UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of
Report (Date of earliest event reported): November
2, 2007
GRIFFON
CORPORATION
(Exact
Name of Company as Specified in Charter)
|
Delaware
|
1-6620
|
11-1893410
|
|
(State
or Other Jurisdiction of Incorporation)
|
(Commission
File Number)
|
(I.R.S.
Employer Identification Number)
|
|
100
Jericho Quadrangle
|
|
|
Jericho,
New York
|
11753
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(516)
938-5544
(Company’s
telephone number, including area code)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the Company under any of the following
provisions (see General Instruction A.2. below):
o
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule
14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
o
Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Executive
Officers
On
November 2, 2007, Eric P. Edelstein, Executive Vice President and Chief
Financial Officer of the Company, notified the Board of Directors of his
retirement. Mr. Edelstein will continue to serve as Executive Vice President
and
Chief Financial Officer until November 30, 2007.
On
November 2, 2007, the Board of Directors of the Company appointed, effective
November 30, 2007, Patrick L. Alesia (Age: 59) to serve as Chief Financial
Officer of the Company. Mr. Alesia has served as the Company’s Treasurer since
April 1979, its Vice President since May 1990 and its Secretary since February
2005. In March 2005, Mr. Alesia was also appointed the Company’s Ethics Officer.
In addition to his new responsibilities as Chief Financial Officer, Mr. Alesia
will continue to serve in his capacities as Treasurer and Secretary of the
Company.
On
November 2, 2007, the Board of Directors of the Company appointed, effective
November 30, 2007, Franklin H. Smith, Jr. (Age: 56) to serve as Executive Vice
President of the Company. Mr. Smith has served as the Chief Financial Officer
of
Clopay Corporation, a wholly-owned subsidiary of the Company, since 1998.
Mr.
Smith
entered into a Severance Agreement with the Company, dated November 2, 2007,
and
effective November 30, 2007 (the “Smith Agreement”). Mr. Alesia entered into a
Severance Agreement with the Company, dated July 18, 2006, as amended August
3,
2007 (the “Alesia Agreement” and together with the Smith Agreement, the
“Severance Agreements”). Set forth below is a summary of the pertinent terms of
the Severance Agreements. Messrs. Smith and Alesia are each sometimes referred
to herein individually as the “Executive” and collectively as the “Executives.”
The
Severance Agreements have an initial term expiring July 18, 2008, subject to
automatic renewal unless a party gives 120 days prior written notice to the
other of non-renewal; notwithstanding the foregoing, the Severance Agreements
shall not terminate if a change in control occurs during the term of the
Severance Agreements. During the term of their Severance Agreements, the
Executives have agreed to continue to perform their regular respective duties
as
an executive of the Company.
The
Severance Agreements provide that if within 24 months of a change in control
(as
defined in the Severance Agreements and summarized below) of the Company, the
Executive’s employment with the Company is terminated by the Company without
Cause or by the Executive for Good Reason (as such terms are defined in the
Severance Agreements), then the Executive will be entitled to, among other
things, a lump sum payment of 2.5 times his base salary plus the average of
the
bonuses received by the Executive in the prior three fiscal years. If any
payments or benefits payable to the Executive would be subject to the excise
tax
under Section 280G of the Internal Revenue Code (the “Code”), then such portion
of the Executive’s payments would be forfeited so that no such excise tax would
be incurred. All benefits payable under the Severance Agreements will be subject
to the six-month payment delay under Section 409A of the Code, if applicable,
at
the time of payment. Each Executive has agreed to a non-competition provision
that extends for 24 months post-termination.
2
Change
in
control is defined in the Severance Agreements to include, among other things,
the acquisition by a person or entity of more than 30% of the voting securities
of the Company, the current Board of Directors no longer constituting a majority
of the Board (directors approved by 2/3 of the Board will be considered a part
of the current Board), and certain merger or sale of assets
transactions.
The
above
is a brief summary of the Severance Agreements and does not purport to be
complete. Reference is made to the Severance Agreements for each Executive
for a
full description of its terms, a copy of each of which is attached hereto as
Exhibits 10.1 and 10.2 and 10.3, respectively, and incorporated herein by
reference.
