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): August
3, 2007
GRIFFON
CORPORATION
(Exact
Name of Registrant as Specified in Charter)
|
Delaware
|
1-6620
|
11-1893410
|
|
(State
or Other Jurisdiction
|
(Commission
|
(I.R.S.
Employer
|
|
of
Incorporation)
|
File
Number)
|
Identification
Number)
|
|
100
Jericho Quadrangle
|
|
|
Jericho,
New York
|
11753
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(516)
938-5544
(Registrant’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 registrant 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
2.02. Results
of Operations and Financial Condition.
On
August
6, 2007, Griffon Corporation (the “Company”) issued a press release announcing
the Company’s financial results for the third fiscal quarter ended June 30,
2007. A copy of the Company’s press release is attached hereto as Exhibit
99.1.
Item
5.02. Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
Amendment
to CEO Employment Agreement
On
August
3, 2007, the Company entered into Amendment No. 3 (the “Amendment”) to the
Employment Agreement between the Company and Harvey R. Blau, dated July 1,
2001,
as amended on August 8, 2003 and July 18, 2006 (the “Employment Agreement”). Mr.
Blau is the Chief Executive Officer and Chairman of the Board of Directors
of
the Company (the “Board”).
The
purpose of the Amendment was to bring the existing agreement into compliance
with the final regulations issued under Section 409A of the Internal Revenue
Code (“Section 409A”). Section 409A applies to arrangements that provide for the
payment of deferred compensation, including severance arrangements, on or after
January 1, 2005. The Amendment was effective as of August 3, 2007 and includes
the following material terms:
· The
definition of change in control has been modified to relate to the acquisition
of 30% of the voting power of the Company, replacing the prior 35% threshold.
· A
change
in control resulting from a change in the composition of the Board has also
been
modified to provide that a change in a majority of the directors on the Board
(excluding directors whose election was approved by a majority of the then
existing Board) over any 12 month period will give rise to a change in control.
Previously, a change in the majority of the directors on the Board (excluding
new directors whose election was approved by a majority of the then existing
Board) since the original execution of the Employment Agreement would arise
to a
change in control.
· As
required under Section 409A, language has been added to the Employment Agreement
that requires the payment of any post-termination: tax gross-up, medical
reimbursements and/or other reimbursements to Mr. Blau must be made prior to
the
end of the year following the year in which the underlying expense is
incurred.
· A
provision has been added that payments due to a separation from service (other
than due to death) must be delayed at least six months if such payments would
otherwise result in additional taxation under Section 409A, regardless of
whether a change in control occurred in the intervening period between a
separation of service and the end of the six month period following such
separation.
The
above
is a brief summary of the Amendment and does not purport to be complete.
Reference is made to the Amendment for a full description of its terms, a copy
of which is attached hereto as Exhibit 10.1 and incorporated herein by
reference.
2
Amendment
to Severance Agreement with Vice President
On
August
3, 2007, the Company entered into Amendment No. 1 (“Amendment No. 1”) to the
Severance Agreement
between the Company and Patrick L. Alesia, dated July 18, 2006 (the
“Severance Agreement”).
Mr. Alesia is the Vice President, Treasurer and Secretary of the Company.
The
purpose of Amendment No. 1 was to bring the existing agreement into compliance
with the final regulations issued under Section 409A. Amendment No. 1 was
effective as of August 3, 2007 and includes the following material terms:
· The
definition of change in control has been modified to relate to the acquisition
of 30% of the voting power of the Company, replacing the prior 35% threshold.
· As
required under Section 409A, language has been added to the
Severance Agreement
that requires the payment of any post-termination medical reimbursements be
made
prior to the end of the year following the year in which the underlying medical
expense is incurred.
The
above
is a brief summary of Amendment No. 1 and does not purport to be complete.
Reference is made to Amendment No. 1 for a full description of its terms, a
copy
of which is attached hereto as Exhibit 10.2 and incorporated herein by
reference.
Amendment
to Supplemental Executive Retirement Plan
On
August
3, 2007, Amendment No. 1 to the Amended and Restated Supplemental Executive
Retirement Plan of the Company (the “Plan”) was adopted. In part, the amendment
to the Plan serves to bring the provisions of the Plan into compliance with
the
final regulations issued under Section 409A, to provide for payments upon a
participant’s disability, to adopt more accurate mortality assumptions and to
provide for the elimination of certain benefit reductions with regard to
selected participants. The amendment to the Plan became effective as of August
3, 2007 and includes the following material terms:
· The
definition of change in control has been modified to relate to the acquisition
of 30% of the voting power of the Company, replacing the prior 35% threshold.
· A
change
in control resulting from a change in the composition of the Board has also
been
modified to provide that a change in a majority of the directors on the Board
(excluding directors whose election was approved by a majority of the then
existing Board) over any 12 month period will give rise to a change in control.
Previously under the terms of the Plan, a change in the majority of the
directors on the Board (excluding new directors whose election was approved
by a
majority of the then existing Board) would occur upon a change in the majority
of the Board over any two year period.
·
The
mortality assumptions under the Plan, which are used in determining the amount
of any lump sum benefits paid under the Plan, have been changed to the Annuity
2000 Male Mortality Table mortality assumptions.
3
· The
Plan
has been amended to provide for lump sum distributions upon a participant’s
“Disability” (as defined in Section 409A). Previously, the Plan did not provide
for any distribution upon the disability of a participant.
