As filed with the Securities and Exchange Commission on November 29, 1995
Registration Statement No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
WATTS INDUSTRIES, INC.
(Exact name of Registrant as Specified in Its Charter)
Delaware 04-2916536
(State of Incorporation) (I.R.S. Employer Identification #)
815 Chestnut Street
North Andover, MA 01845
(508) 688-1811
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
WATTS INDUSTRIES, INC. MANAGEMENT STOCK PURCHASE PLAN
(Full Title of the Plan)
Thomas J. White, Esq.
Corporate Attorney
Watts Industries, Inc
815 Chestnut Street
North Andover, MA 01845
(508) 688-1811
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
With copy to:
_____________
John R. LeClaire, P.C.
Goodwin, Procter & Hoar
Exchange Place
53 State Street
Boston, Massachusetts 02109-2881
(617) 570-1000
CALCULATION OF REGISTRATION FEE
Title of Amount to be Proposed Proposed Amount of
Securities Being Registered (1) Maximum Maximum Registration
Registered Offering Price Aggregate Fee
Per Share Offering Price
Class A Common 1,000,000 $22.1875 (2) $22,187,500 $7,650.86
Stock, $.10 par shares
value
(1) Plus such additional number of shares as may be required pursuant to
the Watts Industries, Inc Management Stock Purchase Plan in the event
of a stock dividend, stock split or similar change in capitalization
affecting the Class A Common Stock of the Registrant.
(2) This estimate is made pursuant to Rule 457(c) and (h) under the
Securities Act of 1933, as amended (the "Securities Act"), solely for
the purpose of determining the amount of the registration fee and is
based upon the average of the high and low prices for the Registrant's
Class A Common Stock, $.10 par value per share, as reported on the New
York Stock Exchange on November 24, 1995.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
Watts Industries, Inc. (the "Company") hereby incorporates by
reference the following documents which have previously been
filed with the Securities and Exchange Commission (the
"Commission"):
(a) The Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1995; and
(b) The Company's Annual Report on Form10-K for the
fiscal year ended June 30, 1995.
(c) The description of the Company's Class A Common Stock,
$.10 par value per share, contained in the Company's
registration statement on Form 8-A dated June 22, 1995, filed
with the Securities and Exchange Commission pursuant to
Section 12 of the Exchange Act of 1934, as amended ("the
Exchange Act"), and any amendments or reports filed for the
purpose of updating such description.
In addition, all documents subsequently filed with the
Securities and Exchange Commission by the Company pursuant to
Sections 13(a) and 13(c), Section 14 and Section 15(d) of the
Exchange Act, prior to the filing of a posteffective amendment
hereto that indicates that all securities offered hereunder have
been sold or that deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of
filing of such documents.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
Under Section 145 of the Delaware General Corporation Law, as
amended (the "DGCL"), the Company has the power to indemnify
directors and officers under certain prescribed circumstances and
subject to certain limitations against certain costs and
expenses, including attorneys' fees actually and reasonably
incurred in connection with any action, suit or proceeding,
whether civil, criminal, administrative or investigative, to
which any of them is a party by reason of his or her being a
director or officer of the Company if it is determined that he or
she acted in accordance with the applicable standard of conduct
set forth in such statutory provisions.
Section102(b)(7) of the DGCL provides that a certificate of
incorporation may contain a provision eliminating or limiting the
personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as
a director provided that such provision shall not eliminate or
limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the DGCL, or (iv) for any
transaction from which the director derived an improper personal
benefit.
Article TENTH of the Company's Restated Certificate of
Incorporation, as amended, states that:
No director of the Company shall be personally liable to the
Company or its stockholders for monetary damages for breach of
fiduciary duty as a director; provided, however, that the
foregoing clause shall not apply to any liability of a director
(i)for any breach of the director's duty of loyalty to the
Company or its stockholders, (ii)for acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law, (iii)under Section 174 of the General
Corporation Law of the State of Delaware, or (iv)for any
transaction from which the director derived an improper personal
benefit. This Article shall not eliminate or limit the liability
of a director for any act or omission occurring prior to the
effective date of this Restated Certificate of Incorporation
under the laws of the State of Delaware.
