SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
Under the Securities Exchange Act of 1934
(Amendment No. )*
Griffon Corporation
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(Name of Issuer)
Common Stock, par value $0.25 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
398433102
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(CUSIP Number)
Marc Weingarten, Esq.
Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
(212) 756-2000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 15, 2006
- --------------------------------------------------------------------------------
(Date of Event which Requires
Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box. [ ]
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other parties
to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 12 Pages)
- --------------------------
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
- ------------------------------ ---------------------
CUSIP NO. 398433102 SCHEDULE 13D PAGE 2 OF 12 PAGES
- ------------------------------ ---------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
CLINTON GROUP, INC.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
-0-
----------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 1,538,944
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH -0-
----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,538,944
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
1,538,944
- --------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.2%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IA; CO
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* SEE INSTRUCTIONS
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CUSIP NO. 398433102 SCHEDULE 13D PAGE 3 OF 12 PAGES
- ------------------------------ ---------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
CLINTON MULTISTRATEGY MASTER FUND, LTD.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
CAYMAN ISLANDS
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
-0-
----------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 1,433,244
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH -0-
----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,433,244
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
1,433,244
- --------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.8%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
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* SEE INSTRUCTIONS
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CUSIP NO. 398433102 SCHEDULE 13D PAGE 4 OF 12 PAGES
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- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
CLINTON SPECIAL OPPORTUNITIES MASTER FUND, LTD.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
CAYMAN ISLANDS
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
-0-
----------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 105,700
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH -0-
----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
105,700
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
105,700
- --------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.4%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
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* SEE INSTRUCTIONS
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CUSIP NO. 398433102 SCHEDULE 13D PAGE 5 OF 12 PAGES
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- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
GEORGE HALL
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
-0-
----------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 1,538,944
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH -0-
----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,538,944
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
1,538,944
- --------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.2%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
* SEE INSTRUCTIONS
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CUSIP NO. 398433102 SCHEDULE 13D PAGE 6 OF 12 PAGES
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- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
CONRAD BRINGSJORD
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
-0-
----------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 1,538,944
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH -0-
----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,538,944
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
1,538,944
- --------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.2%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
* SEE INSTRUCTIONS
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CUSIP NO. 398433102 SCHEDULE 13D PAGE 7 OF 12 PAGES
- ------------------------------ ---------------------
Item 1. SECURITY AND ISSUER.
This statement relates to the shares of Common Stock, par value $0.25
per share (the "Shares"), of Griffon Corporation, a Delaware corporation (the
"Issuer"). The principal executive office of the Issuer is located at 100
Jericho Quadrangle, Jericho, New York 11753.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This statement is filed by Clinton Group, Inc., a Delaware
corporation ("CGI"), Clinton Multistrategy Master Fund, Ltd., a Cayman Islands
company ("CMSF"), Clinton Special Opportunities Master Fund, Ltd., a Cayman
Islands company ("CSO"), George Hall and Conrad Bringsjord (collectively, the
"Reporting Persons").
(b) The principal business address of CGI, George Hall and Conrad
Bringsjord is 9 West 57th Street, 26th Floor, New York, New York 10019. The
principal business address of CMSF and CSO is c/o Fortis Fund Services (Cayman)
Limited, P.O. Box 2003 GT, Grand Pavilion Commercial Centre, 802 West Bay Road,
Grand Cayman, Cayman Islands.
(c) The principal business of CGI is investing for funds and accounts
under its management. The principal business of CMSF and CSO is to invest in
securities. George Hall is the Chief Investment Officer and President of CGI.
Conrad Bringsjord is a managing director and senior portfolio manager of CGI.
(d) None of the Reporting Persons nor any of the individuals set forth
in Schedule A attached hereto has, during the last five years, been convicted in
a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) None of the Reporting Persons nor any of the individuals set forth
in Schedule A attached hereto has, during the last five years, been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
(f) George Hall and Conrad Bringsjord are citizens of the United States
of America.
The name, citizenship, present principal occupation or employment and
business address of each director and executive officer of CGI, CMSF and CSO is
set forth in Schedule A attached hereto. To the best of the Reporting Persons'
knowledge, except as set forth in this statement on Schedule 13D, none of such
individuals owns any Shares.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Funds for the purchase of the Shares reported herein were derived from
available capital of CMSF and CSO. A total of approximately $36,856,532 was paid
to acquire such Shares.
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CUSIP NO. 398433102 SCHEDULE 13D PAGE 8 OF 12 PAGES
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ITEM 4. PURPOSE OF TRANSACTION.
The Reporting Persons originally acquired Shares for investment in the
ordinary course of business because they believed that the Shares, when
purchased, were undervalued and represented an attractive investment
opportunity. On December 19, 2006, CGI delivered a letter to the Issuer stating
its belief that the market price of the Shares fails to reflect the stand-alone
value of the Issuer's operating subsidiaries. The letter also indicated CGI's
desire to work constructively with the Issuer's management to continue to
evaluate multiple strategic alternatives for the Issuer, including, but not
limited to, a tax-free spin-off or sale to strategic acquirors of one or more of
the Issuer's subsidiaries, or a going-private transaction for the Issuer. A copy
of this letter is attached hereto as Exhibit B and is incorporated herein by
reference.
