RE: COMPANY RESTRUCTURING

DATE: AUGUST 24, 2016

Over the past several months we have done some “soul searching” in an ongoing attempt to deliver a better customer experience and a more powerful brand.

In the past 12 months we have:

• Redesigned our website
• Introduced a new catalog complete with new Sutton and TOD collections
• Added new product categories: Actuator plates and Shower Door Pulls
• Debuted new 2016 hand out literature
• Started sending out an automatic open order report every Sunday
• Outlined new Dealer Commitment program

We are now in the midst of Phase I of one of our most ambitious overhauls and company revitalization in recent years. While there are many phases to this plan over several years, Phase 1 is outlined below. The main objective is to bring lead times down, make the catalog easier to use and create a more consistent message and experience to the A&D community regarding our designs and core competencies.

By 2018 the following collections will be discontinued (subject to change):

• Pret-A-Vive 26
• Buckingham 28
• Dania 96
• Lago 140
• Aqueduct 150
• Aqueduct 160
• Sarah 32
• Prestige 203
• Hampshire 310
• Kensington 319
• Country Club 204-2.15

By 2018 the following finishes will be discontinued (subject to change):

• Green patina (GP)
• Hammered copper (HCO)
• Hammered pewter (HPT)
• Matte white (MWH) – already discontinued
• Velvet chrome (VC)
• Velvet gold (VG)
• Velvet nickel (VN)
• Weathered bronze (WBR)
• Powder coatings will all be special order (the exceptions will be some popular accent pieces such as Red BK handles, Black and white H4 lever inserts, etc, which will be stocked)

By 2018, finishes will be categorized and priced according to lead time resulting in the most popular finishes shipping faster and priced better.

By 2018 we will have our own PVD machine allowing for all finishes to be done in-house. Effective immediately, we will not accept any new PVD orders for items in one of the soon to be discontinued collections listed above.
In early 2017 we will have the new ELEMENTS Collection ready to ship and will have a new part of our website devoted to highlighting the infinite combinations of this revolutionary collection.
By 2017 there will be no exceptions to the 2016 Commitment Letter that we had hoped to have signed by every Watermark dealer in 2016. The Commitment letter outlines the level of sales and displays required by any dealer to enjoy open account status and/or realize their sales multiplier. We understand that this will result in the termination of many currently open accounts, some with long term relationships, but as we continue to grow at unprecedented levels, it is the only way we can properly service those accounts that have made true commitments to Watermark. As previously stated in the current Commitment Letter, any request for exceptions will be “politely refused.” Likewise, any special display pricing considerations will be politely refused.
By 2017 we will have new finish samples/finish rings and programs for distribution to dealers, designers and home owners.

Avi Abel
Watermark Designs