Article V of the Company's By-laws provides that the Company
shall indemnify, to the fullest extent permitted by the General
Corporation Law of the State of Delaware (as presently in effect
or as hereafter amended):
Any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action or
suit by or in the right of the Company) by reason of the
fact that he is or was a director or officer of the
Company, or is or was serving at the request of the
Company as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such suit,
action or proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to
the best interests of the Company, and, with respect to
any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act
in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of
the Companyor, with respect to any criminal action or
proceeding, that the person had reasonable cause to
believe that his conduct was unlawful.
Any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed
action or suit by or in the right of the Company to
procure a judgment in its favor by reason of the fact
that he is or was a director or officer of the Company,
or is or was serving at the request of the Company as a
director or officer of another corporation, partnership,
joint venture, trust or other enterprise, against
expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense
or settlement of such action or suit if he acted in good
faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Company and
except that no indemnification shall be made in respect
of any claim, issue or matter as to which such person
shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Company
unless, and only to the extent that, the Court of
Chancery of the State of Delaware or the court in which
such action or suit was brought shall determine upon
application that, despite the adjudication of liability
but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for
such expenses which the Court of Chancery or such other
court shall deem proper.
To the extent that a director or officer of the
Company has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in
the two immediately preceding paragraphs, or in defense
of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection
therewith.
Article V of the Company's By-laws also authorizes the Board
of Directors of the Company, in its discretion to indemnify:
Any person who was or is a party or is threatened to
be made a party to any threatened pending or completed
action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by
or in the right of the Company) by reason of the fact
that he is or was an employee or agent of the Company, or
is or was serving at the request of the Company as a
director or as an employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not
opposed to the best interests of the Company and, with
respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act
in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of
the Company or, with respect to any criminal action or
proceeding, that the person had reasonable cause to
believe that his conduct was unlawful.
Any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed
action or suit by or in the right of the Company to
procure a judgment in its favor by reason of the fact
that he is or was an employee or agent of the Company, or
is or was serving at the request of the Company as a
employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against
expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense
or settlement of such action or suit if he acted in good
faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Company and
except that no indemnification shall be made in respect
of any claim, issue or matter as to which such person
shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Company
unless, and only to the extent that, the Court of
Chancery of the State of Delaware or the court in which
such action or suit was brought shall determine upon
application that, despite the adjudication of liability
but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnify for
such expenses which the Court of Chancery or such other
court shall deem proper.
Article V of the Company's By-laws also includes certain
provisions relating to the scope of the indemnification for
officers and directors of the Company and the procedures for
determining entitlement to indemnification:
Determination of Entitlement. Any indemnification
pursuant to Article V (unless required by law or ordered
by a court) shall be made by the Company only as
authorized in the specific case upon a determination that
indemnification of the director, officer, employee or
agent is proper in the circumstances because he has met
the applicable standard of conduct set forth in Section1
of ArticleV. Such determination shall be made (a) by the
Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to such
action, suit or proceeding, or (b) if such a quorum is
not obtainable, or, even if obtainable a quorum of
disinterested directors so directs, by independent legal
counsel in a written opinion, or (c) by the stockholders
of the Company.
Advance Payments. Expenses incurred in defending a
civil or criminal action, suit or proceeding may be paid
by the Company in advance of the final disposition of
such action, suit or proceeding, only as authorized by
the Board of Directors in the specific case (including by
one or more directors who may be parties to such action,
suit or proceeding), upon receipt of an undertaking by or
on behalf of the director, officer, employee or agent to
repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified by the
Company as authorized in ArticleV.
Non-Exclusive Nature of Indemnification. The
indemnification provided in Article V shall not be deemed
exclusive of any other rights to which any person,
whether or not entitled to be indemnified hereunder, may
be entitled under any statute, by-law, agreement, vote of
stockholders or directors or otherwise, both as to action
in his official capacity and as to action in another
capacity while holding such office, and shall continue as
to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
Each person who is or becomes a director or officer as
aforesaid shall be deemed to have served or to have
continued to serve in such capacity in reliance upon the
indemnity provided for in ArticleV.