·
A
provision has been added to the Plan that payments due to a separation from
service (other than due to death) must be delayed at least six months if such
payments would otherwise result in additional taxation under Section 409A,
regardless of whether a change in control occurred in the intervening period
between a separation of service and the end of the six month period following
such separation.
· The
early
retirement reduction has been eliminated for all participants who receive a
distribution under the Plan due to a change in control and for Mr. Alesia in
all
cases.
· The
Plan
provides that a participant’s benefit under the Plan shall be offset by the
value of the Social Security benefit such participant is entitled to receive.
This offset has been eliminated with respect to Mr. Alesia.
·
The Plan
has been amended to provide that the applicable death benefit, if any, for
any
participant who terminated employment with the Company after December 31, 2006
shall be payable in lump sum.
The
above
is a brief summary of Amendment No. 1 to the Plan and does not purport to be
complete. Reference is made to Amendment No. 1 to the Plan for a full
description of its terms, a copy of which is attached hereto as Exhibit 10.3
and
incorporated herein by reference.
Item
9.01. Financial
Statements and Exhibits.
(d)
Exhibits.
| 10.1 |
Amendment
No. 3 to the Employment Agreement, dated August 3, 2007, between
the
Company
and Harvey R. Blau.
|
| 10.2 |
Amendment
No. 1 to the Severance Agreement, dated August 3, 2007, between the
Company and
Patrick L. Alesia.
|
| 10.3 |
Amendment
No. 1 to the Amended and Restated Supplemental Executive Retirement
Plan,
dated
August 3, 2007.
|
| 99.1. |
Press
Release, dated August 6, 2007
|
4
The
information filed as exhibit 99.1 to this Form 8-K is being furnished in
accordance with Item 2.02 and shall not be deemed to be “filed” for the purposes
of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), or otherwise subject to the liabilities of such section, nor shall such
information be deemed incorporated by reference in any filing under the
Securities Act of 1933, as amended, or the Exchange Act, except as shall be
expressly set forth by specific reference in such a filing.
5
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| GRIFFON CORPORATION | ||
| |
|
|
| By: | /s/ Eric P. Edelstein | |
|
Eric P. Edelstein |
||
|
Executive
Vice President and
Chief
Financial Officer
|
||
Date:
August 6, 2007
6
Exhibit
Index
| 10.1 |
Amendment
No. 3 to the Employment Agreement, dated August 3, 2007, between
the
Company
and Harvey R. Blau.
|
| 10.2 |
Amendment
No. 1 to the Severance Agreement, dated August 3, 2007, between the
Company and
Patrick L. Alesia.
|
| 10.3 |
Amendment
No. 1 to the Amended and Restated Supplemental Executive Retirement
Plan,
dated
August 3, 2007.
|
| 99.1. |
Press
release, dated August 6, 2007
|
7
AMENDMENT
NO. 3 TO EMPLOYMENT AGREEMENT
AMENDMENT
NO. 3 TO THE EMPLOYMENT AGREEMENT (this “Amendment”) made as of the
3rd
day of
August, 2007 by and between GRIFFON CORPORATION, a Delaware corporation
(hereinafter the “Company”) and HARVEY R. BLAU (hereinafter the
“Executive”).
WITNESSETH:
WHEREAS,
the Company and Executive entered into an Employment Agreement dated July 1,
2001, as amended subsequently by the Amendment Agreement, dated August 8, 2003
and the Amendment Agreement, dated July 18, 2006 (hereinafter the “Employment
Agreement”); and
WHEREAS,
the Company and Executive desire to further modify the said Employment Agreement
to comply with the requirements of Section 409A of the Internal Revenue
Code.
NOW,
THEREFORE, the parties hereto agree as follows:
|
1.
|
All
references to 35 percent with regard to an amount of voting securities
or
outstanding stock in Section 1(d) shall henceforth be read to mean
30
percent, effective as of the date
hereof.
|
|
2.
|
Section
1(d)(ii) shall be amended and restated in its entirety to read as
follows,
effective as of the date hereof:
|
“(ii)
during any period of 12 consecutive months, individuals who at the beginning
of
such period and any new director whose election by the Board or nomination
for
election by the Company's stockholders was approved by a vote of at least a
majority of the directors then still in office who either were directors at
the
beginning of any such period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority of the
Board, but excluding any such new director whose initial assumption of office
during such 12 month period occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of
a
Person other than the Board.”
|
3.
|
A
new sentence shall be added at the end of Section 7, which shall
read in
its entirety as follows, effective as of the date
hereof:
|
|
“Notwithstanding
the foregoing, any such reimbursement of such costs or expenses shall
be
made prior to the end of the year following the year in which such
cost or
expense is incurred.”
|
|
4.
|
The
last two sentences of Section 9(b) shall be deleted and the following
sentence shall be added at the end of Section 9(b), which shall read
in
its entirety as follows, effective as of the date
hereof:
|
“Notwithstanding
the foregoing, any claims for reimbursement of a proper medical 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.”
|
5.
|
A
new sentence shall be added at the end of Section 10(a), which shall
read
in its entirety as follows, effective as of the date
hereof:
|
“Solely
for the purposes of determining whether a “separation of service” has occurred
under Code Section 409A, an anticipated reduction in services performed for
the
Company by Blau of at least 50% upon a termination of employment shall be
considered a separation of service.”
|
6.
