivor Annuity then the Actuarial Equivalent shall be determined using the rates in (A) or (B), whichever results in the lesser benefit:

(A) the interest rate specified in Section 1.02(b) and the mortality rate specified in Section 1.02(b); or

(B) the interest rate specified in Section 1.02(a) and the mortality rate specified in Section 1.02(a).

(iv) if the benefit payable to the Participant is in the form of a single life annuity or a Spouse Joint and Survivor Annuity, then the Actuarial Equivalent shall be determined using the rates in (C) or (D), whichever results in the lesser benefit:

(C) a 5% interest rate and the mortality rate specified in
Section 1.02(b); or

(D) the interest rate and mortality rate specified in
Section 1.02(a).

(f) If the payment of benefits to a Participant commences after his Social Security Retirement Age, the maximum annual amount determined under paragraph (a)(i) above shall be increased so that it is the Actuarial Equivalent of a $90,000 benefit multiplied by the adjustment factor specified in paragraph (e) above, and payable in the normal form at the Participant's Social Security Retirement Age. For purposes of this paragraph, the Actuarial Equivalent shall be determined using an interest rate equal to 5% and the mortality rate specified in Section 1.02(b).

(g) The annual benefit is a retirement benefit under the Plan which is payable annually in the form of a single life annuity. If the benefit payable to a Participant is not in the form of a single life annuity nor in the form of a Spouse Joint and Survivor Annuity, then the maximum annual amount determined under paragraph (a) above shall be reduced in accordance with the applicable regulations so that it is the Actuarial Equivalent of such amount as payable in the normal form. The interest rate and mortality assumptions used to determine the Actuarial Equivalent will be the rates specified in Section 1.02(b)."

3. The Plan is hereby amended by adding the provisions contained in Part B attached hereto.

IN WITNESS WHEREOF, Watts Industries, Inc. has caused this instrument to be executed by its authorized officer and its seal affixed this __________ day of __________, 1996.

WATTS INDUSTRIES, INC.

By:

EXHIBIT 10.6 (iii)

AMENDMENT NUMBER THREE

WATTS INDUSTRIES, INC.

RETIREMENT PLAN FOR SALARIED EMPLOYEES

WHEREAS, Watts Industries, Inc. (the "Sponsoring Employer") established the Watts Industries, Inc. Retirement Plan for Salaried Employees (the "Plan") which was amended and restated effective as of January 1, 1994;

WHEREAS, pursuant to Section 13.01 of the Plan effective January 1, 1996, the Sponsoring Employer reserved the right to amend the Plan; and

WHEREAS, the Sponsoring Employer desires to amend the Plan effective January 1, 1996 to include employees of Anderson-Barrows Metal Corporation and to amend the definition of "Compensation" to include amounts deferred under the Management Stock Purchase Plan.

NOW, THEREFORE, the Plan is hereby amended as follows:

1. Section 1.16 is amended by adding the following sentence to the end thereof:

"As of January 1, 1996, "Employer" includes Anderson-Barrows Metal Corporation and as of __________, 1996, "Employer" includes Webster Valve, Inc."

2. Section 3.01 is amended by adding the following subparagraph (ix) to subsection (b) thereof:

"(ix)Effective January 1, 1996 an Eligible Employee of Anderson-Barrows Metal Corporation shall be eligible to join the Plan on the first day of the month coinciding with or next following the date on which he attains age 21 and completes one year of Service. Subject to the rules of the Plan, service with Anderson-Barrows Metal Corporation prior to January 1, 1996 shall be recognized for vesting and eligibility purposes. Service for benefit accrual purposes shall begin on or after January 1, 1996."

3. Section 1.19 is amended by adding the following sentence to the end thereof:

"With respect to Employees of Anderson-Barrows Metal Corporation, "Service" for purposes of calculating Final Average Earnings shall include service with Anderson-Barrows Metal Corporation prior to January 1, 1996."

4. Section 1.09 is deleted in its entirety and the following inserted in its place:

1.09 "Compensation" shall mean the total compensation payable to an Employee by the Employer and reportable to the Federal Government for income tax purposes on Form W-2, or any form prescribed by the Internal Revenue Service to take its place, excluding stock option rights.

Compensation also includes (1) amounts deferred under the Management Stock Purchase Plan and (2) contributions made on behalf of an Employee by the Employer pursuant to a salary deferral agreement under
Section 401(k) of the Code and/or a salary reduction agreement pursuant to a cafeteria plan established under Section 125 of the Code.

In no event shall a Participant's Compensation taken into account under the Plan for any Plan Year exceed $200,000 ($150,000 for Plan Years commencing on or after January 1, 1994) or such other amount as the Secretary of the Treasury may determine for such Plan Year in accordance with Section 401(a)(17) of the Code. Any change in the dollar amount set forth above as adjusted by the Secretary of the Treasury in accordance with Section 401(a)(17) of the Code shall apply only to Compensation taken into account for Plan Years beginning with the Plan Year in which such change is effective (with the first such adjustment being effective January 1, 1990).

In determining the Compensation of a Participant for purposes of this dollar limitation, the rules of Section 414(q)(6) of the Code shall apply, except that in applying such rules, the term "family" shall include only the Spouse of the Participant and any lineal descendants of the Participant who have not attained age 19 before the close of such year. If, as a result of applying such rules, the dollar limitation is exceeded, the limitation shall be prorated among the affected family members in proportion to each such individual's Compensation as determined under this Section before application of the dollar limitation."

For purposes of Section 1.19, Compensation shall also mean compensation paid by Anderson-Barrows, Inc. prior to January 1, 1996.

IN WITNESS WHEREOF, Watts Industries, Inc. has caused this instrument to be executed by its authorized officer and its seal affixed this __________ day of __________, 1996.

WATTS INDUSTRIES, INC.

By:

EXHIBIT 10.13 (I)

AMENDMENT NO. 1 TO THE LETTER OF CREDIT,
REIMBURSEMENT AND GUARANTY AGREEMENT

THIS AMENDMENT NO. 1 TO THE LETTER OF CREDIT, REIMBURSEMENT AND GUARANTY
AGREEMENT, dated as of August 1, 1996, by and among SPENCE ENGINEERING COMPANY, INC., a Delaware corporation (the "Borrower"), WATTS INDUSTRIES, INC., a Delaware corporation (the "Guarantor") and FIRST UNION NATIONAL BANK OF NORTH CAROLINA, a national banking association organized and existing under the laws of the United States with its principal offices located in Charlotte, North Carolina (the "Bank");

W I T N E S S E T H:

WHEREAS, the Borrower, the Guarantor and the Bank have previously entered into the Letter of Credit, Reimbursement and Guaranty Agreement, dated as of June 1, 1994 (the "Agreement"), pursuant to which the Bank has issued its irrevocable letter of credit, dated June 17, 1994; and

WHEREAS, the Borrower, the Guarantor and the Bank now desire to amend certain provisions of the Agreement;

NOW, THEREFORE, in consideration of the premises, mutual covenants hereinafter contained and other good and valuable consideration, the Borrower, the Guarantor and the Bank do hereby amend the Agreement as follows:

Section 1. Article I of the Agreement Amended. Article I of the Agreement is hereby amended by inserting the following at the end of said Article I:

1.54. "Capital Assets" means fixed assets, both tangible (such as land, buildings, fixtures, machinery and equipment) and intangible (such as patents, copyrights, trademarks, franchises and good will); provided that Capital Assets shall not include any item customarily charged directly or indirectly to expense or depreciated over a useful life of twelve (12) months or less in accordance with generally accepted accounting principles.

1.55. "Capital Expenditures" means amounts paid or indebtedness incurred by the Guarantor, the Borrower or any of their Subsidiaries in connection with the purchase or lease by the Guarantor, the Borrower or any of their Subsidiaries of Capital Assets that would be required to be capitalized and show on the balance sheet of such Person in accordance with generally accepted accounting principles.

1.56. "Capitalized Leases" means leases under which the Guarantor or the Borrower or the Subsidiaries is the lessee or obligor, the discounted future rental payment obligations under which are required to be capitalized on the balance sheet of the lessee or obligor in accordance with generally accepted accounting principles.

1.57. "Consolidated Total Interest Expense" means for any period, the aggregate amount of interest required to be paid or accrued by the Guarantor and the Borrower and the Subsidiaries during such period on all Indebtedness of the Guarantor and the Borrower and the Subsidiaries outstanding during all or any part of such period, whether such interest was or is required to be reflected as an item of expense or capitalized, including payments consisting of interest in respect of Capitalized Leases and plus, without duplication, commitment fees, agency fees, facility fees, balance deficiency fees and similar fees or expenses in connection with the borrowing of money.