Insurance. To the extent obtainable, the Company may
purchase and maintain insurance with reasonable limits on
behalf of any person who is or was a director, officer,
employee or agent of the Company, or is or was serving at
the request of the Company as a director, officer,
employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any
liability asserted against such person and incurred by
such person in any such capacity, or arising out of such
person's status as such, whether or not the Company would
have the power to indemnify such person against such
liability under the provisions of the General Corporation
Law of the State of Delaware (as presently in effect or
hereafter amended), the Restated Certificate of
Incorporation or these By-laws.
No Duplicate Payments. The Company's indemnification
under Section1 of ArticleV of any person who is or was a
director, officer, employee or agent of the Company, or
is or was serving at the request of the Company as a
director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise, shall be reduced by any amounts such person
receives as indemnification (i) under any policy of
insurance purchased and maintained on such person's
behalf by the Company, (ii) from such other Company,
partnership, joint venture, trust or other enterprise, or
(iii) under any other applicable indemnification
provision.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following is a complete list of exhibits filed or
incorporated by reference as part of this registration statement.
Exhibit
4.1 Restated Certificate of Incorporation, as amended, of
the Company (1)
4.2 Amended and Restated By-laws of the Company (2)
4.3 Watts Industries, Inc. Management Stock Purchase Plan
5.1 Opinion of Goodwin, Procter & Hoar as to the legality
of the securities being registered
23.1 Consent of Goodwin, Procter & Hoar (included in
Exhibit 5.1 to this Registration Statement)
23.2 Consent of Ernst & Young LLP, Independent Auditors
23.3 Consent of Deloitte & Touche, Independent Auditors
24.1 Powers of Attorney (included on signature page to this
registration statement)
_____________________
(1) Incorporated by reference to the relevant exhibit to the
Company's Annual Report on Form 10-K filed with the
Commission on September 28, 1995.
(2) Incorporated by reference to the relevant exhibit to the
Company's Current Report on Form 8-K filed with the
Commission on May 15, 1992.
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a posteffective amendment to this
registration statement;
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any
facts or events arising after the effective date of the
registration statement (or the most recent post-
effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar
value of securities offered would not exceed that which
was registered) and any deviation from the low or high
end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set
forth in "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To include any material information
with respect to the plan of distribution not previously
disclosed in the registration statement or any material
change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) herein do not apply if the information
required to be included in a posteffective amendment by
those paragraphs is contained in periodic reports filed
by the undersigned registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated
by reference in the registration statement;
(2) That, for the purpose of determining any
liability under the Securities Act, each such posteffective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) To remove from registration by means of a
posteffective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that,
for purposes of determining any liability under the
Securities Act, each filing of the registrant's annual
report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of
the Exchange Act) that is incorporated by reference in
the registration statement shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors,
officers and controlling persons of the registrant pursuant
to the foregoing provisions, or otherwise, the registrant has
been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Securities Act, and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
Watts Industries, Inc. certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on
Form S-8 and has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of North Andover, Commonwealth of
Massachusetts, on this 29th day of November, 1995.
WATTS INDUSTRIES, INC.
By: /s/ Timothy P. Horne
Timothy P. Horne, Chairman of the Board,
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned
officers and directors of Watts Industries, Inc. hereby severally
constitute and appoint Timothy P. Horne and Kenneth J. McAvoy,
and each of them singly, our true and lawful attorneys with full
power to them, and each of them singly, to sign for us and in our
names in the capacities indicated below, the Registration
Statement on FormS-8 filed herewith and any and all amendments to
said Registration Statement, and generally to do all such things
in our names and in our capacities as officers and directors to
enable Watts Industries, Inc. to comply with the provisions of
the Securities Act of 1933, and all requirements of the
Securities and Exchange Commission, hereby ratifying and
confirming our signatures as they may be signed by our said
attorneys, or any of them, to said Registration Statement and any
and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following
persons in the capacities and on the dates indicated.