Directors
Effective
November 2, 2007, Lester L. Wolff resigned as a member of the Board of Directors
of the Company. At the time of his resignation, Mr. Wolff served as a Class
I
director whose term of office expires at the Company’s annual meeting of
stockholders in 2008. Effective with Mr. Wolff’s resignation, the Board of
Directors determined that Ronald J. Kramer, a director of the Company currently
serving in Class II, shall serve as a Class I director to replace Mr.
Wolff.
On
November 2, 2007, upon the recommendation of the Nominating and Governance
Committee of the Board of Directors, the Board of Directors appointed Lieutenant
General Gordon E. Fornell and James A. Mitarotonda as members of the Board
of
Directors effective November 2, 2007, to fill the vacancy created by the
resignation of Mr. Wolff and to fill a newly created directorship resulting
from
the increase in the authorized number of directors on the Board from thirteen
to
fourteen. General Fornell and Mr. Mitarotonda were elected as Class II
directors, which class serves until the Company’s 2009 annual meeting of
stockholders. General Fornell and Mr. Mitarotonda will be submitted at the
Company’s 2008 annual meeting of stockholders as part of management’s slate for
election as members of the class of directors that will be up for re-election
at
the Company’s 2009 annual meeting.
General
Fornell, currently retired, served in the United States Air Force for over
35
years and his positions include having been the Commander of Electronic Systems
Division, Air Force Systems Command, Hanscom Air Force Base, Massachusetts,
and
Commander of the Armament Division at Elgin Air Force Base.
Mr.
Mitarotonda is the founder of and current Chairman of the Board, Chief Executive
Officer and President of Barington Capital Group, L.P., an investment
firm.
There
are
no transactions or series of transactions, since the beginning of the Company’s
last fiscal year, or any currently proposed transaction or series of
transactions to which the Company was or is to be a party, in which the amount
involved exceeds $120,000 and in which either General Fornell or Mr. Mitarotonda
had, or will have, a direct or indirect material interest.
3
As
non-employee directors of the Company, General Fornell and Mr. Mitarotonda
will
each receive an annual fee of $25,000 and a fee of $1,500 for each Board of
Directors meeting attended. In addition, under the Company’s Outside Director
Stock Award Plan, each non-employee director receives, at the time of the annual
meeting of stockholders each year, shares of the Company’s common stock having a
market value of $10,000.
A
copy of
the press release, dated November 2, 2007, announcing the foregoing changes
in
the executive officers and directors of the Company is attached hereto as
Exhibit 99.1.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
|
10.1.
|
Severance
Agreement, dated November 2, 2007, between the Company and Franklin
H.
Smith, Jr.
|
|
10.2.
|
Severance
Agreement, dated July 18, 2006, between the Company and Patrick L.
Alesia
(incorporated by reference to Exhibit 10.2 of the Company’s Current Report
on Form 8-K (filed on July 21,
2006)).
|
|
10.3.
|
Amendment
No. 1, dated August 3, 2007, to the Severance Agreement, dated July
18,
2006, between the Company and Patrick L. Alesia (incorporated by
reference
to Exhibit 10.2 of the Company’s Current Report on Form 8-K (filed on
August 6, 2007)).
|
| 99.1. | Press Release, dated November 2, 2007. |
4
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Company has
duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
| GRIFFON CORPORATION | ||
| |
|
|
| By: | /s/ Patrick L. Alesia | |
|
Name: Patrick L. Alesia |
||
| Title:Vice President, Treasurer and Secretary | ||
Date: November
7, 2007
5
Exhibit
Index
|
10.1.
|
Severance
Agreement, dated November 2, 2007, between the Company and Franklin
H.
Smith, Jr.
|
|
10.2.
|
Severance
Agreement, dated July 18, 2006, between the Company and Patrick L.
Alesia
(incorporated by reference to Exhibit 10.2 of the Company’s Current Report
on Form 8-K (filed on July 21,
2006)).
|
|
10.3.
|
Amendment
No. 1, dated August 3, 2007, to the Severance Agreement, dated July
18,
2006, between the Company and Patrick L. Alesia (incorporated by
reference
to Exhibit 10.2 of the Company’s Current Report on Form 8-K (filed on
August 6, 2007)).
|
| 99.1. | Press Release, dated November 2, 2007. |
6
Exhibit
10.1
SEVERANCE
AGREEMENT
THIS
SEVERANCE AGREEMENT
(this
“Agreement”), made and entered into as of November 2, 2007, which shall be
effective upon November 30, 2007 (“the Effective Date”), by and between Griffon
Corporation, a Delaware corporation, with its principal office located at 100
Jericho Quadrangle, Jericho, New York 11753 (hereinafter, together with its
subsidiaries, collectively referred to as “the Corporation”) and Frank Smith who
resides at 6555 Adams Avenue, Cincinnati, OH 45243 (hereinafter referred to
as
“the Executive”).