1.58. "Consolidated Worth" means all assets of the Guarantor and the Borrower and the Subsidiaries determined on a consolidated basis in accordance with generally accepted accounting principles minus Consolidated Total Liabilities and minus in the extent otherwise includable to the computation of Consolidated Worth, any subscriptions receivable for the purchase of capital stock.

1.59. "Earnings Before Interest, Taxes, Depreciation and Amortization" means the Consolidated Net Income (deficit) of the Guarantor and the Borrower and the Subsidiaries for any period, after all expenses and other proper charges but before payment or provision for any income taxes or interest expense for such period, plus depreciation and amortization for such period, determined in accordance with generally accepted accounting principles.

1.60. "Fixed Charge Coverage Ratio" means for any period, the ratio of (i) the result of (A) Earnings Before Interest, Taxes, Depreciation and Amortization minus (B) Capital Expenditures, to (ii) the sum of (A) Consolidated Total Interest Expense (without duplication of any interest taken into account in the computation of the Fixed Charge Coverage Ratio in any prior period) plus (B) current maturities of long term Indebtedness due and payable during such period in accordance with generally accepted accounting principles, in each case for the Guarantor and the Borrower and the Subsidiaries on a consolidated basis for such period.

1.61. "Restructuring Charges" means any restructuring charge taken by the Borrower, the Guarantor or other Subsidiaries of the Guarantor in the Guarantor's fiscal year ending June 30, 1996 in connection with (i) Financial Accounting Standards Board Statement No. 121 or (ii) the restructuring, downsizing, and consolidation of the operations of the Borrower, the Guarantor or other Subsidiaries of the Guarantor, including but not limited to, the consolidation of the selling, general and administrative functions and the closure of certain manufacturing facilities of the Borrower, the Guarantor or other Subsidiaries of the Guarantor, provided, however, that the amount of the Restructuring Charges shall not exceed $95,000,000 after giving effect to any tax benefits. All Restructuring Charges will be incurred and/or paid according to generally accepted accounting principles.

1.62. "Total Funded Debt" means the principal amount of Indebtedness for borrowed money (including obligations under Capitalized Leases allocable to principal) of the Guarantor and its Subsidiaries on a consolidated basis."

Section 2. Article I of the Agreement Further Amended. Article I of the Agreement is further amended by deleting the terms "Consolidated Net Income" and "Indebtedness" in their entirety and by inserting in lieu thereof the following:

1.10. "Consolidated Net Income" means the consolidated net income (or deficit) of the Guarantor, the Borrower and their Subsidiaries, after deduction of all expenses, taxes and other proper charges, determined in accordance with generally accepted accounting principles, after eliminating therefrom all extraordinary nonrecurring items of income or loss.

1.27. "Indebtedness" means all obligations, contingent and otherwise, that in accordance with generally accepted accounting principles should be classified upon the obligors balance sheet as liabilities, or to which reference should be made by footnotes thereto, including in any event and whether or not so classified: (i) all debt and similar monetary obligation, whether direct or indirect, including, without limitation, Capitalized Lease obligations; (ii) all liabilities secured by any mortgage, pledge, security interest, lien, charge or other encumbrance existing on property owned or acquired subject thereto, whether or not the liability secured thereby shall have been assumed; and (iii) all guarantees, endorsements and other contingent obligations whether direct or indirect in respect of indebtedness of others, including any obligation to supply funds to or in any manner to invest in, directly or indirectly, the debtor, to purchase indebtedness, or to assure the owner of indebtedness against loss, through an agreement to purchase goods, supplies, or services for the purpose of enabling the debtor to make payment of the indebtedness held by such owner or otherwise, and the obligations to reimburse the issuer in respect of any letters or credit, whether drawn or undrawn, to the extent not duplicative of the Indebtedness secured by such letters of credit.

Section 3. Section 7.3 of the Agreement Amended. Section 7.3 of the Agreement is hereby amended by deleting in its entirety said Section 7.3 of the Agreement and inserting in lieu of the following:

"7.3. Sale of Assets, Dissolution, Etc. Neither the Guarantor nor the Borrower nor the Subsidiaries will become a party to or agree to or effect any dispositions of assets (including capital stock), other than (i) the sale of inventory and obsolete equipment in the ordinary course of business, consistent with past practices, or (ii) prior to the occurrence of a Default or Event of Default, the disposition or sale of assets, in one or more arms-length transactions, having a cumulative aggregate sales price not to exceed (A) in any fiscal year of the Guarantor, $100,000,000, and (B) in the aggregate from August 30, 1994, $150,000,000; provided that, the value as of the date of disposition of any non-cash assets received by the Guarantor, the Borrower and the Subsidiaries in payment of any portion of the purchase price shall be equal to the fair market value of such assets."

Section 4. Section 7.5 of the Agreement Amended. Section 7.5 of the Agreement is hereby amended by deleting in its entirety said Section 7.5 of the Agreement and inserting in lieu of the following:

"7.5. Leverage Ratio. Neither the Borrower nor the Guarantor will permit the ratio of (i) Total Funded Debt to (ii) the sum of (A) Total Funded Debt plus (B) Consolidated Worth on any date (a "Test Date") occurring during any period described in the table set forth below to exceed the ratio set forth opposite the period in the table below in which such Test Date occurs:

Period                                               Ratio
------                                               -----
August 1, 1994 - December 31, 1995                   0.40:1.00
January 1, 1996 - June 30, 1997                      0.45:1.00
July 1, 1997 - June 30, 1998                         0.42:1.00
July 1, 1998 and thereafter                          0.40:1.00"

Section 5. Section 7.6 of the Agreement Amended. Section 7.6 of the Agreement is hereby amended by deleting in its entirety said Section 7.6 of the Agreement and inserting in lieu of the following:

"7.6. Fixed-Charge Coverage Ratio. Neither the Borrower nor the Guarantor will permit the Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters of the Guarantor to be less than 3.00:1.00; provided, however, that all Restructuring Charges shall be excluded from the calculation of Earnings Before Interest, Taxes, Depreciation and Amortization for purposes of determining the Fixed Charge Coverage Ratio only."

Section 6. Section 7.8 of the Agreement Amended. Section 7.8 of the Agreement is hereby amended by deleting in its entirety said Section 7.8 of the Agreement and inserting in lieu of the following:

"7.8. Consolidated Worth. The Guarantor will not permit at any time Consolidated Worth to be less than the sum of (a) $295,000,000 plus (b) on a cumulative basis, 50% of positive Consolidated Net Income for each full fiscal year of the Guarantor subsequent to June 30, 1996. Increases pursuant to clause (b), if any, shall be effective on the first day after the end of each such fiscal year."

Section 7. Effect of Modification and Amendment of Agreement. The Agreement shall be deemed to be modified and amended in accordance with the provisions of this Amendment No. 1 to the Agreement and the respective rights, duties and obligations of the Borrower, the Guarantor and the Bank under the Agreement shall remain to be determined, exercised and enforced under the Agreement subject in all respects to such modifications and amendments in writing, and all the terms and conditions of this Amendment No. 1 to the Agreement shall be part of the terms and conditions of the Agreement for any and all purposes. All the other terms of the Agreement shall continue in full force and effect subject to the amendments set forth herein.

Section 8. Representations and Warranties. The Borrower and the Guarantor each represent and warrant to the Bank as follows:

(a) Representations and Warranties in Agreement. The representations and warranties of the Borrower and the Guarantor contained in the Agreement (i) were true and correct when made, and (ii) after giving effect to this Amendment No. 1, continue to be true and correct on the date hereof (except to the extent of changes resulting from transactions contemplated or permitted by the Agreement, as amended hereby, and changes occurring in the ordinary course of business that singly or in the aggregate are not materially adverse, and to the extent that such representations and warranties relate expressly to an earlier date).