Signature Title Date
/s/ Timothy P. Horne Chairman of the Board, President November 29, 1995
Timothy P. Horne and Chief Executive Officer
/s/ Kenneth J. McAvoy Chief Financial Officer November 29, 1995
Kenneth J. McAvoy and Treasurer, Secretary
and Director
/s/ David A. Bloss, Sr. Executive Vice President and November 29, 1995
David A. Bloss, Sr. Director
/s/ Frederic B. Horne Corporate Vice President and November 29, 1995
Frederic B. Horne Director
/s/ Noah T. Herndon Director November 29, 1995
Noah T. Herndon
/s/ Wendy E. Lane Director November 29, 1995
Wendy E. Lane
/s/ Gordon W. Moran Director November 29, 1995
Gordon W. Moran
/s/ Daniel J. Murphy, III Director November 29, 1995
Daniel J. Murphy, III
EXHIBIT INDEX
Exhibit No. Description Page*
4.1 Restated Certificate of Incorporation, as amended, of the Company (1)
4.2 Amended and Restated By-laws of the Company (2)
4.3 Watts Industries, Inc. Management Stock Purchase Plan
5.1 Opinion of Goodwin, Procter & Hoar as to the legality of
the securities being registered
23.1 Consent of Goodwin, Procter & Hoar (included in
Exhibit 5.1 hereto)
23.2 Consent of Ernst & Young LLP, Independent Auditors
23.3 Consent of Deloitte & Touche, Independent Auditors
24.1 Powers of Attorney (included on signature page to this
registration statement)
__________________________
(1) Incorporated by reference to the relevant exhibit to the
Company's Annual Report on Form 10-K filed with the Commission
on September 28, 1995.
(2) Incorporated by reference to the relevant exhibit to the
Company's Current Report on Form 8-K filed with the Commission
on May 15, 1992.
* Refers to sequentially numbered copy.
222290.c3
WATTS INDUSTRIES, INC.
MANAGEMENT STOCK PURCHASE PLAN
I. INTRODUCTION
The purpose of the Watts Industries, Inc. Management
Stock Purchase Plan (the "Plan") is to provide equity
incentive compensation to selected management employees of
Watts Industries, Inc. (the "Company") and its subsidiaries.
Participants in the Plan may elect to receive restricted
stock units ("RSUs") in lieu of all or a portion of their
annual incentive bonus and, in some circumstances, make
after-tax contributions in exchange for RSUs. Each RSU
represents the right to receive one share of the Company's
Class A Common Stock (the "Stock") upon the terms and
conditions stated herein. RSUs are granted at a discount of
25% from the fair market value of the Stock on the date of
grant. So long as the participant remains employed by the
Company for at least three years after the date of grant,
his or her RSUs will be settled in shares of Stock after a
period of deferral selected by the participant, or upon
termination of employment, if earlier.
II. ADMINISTRATION
The Plan shall be administered by the Stock Option and
Compensation Committee of the Board of Directors of the
Company (the "Committee"). Each member of the Committee
shall be a "disinterested person" within the meaning of Rule
16b-3(c)(2)(i) promulgated under the Securities Exchange Act
of 1934, as amended (the "Act"). The Committee shall have
complete discretion and authority with respect to the Plan
and its application, except as expressly limited herein.
Determinations by the Committee shall be final and binding
on all parties with respect to all matters relating to the
Plan.
III. ELIGIBILITY
Management employees of the Company and its
subsidiaries as designated by the Committee shall be
eligible to participate in the Plan.
IV. PARTICIPATION
A. Restricted Stock Units. Participation in the Plan
shall be based on the award of RSUs. Each RSU awarded to a
participant shall be credited to a bookkeeping account
established and maintained for that participant.
B. Valuation of RSUs; Fair Market Value of Stock.
The value of each RSU, for purposes of the Plan, shall be
determined as follows: 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. The "Value" of each RSU shall be
equal to its Cost plus simple interest per annum on such
amount at the one-year U.S. Treasury Bill rate (as published
in The Wall Street Journal) in effect on the award date and
each anniversary thereof. For all purposes of the Plan, the
"fair market value of the Stock" on any given date shall
mean the last reported sale price at which Stock is traded
on such date or, if no Stock is traded on such date, the
most recent date on which Stock was traded, as reflected on
the New York Stock Exchange.