WITNESSETH:
WHEREAS,
the
Executive has had extensive experience in the business and affairs of the
Corporation and is a valuable member of the management team; and
WHEREAS,
the
Board of Directors of Griffon Corporation (the “Board”) has determined that it
is appropriate to reinforce the continued attention of certain key management
employees, including the Executive, to their assigned duties without distraction
if the possibility should arise of a change in control of the
Corporation;
NOW,
THEREFORE,
in
consideration of the mutual covenants and agreements hereinafter set forth,
the
parties hereto agree as follows:
1. EMPLOYMENT.
During
the term of this Agreement, the Executive agrees to remain in the employ of
the
Corporation and to continue to perform the Executive’s regular duties as an
executive of the Corporation.
2. CHANGE
IN CONTROL.
No
benefits shall be payable hereunder unless there shall have been a Change in
Control of the Corporation, as set forth below, and the Executive’s employment
by Griffon Corporation shall thereafter have been terminated in accordance
with
Section 3 hereof. For purposes of this Agreement, a “Change in Control” shall
mean the occurrence of any of the following events after the date of this
Agreement:
2.1 the
acquisition, directly or indirectly, by a “person” (within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended from time
to
time, including rules thereunder and successor provisions and rules thereto
(the
“Exchange Act”) (a “Person”) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of more than 30% of the combined
voting power of the voting securities of Griffon Corporation entitled to vote
generally in the election of directors (the “Voting Securities”); provided,
however, that the following acquisitions shall not constitute a Change in
Control: (a) any acquisition by or from Griffon Corporation or any corporation
or other entity in which the Griffon Corporation owns or controls directly
or
indirectly at least 50 percent of the total combined voting power represented
by
all classes of stock issued by such corporation, or in the case of a
noncorporate entity, at least 50% of the profits or capital interest in such
entity (a “Subsidiary,”) or by any employee benefit plan (or related trust)
sponsored or maintained by Griffon Corporation or any Subsidiary, (b) any
acquisition by an individual who as of the effective date of the Plan is a
member of the Board, (c) any acquisition by any underwriter in any firm
commitment underwriting of securities to be issued by Griffon Corporation,
or
(d) any acquisition by any corporation (or other entity) if, immediately
following such acquisition, 65% or more of the then outstanding shares of common
stock (or other equity unit) of such corporation (or other entity) and the
combined voting power of the then outstanding voting securities of such
corporation (or other entity), are beneficially owned, directly or indirectly,
by all or substantially all of the individuals or entities who, immediately
prior to such acquisition, were the beneficial owners of the then outstanding
Voting Securities in substantially the same proportions, respectively, as their
ownership immediately prior to the acquisition of the stock and Voting
Securities; or
2.2 the
following individuals cease for any reason to constitute a majority of the
Board: individuals who, as of the date of the this Agreement, constitute the
Board and any new director (other than a director whose initial assumption
of
office is in connection with an actual or threatened election contest,
including, but not limited to, a consent solicitation relating to the election
of directors of Griffon Corporation) whose appointment or election by the Board
or nomination for election by the stockholders of Griffon Corporation was
approved and recommended by a vote of at least two-thirds of the directors
then
still in office who either were directors on the effective date of the Plan
or
whose appointment, election or nomination for election was previously so
approved or recommended; or
2.3 the
consummation of the sale or other disposition of all or substantially all of
the
assets of Griffon Corporation, other than to an entity, at least 65% of the
Voting Securities of which are owned by Persons in substantially the same
proportions as their ownership of Griffon Corporation immediately prior to
such
sale; or
2.4 the
consummation of a merger, consolidation, statutory share exchange or similar
form of corporate transaction involving the Corporation or any of its
Subsidiaries that requires the approval of the Corporation's stockholders,
whether for such transaction or the issuance of securities in the transaction
(a
"Business Combination"), unless immediately following such Business Combination:
(i) more than 65% of the total voting power of (x) the corporation resulting
from such Business Combination (the "Surviving Corporation"), or (y) if
applicable, the ultimate parent corporation that directly or indirectly has
beneficial ownership of 100% of the voting securities eligible to elect
directors of the Surviving Corporation (the "Parent Corporation"), is
represented by Voting Securities that were outstanding immediately prior to
such
Business Combination (or, if applicable, is represented by shares into which
such Corporation Voting Securities were converted pursuant to such Business
Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Voting Securities
among the holders thereof immediately prior to the Business Combination;
or
-2-
2.5 the
consummation of a plan of complete liquidation or substantial dissolution of
Griffon Corporation, other than a liquidation or substantial dissolution, which
would result in the Voting Securities of the entity after such liquidation
or
dissolution, if any, continuing to represent (whether by remaining outstanding
or by being converted to voting securities of the surviving entity) 65% or
more
of the Voting Securities or the voting power of the voting securities of such
surviving entity outstanding immediately after such liquidation or dissolution,
and such voting power among the holders thereof is in substantially the same
proportion as the voting power of such Voting Securities among the holders
thereof immediately prior to the such liquidation or dissolution;
or
2.6 the
sale,
transfer, assignment, distribution or other disposition by Griffon Corporation
and/or one of its Subsidiaries, in one transaction, or in a series of related
transactions within any period of 18 consecutive calendar months (including,
without limitation, by means of the sale, transfer, assignment, distribution
or
other disposition of the capital stock of any Subsidiary or Subsidiaries),
of
assets which account for an aggregate of 50% or more of the consolidated
revenues of Griffon Corporation and the Subsidiaries of Griffon Corporation,
as
applicable, as determined in accordance with U.S. generally accepted accounting
principles, for the fiscal year most recently ended prior to the date of such
transaction (or, in the case of a series of transactions as described above,
the
first such transaction); provided, however, that no such transaction shall
be
taken into account if substantially all the proceeds thereof (whether in cash
or
in kind) are used after such transaction in the ongoing conduct by Griffon
Corporation and/or its Subsidiaries) of the business conducted by Griffon
Corporation and/or its Subsidiaries prior to such transaction.
3. TERMINATION
FOLLOWING A CHANGE IN CONTROL.
If any
of the events described in Section 2 hereof constituting a Change in Control
of
Griffon Corporation shall have occurred, the Executive, if terminated during
the
twenty four (24) months following such
Change in Control, shall be entitled to the benefits provided in Section 4
hereof, unless such termination is due to the Executive’s death or Disability,
or is by Griffon Corporation for Cause, or is by the Executive for other than
Good Reason. In the event that, upon the occurrence of a Change in Control,
the
Executive is eligible for retirement in accordance with the terms and conditions
of any applicable corporate retirement plan or program in effect immediately
preceding such Change in Control, the Executive’s eligibility for immediate
retirement benefits, and any request therefor, shall not preclude the
Executive’s receipt of severance benefits under Section 4 hereof as a result of
any termination without Cause or for Good Reason. For purposes of this
Agreement, the following definitions shall apply:
3.1 “Cause”
shall mean (i) the willful and continued failure by the Executive to
substantially perform the Executive’s duties (other than any such failure
resulting from incapacity due to physical or mental illness); or (ii) conviction
of a felony or acts of dishonesty resulting in gain or personal enrichment
at
the expense of the Corporation; or (iii) the Executive’s willful misconduct or
insubordination which is materially injurious to the Corporation. With respect
to (i) and (iii) “Cause” shall only be determined to exist until Griffon
Corporation presents written notice to the Executive specifically identifying
the alleged circumstances or actions giving rise to Cause (a “Cause Notice”),
and the Executive fails to correct such action or circumstances within 20 days
of receiving the Cause Notice. For purposes of this paragraph, no act or failure
to act on the Executive’s part shall be considered as willful unless done, or
omitted to be done, by the Executive not in good faith and without reasonable
belief that the action or omission was in the best interests of the
Corporation.