|
Section
10(g)(ii)(C) shall be amended and restated in its entirety to read
as
follows, effective as of the date
hereof:
|
“(C)
continued medical reimbursement for the remainder of the Employment Term and
thereafter the lifetime medical benefits described in Section 9(b); provided
that any such reimbursement of such costs or expenses shall be made prior to
the
end of the year following the year in which such cost or expense is
incurred.”
|
7.
|
Section
10(g)(ii)(E) shall be amended and restated in its entirety to read
as
follows, effective as of the date
hereof:
|
“(E)
continued participation in all employee benefit plans or programs available
to
Griffon employees generally in which Blau was participating on the date of
termination of his employment until the end of the Employment
Term;”
|
8.
|
Section
10(g)(ii)(F) shall be amended and restated in its entirety to read
as
follows, effective as of the date
hereof:
|
|
“(F)
other benefits in accordance with applicable plans and programs of
the
Company.”
|
2
|
9.
|
Section
10(i)(iii) shall be amended and restated in its entirety to read
as
follows, effective as of the date
hereof:
|
“(iii) continued
medical reimbursement for the remainder of the Employment Term and thereafter
the lifetime medical benefits described in Section 9(b); provided that any
such
reimbursement of such costs or expenses shall be made prior to the end of the
year following the year in which such cost or expense is incurred;”
|
10.
|
Section
10(i)(v) shall be amended and restated in its entirety to read as
follows,
effective as of the date hereof:
|
“(v) continued
participation in all employee benefit plans or programs available to Griffon
employees generally in which Blau was participating on the date of termination
of his employment until the end of the Employment Term; and”
|
11.
|
Section
10(i)(vi) and the flush language below such subsection shall be amended
and restated in its entirety to read as follows, effective as of
the date
hereof:
|
“(vi) other
benefits in accordance with applicable plans and programs of the
Company.”
Payments
under this Section 10(i) shall be in full satisfaction of any payments or
benefits Blau would otherwise be entitled to under Section 10(g).”
|
12.
|
The
first sentence of Section 10(j) shall be amended and restated in
its
entirety to read as follows, effective as of the date
hereof:
|
“10(j) Notwithstanding
the foregoing, if (a) Blau or his estate is to receive payments or benefits
under Section 10 for any reason other than due to Blau’s death or due to a
Change in Control (which occurs prior to the termination of Blau’s employment
hereunder), and (b) Blau is a “specified employee” within the meaning of Code
Section 409A for the period in which the payment or benefits would otherwise
commence, and (c) such payment or benefit would otherwise subject Blau to any
tax, interest or penalty imposed under Section 409A(a)(1)(B) of the Code (or
any
regulation or any guidance promulgated thereunder or with respect to) if the
payment or benefit would commence within six months of a termination of Blau’s
employment, then such payment or benefit required under Section 10 shall not
commence until the first day which is at least six months after the termination
of Blau’s employment.”
3
|
13.
|
Section
12(d) shall be added, which shall read in its entirety to read as
follows,
effective as of the date hereof:
|
|
“(d)
Any payments due to Blau under this Section 12, shall be paid no
later the
end of the year following the year in which Blau pays the excise
tax on
which such Parachute Gross-up is payable under this
Section.”
|
|
14.
|
Except
as specifically provided in and modified by this Amendment, the Employment
Agreement is in all other respects hereby ratified and confirmed
and
references to the Employment Agreement shall be deemed to refer to
the
Employment Agreement as modified by this
Amendment.
|
IN
WITNESS WHEREOF, the undersigned have executed this Amendment as of the day
and
year first above written.
| GRIFFON CORPORATION | ||
| |
|
|
| By: | /s/ Patrick L. Alesia | |
|
Vice President, Treasurer and Secretary
|
||
|
/s/ Harvey R. Blau
|
||
|
Harvey R. Blau
|
||
4
AMENDMENT
NO. 1 TO SEVERANCE AGREEMENT
AMENDMENT
NO. 1 TO THE SEVERANCE AGREEMENT (this “Amendment”) made as of the 3rd
day of
August, 2007 by and between GRIFFON CORPORATION, a Delaware corporation
(hereinafter the “Company”) and PATRICK ALESIA (hereinafter the
“Executive”).
WITNESSETH:
WHEREAS,
the Company and Executive entered into a Severance Agreement dated July 18,
2006
(hereinafter the “Severance Agreement”); and
WHEREAS,
the Company and Executive desire to modify the said Severance Agreement to
comply with the requirements of Section 409A of the Internal Revenue
Code.
NOW,
THEREFORE, the parties hereto agree as follows:
|
1.
|
All
references to 35 percent with regard to an amount of voting securities
or
outstanding stock in Section 2.1 shall henceforth be read to mean
30
percent, effective as of the date
hereof.
|
|
2.
|
A
new sentence shall be added after the first sentence of Section 4.3,
which
shall read in its entirety as follows, effective as of the date
hereof:
|
|
“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.”
|
|
3.
|
Except
as specifically provided in and modified by this Amendment, the Severance
Agreement is in all other respects hereby ratified and confirmed
and
references to the Severance Agreement shall be deemed to refer to
the
Severance Agreement as modified by this
Amendment.
|
IN
WITNESS WHEREOF, the undersigned have executed this Amendment as of the day
and
year first above written.
| GRIFFON CORPORATION | ||
| |
|
|
| By: | /s/ Eric P. Edelstein | |
|
|
||
| /s/ Patrick L. Alesia | ||
|
Patrick Alesia |
||
2
AMENDMENT
NO. 1
TO
THE GRIFFON CORPORATION AMENDED AND
RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
AMENDMENT
NO. 1 TO THE GRIFFON CORPORATION SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN, AMENDED
AND RESTATED, as of July 18, 2006 (the “Amendment”) made as of the 3rd
day of
August, 2007.