C. Election to Participate. Each year, each
participant may elect to receive an award of RSUs under the
Plan during the subsequent calendar year by completing a
Bonus Deferral and RSU Subscription Agreement ("Subscription
Agreement"). The Subscription Agreement shall provide that
the participant elects to receive RSUs in lieu of a
specified portion of any annual incentive bonus. Such
portion may be expressed as either (1) a specified
percentage of the participant's actual bonus amount; (2) the
lesser of a specified percentage or a specified dollar
amount of the participant's actual bonus amount; or (3) a
specified dollar amount, up to 100% of the participant's
targeted maximum bonus. Any dollar amount specified must be
at least $1,000; and any percentage specified must be at
least 10% and not more than 100%. Amounts specified
pursuant to methods (1) and (2) are entirely contingent on
the amount of bonus actually awarded. Where the participant
specifies a fixed dollar amount pursuant to method (3),
however, the Subscription Agreement shall provide that, if
the specified dollar amount exceeds the actual bonus amount
awarded, the participant undertakes to pay the excess, in
cash or by check, to the Company within five days after the
date the participant receives notice of the bonus amount.
Each Subscription Agreement, in addition, shall specify a
deferral period for the RSUs to which it pertains. The
deferral period shall be expressed as a number of whole
years, not less than three, beginning on the award date.
Subscription Agreements must be received by the Company no
later than December 31 of the fiscal year for which such
bonus amount will be determined. A participant who is not
subject to the short-swing profits rule of Section 16 of the
Act may revise his or her Subscription Agreement with
respect to the amount of elected RSUs no later than June 1
of the fiscal year for which such bonus amount will be
determined.
D. Award of RSUs. Once each year, on the date that
annual incentive bonuses are paid or would otherwise be
paid, the Company shall award RSUs to each participant as
follows: Each participant's account shall be credited with
a whole number of RSUs determined by dividing the amount
(expressed in dollars) that is determined under his or her
Subscription Agreement by the Cost of each RSU awarded on
such date. No fractional RSU will be credited and the
amount equivalent in value to the fractional RSU will be
paid out to the participant currently in cash.
V. VESTING AND SETTLEMENT OF RSUs
A. Vesting. A participant shall be fully vested in
each RSU three years after the date such RSU was awarded.
B. Settlement After Vesting. With respect to each
vested RSU, the Company shall issue to the participant one
share of Stock at the end of the deferral period specified
in the participant's Subscription Agreement pertaining to
such RSU, or upon the participant's termination of
employment or the termination of the Plan, if sooner.
C. Settlement Prior to Vesting.
1. Voluntary Termination. If a participant
voluntarily terminates his/her employment with the
Company for reasons other than death or permanent
disability, the participant's nonvested RSUs shall be
canceled and he or she shall receive a cash payment
equal to the lesser of (a) the Value of such RSUs or
(b) an amount equal to the number of such RSUs
multiplied by the fair market value of the Stock on the
date of the participant's termination of employment.
2. Involuntary Termination. If a participant's
employment is terminated by the Company, or if the
participant's employment terminates as a result of
death or permanent disability, the participant's
nonvested RSUs shall be canceled and he or she shall
receive payment as follows: The number of nonvested
RSUs awarded on each award date shall be multiplied by
a fraction that is equal to the number of full years
that the participant was employed by the Company after
each such award date divided by three and the
participant shall receive the resulting number of such
RSUs in shares of Stock. With respect to the
participant's remaining nonvested RSUs, the participant
shall receive cash in an amount equal to the lesser of
(a) the Value of such RSUs or (b) an amount equal to
the number of such RSUs multiplied by the fair market
value of the Stock on the date of the participant's
termination of employment.
3. Committee's Discretion. The Committee shall have
complete discretion to determine the circumstances of a
participant's termination of employment, including
whether the same results from voluntary termination,
permanent disability or termination by the Company, and
the Committee's determination shall be final and
binding on all parties and not subject to review or
challenge by any participant or other person.
VI. DIVIDEND EQUIVALENT AMOUNTS
Whenever dividends (other than dividends payable only
in shares of Stock) are paid with respect to Stock, each
participant shall be paid an amount in cash equal to the
number of his or her vested RSUs multiplied by the dividend
value per share. In addition, each participant's account
shall be credited with an amount equal to the number of such
participant's nonvested RSUs multiplied by the dividend
value per share. Amounts credited with respect to each
nonvested RSU shall be paid, without interest, on the date
the participant becomes vested in such RSU, or when the
participant receives payment of his or her nonvested RSUs
pursuant to Subsection V.(C).