-3-
3.2 “Disability”
shall mean the illness or other mental or physical disability of the Executive,
as determined by a physician reasonably acceptable to the Corporation and the
Executive, resulting in the Executive’s failure to perform substantially all of
his applicable material duties for a period of six consecutive months and to
return to the performance of such duties within 30 days after receiving written
notice of termination.
3.3 “Good
Reason” shall mean (i) reduction in the Executive’s (then) current base salary
immediately preceding the Change in Control; (ii) diminution, reduction or
other
adverse change in the annual bonus opportunity or other incentive compensation
opportunities available to the Executive immediately preceding the Change in
Control; (iii) the Corporation’s failure to pay the Executive any amounts
otherwise earned, vested or due under any compensation plan or human resources
policy of the Corporation immediately preceding the Change in Control; (iv)
diminution of the Executive’s title, position, authority or responsibility; (v)
assignment to the Executive of duties incompatible with the position occupied
by
the Executive immediately preceding the Change in Control; (vi) a change in
the
organizational position to which the Executive directly reports; or (vii)
relocation of the Executive’s position to a location more than 35 miles from the
location to which the Executive was assigned immediately preceding the Change
in
Control.
4. CERTAIN
SEVERANCE BENEFITS ON TERMINATION.
If,
after any Change in Control (as defined herein) shall have occurred, the
Executive’s employment shall be terminated during the twenty-four (24) months
following the date of such Change in Control (i) by the Corporation other than
for death, Disability or Cause or (ii) by the Executive for Good Reason, the
Executive shall be entitled to certain severance benefits (hereinafter “the
Severance Benefits”) as provided below:
4.1 The
Corporation shall pay the Executive’s full base salary through the date of
termination at the rate which is the higher of the (then) current annual rate
or
the annual rate in effect immediately prior to the date of any Change in
Control. The Corporation shall also pay the Executive the amount, if any, of
any
unpaid earned annual bonus for the preceding fiscal year, as well as a pro
rata
portion of the higher of (i) the earned annual bonus for the preceding fiscal
year or (ii) the target or projected annual bonus for the fiscal year in which
the termination of employment occurs. In addition, the Corporation shall
continue in full force and effect through the date of termination the
Executive’s participation in all stock ownership, stock purchase or stock option
plans, all health and welfare benefit plans, and all insurance and disability
plans as may be in effect at the date of the Change in Control.
4.2 Subject
to Section 4.4 and 4.5 hereof, the Corporation shall pay as Severance Benefits
to the Executive on or before the fifth (5th) day following the date of
termination of employment, a lump sum payment (“the lump sum payment”) equal to
two and fifty one hundredths (2.50) times the sum of (i) the Executive’s base
salary at the rate which is the higher of the (then) current annual rate or
the
annual rate in effect immediately prior to the date of any Change in Control
and
(ii) the average of the annual bonuses received by the Executive for each of
the
last three fiscal years of the Corporation and its affiliates. Such lump sum
payment shall be subject to all applicable Federal, state and local income
and
FICA taxes including all required withholding amounts.
-4-
4.3 For
the
continued benefit of the Executive and the Executive’s eligible dependents, the
Corporation shall maintain in full force and effect until the earlier of (i)
December 31 of the second calendar year following the calendar year of
termination or (ii) the Executive’s commencement of full-time employment with a
new employer, at the same cost as is paid by similarly-situated continuing
employees all medical and health plans and programs for which the Executive
was
eligible immediately prior to the date of termination, provided that the
Executive’s continued participation is possible under the general terms and
provisions of such plans and programs, and subject further to such periodic
changes in such plans and programs as are generally applicable to all
participants in such plans and programs. Any such claims for reimbursement
of a
proper medical or health expense shall be paid as soon as administratively
feasible following the proper submission of such expense; provided however,
that
all such claims must be submitted and paid by the end of the year following
the
year in which such expense is incurred.
The
Executive will be responsible for any income tax liability arising out of any
continued participation in such health and medical plans and programs, and
notwithstanding the provision of this Section 4.3, no additional employment
service credits shall be given for the period of such continued
participation.