The
Griffon Corporation Supplemental Executive Retirement Plan, Amended and Restated
as of July 18, 2006 (the “Plan”), provides lifetime benefits to qualifying
Participants and may also provide benefits to a surviving named beneficiary
following a qualifying Participant’s death. The purpose of this Amendment is to
provide for: compliance with the final regulations under Section 409A of the
Internal Revenue Code; updated mortality assumptions to more accurately reflect
current mortality; disability benefits; and certain other changes to the Plan.
To effectuate these changes, the Plan is hereby amended as follows:
|
1.
|
Section
1.11 of the Plan shall be amended and restated in its entirety to
read as
follows, effective as of the date hereof:
|
“1.11 “Present
Value”
means,
with respect to an annual benefit, the present value of such benefit as
determined on the basis of (i) the Annuity 2000 Male Mortality Table mortality
assumptions (as set forth in Exhibit A to the Plan) and (ii) a discount rate
equal to the annualized yield (adjusted for constant maturity) on ten-year
U.S.
Treasury notes, as reported by the Federal Reserve Board and reprinted in the
Wall Street Journal (or, if not so reprinted, as reprinted in another
publication or in a release of the Federal Reserve Board), for the most recent
week ended prior to the week in which the determination of present value is
made.”
|
2.
|
A
new Section 1.14 shall be added to the Plan to read in its entirety
as
follows, effective as of the date hereof:
|
|
“1.14
“Total
Disability”
means “Disabled” as such term is defined in Section 409A(a)(2)(C) of the
Code.”
|
|
3.
|
Section
2.4 of the Plan shall be amended and restated in its entirety to
read as
follows, effective as of the date hereof:
|
|
“2.4
A “Change of Control” shall mean either or both of the
following:
|
|
(a)
if any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (the “Exchange Act”)) other than the
Employer or any “person” who on the date of this Agreement is a director
or officer of the Employer, becomes the “beneficial owner” (as defined in
Rule 13(d)-3 under the Exchange Act), directly or indirectly, of
securities of the Employer representing thirty (30%) percent of the
voting
power of the Employer's then outstanding securities; or
|
|
(b)
if, during any period of 12 consecutive months during the term of
this
Plan, individuals who at the beginning of such period and any new
director
whose election by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least a majority of the
directors then still in office who either were directors at the beginning
of any such period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority
of
the Board.”
|
|
4.
|
Section
3.3 of the Plan shall be amended and restated in its entirety to
read as
follows, effective as of the date hereof:
|
“3.3 If
a
Change of Control occurs while a Participant is employed by the Employer (or
if
the Participant was employed by the Employer thirty days before, the Change
of
Control), then the Present Value of a benefit computed in the manner described
in Article IV shall be paid to such Participant in a lump sum within thirty
days
after such Change of Control, in lieu of any annual benefit otherwise payable
under this Plan. If the date of such Change of Control precedes the
Participant’s Normal Retirement Date, the benefit referred to in the preceding
sentence shall be computed in the manner described in Section 4.1 as if the
date
of the Change of Control were the Participant’s Normal Retirement Date
(regardless of whether the Change of Control occurs on or before his Normal
Retirement Date). Notwithstanding the foregoing, in the event that a
Participant’s termination of employment with the Company precedes the date of
the Change in Control, and such Participant was a “specified employee” within
the meaning of Section 409A of the Code at the time of termination and such
lump
sum payment would otherwise subject the Participant to any tax, interest or
penalty imposed under Section 409A(a)(1)(B) of the Code (or any regulation
or
any guidance promulgated thereunder or with respect to) if the payment or
benefit would commence as set forth in this Section 3.3, then the lump sum
payment due under this Section 3.3 shall not be made until the first day which
is at least six month after the date of the Participant’s termination of
employment.”
|
5.
|
A
new sentence shall be added after the first sentence of Section 3.4
of the
Plan to read in its entirety as follows, effective as of the date
hereof:
|
|
“Notwithstanding
the foregoing, in the event that a Participant was a “specified employee”
within the meaning of Section 409A of the Code at the time of termination
and such lump sum payment would otherwise subject the Participant
to any
tax, interest or penalty imposed under Section 409A(a)(1)(B) of the
Code
(or any regulation or any guidance promulgated thereunder or with
respect
to) if the payment or benefit would commence as set forth in this
Section
3.4, then the lump sum payment due under this Section 3.4 shall not
be
made until the first day which is at least six month after the date
of the
Participant’s termination of employment.”
|
|
6.
|
A
new Section 3.5 shall be added to the Plan to read in its entirety
as
follows, effective as of the date hereof:
|
“3.5 If
a
Participant incurs a Total Disability during such Participant’s employment with
the Company, then, notwithstanding any other provision of this Plan to the
contrary, the Present Value of a benefit computed in the manner described in
Article IV shall be paid to such Participant in a lump sum within thirty days
after the Participant incurs a Total Disability, in lieu of any annual benefit
otherwise payable under this Plan. If the date of the Total Disability precedes
the Participant’s Early Retirement Date, the benefit referred to in the
preceding sentence shall be computed in the manner described in Section 4.1
or
Section 4.2, as applicable, as if the date of the Total Disability were the
Participant’s Early Retirement Date (regardless of whether the Total Disability
occurs on or before his Early Retirement Date).”