VII. DESIGNATION OF BENEFICIARY
A participant may designate one or more beneficiaries
to receive payments or shares of Stock in the event of
his/her death. A designation of beneficiary shall apply to
a specified percentage of a participant's entire interest in
the Plan. Such designation, or any change therein, must be
in writing and shall be effective upon receipt by the
Company. If there is no effective designation of
beneficiary, or if no beneficiary survives the participant,
the participant's estate shall be deemed to be the
beneficiary.
VIII. SHARES ISSUABLE; MAXIMUM NUMBER OF RSUs;
ADJUSTMENTS
A. Shares Issuable. The aggregate maximum number of
shares of Stock reserved and available for issuance under
the Plan shall be 1,000,000. For purposes of this
limitation, the shares of Stock underlying any RSUs that are
canceled shall be added back to the shares of Stock
available for issuance under the Plan. Shares subject to
the Plan are authorized but unissued shares or shares that
were once issued and subsequently re-acquired by the
Company.
B. Adjustments. In the event of a stock dividend,
stock split or similar change in capitalization affecting
the Stock, the Committee shall make appropriate adjustments
in (i) the number and kind of shares of Stock or securities
with respect to which RSUs shall thereafter be granted, (ii)
the number and kind of shares remaining subject to
outstanding RSUs; (iii) the number of RSUs credited to each
participant's account; and (iv) the method of determining
the value of RSUs. In the event of any proposed merger,
consolidation, sale, dissolution or liquidation of the
Company, all non-vested RSUs shall become fully vested upon
the effective date of such merger, consolidation, sale,
dissolution or liquidation and the Committee in its sole
discretion may, as to any outstanding RSUs, make such
substitution or adjustment in the aggregate number of shares
reserved for issuance under the Plan and the number of
shares subject to such RSUs as it may determine on an
equitable basis and as may be permitted by the terms of such
transaction, or terminate such RSUs upon such terms and
conditions as it shall provide. In the case of the
termination of any vested RSU, the Committee shall provide
payment or other consideration which the Committee deems
equitable in the circumstances.
IX. AMENDMENT OR TERMINATION OF PLAN
The Company reserves the right to amend or terminate
the Plan at any time, by action of its Board of Directors,
provided that no such action shall adversely affect a
participant's rights under the Plan with respect to RSUs
awarded and vested before the date of such action, and
provided, further, that Plan amendments shall be subject to
approval by the Company's shareholders to the extent
required by the Act to ensure that awards are exempt under
Rule 16b-3 promulgated under the Act.
X. MISCELLANEOUS PROVISIONS
A. No Distribution; Compliance with Legal
Requirements. The Committee may require each person
acquiring shares of Stock under the Plan to represent to and
agree with the Company in writing that such person is
acquiring the shares without a view to distribution thereof.
No shares of Stock shall be issued until all applicable
securities law and other legal and stock exchange
requirements have been satisfied. The Committee may require
the placing of such stop-orders and restrictive legends on
certificates for Stock as it deems appropriate.
B. Withholding. Participation in the Plan is subject
to any required tax withholding on wages or other income of
the participant in connection with the Plan. Each
participant agrees, by entering the Plan, that the Company
shall have the right to deduct any such taxes, in its sole
discretion, from any amount payable to the participant under
the Plan or from any payment of any kind otherwise due to
the participant. Participants who wish to avoid the
withholding of shares of Stock otherwise issuable to them
under the Plan should arrange with the Company to pay the
amount of taxes required to be withheld in advance of the
settlement date.
C. Notices; Delivery of Stock Certificates. Any
notice required or permitted to be given by the Company or
the Committee pursuant to the Plan shall be deemed given
when personally delivered or deposited in the United States
mail, registered or certified, postage prepaid, addressed to
the participant at the last address shown for the
participant on the records of the Company. Delivery of
stock certificates to persons entitled to receive them under
the Plan shall be deemed effected for all purposes when the
Company or a share transfer agent of the Company shall have
deposited such certificates in the United States mail,
addressed to such person at his/her last known address on
file with the Company.
D. Nontransferability of Rights. During a
participant's lifetime, any payment or issuance of shares
under the Plan shall be made only to him/her. No RSU or
other interest under the Plan shall be subject in any manner
to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge, and any attempt by a
participant or any beneficiary under the Plan to do so shall
be void. No interest under the Plan shall in any manner be
liable for or subject to the debts, contracts, liabilities,
engagements or torts of a participant or beneficiary
entitled thereto.