4.4 The
Severance Benefits to be provided to the Executive hereunder and all other
payments or benefits which are “parachute payments” (as defined in Section
280(G)(b)(2)(A) of the Code) payable to the Executive under other arrangements
or agreements (the “Total Payments”) shall be adjusted as set forth in this
Section 4.4. If the Total Payments as a result of any Change in Control would
(in the aggregate) result in an amount not being deductible under Code Section
280G or an excise tax under Section 4999, the Total Payments shall be reduced
to
the extent necessary so that the deductibility of the full amount of such
reduced Total Payments is not limited by Code Section 280G or such Total Payment
is not subject to an excise tax under Section 4999.
4.5 Notwithstanding
anything herein to the contrary, if any payments due under this Agreement would
subject Executive to any tax imposed under Section 409A of the “Code” if such
payments were made at the time otherwise provided herein, then the payments
that
cause such taxation shall be payable in a single lump sum on the first day
which
is at least six months after the date of the Executive’s “separation of service”
as set forth in Code Section 409A and the regulations issued
thereunder.
4.6 The
Executive shall not be required to mitigate or offset the amount of any
Severance Benefits or other benefits provided under this Section 4 by seeking
employment or otherwise, nor shall the amount of any payment provided under
this
Section 4 be reduced by any compensation earned by the Executive as the result
of employment by another employer after the date of termination from the
Corporation.
-5-
5. RESTRICTIVE
COVENANTS.
5.1 Executive
agrees at all times during Executive’s employment with the Corporation and at
all times thereafter (except as otherwise required by applicable law, regulation
or legal process) that Executive shall hold in strictest confidence and not
to
use for his own benefit or the benefit of any other person, or to disclose
to
any person without authorization from the Corporation, any Confidential
Information. “Confidential Information” means any and all confidential or
proprietary business information of the Corporation or its affiliates,
including, without limitation, information relating to the Corporation’s or its
affiliates’ trade secrets, software and technology architecture, networks,
business methodologies, facilities, financial and operational information,
contracts, customer lists, marketing or sales prospect lists, “know how”, and
all copies, reproductions, notes, analyses, compilations, studies,
interpretations, summaries and other documents in connection with the foregoing.
Confidential Information does not include any information which (i) is or
becomes publicly known or available other than as a result of wrongful
disclosure by Executive, (ii) becomes available to Executive on a
non-confidential basis from a source which, to Executive’s knowledge, is not
prohibited from disclosing such Confidential Information to Executive, or (iii)
is generally known in the industry in which the Corporation or its affiliates
operate and pertains to activities or business not specific to the Corporation
or its affiliates.
5.2 From
the
Effective Date through the date that is twenty-four (24) months following the
Executive’s termination of employment (the “Restriction Period”), Executive will
not, without the prior written consent of the Board, engage in “Competition” (as
defined below) with the Corporation. For purposes of this Agreement, if
Executive takes any of the following actions Executive will be engaged in
“Competition”: if Executive is engaging in or carrying on, directly or
indirectly, any enterprise, whether as an advisor, principal, agent, partner,
officer, director, employee, stockholder, associate or consultant to any person,
partnership, corporation or any other business entity, that is engaged in a
business that is competitive with any material business that the Corporation
is
engaged in at the time of the Executive’s termination of employment.
Notwithstanding anything herein to the contrary, “Competition” will not include
the ownership of less than a one percent equity interest in a publicly held
company and exercise of rights appurtenant thereto.
5.3 If
a
court or arbitrator holds that the duration, scope, area or other restrictions
stated herein are unreasonable under circumstances then existing, the
Corporation and the Executive agree that the maximum duration, scope, area
or
other restrictions reasonable under such circumstances will be substituted
for
the stated duration, scope, area or other restrictions.
5.4 The
existence of any claim or cause of action of Executive against the Corporation,
whether or not predicated upon the terms of this Agreement, will not constitute
a defense to the enforcement of the provisions of this Section 5.
-6-
5.5 The
parties acknowledge that any violation of this Section 5 can cause substantial
and irreparable harm to the Corporation. Therefore, the Corporation will be
entitled to pursue any and all legal and equitable remedies, including but
not
limited to any injunctions.
6. PROPRIETARY
INFORMATION.