(b) Authority. The execution and delivery by each of the Borrower and the Guarantor of this Amendment No. 1 and the performance by each of the Borrower and the Guarantor of all of its respective agreements and obligations under this Amendment No. 1 are within its corporate authority, have been duly authorized by all necessary corporate action and do not and will not: (i) contravene any provision of its charter documents or any amendment thereof; (ii) conflict with, or result in a breach of any material term, condition or provision of, or constitute a default under or result in the creation of any mortgage, lien, pledge, charge, security interest or other encumbrance upon any of its property under any agreement, deed of trust, indenture, mortgage or other instruments to which it is a party or by which any of its properties are bound including, without limitation, any of the Other Agreements; (iii) violate or contravene any provision of any law, statute, rule or regulation to which the Borrower or the Guarantor is subject or any decree, order or judgment of any court or governmental or regulatory authority, bureau, agency or official applicable to the Borrower or the Guarantor; (iv) require any waivers, consents or approvals by any of its creditors which have not been obtained; or (v) require any approval, consent, order, authorization or license by, or giving notice to, or taking any other action with respect to, any governmental or regulatory authority or agency under any provision of any law, except (A) those actions which have been taken or will be taken prior to the date of execution of this Amendment No. 1 and (B) filings with the Securities and Exchange Commission to be made on or prior to May 15, 1996.

(c) Enforceability of Obligations. This Amendment No. 1 and the Agreement, as amended hereby, constitute the legal, valid and binding obligations of the Borrower and the Guarantor enforceable against the Borrower and the Guarantor in accordance with their respective terms, provided that: (i) enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of general application affecting the rights and remedies of creditors; and (ii) the availability of the remedies of specific performance and injunctive relief may be subject to the discretion of the court before which any proceedings for such remedies may be brought.

Section 9. Counterparts. This Amendment No. 1 to the Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the Borrower, the Guarantor and the Bank have caused this Amendment No. 1 to the Agreement to be executed in their respective names and their respective seals to be hereunto affixed and attested by their duly authorized representatives, all as of the date first above written.

THE BORROWER:

SPENCE ENGINEERING COMPANY, INC.

By:__________________________________
Title:

THE GUARANTOR:

WATTS INDUSTRIES, INC.

By:__________________________________
Title:

THE BANK:

FIRST UNION NATIONAL BANK OF NORTH CAROLINA

By:_______________________________
Title:

ATTEST:

(Corporate Seal)

EXHIBIT 10.16 (I)

AMENDMENT NO. 1 TO THE LETTER OF CREDIT,
REIMBURSEMENT AND GUARANTY AGREEMENT

THIS AMENDMENT NO. 1 TO THE LETTER OF CREDIT, REIMBURSEMENT AND GUARANTY
AGREEMENT, dated as of August 1, 1996, by and among LESLIE CONTROLS, INC., a New Jersey corporation (the "Borrower"), WATTS INDUSTRIES, INC., a Delaware corporation (the "Guarantor") and FIRST UNION NATIONAL BANK OF NORTH CAROLINA, a national banking association organized and existing under the laws of the United States with its principal offices located in Charlotte, North Carolina (the "Bank");

W I T N E S S E T H:

WHEREAS, the Borrower, the Guarantor and the Bank have previously entered into the Letter of Credit, Reimbursement and Guaranty Agreement, dated as of July 1, 1994 (the "Agreement"), pursuant to which the Bank has issued its irrevocable letter of credit, dated August 4, 1994; and

WHEREAS, the Borrower, the Guarantor and the Bank now desire to amend certain provisions of the Agreement;

NOW, THEREFORE, in consideration of the premises, mutual covenants hereinafter contained and other good and valuable consideration, the Borrower, the Guarantor and the Bank do hereby amend the Agreement as follows:

Section 1. Article I of the Agreement Amended. Article I of the Agreement is hereby amended by inserting the following at the end of said Article I:

1.54. "Capital Assets" means fixed assets, both tangible (such as land, buildings, fixtures, machinery and equipment) and intangible (such as patents, copyrights, trademarks, franchises and good will); provided that Capital Assets shall not include any item customarily charged directly or indirectly to expense or depreciated over a useful life of twelve (12) months or less in accordance with generally accepted accounting principles.

1.55. "Capital Expenditures" means amounts paid or indebtedness incurred by the Guarantor, the Borrower or any of their Subsidiaries in connection with the purchase or lease by the Guarantor, the Borrower or any of their Subsidiaries of Capital Assets that would be required to be capitalized and show on the balance sheet of such Person in accordance with generally accepted accounting principles.

1.56. "Capitalized Leases" means leases under which the Guarantor or the Borrower or the Subsidiaries is the lessee or obligor, the discounted future rental payment obligations under which are required to be capitalized on the balance sheet of the lessee or obligor in accordance with generally accepted accounting principles.

1.57. "Consolidated Total Interest Expense" means for any period, the aggregate amount of interest required to be paid or accrued by the Guarantor and the Borrower and the Subsidiaries during such period on all Indebtedness of the Guarantor and the Borrower and the Subsidiaries outstanding during all or any part of such period, whether such interest was or is required to be reflected as an item of expense or capitalized, including payments consisting of interest in respect of Capitalized Leases and plus, without duplication, commitment fees, agency fees, facility fees, balance deficiency fees and similar fees or expenses in connection with the borrowing of money.

1.58. "Consolidated Worth" means all assets of the Guarantor and the Borrower and the Subsidiaries determined on a consolidated basis in accordance with generally accepted accounting principles minus Consolidated Total Liabilities and minus in extent otherwise includable to the computation of Consolidated Worth, any subscriptions receivable for the purchase of capital stock.

1.59. "Earnings Before Interest, Taxes, Depreciation and Amortization" means the Consolidated Net Income (or deficit) of the Guarantor and the Borrower and the Subsidiaries for any period, after all expenses and other proper charges but before payment or provision for any income taxes or interest expense for such period, plus depreciation and amortization for such period, determined in accordance with generally accepted accounting principles.

1.60. "Fixed Charge Coverage Ratio" means for any period, the ratio of (i) the result of (A) Earnings Before Interest, Taxes, Depreciation and Amortization minus (B) Capital Expenditures, to (ii) the sum of (A) Consolidated Total Interest Expense (without duplication of any interest taken into account in the computation of the Fixed Charge Coverage Ratio in any prior period) plus (B) current maturities of long term Indebtedness due and payable during such period in accordance with generally accepted accounting principles, in each case for the Guarantor and the Borrower and the Subsidiaries on a consolidated basis for such period.

1.61. "Restructuring Charges" means any restructuring charge taken by the Borrower, the Guarantor or other Subsidiaries of the Guarantor in the Guarantor's fiscal year ending June 30, 1996 in connection with (i) Financial Accounting Standards Board Statement No. 121 or (ii) the restructuring, downsizing, and consolidation of the operations of the Borrower, the Guarantor or other Subsidiaries of the Guarantor, including but not limited to, the consolidation of the selling, general and administrative functions and the closure of certain manufacturing facilities of the Borrower, the Guarantor or other Subsidiaries of the Guarantor, provided, however, that the amount of the Restructuring Charges shall not exceed $95,000,000 after giving effect to any tax benefits. All Restructuring Charges will be incurred and/or paid according to generally accepted accounting principles.

1.62. "Total Funded Debt" means the principal amount of Indebtedness for borrowed money (including obligations under Capitalized Leases allocable to principal) of the Guarantor and its Subsidiaries on a consolidated basis."

Section 2. Article I of the Agreement Further Amended. Article I of the Agreement is further amended by deleting the terms "Consolidated Net Income" and "Indebtedness" in their entirety and by inserting in lieu thereof the following:

1.10. "Consolidated Net Income" means the consolidated net income (or deficit) of the Guarantor, the Borrower and their Subsidiaries, after deduction of all expenses, taxes and other proper charges, determined in accordance with generally accepted accounting principles, after eliminating therefrom all extraordinary nonrecurring items of income or loss.

1.27. "Indebtedness" means all obligations, contingent and otherwise, that in accordance with generally accepted accounting principles should be classified upon the obligors balance sheet as liabilities, or to which reference should be made by footnotes thereto, including in any event and whether or not so classified: (i) all debt and similar monetary obligation, whether direct or indirect, including, without limitation, Capitalized Lease obligations; (ii) all liabilities secured by any mortgage, pledge, security interest, lien, charge or other encumbrance existing on property owned or acquired subject thereto, whether or not the liability secured thereby shall have been assumed; and (iii) all guarantees, endorsements and other contingent obligations whether direct or indirect in respect of indebtedness of others, including any obligation to supply funds to or in any manner to invest in, directly or indirectly, the debtor, to purchase indebtedness, or to assure the owner of indebtedness against loss, through an agreement to purchase goods, supplies, or services for the purpose of enabling the debtor to make payment of the indebtedness held by such owner or otherwise, and the obligations to reimburse the issuer in respect of any letters or credit, whether drawn or undrawn, to the extent not duplicative of the Indebtedness secured by such letters of credit.