E. Company's Obligations to Be Unfunded and
Unsecured. The Plan shall at all times be entirely
unfunded, and no provision shall at any time be made with
respect to segregating assets of the Company (including
Stock) for payment of any amounts or issuance of any shares
of Stock hereunder. No participant or other person shall
have any interest in any particular assets of the Company
(including Stock) by reason of the right to receive payment
under the Plan, and any participant or other person shall
have only the rights of a general unsecured creditor of the
Company with respect to any rights under the Plan.
F. Governing Law. The terms of the Plan shall be
governed, construed, administered and regulated in
accordance with the laws of the Commonwealth of
Massachusetts. In the event any provision of this Plan
shall be determined to be illegal or invalid for any reason,
the other provisions shall continue in full force and effect
as if such illegal or invalid provision had never been
included herein.
G. Effective Date of Plan. The Plan shall become
effective as of the date of its approval by the holders of a
majority of the shares of the Company's Class A Common Stock
and Class B Common Stock, voting as a single class, present
or represented and entitled to vote at a meeting of the
shareholders.
119535.b5
November 29, 1995
Watts Industries, Inc.
815 Chestnut Street
North Andover, MA 01845
Re: Watts Industries, Inc. Management Stock
Purchase Plan
Ladies and Gentlemen:
This opinion is furnished in connection with the
registration pursuant to the Securities Act of 1933, as
amended (the "Act"), of 1,000,000 shares (the "Shares") of
Class A Common Stock, par value $.10 per share (the "Class A
Common Stock"), of Watts Industries, Inc. (the "Company")
which may be issued pursuant to restricted stock units
granted under the Company's Management Stock Purchase Plan
(the "Plan").
We have acted as counsel to the Company in connection
with the registration of the Shares under the Act. We have
examined the Restated Certificate of Incorporation, as
amended, and the Amended and Restated By-laws of the
Company; such records of the corporate proceedings of the
Company as we deemed necessary; a registration statement on
Form S-8 under the Act relating to the Shares (the
"Registration Statement"); and such other certificates,
receipts, records and documents as we considered necessary
for the purposes of this opinion. We have assumed the
genuineness of all signatures, the conformity to the
originals of all documents reviewed by us as copies, the
authenticity and completeness of all original documents
reviewed by us in original form, and the legal competence of
each individual executing a document.
We are attorneys admitted to practice in the
Commonwealth of Massachusetts. We express no opinion
concerning the laws of any jurisdictions other than the laws
of the United States of America, the Commonwealth of
Massachusetts and the corporate laws of the State of
Delaware.
Based upon the foregoing, we are of the opinion that
upon the issuance and delivery of, and payment for, the
Shares in accordance with the terms of the Registration
Statement, the Plan and the Bonus Deferral and RSU
Subscription Agreements entered into pursuant to the Plan,
the Shares will be legally issued, fully paid and non-
assessable shares of the Company's Class A Common Stock.
The foregoing opinion assumes that all requisite steps
will be taken to comply with the requirements of the Act and
applicable requirements of state laws regulating the offer
and sale of securities. The foregoing opinion further
assumes that the purchase price paid for the Shares will be
in excess of the par value thereof.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement.
Very truly yours,
/s/ Goodwin, Procter & Hoar
GOODWIN, PROCTER & HOAR
223195.c3
Exhibit 23.2
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the
Registration Statement (Form S-8) and in the related
Prospectus pertaining to the Watts Industries, Inc.
Management Stock Purchase Plan of our reports dated August 8,
1995, with respect to the consolidated financial statements
of Watts Industries, Inc. incorporated by reference in its
Annual Report (Form 10-K) for the year ended June 30, 1995,
and the related financial statement schedule included
therein, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Boston, Massachusetts
November 27, 1995
Exhibit 23.3
Consent of Deloitte & Touche, Independent Auditors
We consent to the incorporation by reference in the
Registration Statement (Form S-8) and in the related
Prospectus pertaining to the Watts Industries, Inc.
Management Stock Purchase Plan of our reports dated August
8, 1995, with respect to the consolidated/combined financial
statements and financial statement schedules of Watts
Industries Europe B.V.
Leiden, The Netherlands, November 27, 1995
Deloitte & Touche
Registeraccountants
P.C. Spaargaren RA