Upon
termination, except to the extent required to render services to or on behalf
of
the Corporation, the Executive will deliver to the Corporation any documents,
files, copies which constitute Proprietary Information (whether in written,
printed, electronic or other form). “Proprietary Information” means all
information or data with respect to the conduct or details of the businesses
of
the Corporation and its affiliates (whether constituting a trade secret or
not)
including, without limitation, methods of operation, customers and customer
lists, supplier lists, sales data, details of contracts with customers,
consultants, suppliers or employees, products, proposed products, former
products, proposed, pending or completed acquisitions of any company, division,
product line or other business unit, prices and pricing policies, fees, costs,
plans, designs, technology, inventions, trade secrets, know how, software,
marketing methods, policies, plans, personnel, suppliers, competitors, markets
or other specialized information or proprietary matters of the Corporation,
or
any of its affiliates.
7. TERM
OF AGREEMENT.
This
Agreement shall have an original term expiring on July 18, 2008, and shall
thereafter be automatically renewed for successive one-year terms unless the
Corporation has notified the Executive of its election not to renew the term
of
this Agreement not less than 120 days before the expiration of the (then)
current term. Notwithstanding anything in this Agreement to the contrary, this
Agreement shall not terminate in the event that a Change in Control (as defined
herein) shall have occurred.
8. SUCCESSORS;
BINDING AGREEMENT.
The
Corporation shall require any successor (whether direct or indirect by purchase,
merger, consolidation or otherwise) to all or substantially all of the business,
equity and/or assets of the Corporation to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Corporation
would be required to perform if no such succession had taken place. Failure
of
the Corporation to obtain such agreement prior to the effective date of any
such
succession shall be a breach of this Agreement and shall entitle the Executive
to compensation from the Corporation in the same amount and on the same terms
as
that which the Executive would be entitled to hereunder as if the Executive’s
employment by the Corporation were immediately terminated without Cause or
for
Good Reason. As referred to in this Agreement, “Corporation” shall mean the
Corporation as herein defined and any successor to its business, equity and/or
assets which becomes bound by the terms and conditions of this Agreement by
operation of law. This Agreement shall inure to the benefit and be enforceable
by the Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amount would still be payable hereunder, all such amounts shall
be
paid in accordance with the terms of this Agreement to the Executive’s
estate.
-7-
9. NOTICES.
Any and
all notices which may be given hereunder by either party to the other shall
be
sufficient if in writing and sent by registered mail to the respective party
at
its or their last known address.
10. MODIFICATIONS
AND WAIVERS; ENTIRE AGREEMENT.
No
agreements or representations, express or implied, with respect to the subject
matter hereof have been made by either party which are not expressly set forth
in this Agreement. No provisions of this Agreement may be modified, waived
or
discharged unless such modification, waiver or discharge is agreed to in writing
signed by the Executive and the Chief Executive Officer of the Corporation.
No
waiver by either party hereto at any time of any breach by the other party
hereto of any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or any prior or subsequent time. This Agreement shall
supersede the Severance Agreement entered into by and between the Executive
and
the Corporation as of July 18, 2006 (the “Former Severance Agreement”); however,
this Agreement shall not supersede or in any way limit the rights, duties or
obligations the Executive may have under any written agreement other than the
Former Severance Agreement with the Corporation including, without limitation,
any employment agreement now in effect or subsequently entered into by and
between the Executive and the Corporation.
11. GOVERNING
LAW.
This
Agreement shall be governed by and construed and interpreted in accordance
with
the laws of the State of New York without reference to principles of conflict
of
laws thereof.
12. COUNTERPARTS.
This
Agreement may be executed in one or more counterparts each of which shall be
deemed to be an original, but all of which together shall constitute one and
the
same instrument.
13. DISPUTES.
Any
dispute or controversy arising under, our of or in connection with this
Agreement may be resolved in any court of competent jurisdiction.
-8-
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement as the day and year first written
above.
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GRIFFON
CORPORATION:
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| By: | /s/ Harvey R. Blau | |
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Harvey R. Blau |
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Chairman
and Chief Executive Officer
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| EXECUTIVE: | ||
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| By: | /s/ Franklin H. Smith | |
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Name: Frank Smith |
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WITNESS:
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| Signature: | /s/ Gary T. Moomjian | |
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Name: Gary
T. Moomjian
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-9-
Exhibit
99.1
GRIFFON
CORPORATION ANNOUNCES
CHANGES
IN SENIOR MANAGEMENT AND
BOARD
OF DIRECTORS
JERICHO,
NY- NOVEMBER 2, 2007- Griffon Corporation (NYSE:GFF) announced today changes
in
its Senior Management and Board of Directors.