Section 3. Section 7.3 of the Agreement Amended. Section 7.3 of the Agreement is hereby amended by deleting in its entirety said Section 7.3 of the Agreement and inserting in lieu of the following:

"7.3. Sale of Assets, Dissolution, Etc. Neither the Guarantor nor the Borrower nor the Subsidiaries will become a party to or agree to or effect any dispositions of assets (including capital stock), other than (i) the sale of inventory and obsolete equipment in the ordinary course of business, consistent with past practices, or (ii) prior to the occurrence of a Default or Event of Default, the disposition or sale of assets, in one or more arms-length transactions, having a cumulative aggregate sales price not to exceed (A) in any fiscal year of the Guarantor, $100,000,000, and (B) in the aggregate from August 30, 1994, $150,000,000; provided that, the value as of the date of disposition of any non-cash assets received by the Guarantor, the Borrower and the Subsidiaries in payment of any portion of the purchase price shall be equal to the fair market value of such assets."

Section 4. Section 7.5 of the Agreement Amended. Section 7.5 of the Agreement is hereby amended by deleting in its entirety said Section 7.5 of the Agreement and inserting in lieu of the following:

"7.5. Leverage Ratio. Neither the Borrower nor the Guarantor will permit the ratio of (i) Total Funded Debt to (ii) the sum of (A) Total Funded Debt plus (B) Consolidated Worth on any date (a "Test Date") occurring during any period described in the table set forth below to exceed the ratio set forth opposite the period in the table below in which such Test Date occurs:

Period                                               Ratio
------                                               -----
August 1, 1994 - December 31, 1995                   0.40:1.00
January 1, 1996 - June 30, 1997                      0.45:1.00
July 1, 1997 - June 30, 1998                         0.42:1.00
July 1, 1998 and thereafter                          0.40:1.00"

Section 5. Section 7.6 of the Agreement Amended. Section 7.6 of the Agreement is hereby amended by deleting in its entirety said Section 7.6 of the Agreement and inserting in lieu of the following:

"7.6. Fixed-Charge Coverage Ratio. Neither the Borrower nor the Guarantor will permit the Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters of the Guarantor to be less than 3.00:1.00; provided, however, that all Restructuring Charges shall be excluded from the calculation of Earnings Before Interest, Taxes, Depreciation and Amortization for purposes of determining the Fixed Charge Coverage Ratio only."

Section 6. Section 7.8 of the Agreement Amended. Section 7.8 of the Agreement is hereby amended by deleting in its entirety said Section 7.8 of the Agreement and inserting in lieu of the following:

"7.8. Consolidated Worth. The Guarantor will not permit at any time Consolidated Worth to be less than the sum of (a) $295,000,000 plus (b) on a cumulative basis, 50% of positive Consolidated Net Income for each full fiscal year of the Guarantor subsequent to June 30, 1996. Increases pursuant to clause (b), if any, shall be effective on the first day after the end of each such fiscal year."

Section 7. Effect of Modification and Amendment of Agreement. The Agreement shall be deemed to be modified and amended in accordance with the provisions of this Amendment No. 1 to the Agreement and the respective rights, duties and obligations of the Borrower, the Guarantor and the Bank under the Agreement shall remain to be determined, exercised and enforced under the Agreement subject in all respects to such modifications and amendments in writing, and all the terms and conditions of this Amendment No. 1 to the Agreement shall be part of the terms and conditions of the Agreement for any and all purposes. All the other terms of the Agreement shall continue in full force and effect subject to the amendments set forth herein.

Section 8. Representations and Warranties. The Borrower and the Guarantor each represent and warrant to the Bank as follows:

(a) Representations and Warranties in Agreement. The representations and warranties of the Borrower and the Guarantor contained in the Agreement (i) were true and correct when made, and (ii) after giving effect to this Amendment No. 1, continue to be true and correct on the date hereof (except to the extent of changes resulting from transactions contemplated or permitted by the Agreement, as amended hereby, and changes occurring in the ordinary course of business that singly or in the aggregate are not materially adverse, and to the extent that such representations and warranties relate expressly to an earlier date).

(b) Authority. The execution and delivery by each of the Borrower and the Guarantor of this Amendment No. 1 and the performance by each of the Borrower and the Guarantor of all of its respective agreements and obligations under this Amendment No. 1 are within its corporate authority, have been duly authorized by all necessary corporate action and do not and will not: (i) contravene any provision of its charter documents or any amendment thereof; (ii) conflict with, or result in a breach of any material term, condition or provision of, or constitute a default under or result in the creation of any mortgage, lien, pledge, charge, security interest or other encumbrance upon any of its property under any agreement, deed of trust, indenture, mortgage or other instruments to which it is a party or by which any of its properties are bound including, without limitation, any of the Other Agreements; (iii) violate or contravene any provision of any law, statute, rule or regulation to which the Borrower or the Guarantor is subject or any decree, order or judgment of any court or governmental or regulatory authority, bureau, agency or official applicable to the Borrower or the Guarantor; (iv) require any waivers, consents or approvals by any of its creditors which have not been obtained; or (v) require any approval, consent, order, authorization or license by, or giving notice to, or taking any other action with respect to, any governmental or regulatory authority or agency under any provision of any law, except (A) those actions which have been taken or will be taken prior to the date of execution of this Amendment No. 1 and (B) filings with the Securities and Exchange Commission to be made on or prior to May 15, 1996.

(c) Enforceability of Obligations. This Amendment No. 1 and the Agreement, as amended hereby, constitute the legal, valid and binding obligations of the Borrower and the Guarantor enforceable against the Borrower and the Guarantor in accordance with their respective terms, provided that: (i) enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of general application affecting the rights and remedies of creditors; and (ii) the availability of the remedies of specific performance and injunctive relief may be subject to the discretion of the court before which any proceedings for such remedies may be brought.

Section 9. Counterparts. This Amendment No. 1 to the Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the Borrower, the Guarantor and the Bank have caused this Amendment No. 1 to the Agreement to be executed in their respective names and their respective seals to be hereunto affixed and attested by their duly authorized representatives, all as of the date first above written.

THE BORROWER:

LESLIE CONTROLS, INC.

By:__________________________________
Title:

THE GUARANTOR:

WATTS INDUSTRIES, INC.

By:__________________________________
Title:

THE BANK:

FIRST UNION NATIONAL BANK OF NORTH CAROLINA

By:_______________________________
Title:

ATTEST:

(Corporate Seal)

EXHIBIT 10.19 (I)

AMENDMENT NO. 1 TO THE LETTER OF CREDIT,
REIMBURSEMENT AND GUARANTY AGREEMENT

THIS AMENDMENT NO. 1 TO THE LETTER OF CREDIT, REIMBURSEMENT AND GUARANTY
AGREEMENT, dated as of August 1, 1996, by and among LESLIE CONTROLS, INC., a New Jersey corporation (the "Borrower"), WATTS INDUSTRIES, INC., a Delaware corporation (the "Guarantor") and FIRST UNION NATIONAL BANK OF NORTH CAROLINA, a national banking association organized and existing under the laws of the United States with its principal offices located in Charlotte, North Carolina (the "Bank");

W I T N E S S E T H:

WHEREAS, the Borrower, the Guarantor and the Bank have previously entered into the Letter of Credit, Reimbursement and Guaranty Agreement, dated as of July 1, 1994 (the "Agreement"), pursuant to which the Bank has issued its irrevocable letter of credit, dated August 4, 1994; and

WHEREAS, the Borrower, the Guarantor and the Bank now desire to amend certain provisions of the Agreement;

NOW, THEREFORE, in consideration of the premises, mutual covenants hereinafter contained and other good and valuable consideration, the Borrower, the Guarantor and the Bank do hereby amend the Agreement as follows:

Section 1. Article I of the Agreement Amended. Article I of the Agreement is hereby amended by inserting the following at the end of said Article I:

1.54. "Capital Assets" means fixed assets, both tangible (such as land, buildings, fixtures, machinery and equipment) and intangible (such as patents, copyrights, trademarks, franchises and good will); provided that Capital Assets shall not include any item customarily charged directly or indirectly to expense or depreciated over a useful life of twelve (12) months or less in accordance with generally accepted accounting principles.

1.55. "Capital Expenditures" means amounts paid or indebtedness incurred by the Guarantor, the Borrower or any of their Subsidiaries in connection with the purchase or lease by the Guarantor, the Borrower or any of their Subsidiaries of Capital Assets that would be required to be capitalized and show on the balance sheet of such Person in accordance with generally accepted accounting principles.

