AMENDMENT NO. 1 TO
AMENDED AND RESTATED
STOCK RESTRICTION AGREEMENT
AMENDMENT NO. 1 TO STOCK RESTRICTION AGREEMENT made as of August 26, 1997
by and among the undersigned, each of whom is a stockholder or beneficiary of a
trust stockholder (hereinafter individually referred to as a "Stockholder" and
collectively as the "Stockholders") of Watts Industries, Inc. (hereinafter
referred to as the "Company"), a corporation organized under the laws of the
State of Delaware.
WITNESSETH
WHEREAS, the shares of Class B Common Stock, par value $.10 per share, of
the Company (the "Class B Common Stock") owned or beneficially owned by the
undersigned are subject to a Stock Restriction Agreement dated as of October 31,
1991 (the "Existing Agreement"); and
WHEREAS, the parties hereto desire to amend certain provisions of the
Existing Agreement. NOW THEREFORE, in consideration of the mutual promises
herein contained, the parties hereto hereby amend the Existing Agreement as
follows:
1. Restatement of Section 7. Section 7 of the Existing Agreement is hereby
amended and restated in its entirety to read as follows:
"7. Exceptions to Restrictions
The restrictions set forth in this Agreement shall be inapplicable to:
a. transfers of Stock between any Stockholder and his guardian or
conservator;
b. transfers of Stock upon any Stockholder's death to his executors
or administrators or to the trustees under his will;
c. transfers of Stock among or between persons (if not individuals,
the beneficial interest(s) in which are owned by, and the
trustees or directors and officers of which are, an individual or
individuals) having a family relationship (i.e., a relationship
by blood, marriage or adoption) with Timothy P. Horne, Frederic
B. Horne or George B. Horne, including the estates of such
persons, or among or between any of such persons or estates and
the trustees under the Horne Family Voting Trust Agreement - 1991
or The George B. Horne Voting Trust Agreement - 1997, in each
case as the same may be amended, or any successor trust or trusts
formed by members of the Horne family; and
d. transfers of Stock (by redemption or otherwise) to the Company
upon the death of any person having a family relationship (as
defined in paragraph c) with Timothy P. Horne, Frederic B.
Horne or George B. Horne;
provided, however, that such Stock in the hands of each such transferee (except
the Company in connection with a transfer contemplated by clause d of this
Section 7) shall remain subject to this Agreement. In the event Stock is or is
to be transferred upon or as a result of death to any of the persons or entities
described in clauses a, b, c or d of this Section 7, Section 3 shall not apply
to such transfer, provided that such Stock shall remain subject to this
Agreement in the hands of the relevant transferee."
2. Schedule A. Schedule A to the Existing Agreement is hereby deleted and
replaced with Schedule A attached hereto, which replacement Schedule A reflects
the Stockholders who are parties to the Existing Agreement and the Stock subject
to the Existing Agreement as of the date of this Amendment.
3. Governing Law; Effect of Amendment
This Amendment shall be construed under and governed by the laws of the
State of Delaware. Except as amended hereby, the Existing Agreement shall remain
in full force and effect in accordance with its terms.
IN WITNESS WHEREOF, each of the undersigned has executed or caused this
Agreement to be duly executed as of the date first set forth above, in one or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute a single instrument executed under seal.
--------------------------
Timothy P. Horne
--------------------------
Frederic B. Horne
The Deborah Horne Trust - 1976
By: _______________________
Timothy P. Horne, as Trustee, and
his successors in trust and not
individually
The Daniel W. Horne Trust - 1980
By: _______________________
Timothy P. Horne, as Trustee, and
his successors in trust and not
individually
The Peter W. Horne Trust - 1976
By: _______________________
Frederic B. Horne, as Trustee, and
his successors in trust and not
individually
--------------------------
Deborah Horne
--------------------------
Daniel W. Horne
--------------------------
Peter W. Horne
The George B. Horne Trust - 1982
By: ______________________
George B. Horne, as Trustee, and
his successors in trust and not
individually
By: ______________________
Timothy P. Horne, as Trustee, and
his successors in trust and not
individually
--------------------------
George B. Horne
--------------------------
Tara V. Horne
- ----------------------------------- ----------------------------------
Timothy P. Horne, as Trustee of the George B. Horne, as Trustee of the
Grandchildren's Trust f/b/o Grandchildren's Trust f/b/o
Tara V. Horne Tara V. Horne
- ----------------------------------- ----------------------------------
Timothy P. Horne, as Trustee of the George B. Horne, as Trustee of the
Grandchildren's Trust f/b/o Grandchildren's Trust f/b/o
Tiffany R. Horne Tiffany R. Horne
- ----------------------------------- ----------------------------------
Frederic B. Horne, as Trustee of the George B. Horne, as Trustee of the
Grandchildren's Trust f/b/o Grandchildren's Trust f/b/o
Kristina M. Horne Kristina M. Horne
----------------------------------
Judith Rae Horne, as Trustee of the
Tiffany Rae Horne Trust--1984
ACKNOWLEDGED:
- -------------------------- ------------------------
Timothy P. Horne, as Trustee Frederic B. Horne, as Trustee
under the Horne Family Voting under the Horne Family Voting
Trust Agreement - 1991 dated Trust Agreement - 1991 dated
October 31, 1991, as the same October 31, 1991, as the same
may be amended, and his may be amended, and his
successors in trust successors in trust
- --------------------------
Timothy P. Horne, as Trustee
under the George B. Horne Voting
Trust Agreement - 1997 dated August __,
1997, as the same may be amended,
and his successors in trust.
SCHEDULE A TO AMENDMENT NO. 1
STOCK RESTRICTION AGREEMENT
Name of Stockholder Shares of Class B Common Stock
Timothy P. Horne 2,751,220**
Frederic B. Horne 1,865,323
Timothy P. Horne and George B. Horne, 2,104,600**
as Trustees of the George B. Horne 20,000
Trust - 1982
Timothy P. Horne as Trustee of The 1,335,840**
Daniel W. Horne Trust - 1980
Timothy P. Horne as Trustee of The 1,335,840**
Deborah Horne Trust - 1976
Frederic B. Horne as Trustee of The 1,235,840*
Peter W. Horne Trust - 1976
Timothy P. Horne and George B. Horne 30,200**
as Trustees of the Grandchildren's
1995 Irrevocable Trust f/b/o Tara V.
Horne
Timothy P. Horne and George B. Horne 22,600**
as Trustees of the Grandchildren's
1995 Irrevocable Trust f/b/o Tiffany
R. Horne
Frederic B. Horne and George B. Horne 22,600
as Trustees of the Grandchildren's
1995 Irrevocable Trust f/b/o Kristina
M. Horne
Tara V. Horne 50,000**
Judith Rae Horne as Trustee of the 50,000**
Tiffany Rae Horne Trust -1984
Frederic B. Horne as Custodian for 11,000
Kristina M. Horne under the
Massachusetts Uniform Gifts to Minors
Act
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* Shares are subject to the Horne Family Voting Trust Agreement - 1991 dated
as of October 31, 1991, as the same may be amended, the trustees of which
voting trust may be deemed the record holder of such shares.
** Shares are subject to The George B. Horne Voting Trust - 1997 dated as of
August __, 1997, as the same may be amended, the trustees of which voting
trust may be deemed the record holder of such shares.