Franklin
H. Smith, Jr. is being promoted to the position of Executive Vice President
of
Griffon Corporation, effective November 30, 2007. Mr. Smith joined the Griffon
team in 1998 as Chief Financial Officer of Clopay Corporation, a wholly-owned
subsidiary of Griffon.
Patrick
L. Alesia, who presently serves as the Vice President, Treasurer and Secretary
of Griffon Corporation, is being promoted to the position of Chief Financial
Officer, effective November 30, 2007. Mr. Alesia has been employed by the
Company for 34 years and has been an executive officer since 1979.
Griffon
Corporation also announced the appointment of two new members to its Board
of
Directors, effective today, Lieutenant General Gordon E. Fornell, USAF (Ret)
and
James A. Mitarotonda. General Fornell and Mr. Mitarotonda will be submitted
at
the Company’s 2008 annual meeting as part of the management slate for election
as members of the class of directors that will be up for re-election at the
Company’s 2009 annual meeting.
General
Fornell served in the United States Air Force for over 34 years and his
positions include having been the Commander of Electronic Systems Division,
Air
Force Systems Command, Hanscom Air Force Base and Commander of the Armament
Division at Elgin Air Force Base.
James
A.
Mitarotonda is a founder of and the current Chairman of the Board, Chief
Executive Officer and President of Barington Capital Group, L.P., an investment
firm.
Griffon
Corporation also reported the retirement, effective today, of Lester L. Wolff
from the Company’s Board of Directors, after 20 years of outstanding service.
Mr. Wolff, a former United States Congressman, shall remain as a Director
Emeritus and Consultant to the Company.
Finally,
Griffon Corporation also reported the retirement of Eric P. Edelstein, effective
November 30, 2007, as Executive Vice President and Chief Financial Officer
of
Griffon. Mr. Edelstein joined the Company in 2005.
Harvey
R.
Blau, the Company’s Chairman and Chief Executive Officer, stated “I am delighted
with the additions to the Senior Management of the Company. Messrs. Smith and
Alesia bring a breadth of experience to Griffon that is sure to contribute
to
the future success of the Company. In addition, we are pleased to add our two
new Board members, General Fornell and Mr. Mitarotonda. In the process of
selecting our two new directors we consulted closely with stockholders of the
Company. We look forward to working with our Board of Directors to achieve
the
Company’s goals and objectives. We thank Mr. Wolff and Mr. Edelstein for their
dedicated service to the Company.”
Griffon
Corporation -
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is
a leading manufacturer and marketer of residential, commercial and
industrial garage doors sold to professional installing dealers and
major
home center retail chains;
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installs
and services specialty building products and systems, primarily garage
doors, openers, fireplaces and cabinets, for new construction markets
through a substantial network of operations located throughout the
country;
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is
an international leader in the development and production of embossed
and
laminated specialty plastic films used in the baby diaper, feminine
napkin, adult incontinent, surgical and patient care markets; and
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develops
and manufactures information and communication systems for government
and
commercial markets worldwide.
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“Safe
Harbor” Statement under the Private Securities Litigation Reform Act of 1995:
All statements other than statements of historical fact included in this
release, including without limitation statements regarding the company’s
financial position, business strategy and the plans and objectives of the
company’s management for future operations, are forward-looking statements. When
used in this release, words such as “anticipate”, “believe”, “estimate”,
“expect”, “intend”, and similar expressions, as they relate to the company or
its management, identify forward-looking statements. Such forward-looking
statements are based on the beliefs of the company’s management, as well as
assumptions made by and information currently available to the company’s
management. Actual results could differ materially from those contemplated
by
the forward-looking statements as a result of certain factors, including but
not
limited to, business and economic conditions, results of integrating acquired
businesses into existing operations, competitive factors and pricing pressures
for resin and steel, capacity and supply constraints. Such statements reflect
the views of the company with respect to future events and are subject to these
and other risks, uncertainties and assumptions relating to the operations,
results of operations, growth strategy and liquidity of the company. Readers
are
cautioned not to place undue reliance on these forward-looking statements.
The
company does not undertake to release publicly any revisions to these
forward-looking statements to reflect future events or circumstances or to
reflect the occurrence of unanticipated events.