1.56. "Capitalized Leases" means leases under which the Guarantor or the Borrower or the Subsidiaries is the lessee or obligor, the discounted future rental payment obligations under which are required to be capitalized on the balance sheet of the lessee or obligor in ..accordance with generally accepted accounting principles.

1.57. "Consolidated Total Interest Expense" means for any period, the aggregate amount of interest required to be paid or accrued by the Guarantor and the Borrower and the Subsidiaries during such period on all Indebtedness of the Guarantor and the Borrower and the Subsidiaries outstanding during all or any part of such period, whether such interest was or is required to be reflected as an item of expense or capitalized, including payments consisting of interest in respect of Capitalized Leases and plus, without duplication, commitment fees, agency fees, facility fees, balance deficiency fees and similar fees or expenses in connection with the borrowing of money.

1.58. "Consolidated Worth" means all assets of the Guarantor and the Borrower and the Subsidiaries determined on a consolidated basis in accordance with generally accepted accounting principles minus Consolidated Total Liabilities and minus in extent otherwise includable to the computation of Consolidated Worth, any subscriptions receivable for the purchase of capital stock.

1.59. "Earnings Before Interest, Taxes, Depreciation and Amortization" means the Consolidated Net Income (or deficit) of the Guarantor and the Borrower and the Subsidiaries for any period, after all expenses and other proper charges but before payment or provision for any income taxes or interest expense for such period, plus depreciation and amortization for such period, determined in accordance with generally accepted accounting principles.

1.60. "Fixed Charge Coverage Ratio" means for any period, the ratio of (i) the result of (A) Earnings Before Interest, Taxes, Depreciation and Amortization minus (B) Capital Expenditures, to (ii) the sum of (A) Consolidated Total Interest Expense (without duplication of any interest taken into account in the computation of the Fixed Charge Coverage Ratio in any prior period) plus (B) current maturities of long term Indebtedness due and payable during such period in accordance with generally accepted accounting principles, in each case for the Guarantor and the Borrower and the Subsidiaries on a consolidated basis for such period.

1.61. "Restructuring Charges" means any restructuring charge taken by the Borrower, the Guarantor or other Subsidiaries of the Guarantor in the Guarantor's fiscal year ending June 30, 1996 in connection with (i) Financial Accounting Standards Board Statement No. 121 or (ii) the restructuring, downsizing, and consolidation of the operations of the Borrower, the Guarantor or other Subsidiaries of the Guarantor, including but not limited to, the consolidation of the selling, general and administrative functions and the closure of certain manufacturing facilities of the Borrower, the Guarantor or other Subsidiaries of the Guarantor, provided, however, that the amount of the Restructuring Charges shall not exceed $95,000,000 after giving effect to any tax benefits. All Restructuring Charges will be incurred and/or paid according to generally accepted accounting principles.

1.62. "Total Funded Debt" means the principal amount of Indebtedness for borrowed money (including obligations under Capitalized Leases allocable to principal) of the Guarantor and its Subsidiaries on a consolidated basis."

Section 2. Article I of the Agreement Further Amended. Article I of the Agreement is further amended by deleting the terms "Consolidated Net Income" and "Indebtedness" in their entirety and by inserting in lieu thereof the following:

1.10. "Consolidated Net Income" means the consolidated net income (or deficit) of the Guarantor, the Borrower and their Subsidiaries, after deduction of all expenses, taxes and other proper charges, determined in accordance with generally accepted accounting principles, after eliminating therefrom all extraordinary nonrecurring items of income or loss.

1.27. "Indebtedness" means all obligations, contingent and otherwise, that in accordance with generally accepted accounting principles should be classified upon the obligors balance sheet as liabilities, or to which reference should be made by footnotes ......thereto, including in any event and whether or not so classified: (i) all debt and similar monetary obligation, whether direct or indirect, including, without limitation, Capitalized Lease obligations; (ii) all liabilities secured by any mortgage, pledge, security interest, lien, charge or other encumbrance existing on property owned or acquired subject thereto, whether or not the liability secured thereby shall have been assumed; and (iii) all guarantees, endorsements and other contingent obligations whether direct or indirect in respect of indebtedness of others, including any obligation to supply funds to or in any manner to invest in, directly or indirectly, the debtor, to purchase indebtedness, or to .......assure the owner of indebtedness against loss, through an agreement to purchase goods, supplies, or services for the purpose of enabling the debtor to make payment of the indebtedness held by such owner or otherwise, and the obligations to reimburse the issuer in respect of any letters or credit, whether drawn or undrawn, to the extent not duplicative of the Indebtedness secured by such letters of credit.

Section 3. Section 7.3 of the Agreement Amended. Section 7.3 of the Agreement is hereby amended by deleting in its entirety said Section 7.3 of the Agreement and inserting in lieu of the following:

"7.3. Sale of Assets, Dissolution, Etc. Neither the Guarantor nor the Borrower nor the Subsidiaries will become a party to or agree to or effect any dispositions of assets (including capital stock), other than (i) the sale of inventory and obsolete equipment in the ordinary course of business, consistent with past practices, or (ii) prior to the occurrence of a Default or Event of Default, the disposition or sale of assets, in one or more arms-length transactions, having a cumulative aggregate sales price not to exceed (A) in any fiscal year of the Guarantor, $100,000,000, and (B) in the aggregate from August 30, 1994, $150,000,000; provided that, the value as of the date of disposition of any non-cash assets received by the Guarantor, the Borrower and the Subsidiaries in payment of any portion of the purchase price shall be equal to the fair market value of such assets."

Section 4. Section 7.5 of the Agreement Amended. Section 7.5 of the Agreement is hereby amended by deleting in its entirety said Section 7.5 of the Agreement and inserting in lieu of the following:

"7.5. Leverage Ratio. Neither the Borrower nor the Guarantor will permit the ratio of (i) Total Funded Debt to (ii) the sum of (A) Total Funded Debt plus (B) Consolidated Worth on any date (a "Test Date") occurring during any period described in the table set forth below to exceed the ratio set forth opposite the period in the table below in which such Test Date occurs:

Period                                             Ratio
------                                             -----
August 1, 1994 - December 31, 1995                 0.40:1.00
January 1, 1996 - June 30, 1997                    0.45:1.00
July 1, 1997 - June 30, 1998                       0.42:1.00
July 1, 1998 and thereafter                        0.40:1.00"

Section 5. Section 7.6 of the Agreement Amended. Section 7.6 of the Agreement is hereby amended by deleting in its entirety said Section 7.6 of the Agreement and inserting in lieu of the following:

"7.6. Fixed-Charge Coverage Ratio. Neither the Borrower nor the Guarantor will permit the Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters of the Guarantor to be less than 3.00:1.00; provided, however, that all Restructuring Charges shall be excluded from the calculation of Earnings Before Interest, Taxes, Depreciation and Amortization for purposes of determining the Fixed Charge Coverage Ratio only."

Section 6. Section 7.8 of the Agreement Amended. Section 7.8 of the Agreement is hereby amended by deleting in its entirety said Section 7.8 of the Agreement and inserting in lieu of the following:

"7.8. Consolidated Worth. The Guarantor will not permit at any time Consolidated Worth to be less than the sum of (a) $295,000,000 plus (b) on a cumulative basis, 50% of positive Consolidated Net Income for each full fiscal year of the Guarantor subsequent to June 30, 1996. Increases pursuant to clause (b), if any, shall be effective on the first day after the end of each such fiscal year."

Section 7. Effect of Modification and Amendment of Agreement. The Agreement shall be deemed to be modified and amended in accordance with the provisions of this Amendment No. 1 to the Agreement and the respective rights, duties and obligations of the Borrower, the Guarantor and the Bank under the Agreement shall remain to be determined, exercised and enforced under the Agreement subject in all respects to such modifications and amendments in writing, and all the terms and conditions of this Amendment No. 1 to the Agreement shall be part of the terms and conditions of the Agreement for any and all purposes. All the other terms of the Agreement shall continue in full force and effect subject to the amendments set forth herein.

Section 8. Representations and Warranties. The Borrower and the Guarantor each represent and warrant to the Bank as follows:

(a) Representations and Warranties in Agreement. The representations and warranties of the Borrower and the Guarantor contained in the Agreement (i) were true and correct when made, and (ii) after giving effect to this Amendment No. 1, continue to be true and correct on the date hereof (except to the extent of changes resulting from transactions contemplated or permitted by the Agreement, as amended hereby, and changes occurring in the ordinary course of business that singly or in the aggregate are not materially adverse, and to the extent that such representations and warranties relate expressly to an earlier date).