2
|
7.
|
A
new sentence shall be added after the first sentence of Section 4.2
of the
Plan to read in its entirety as follows, effective as of the date
hereof:
|
|
“Notwithstanding
the foregoing, the reduction in the preceding sentence shall not
apply to
any Participant listed on Exhibit B or to any distribution under
Section
3.3.”
|
|
8.
|
Section
4.5 of the Plan shall be amended and restated in its entirety to
read as
follows, effective as of the date hereof:
|
“4.5 Any
benefit otherwise payable under this Article IV shall be reduced by any benefit
payable to the Participant under any defined benefit retirement plan that is
qualified under Section 401(a) of the Code and sponsored by the Employer and
(ii) only with respect to Participants not listed on Exhibit B, any Social
Security benefit attributable to the employment of the Participant.”
|
9.
|
A
new sentence shall be added after the first sentence of Section 4.6
of the
Plan to read in its entirety as follows, effective as of the date
hereof:
|
|
“Notwithstanding
the foregoing, no monthly benefit shall be paid to a Participant
who has
received a lump sum payment of his Plan benefit under any applicable
Section hereunder, including, without limitation under Section
3.5.”
|
|
10.
|
The
last sentence of Section 5.1 of the Plan shall be amended and restated
in
its entirety to read as follows, effective as of the date hereof:
|
|
“Such
benefit shall be equal to the Present Value of the benefit that would
otherwise be payable under the SERP to the Participant over a ten
(10)
year period and shall be paid to the Participant's Surviving Spouse,
named
beneficiary or estate, in a lump sum as soon as practicable after
the
death of the Participant.”
|
|
11.
|
Section
5.2 of the Plan shall be amended and restated in its entirety to
read as
follows, effective as of the date hereof:
|
“5.2 In
the
event that a vested Participant who terminated employment on or prior to
December 31, 2006, dies after the termination of the Participant's employment
by
the Employer, but either (a) before benefit payments to the Participant under
this Plan have been paid for a period of ten (10) years or (b) prior to the
payment of the Participant’s benefit in a lump sum, the benefit otherwise
payable to the Participant under Article IV shall be paid to the Participant's
Surviving Spouse, named beneficiary or estate, beginning as soon as practicable
after the death of the Participant, for a period equal to ten (10) years minus
the duration of the period over which benefits were paid to the Participant.
In
the event that a vested Participant who terminates employment after December
31,
2006, dies after the termination of the Participant's employment by the
Employer, but either (a) before benefit payments to the Participant under this
Plan have been paid for a period of ten (10) years or (b) prior to the payment
of the Participant’s benefit in a lump sum, the Present Value of the benefit
that would otherwise be payable to the Participant under Article IV for a period
equal to ten (10) years minus the duration of the period over which benefits
were paid to the Participant shall be paid to the Participant's Surviving
Spouse, named beneficiary or estate, in a lump sum as soon as practicable after
the death of the Participant.”
3
|
12.
|
Two
new exhibits, Exhibit A and Exhibit B shall be added to the end of
the
Plan in substantially the form as set forth on Appendix A and Appendix
B
to this Amendment, effective as of the date hereof.
|
Except
as
specifically provided in and modified by this Amendment, all of the terms and
conditions of the Plan are hereby ratified and confirmed and references to
the
Plan shall be deemed to refer to the Plan as modified by this
Amendment.
IN
WITNESS WHEREOF, the Company has caused this First Amendment to the Griffon
Corporation Supplemental Executive Retirement Plan to be executed by its duly
authorized officers this 3rd
day of
August, 2007.
| Attest: | GRIFFON CORPORATION | ||
| /s/ Marjorie Charles | By: /s/ Patrick L. Alesia | ||
|
|
|
||
4
APPENDIX
A
EXHIBIT
A
Single Life
Expectancies Based on Annuity 2000 Mortality Table
|
Age
|
Years
|
Age
|
Years
|
Age
|
Years
|
|||||
|
5
|
76.6
|
42
|
40.8
|
79
|
10.8
|
|||||
|
6
|
75.6
|
43
|
39.8
|
80
|
10.2
|
|||||
|
7
|
74.7
|
44
|
38.9
|
81
|
9.7
|
|||||
|
8
|
73.7
|
45
|
37.9
|
82
|
9.2
|
|||||
|
9
|
72.7
|
46
|
37
|
83
|
8.7
|
|||||
|
10
|
71.7
|
47
|
36.1
|
84
|
8.2
|
|||||
|
11
|
70.8
|
48
|
35.2
|
85
|
7.8
|
|||||
|
12
