AMENDMENT NUMBER FOUR

                             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; and

WHEREAS,  the Sponsoring  Employer desires to amend the Plan to reflect the sale
of Henry  Pratt  Company and James  Jones  Company and for other  administrative
matters.

NOW,  THEREFORE,  except  as  otherwise  provided,  the Plan is  hereby  amended
effective September 4, 1996 as follows:

1.    Section  1.16 of the Plan is amended by deleting  James Jones  Company and
      Henry Pratt Company from the list of entities  which are  considered to be
      an "Employer".

2.    Section  1.16 of the Plan is  amended  effective  July 1,  1996 by  adding
      Webster Valve,  Inc. to the list of entities which are considered to be an
      "Employer".

3.    Section  3.01(b)(ii) is amended by deleting that last sentence thereof and
      substituting the following in its place:

            "Service  for  benefit  accrual  purposes  shall  begin  on or after
            January 1, 1987 and shall end on the earlier of September 4, 1996 or
            the date a Participant terminates his Service."

4.    Section 3.01(b)(viii) is amended by deleting the last sentence thereof and
      substituting the following in its place:

             "Service  for  benefit  accrual  purposes  shall  begin on or after
            October 1, 1993 and shall end on the earlier of September 4, 1996 or
            the date a Participant terminates his Service."

5.  Section  6.02 is amended by adding the  following  new  paragraph to the end
thereof:

      (c)   Effective  September  4, 1996, a  Participant  who is an Employee of
            Henry Pratt  Company of James  Jones  Company on  September  4, 1996
            shall be 100%  vested and shall be  entitled  to a  deferred  vested
            benefit  commencing  on his  Normal  Retirement



            Date equal to his Accrued Normal  Retirement  Benefit  determined in
            accordance with the provisions of Section 6.021(c).

6.    Effective January 1, 1996, Section 2.05 is amended by adding the following
      sentence to the end thereof:

            "During any computation period in which an Eligible Employee's Hours
            of Service  cannot be  determined,  the Eligible  Employee  shall be
            credited with 190 Hours of Service for each month during such period
            in which he or she completes one Hour of Service."

7.    Section 5.032, as amended by Amendment  Number One, is hereby clarified by
      deleting the third  paragraph  thereof and  inserting the following in its
      place:

            "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 an amount  equal to the sum of his or her Accrued  Benefit
            determined  as of  December  31,  1993 plus an  amount  equal to the
            Participant's  Accrued  Benefit  determined in  accordance  with the
            provisions of this Section  5.032 based on Years of Benefit  Service
            earned by the Participant after December 31, 1993."


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


                             WATTS INDUSTRIES, INC.


                     By:___________________________________