(b) Authority. The execution and delivery by each of the Borrower and the Guarantor of this Amendment No. 1 and the performance by each of the Borrower and the Guarantor of all of its respective agreements and obligations under this Amendment No. 1 are within its corporate authority, have been duly authorized by all necessary corporate action and do not and will not: (i) contravene any provision of its charter documents or any amendment thereof; (ii) conflict with, or result in a breach of any material term, condition or provision of, or constitute a default under or result in the creation of any mortgage, lien, pledge, charge, security interest or other encumbrance upon any of its property under any agreement, deed of trust, indenture, mortgage or other instruments to which it is a party or by which any of its properties are bound including, without limitation, any of the Other Agreements; (iii) violate or contravene any provision of any law, statute, rule or regulation to which the Borrower or the Guarantor is subject or any decree, order or judgment of any court or governmental or regulatory authority, bureau, agency or official applicable to the Borrower or the Guarantor; (iv) require any waivers, consents or approvals by any of its creditors which have not been obtained; or (v) require any approval, consent, order, authorization or license by, or giving notice to, or taking any other action with respect to, any governmental or regulatory authority or agency under any provision of any law, except (A) those actions which have been taken or will be taken prior to the date of execution of this Amendment No. 1 and (B) filings with the Securities and Exchange Commission to be made on or prior to May 15, 1996.

(c) Enforceability of Obligations. This Amendment No. 1 and the Agreement, as amended hereby, constitute the legal, valid and binding obligations of the Borrower and the Guarantor enforceable against the Borrower and the Guarantor in accordance with their respective terms, provided that: (i) enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of general application affecting the rights and remedies of creditors; and (ii) the availability of the remedies of specific performance and injunctive relief may be subject to the discretion of the court before which any proceedings for such remedies may be brought.

Section 9. Counterparts. This Amendment No. 1 to the Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the Borrower, the Guarantor and the Bank have caused this Amendment No. 1 to the Agreement to be executed in their respective names and their respective seals to be hereunto affixed and attested by their duly authorized representatives, all as of the date first above written.

THE BORROWER:

LESLIE CONTROLS, INC.

By:__________________________________
Title:

THE GUARANTOR:

WATTS INDUSTRIES, INC.

By:__________________________________
Title:

THE BANK:

FIRST UNION NATIONAL BANK OF NORTH CAROLINA

By:_______________________________
Title:

ATTEST:

(Corporate Seal)

EXHIBIT 10.22 (:)

AMENDMENT NO. 1

WATTS INDUSTRIES, INC.

1991 NON-EMPLOYEE DIRECTORS' NONQUALIFIED STOCK OPTION PLAN

August 6, 1996

The 1991 Non-Employee Directors' Nonqualified Stock Option Plan ("1991 Plan") is hereby amended as follows:

1. Section 3(b) Purchase Price is deleted in its entirety and replaced with the following:

"Effective with option grants to be made on or after November 1, 1996, the purchase price of such options shall be adjusted from the current price of $22.75, which was the closing price of the Company's Class A Common Stock on October 18, 1991 (adjusted for the March 1994 stock split), to $16.375, the closing price of such stock on the New York Stock Exchange on August 5, 1996."

2. Except as provided for in this Amendment No. 1, all of the terms and conditions of the 1991 Plan shall remain in full force and effect.

EXECUTED as of the date first set forth above.

Watts Industries, Inc.

By:/s/ Kenneth J. McAvoy

EXHIBIT 10.29 (i)

AMENDMENT NO. 1

DATED AS OF JUNE 30, 1995

Amendment No. 1 (this "Amendment") dated as of June 30, 1995 to the Revolving Credit Agreement, dated as of August 30, 1994 (as amended and in effect from time to time, the "Credit Agreement"), by and among Watts Investment Company (the "Borrower"), Watts Industries, Inc. (the "Parent"), as Guarantor, The First National Bank of Boston and the other lenders that are or may become parties thereto from time to time (collectively, the "Banks") and The First National Bank of Boston as agent for the Banks (the "Agent"). Capitalized terms which are used herein without definition and which are defined in the Credit Agreement shall have the same meaning herein as in the Credit Agreement.

WHEREAS, the Borrower and the Parent have requested that the Banks amend certain terms and conditions of the Credit Agreement and the Banks, subject to the terms and conditions set forth below, have agreed to amend the Credit Agreement;

NOW, THEREFORE, in consideration of the foregoing premises, on the terms and subject to the conditions set forth herein, the parties hereto hereby agree as follows:

1. Amendment to the Credit Agreement. The Credit Agreement is hereby amended by deleting section 9.3 in its entirety and inserting in lieu thereof the following text:

9.3 Consolidated Net Worth. Neither the Borrower nor the Parent will permit at any time Consolidated Net Worth to be less than the sum of (a) $350,000,000 plus (b) on a cumulative basis, 50% of positive Consolidated Net Income for each full fiscal year subsequent to the Balance Sheet Date. Increases pursuant to clause (b), if any, shall be effective on the first day after the end of each such fiscal year.

2. Affirmation and Acknowledgment of the Borrower and the Parent.

2.01 The Borrower hereby ratifies and confirms all of its Obligations to the Banks and the Borrower hereby affirms its absolute and unconditional promise to pay to the Banks the Loans and all other amounts due under the Credit Agreement, as amended hereby.

2.02 The Parent hereby ratifies and confirms all of its Guaranteed Obligations to the Banks and the Parent hereby affirms its unconditional and irrevocable guaranty of the Guaranteed Obligations under the Credit Agreement, as amended hereby.

3. Representation and Warranties. The Borrower and the Parent each represent and warrant to the Banks and the Agent as follows:

3.01 Representations and Warranties in Credit Agreement. The representations and warranties of the Borrower and the Parent contained in the Credit Agreement (i) were true and correct when made, and (ii) after giving effect to this Amendment, continue to be true and correct on the date hereof (except to the extent of changes resulting from transactions contemplated or permitted by the Credit Agreement, as amended hereby, and changes occurring in the ordinary course of business that singly or in the aggregate are not materially adverse, and to the extent that such representations and warranties relate expressly to an earlier date).

3.02 Authority. The execution and delivery by the each of Borrower and the Parent of this Amendment and the performance by each of the Borrower and the Parent of all its respective agreements and obligations under this Amendment are within its corporate authority, have been duly authorized by all necessary corporate action and do not and will not (i) contravene any provision of its charter documents or any amendment thereof, (ii) conflict with, or result in a breach of any material term, condition or provision of, or constitute a default under or result in the creation of any mortgage, lien, pledge, charge, security interest or other encumbrance upon any of its property under any agreement, deed of trust, indenture, mortgage or other instruments to which it is a party or by which any of its properties are bound including, without limitation, any of the Loan Documents (iii) violate or contravene any provision of any law, statute, rule or regulation to which the Borrower or the Parent is subject or any decree, order or judgment of any court or governmental or regulatory authority, bureau, agency or official applicable to the Borrower or the Parent, (iv) require any waivers, consents or approvals by any of its creditors which have not been obtained, or (v) require any approval, consent, order, authorization or license by, or giving notice to, or taking any other action with respect to, any governmental or regulatory authority or agency under any provision of any law, except (A) those actions which have been taken or will be taken prior to the date of execution of this Amendment and (B) filings with the Securities and Exchange Commission to be made on or prior to October 1, 1995.

3.03 Enforceability of Obligations. This Amendment and the Credit Agreement, as amended hereby, constitute the legal, valid and binding obligations of the Borrower and the Parent enforceable against the Borrower and the Parent in accordance with their respective terms, provided that (i) enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of general application affecting the rights and remedies of creditors, and (ii) the availability of the remedies of specific performance and injunctive relief may be subject to the discretion of the court before which any proceedings for such remedies may be brought.

4. Conditions to Effectiveness. This Amendment shall become effective as of the date hereof subject to the satisfaction of the following conditions precedent: (i) the execution and delivery of this Amendment by each of the Borrower, the Parent; the Majority Banks and the Agent, in form and substance satisfactory to the Majority Banks (ii) no Defaults or Events of Default shall have occurred and be continuing;
(iii) no material adverse change in the financial condition or business of the Borrower or the Parent shall have occurred and (iv) proceedings in connection with the execution of this Amendment and all other documents incident thereto shall be satisfactory in substance and in form to the Majority Banks and to the Agent and the Agent's Special Counsel, and the Banks, the Agent and such counsel shall have received all information and such counterpart originals or certified or other copies of such documents as the Agent may reasonably request.

