AMENDMENT NO. 1

                             WATTS INDUSTRIES, INC.

                         MANAGEMENT STOCK PURCHASE PLAN

                                                            August 5, 1997


      The Watts Industries, Inc. Management Stock Purchase Plan ("Management
Plan") is hereby amended as follows:

1.    Article I. INTRODUCTION:

      Delete  "RSUs are granted at a discount of 25% from the fair market  value
of the Stock on the date of grant."  and  replace it with "RSUs are granted at a
discount of 33% from the fair market value of the Stock on the date of grant."

2. Article IV.  PARTICIPATION,  Sub-article  B.  Valuation of RSUs;  Fair Market
Value of Stock:

      Delete  "The  "Cost" of each RSU shall be equal to 75% of the fair  market
value of the Stock on the date the RSU is  awarded."  and  replace  it with "The
"Cost" of each RSU shall be equal to 67% of the fair  market  value of the Stock
on the date the RSU is awarded."

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

EXECUTED as of the date first set forth above.

                             Watts Industries, Inc.



                             By:___________________