Except as set forth herein or as would occur upon completion of any of
the actions discussed herein, including in any Exhibits hereto, the Reporting
Persons have no present plan or proposal that would relate to or result in any
of the matters set forth in subparagraphs (a)-(j) of Item 4 of Schedule 13D. The
Reporting Persons intend to review their investment in the Issuer on a
continuing basis and may engage in discussions with management, the board of
directors, other shareholders of the Issuer and other relevant parties
concerning the business, operations, management, strategy and future plans of
the Issuer. Depending on various factors including, without limitation, the
Issuer's financial position and strategic direction, the outcome of the
discussions and actions referenced above, actions taken by the board of
directors, price levels of the Shares, other investment opportunities available
to the Reporting Persons, conditions in the securities market and general
economic and industry conditions, the Reporting Persons may in the future take
such actions with respect to their investment in the Issuer as they deem
appropriate including, without limitation, purchasing additional Shares or
selling some or all of their Shares, engaging in short selling of or any hedging
or similar transactions with respect to the Shares and/or otherwise changing
their intention with respect to any and all matters referred to in Item 4 of
Schedule 13D.
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CUSIP NO. 398433102 SCHEDULE 13D PAGE 9 OF 12 PAGES
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ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the close of business on December 19, 2006, the Reporting
Persons beneficially owned an aggregate of 1,538,944 Shares, constituting
approximately 5.2% of the Shares outstanding.
The aggregate percentage of Shares beneficially owned by the Reporting
Persons is based upon 29,824,789 Shares outstanding, which is the total number
of Shares outstanding as of December 8, 2006 as reported in the Issuer's Annual
Report on Form 10-K for the period ended September 30, 2006.
(b) By virtue of investment management agreements with each of CMSF
and CSO, CGI has the power to vote or direct the voting, and to dispose or
direct the disposition, of all of the 1,433,244 Shares held by CMSF and the
105,700 Shares held by CSO. By virtue of his direct and indirect control of CGI,
George Hall is deemed to have shared voting power and shared dispositive power
with respect to all Shares as to which CGI has voting power or dispositive
power. By virtue of his position as managing director and senior portfolio
manager of CGI, Conrad Bringsjord is also deemed to have shared voting power and
shared dispositive power with respect to all Shares as to which CGI has voting
power or dispositive power. Accordingly, CGI, George Hall and Conrad Bringsjord
are deemed to have shared voting and shared dispositive power with respect to an
aggregate of 1,538,944 Shares.
(c) Information concerning transactions in the Shares effected by the
Reporting Persons during the past sixty days is set forth in Schedule B hereto
and is incorporated herein by reference. Unless otherwise indicated, all of such
transactions were effected in the open market.
(d) No person other than the Reporting Persons is known to have the
right to receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, the Shares.
(e) Not applicable.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
The Reporting Persons may, from time to time, enter into and dispose
of cash-settled equity swap or other similar derivative transactions with one or
more counterparties that are based upon the value of Shares, which transactions
may be significant in amount. The profit, loss and/or return on such contracts
may be wholly or partially dependent on the market value of the Shares, the
relative value of Shares in comparison to one or more other financial
instruments, indexes or securities, a basket or group of securities in which
Shares may be included, or a combination of any of the foregoing. In addition to
the Shares that they beneficially own without reference to these contracts, the
Reporting Persons currently have long economic exposure to 559,200 Shares
through such contracts. These contracts do not give the Reporting Persons direct
or indirect voting, investment or dispositive control over any securities of the
Issuer and do not require the counterparties thereto to acquire, hold, vote or
dispose of any securities of the Issuer. Accordingly, the Reporting Persons
disclaim any beneficial ownership in any securities that may be referenced in
such contracts or that may be held from time to time by any counterparties to
such contracts.
Except as otherwise set forth herein, the Reporting Persons do not
have any contract, arrangement, understanding or relationship with any person
with respect to the securities of the Issuer.
Item 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit A - Joint Filing Agreement dated December 20, 2006
Exhibit B - Letter to Issuer dated December 20, 2006
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CUSIP NO. 398433102 SCHEDULE 13D PAGE 10 OF 12 PAGES
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SIGNATURES
After reasonable inquiry and to the best of his or its knowledge and
belief, each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: December 20, 2006
CLINTON GROUP, INC.
By: /s/ Francis Ruchalski
---------------------------
Name: Francis Ruchalski
Title: Comptroller
CLINTON MULTISTRATEGY MASTER FUND, LTD.
By: Clinton Group, Inc. its investment
manager
By: /s/ Francis Ruchalski
---------------------------
Name: Francis Ruchalski
Title: Comptroller
CLINTON SPECIAL OPPORTUNITIES MASTER FUND, LTD.