5. Miscellaneous Provisions.

5.01 Except as otherwise expressly provided by this Amendment, all of the terms, conditions and provisions of the Credit Agreement shall remain the same. It is declared and agreed by each of the parties hereto that the Credit Agreement, as amended hereby shall continue in full force and effect.

5.02 THIS AMENDMENT IS INTENDED TO TAKE EFFECT AS AN AGREEMENT UNDER SEAL AND SHALL BE CONSTRUED ACCORDING TO AND GOVERNED BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.

5.03 This Amendment may be executed in any number of counterparts, but all such counterparts shall together constitute but one instrument. In making proof of this Amendment it shall not be necessary to produce or account for more than one counterpart signed by each party hereto by and against which enforcement hereof is sought.

5.04 The Borrower agrees to pay to the Agent, on demand by the Agent, all reasonable out-of-pocket costs and expenses incurred or sustained by the Agent in connection with this Amendment (including reasonable legal fees).

IN WITNESS WHEREOF, the undersigned have duly executed this Amendment under seal as of the date first written above.

WATTS INVESTMENT COMPANY

By: ______________________________
Name:
Title:

THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent

By: ______________________________
Name:
Title:

FIRST UNION NATIONAL BANK OF NORTH CAROLINA

By: ______________________________
Name:
Title:

MELLON BANK, N.A.
By: ______________________________
Name:
Title:

THE NORTHERN TRUST COMPANY

By: ______________________________
Name:
Title:

CREDIT LYONNAIS CAYMAN ISLAND BRANCH

By: ______________________________
Name:
Title:

BROWN BROTHERS HARRIMAN & CO.

By: _____________________________
Name:
Title:

WATTS INDUSTRIES, INC., as Guarantor

By: _____________________________
Name:
Title:

EXHIBIT 10.29 (ii)

AMENDMENT NO. 2

Dated as of April 15, 1996

This AMENDMENT NO. 2 (this "Amendment") dated as of April 15, 1996 to the Revolving Credit Agreement, dated as of August 30, 1994 (as amended and in effect from time to time, the "Credit Agreement"), is by and among WATTS INVESTMENT COMPANY (the "Borrower"), WATTS INDUSTRIES, INC. (the "Parent"), as Guarantor, THE FIRST NATIONAL BANK OF BOSTON and the other lenders that are or may become parties thereto from time to time (collectively, the "Banks") and THE FIRST NATIONAL BANK OF BOSTON AS AGENT for the Banks (the "Agent"). Capitalized terms which are used herein without definition and which are defined in the Credit Agreement shall have the same meaning herein as in the Credit Agreement.

WHEREAS, the Borrower and the Parent have requested that the Banks amend certain terms and conditions of the Credit Agreement, and the Banks, subject to the terms and conditions set forth below, have agreed to amend the Credit Agreement as follows;

NOW, THEREFORE, in consideration of the foregoing premises, on the terms and subject to the conditions set forth herein, the parties hereto hereby agree as follows:

1. Amendments to the Credit Agreement. The Credit Agreement is hereby amended as follows:

(a) Section 1.1 is hereby amended by inserting the following definition in the appropriate place designated by alphabetical order:

"Restructuring Charges. Any restructuring charge taken by the Borrower, the Parent or other Subsidiaries of the Parent in the Parent's fiscal year ending June 30, 1996 in connection with (i) Financial Accounting Standards Board Statement No. 121 or (ii) the restructuring, downsizing, and consolidation of the operations of the Borrower, the Parent or other Subsidiaries of the Parent, including but not limited to, the consolidation of the selling, general and administrative functions and the closure of certain manufacturing facilities of the Borrower, the Parent or other Subsidiaries of the Parent, provided, however, that the amount of the Restructuring Charges shall not exceed $95,000,000 after giving effect to any tax benefits. All Restructuring Charges will be incurred and/or paid according to generally accepted accounting principles."

(b) Section 8.5.2 of the Credit Agreement is hereby amended by deleting the amount "$70,000,000" set forth in the ninth line thereof and by replacing it with the amount "$100,000,000".
Section 8.5.2 of the Credit Agreement is further amended by deleting the amount "$100,000,000" set forth in the tenth line thereof and by replacing it with the amount "$150,000,000".

(c) Section 9.1 of the Credit Agreement is hereby amended by inserting immediately before the period at the end thereof, the following new phrase:

"; provided, however, that all Restructuring Charges shall be excluded from the calculation of Earnings Before Interest, Taxes, Depreciation and Amortization for purposes of determining the Fixed Charge Coverage Ratio only."

(d) Section 9.2 of the Credit Agreement is hereby amended by deleting
(beta)9.2 in its entirety and inserting the following new
(beta)9.2 in place thereof:

"9.2 Leverage Ratio. Neither the Borrower nor the Parent will permit the ratio of (i) Total Funded Debt to (ii) the sum of (A) Total Funded Debt plus (B) Consolidated Net Worth on any date (a "Test Date") occurring during any period described in the table set forth below to exceed the ratio set forth opposite the period in the table below in which such Test Date occurs:

Period                                 Ratio
------                                 -----
Closing  Date - December  31, 1995     0.40:1.00
January 1, 1996 - June 30, 1997        0.45:1.00
July 1, 1997 - June 30, 1998           0.42:1.00
July 1, 1998 and thereafter            0.40:1.00"

(e) Section 9.3 of the Credit Agreement is hereby amended by deleting
(beta)9.3 in its entirety and inserting the following new
(beta)9.3 in place thereof:

"9.3 Consolidated Net Worth. Neither the Borrower nor the Parent will permit at any time Consolidated Net Worth to be less than the sum of (a) $295,000,000 plus (b) on a cumulative basis, 50% of positive Consolidated Net Income for each full fiscal year of the Parent subsequent to June 30, 1996. Increases pursuant to clause (b), if any, shall be effective on the first day after the end of each such fiscal year."

(f) The Credit Agreement is hereby amended by inserting the following new (beta)9.4 immediately following (beta)9.3 and immediately preceding (beta)10 thereof:

"9.4. Profitable Operations. Neither the Borrower nor the Parent will permit Consolidated Net Income (or Deficit) to be less than (a) a loss of $10,000,000 for any fiscal quarter of the Parent and (b) a loss of $20,000,000 for any complete fiscal year of the Parent, in each case other than a loss resulting from Restructuring Charges."

2. Affirmation and Acknowledgment of the Borrower and the Parent.

2.01 The Borrower hereby ratifies and confirms all of its Obligations to the Banks, and the Borrower hereby affirms its absolute and unconditional promise to pay to the Banks, the Loans and all other amounts due under the Credit Agreement, as amended hereby.

2.02 The Parent hereby ratifies and confirms all of its Guaranteed Obligations to the Banks, and the Parent hereby affirms its unconditional and irrevocable guaranty of the Guaranteed Obligations under the Credit Agreement, as amended hereby.

3. Representations and Warranties. The Borrower and the Parent each represent and warrant to the Banks and the Agent as follows:

3.01 Representations and Warranties in Credit Agreement. The representations and warranties of the Borrower and the Parent contained in the Credit Agreement (i) were true and correct when made, and (ii) after giving effect to this Amendment, continue to be true and correct on the date hereof (except to the extent of changes resulting from transactions contemplated or permitted by the Credit Agreement, as amended hereby, and changes occurring in the ordinary course of business that singly or in the aggregate are not materially adverse, and to the extent that such representations and warranties relate expressly to an earlier date).

3.02 Authority. The execution and delivery by each of the Borrower and the Parent of this Amendment and the performance by each of the Borrower and the Parent of all its respective agreements and obligations under this Amendment are within its corporate authority, have been duly authorized by all necessary corporate action and do not and will not: (i) contravene any provision of its charter documents or any amendment thereof; (ii) conflict with, or result in a breach of any material term, condition or provision of, or constitute a default under or result in the creation of any mortgage, lien, pledge, charge, security interest or other encumbrance upon any of its property under any agreement, deed of trust, indenture, mortgage or other instruments to which it is a party or by which any of its properties are bound including, without limitation, any of the Loan Documents; (iii) violate or contravene any provision of any law, statute, rule or regulation to which the Borrower or the Parent is subject or any decree, order or judgment of any court or governmental or regulatory authority, bureau, agency or official applicable to the Borrower or the Parent; (iv) require any waivers, consents or approvals by any of its creditors which have not been obtained; or (v) require any approval, consent, order, authorization or license by, or giving notice to, or taking any other action with respect to, any governmental or regulatory authority or agency under any provision of any law, except (A) those actions which have been taken or will be taken prior to the date of execution of this Amendment and (B) filings with the Securities and Exchange Commission to be made on or prior to May 15, 1996.