|
69.8
|
49
|
34.2
|
86
|
7.3
|
|||||
|
13
|
68.8
|
50
|
33.3
|
87
|
6.9
|
|||||
|
14
|
67.8
|
51
|
32.4
|
88
|
6.5
|
|||||
|
15
|
66.9
|
52
|
31.5
|
89
|
6.2
|
|||||
|
16
|
65.9
|
53
|
30.7
|
90
|
5.8
|
|||||
|
17
|
64.9
|
54
|
29.8
|
91
|
5.5
|
|||||
|
18
|
63.9
|
55
|
28.9
|
92
|
5.2
|
|||||
|
19
|
63
|
56
|
28
|
93
|
4.9
|
|||||
|
20
|
62
|
57
|
27.2
|
94
|
4.6
|
|||||
|
21
|
61
|
58
|
26.3
|
95
|
4.3
|
|||||
|
22
|
60.1
|
59
|
25.4
|
96
|
4.1
|
|||||
|
23
|
59.1
|
60
|
24.6
|
97
|
3.8
|
|||||
|
24
|
58.1
|
61
|
23.7
|
98
|
3.6
|
|||||
|
25
|
57.2
|
62
|
22.9
|
99
|
3.4
|
|||||
|
26
|
56.2
|
63
|
22.1
|
100
|
3.1
|
|||||
|
27
|
55.2
|
64
|
21.3
|
101
|
2.9
|
|||||
|
28
|
54.3
|
65
|
20.4
|
102
|
2.7
|
|||||
|
29
|
53.3
|
66
|
19.6
|
103
|
2.4
|
|||||
|
30
|
52.3
|
67
|
18.9
|
104
|
2.2
|
|||||
|
31
|
51.4
|
68
|
18.1
|
105
|
2
|
|||||
|
32
|
50.4
|
69
|
17.3
|
106
|
1.8
|
|||||
|
33
|
49.5
|
70
|
16.6
|
107
|
1.6
|
|||||
|
34
|
48.5
|
71
|
15.9
|
108
|
1.4
|
|||||
|
35
|
47.5
|
72
|
15.2
|
109
|
1.3
|
|||||
|
36
|
46.6
|
73
|
14.5
|
110
|
1.1
|
|||||
|
37
|
45.6
|
74
|
13.8
|
111
|
1
|
|||||
|
38
|
44.6
|
75
|
13.2
|
112
|
0.8
|
|||||
|
39
|
43.6
|
76
|
12.5
|
113
|
0.7
|
|||||
|
40
|
42.7
|
77
|
11.9
|
114
|
0.6
|
|||||
|
41
|
41.7
|
78
|
11.3
|
115
|
0
|
|||||
|
Age
|
Years
|
Age
|
Years
|
Age
|
Years
|
5
APPENDIX
B
EXHIBIT
B
Alternative
Early Retirement Formula Participants
1. Patrick
Alesia
6
GRIFFON
CORPORATION ANNOUNCES OPERATING RESULTS
FOR
THE THIRD QUARTER OF FISCAL 2007
Jericho,
New York, August 6, 2007 - Griffon Corporation (NYSE:GFF) today reported
operating results for the third quarter of fiscal 2007. Net sales for the
quarter ended June 30, 2007 were $398,726,000 compared to $429,071,000 for
the
third quarter of fiscal 2006. Income before income taxes was $7,401,000 compared
to $26,943,000 last year. Net income was $4,397,000 in the current quarter
compared to $19,363,000 last year. Diluted earnings per share for the quarter
was $.14 compared to $.61 in last year’s third quarter.
The
decline in sales and operating income in our garage door and installation
services segments was principally due to declines in sales volume, principally
a
result of the slowdown in the new home construction and home resale markets.
In
both segments, management is continuing to evaluate and implement initiatives
to
reduce costs and improve operating efficiencies, awaiting an improvement
in the
market. Specialty Plastic Films segment sales were favorably affected by
higher
unit volume in Europe and the positive impact of foreign exchange offset
by
lower selling prices to our major customer and lower selling prices caused
by
resin cost fluctuations. The decrease in operating income for Specialty Plastic
Films is primarily attributable to the impact of resin price and cost
fluctuations and the lower selling prices to our major customer. The increase
in
sales of Telephonics, the company’s electronic information and communication
systems segment, was primarily attributable to the MH60 program. The decrease
in
operating income is primarily attributable to a number of programs which
had
lower gross profit margins in the quarter and increased marketing expenses.
Net
sales
for the nine months ended June 30, 2007 were $1,220,412,000 compared to
$1,153,746,000 for the first nine months of fiscal 2006. Income before income
taxes for the nine months was $22,456,000 compared to $49,204,000 last year.
Net
income was $13,117,000 compared to $33,347,000 for the first nine months
of
2006. Diluted earnings per share for the nine months was $.42 compared to
$1.06
last year.
Cash
flow
provided by operations was $10,472,000 for the quarter. Capital expenditures
were $4,123,000 which were funded by existing cash balances. Also, during
the
quarter $987,000 was used to acquire 45,000 shares of the company's common
stock
under its buyback program. Additional purchases will be made from time to
time,
depending on market conditions, at prices deemed appropriate by management
or
under a Rule 10b5-1 trading plan.
The
Company retained Goldman, Sachs & Co. to assist the Company in evaluating
components of our business, our capital structure and other potential strategic
alternatives. The Company and Goldman, Sachs & Co. have concluded the
initial evaluation of such alternatives. Due to present conditions in the
residential housing and credit markets, options that would increase shareholder
value are being explored but are not attractive at this time.
Griffon
Corporation -
|
l
|
is
a leading manufacturer and marketer of residential, commercial
and
industrial garage doors sold to professional installing dealers
and major
home center retail chains;
|
|
l
|
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;
|
|
l
|
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
|
|
l
|
develops
and manufactures information and communication systems for government
and
commercial markets worldwide.
|
“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.
|
GRIFFON
CORPORATION AND SUBSIDIARIES
|
||||||||
|
OPERATING
HIGHLIGHTS
|
||||||||
|
(Unaudited)
|
||||||||
|
(IN
THOUSANDS)
|
||||||||
|
PRELIMINARY
|
|
For
the Three Months Ended
|
For
the Nine Months Ended
|
||||||||||||
|
June
30,
|
June
30,
|
||||||||||||
|
2007
|
|
2006
|
|
2007
|
|
2006
|
|||||||
|
Net
sales:
|
|||||||||||||
|
Garage
Doors
|
$
|
118,100
|
$
|
139,297
|
$
|
351,995
|
$
|
403,711
|
|||||
|
Installation
Services
|
67,505
|
86,454
|
206,716
|
250,229
|
|||||||||
|
Specialty
Plastic Films
|
96,848
|
97,246
|
300,233
|
279,288
|
|||||||||
|
Electronic
Information and Communication Systems
|
120,553
|
111,404
|
374,567
|
235,702
|
|||||||||
|
Intersegment
eliminations
|
(4,280
|
)
|
(5,330
|
)
|
(13,099
|
)
|
(15,184
|
)
|
|||||
|
$
|
398,726
|
$
|
429,071
|
$
|
1,220,412
|
$
|
1,153,746
|
||||||
|
Operating
income (loss):
|
|||||||||||||
|
Garage
Doors
|
$
|
4,573
|
$
|
10,324
|
$
|
4,030
|
$
|
27,531
|
|||||
|
Installation
Services
|
(2,975
|
)
|
2,203
|
(8,716
|
)
|
6,217
|
|||||||
|
Specialty
Plastic Films
|
2,859
|
8,137
|
12,136
|
15,411
|
|||||||||
|
Electronic
Information and Communication Systems
|
9,950
|
12,670
|
35,301
|
20,388
|
|||||||||
|
Segment
operating income
|
14,407
|
33,334
|
42,751
|
69,547
|
|||||||||
|
Unallocated
amounts
|
(4,318
|
)
|
(4,242
|
)
|
(12,983
|
)
|
(13,959
|
)
|
|||||
|
Interest
and other, net
|
(2,688
|
)
|
(2,149
|
)
|
(7,312
|
)
|
(6,384
|
)
|
|||||
|
Income
before income taxes
|
$
|
7,401
|
$
|
26,943
|
$
|
22,456
|
$
|
49,204
|
|||||
1
|
GRIFFON
CORPORATION AND SUBSIDIARIES
|
|||
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|||
|
(IN
THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
|
|||
|
PRELIMINARY
|
|
For
the Three Months Ended
|
|||||||
|
June
30,
|
|||||||
|
2007
|
|
2006
|
|||||
|
Net
sales
|
$
|
398,726
|
$
|
429,071
|
|||
|
Cost
of sales
|
309,121
|
320,793
|
|||||
|
Gross
profit
|
89,605
|
108,278
|
|||||
|
Selling,
general and administrative expenses
|
80,663
|
80,341
|
|||||
|
Income
from operations
|
8,942
|
27,937
|
|||||
|
Other
income (expense):
|
|||||||
|
Interest
expense
|
(3,221
|
)
|
(2,572
|
)
|
|||
|
Interest
income
|
533
|
423
|
|||||
|
Other,
net
|
1,147
|
1,155
|
|||||
|
(1,541
|
)
|
(994
|
)
|
||||
|
Income
before income taxes
|
7,401
|
26,943
|
|||||
|
Provision
for income taxes:
|
|||||||
|
Federal
|
1,418
|
6,698
|
|||||
|
State
and foreign
|
1,586
|
882
|
|||||
|
3,004
|
7,580
|
||||||
|
Net
income
|
$
|
4,397
|
$
|
19,363
|
|||
|
Basic
earnings per share of common stock:
|
$
|
.15
|
$
|
.65
|
|||
|
Diluted
earnings per share of common stock:
|
$
|
.14
|
$
|
.61
|
|||
|
Weighted
average number of shares outstanding:
|
|||||||
|
Basic
|
29,977,000
|
29,896,000
|
|||||
|
Diluted
|
31,032,000
|
31,718,000
|
|||||
2
|
GRIFFON
CORPORATION AND SUBSIDIARIES
|
|||
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|||
|
(IN
THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
|
|||
|
PRELIMINARY
|
|
For
the Nine Months Ended
|
|||||||
|
June
30,
|
|||||||
|
2007
|
2006
|
||||||
|
Net
sales
|
$
|
1,220,412
|
$
|
1,153,746
|
|||
|
Cost
of sales
|
956,085
|
866,046
|
|||||
|
Gross
profit
|
264,327
|
287,700
|
|||||
|
Selling,
general and administrative expenses
|
236,906
|
234,275
|
|||||
|
Income
from operations
|
27,421
|
53,425
|
|||||
|
Other
income (expense):
|
|||||||
|
Interest
expense
|
(9,217
|
)
|
(7,715
|
)
|
|||
|
Interest
income
|
1,905
|
1,331
|
|||||
|
Other,
net
|
2,347
|
2,163
|
|||||
|
(4,965
|
)
|
(4,221
|
)
|
||||
|
Income
before income taxes
|
22,456
|
49,204
|
|||||
|
Provision
for income taxes:
|
|||||||
|
Federal
|
5,417
|
11,127
|
|||||
|
State
and foreign
|
3,922
|
4,730
|
|||||
|
9,339
|
15,857
|
||||||
|
Net
income
|
$
|
13,117
|
$
|
33,347
|
|||
|
Basic
earnings per share of common stock:
|
$
|
.44
|
$
|
1.11
|
|||
|
Diluted