3.03 Enforceability of Obligations. This Amendment and the Credit Agreement, as amended hereby, constitute the legal, valid and binding obligations of the Borrower and the Parent enforceable against the Borrower and the Parent in accordance with their respective terms, provided that: (i) enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of general application affecting the rights and remedies of creditors; and (ii) the availability of the remedies of specific performance and injunctive relief may be subject to the discretion of the court before which any proceedings for such remedies may be brought.

4. Conditions to Effectiveness. This Amendment shall become effective as of the date hereof subject to the satisfaction of the following conditions precedent: (i) the execution and delivery of this Amendment by each of the Borrower, the Parent, the Majority Banks and the Agent, in form and substance satisfactory to the Majority Banks; (ii) payment of an amendment fee in the amount of $37,500 to the Agent for the pro rata accounts of the Banks in accordance with their respective Commitment Percentages; (iii) after giving effect to the provisions of this Amendment, no Default or Events of Default shall have occurred and be continuing; (iv) except as contemplated by the provisions of this Amendment no material adverse change in the financial condition or business of the Borrower or the Parent shall have occurred and (v) proceedings in connection with the execution of this Amendment and all other documents incident thereto shall be satisfactory in substance and in form to the Majority Banks and to the Agent and the Agent's Special Counsel, and the Banks, the Agent and such counsel shall have received all information and such counterpart originals or certified or other copies of such documents as the Agent may reasonably request.

5. Miscellaneous Provisions.

5.01 Except as otherwise expressly provided by this Amendment, all of the terms, conditions and provisions of the Credit Agreement shall remain the same. It is declared and agreed by each of the parties hereto that the Credit Agreement, as amended hereby shall continue in full force and effect.

5.02 THIS AMENDMENT IS INTENDED TO TAKE EFFECT AS AN AGREEMENT UNDER SEAL AND SHALL BE CONSTRUED ACCORDING TO AND GOVERNED BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.

5.03 This Amendment may be executed in any number of counterparts, but all such counterparts shall together constitute but one instrument. In making proof of this Amendment it shall not be necessary to produce or account for more than one counterpart signed by each party hereto by and against which enforcement hereof is sought.

5.04 The Borrower agrees to pay to the Agent, on demand by the Agent, all reasonable out-of-pocket costs and expenses incurred or sustained by the Agent in connection with this Amendment (including reasonable legal fees).

IN WITNESS WHEREOF, the undersigned have duly executed this Amendment under seal as of the date first written above.

WATTS INVESTMENT COMPANY

By: ____________________________
Name:
Title:

THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent

By: ____________________________
Name:
Title:

FIRST UNION NATIONAL BANK OF NORTH CAROLINA

By: ____________________________
Name:
Title:

MELLON BANK, N.A.

By: ____________________________
Name:
Title:

THE NORTHERN TRUST COMPANY

By: ____________________________
Name:
Title:

CREDIT LYONNAIS CAYMAN ISLAND BRANCH

By: _____________________________
Name:
Title:

BROWN BROTHERS HARRIMAN & CO.

By: _____________________________
Name:
Title:

WATTS INDUSTRIES, INC., as Guarantor

By:______________________________
Name:
Title:

                                                                            Fiscal year ended June 30
                                                                      1996             1995              1994
                                                                ---------------   ---------------   ---------------

Average shares outstanding:
  Class A Common Stock, par value $.10                                18,161            18,118           17,969
  Class B Common Stock, par value $.10                                11,366            11,448           11,488
Net effect of dilutive stock options--based
  upon treasury stock method using ending
  market price, if higher than average price                               0               189              260
                                                                ---------------   ---------------   ---------------

Total                                                                 29,527            29,755           29,717
                                                                ===============   ===============   ===============

Income (loss) from continuing operations                            ($53,765)          $42,463          $39,400
Income from discontinued operations                                    3,480             3,275            1,610
                                                                ===============   ===============   ===============
Net income (loss)                                                   ($50,285)           $45,738          $41,010
                                                                ===============   ===============   ===============

Income (loss) per Common Share:

  Income (loss) from continuing operations                            ($1.82)            $1.43            $1.33
  Income from discontinued operations                                   0.12              0.11             0.05
                                                                ===============   ===============   ===============
Net income (loss)                                                     ($1.70)            $1.54            $1.38
                                                                ===============   ===============   ===============

EXHIBIT 21

Exhibit 21

DIRECT AND INDIRECT SUBSIDIARIES OF WATTS INDUSTRIES, INC.

AS OF 8/15/96

DOMESTIC:

Watts International Sales Corp. [Massachusetts] Watts Investment Company [Delaware]
Watts Regulator Company [Massachusetts]
Watts Securities Corp. [Massachusetts]
Circle Seal Controls, Inc. [Delaware]
Green Country Castings, Inc. [Oklahoma]
Henry Pratt Company [Delaware]
James Jones Company [California]
KF Industries, Inc. [Oklahoma]
KF Sales Corp. [Delaware]
Rudolph Labranche, Inc. [New Hampshire]
Leslie Controls, Inc. [New Jersey]
Nicholson Steam Trap, Inc. [Delaware]
Spence Engineering Company, Inc. [Delaware] Ancon U.S.A., Inc. [Delaware]
Anderson-Barrows Metals Corp. [California] Jameco Acquisition Corp. [Delaware]
Jameco Industries, Inc. [New York]
R.G. Laurence Company, Inc. [New Jersey] Webster Valve, Inc. [New Hampshire]

INTERNATIONAL:

Watts Industries (Canada) Inc. [Canada]
Watts Investment Company Canada Ltd. [Canada] Watts Industries Europe B.V. [The Netherlands] Watts Industries France S.A. [France]
Watts Industries Germany GmbH [Germany]
Wattsco International [U.S. Virgin Islands] Watts Ocean BV [The Netherlands]
Societe des Etablissements Rene TRUBERT SA [France] Watts SFR SA [France]
Watts UK Ltd. [United Kingdom]
Edward Barber & Co. Ltd. [United Kingdom] Edward Barber (UK) Ltd. [United Kingdom] G.R.C. Controls SA [Spain]
HST AG [Switzerland]
HST GmbH [Austria]
Intermes SpA [Italy]
Intermes UK Ltd [United Kingdom]

KF Industries Europe BV [The Netherlands] Kingsworth Products Ltd. [United Kingdom] Leslie International V.I. [Virgin Islands] M.T.R GmbH [Germany]
Artec GmbH [Germany]
Ocean B.V. [The Netherlands]
Pibiviesse SpA [Italy]
Philabel BV [The Netherlands]
Watts AG [Switzerland]
Watts Ocean NV [Belgian]
Jameco Export Sales Corporation [U.S. Virgin Islands] WIG Armaturen Vertriebs, GmbH [Germany]
WSA Heizungs und Sanitartechnik GmbH [Germnay] WIC Verwaltungs und Beteiligungs GmbH [Germany] Londa SpA [Italy]
ISI SpA [Italy]

In addition to the foregoing, the Company holds an 80% interest in De Martin Srl
[Italy], a 60% interest in Tianjin Tanggu Watts Valve Company Limited, a Chinese joint venture, and a 60% interest in Suzhou Watts Valve Co., Ltd., a Chinese joint venture.

EXHIBIT 23.1

Exhibit 23.1--Consent of Ernst & Young, LLP Independent Auditors

We consent to the incorporation by reference in the Registration Statements (Post-Effective Amendment No. 1 to Form S-8 No. 33-30377) pertaining to the 1986 Incentive Stock Option Plan, (Form S-8 No. 33-37926) pertaining to the Nonqualified Stock Option Plan, (Form S-8 No. 33-69422) pertaining to the 1991 Non-Employee Directors' Nonqualified Stock Option Plan of Watts Industries, Inc. and (Form S-8 No. 33-64627) pertaining to the Watts Industries, Inc. Management Stock Purchase Plan, and in the related Prospectuses of our report dated August 6, 1996, with respect to the consolidated financial statements included in this Annual Report (Form 10-K) of Watts Industries, Inc.

ERNST & YOUNG LLP

Boston, Massachusetts
September 9, 1996

EXHIBIT 23.2

Kanaalpark 143      Telephone: +31 71 5352352
2321 JV Leiden      Telefax:     +31 71 5352360
P.O. Box 402
2300 AK Leiden
The Netherlands

Date                      Reference
September 6, 1996         P.C. Spaargaren RA