earnings per share of common stock:
|
$
|
.42
|
$
|
1.06
|
|||
|
Weighted
average number of shares outstanding:
|
|||||||
|
Basic
|
29,959,000
|
29,992,000
|
|||||
|
Diluted
|
31,089,000
|
31,441,000
|
|||||
3
|
GRIFFON
CORPORATION AND SUBSIDIARIES
|
|||
|
CONSOLIDATED
BALANCE SHEETS
|
|||
|
(IN
THOUSANDS)
|
|||
|
PRELIMINARY
|
|
JUNE
30,
|
|
SEPTEMBER
30,
|
|
||||
|
|
|
2007
|
|
2006
|
|||
|
ASSETS
|
|||||||
|
Current
Assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
36,024
|
$
|
22,389
|
|||
|
Accounts
receivable, net
|
231,435
|
247,172
|
|||||
|
Contract
costs and recognized income not yet billed
|
69,124
|
68,279
|
|||||
|
Inventories
|
169,568
|
165,089
|
|||||
|
Prepaid
expenses and other current assets
|
49,244
|
42,075
|
|||||
|
Total
current assets
|
555,395
|
545,004
|
|||||
|
Property,
plant and equipment, at cost less
|
|||||||
|
depreciation
and amortization
|
232,597
|
231,975
|
|||||
|
Goodwill
|
112,562
|
99,540
|
|||||
|
Intangible
and other assets
|
67,991
|
51,695
|
|||||
|
$
|
968,545
|
$
|
928,214
|
||||
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|||||||
|
Current
Liabilities:
|
|||||||
|
Notes
payable and current portion of long-term debt
|
$
|
2,874
|
$
|
8,092
|
|||
|
Accounts
payable
|
107,716
|
128,104
|
|||||
|
Accrued
liabilities
|
77,298
|
81,672
|
|||||
|
Income
taxes
|
9,642
|
18,431
|
|||||
|
Total
current liabilities
|
197,530
|
236,299
|
|||||
|
Long-term
debt:
|
|||||||
|
Convertible
subordinated notes
|
130,000
|
130,000
|
|||||
|
Other
|
119,409
|
79,228
|
|||||
|
Other
liabilities and deferred credits
|
77,955
|
70,242
|
|||||
|
Shareholders'
equity
|
443,651
|
412,445
|
|||||
|
$
|
968,545
|
$
|
928,214
|
||||
4
|
GRIFFON
CORPORATION AND SUBSIDIARIES
|
|||
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|||
|
(IN
THOUSANDS)
|
|||
|
PRELIMINARY
|
|||
|
For
the Nine Months Ended
|
|||||||
|
June
30,
|
|||||||
|
2007
|
|
2006
|
|||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||
|
Net
income
|
$
|
13,117
|
$
|
33,347
|
|||
|
Adjustments
to reconcile net income to net cash
|
|||||||
|
provided
by operating activities:
|
|||||||
|
Depreciation
and amortization
|
30,671
|
25,778
|
|||||
|
Stock
based compensation
|
1,884
|
1,142
|
|||||
|
Provision
for losses on accounts receivable
|
1,393
|
1,435
|
|||||
|
Change
in assets and liabilities:
|
|||||||
|
(Increase)
decrease in accounts receivable and contract
|
|||||||
|
costs
and recognized income not yet billed
|
18,942
|
(25,981
|
)
|
||||
|
Increase
in inventories
|
(1,259
|
)
|
(24,771
|
)
|
|||
|
Increase
in prepaid expenses and other assets
|
(1,022
|
)
|
(19
|
)
|
|||
|
Increase
(decrease) in accounts payable, accrued liabilities
|
|||||||
|
and
income taxes payable
|
(34,605
|
)
|
8,394
|
||||
|
Other
changes, net
|
698
|
(20
|
)
|
||||
|
16,702
|
(14,042
|
)
|
|||||
|
Net
cash provided by operating activities
|
29,819
|
19,305
|
|||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
|
Acquisition
of property, plant and equipment
|
(23,600
|
)
|
(22,408
|
)
|
|||
|
Acquisition
of minority interest in subsidiary
|
-
|
(1,304
|
)
|
||||
|
Acquired
businesses
|
(17,167
|
)
|
-
|
||||
|
Increase
in equipment lease deposits
|
(4,597
|
)
|
(5,353
|
)
|
|||
|
Funds
restricted for capital projects
|
(4,471
|
)
|
-
|
||||
|
Net
cash used in investing activities
|
(49,835
|
)
|
(29,065
|
)
|
|||
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
|
Purchase
of shares for treasury
|
(3,287
|
)
|
(17,218
|
)
|
|||
|
Proceeds
from issuance of long-term debt
|
47,891
|
63,000
|
|||||
|
Payments
of long-term debt
|
(7,449
|
)
|
(68,455
|
)
|
|||
|
Decrease
in short-term borrowings
|
(6,132
|
)
|
(446
|
)
|
|||
|
Exercise
of stock options
|
2,563
|
2,060
|
|||||
|
Tax
benefit from exercise of stock options
|
685
|
2,386
|
|||||
|
Distributions
to minority interest
|
-
|
(354
|
)
|
||||
|
Other,
net
|
(1,315
|
)
|
(363
|
)
|
|||
|
Net
cash provided by (used in) financing activities
|
32,956
|
(19,390
|
)
|
||||
|
Effect
of exchange rate changes on cash and cash equivalents
|
695
|
588
|
|||||
|
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
13,635
|
(28,562
|
)
|
||||
|
CASH
AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
22,389
|
60,663
|
|||||
|
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
36,024
|
$
|
32,101
|
|||
5