By: Clinton Group, Inc. its investment
manager
By: /s/ Francis Ruchalski
---------------------------
Name: Francis Ruchalski
Title: Comptroller
/s/ George Hall
------------------------------
George Hall
/s/ Conrad Bringsjord
------------------------------
Conrad Bringsjord
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CUSIP NO. 398433102 SCHEDULE 13D PAGE 11 OF 12 PAGES
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SCHEDULE A
DIRECTORS AND EXECUTIVE OFFICERS OF CERTAIN REPORTING PERSONS
The following sets forth the name, position and principal occupation of
each director and executive officer of CGI. Each such person is a citizen of the
United States of America. The business address of each director and executive
officer is 9 West 57th Street, 26th Floor, New York, New York 10019.
CLINTON GROUP, INC.
Name Position
- --------------------------- -------------------------------------------
George E. Hall Director and President
John L. Hall Director and Chief Financial Officer
Wendy Ruberti General Counsel and Assistant Secretary
Francis A. Ruchalski Director and Comptroller
John B. Breaux Director and Senior Managing Director
Hani K. Findakly Director
The following sets forth the name, position and principal occupation
of each director of each of CMSF and CSO. There are no executive officers of
CMSF and CSO.
CLINTON MULTISTRATEGY MASTER FUND, LTD.
Jane Fleming is a citizen of the United Kingdom. Her principal occupation is
Client Accountant of Queensgate Bank & Trust Company Ltd. Her business address
is Queensgate Bank & Trust Company Ltd., Harbour Place, 5th Floor, 103 South
Church Street, P.O. Box 30464 SMB, Grand Cayman, Cayman Islands.
Dennis Hunter is a citizen of the United Kingdom. His principal occupation is
Director of Queensgate Bank & Trust Company Ltd. His business address is
Queensgate Bank & Trust Company Ltd., Harbour Place, 5th Floor, 103 South Church
Street, P.O. Box 30464 SMB, Grand Cayman, Cayman Islands.
Roger Hanson is a citizen of the United Kingdom. His principal occupation is
director of dms Management Ltd. His business address is dms Management Ltd.,
P.O. Box 31910 SMB, Ansbacher House, 20 Genesis Close, Grand Cayman, Cayman
Islands.
Blair Gauld is a citizen of New Zealand. His principal occupation is Director of
Queensgate Bank & Trust Company Ltd. His business address is Queensgate Bank &
Trust Company Ltd., Harbour Place, 5th Floor, 103 South Church Street, P.O. Box
30464 SMB, Grand Cayman, Cayman Islands.
CLINTON SPECIAL OPPORTUNITIES MASTER FUND, LTD.
Dennis Hunter's citizenship, principal occupation and business address are set
forth above.
Roger Hanson's citizenship, principal occupation and business address are set
forth above.
Cassandra Powell is a citizen of the Cayman Islands. Her principal occupation is
Senior Manager of Queensgate Bank & Trust Company Ltd. Her business address is
Queensgate Bank & Trust Company Ltd., Harbour Place, 5th Floor, 103 South Church
Street, P.O. Box 30464 SMB, Grand Cayman, Cayman Islands.
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CUSIP NO. 398433102 SCHEDULE 13D PAGE 12 OF 12 PAGES
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SCHEDULE B
TRANSACTIONS IN THE SHARES BY THE REPORTING PERSONS DURING THE PAST 60 DAYS
Clinton Multistrategy Master Fund, Ltd.
Trade Date Shares Purchased (Sold) Price Per Share ($)
---------- ----------------------- -------------------
10/19/06 54,000 25.13
10/20/06 24,300 24.88
10/20/06 1,300 25.00
10/23/06 11,000 24.94
10/24/06 7,000 24.81
10/25/06 17,000 24.80
10/26/06 13,000 24.95
10/30/06 25,000 24.72
10/31/06 74,200 24.76
11/01/06 41,000 24.53
11/02/06 78,344 24.10
11/02/06 13,000 24.05
11/03/06 5,000 24.09
11/03/06 2,000 24.25
11/03/06 489,300 23.81
11/03/06 (7,700) 23.47
11/03/06 34,600 25.00
11/06/06 75,000 21.75
11/06/06 (108) 22.14
11/07/06 20,500 25.00
11/07/06 15,500 22.10
11/17/06 11,200 25.00
12/15/06 77,700 23.94
Clinton Special Opportunities Master Fund, Ltd.
Trade Date Shares Purchased (Sold) Price Per Share ($)
---------- ----------------------- -------------------
11/03/06 15,200 23.81
11/06/06 75,000 21.75
11/07/06 15,500 22.10
The following transactions in the Shares were effected by CGI pursuant to
investment management agreements with each of the funds listed below.
Clinton Quantitative Equity Strategies Master Fund, Ltd.
Trade Date Shares Purchased (Sold) Price Per Share ($)
---------- ----------------------- -------------------
11/06/06 (52) 22.14
Clinton Statistical Arbitrage Master Fund (2X) Ltd.
Trade Date Shares Purchased (Sold) Price Per Share ($)
---------- ----------------------- -------------------
11/06/06 (36) 22.14
Clinton Equity Strategies Master Fund, Ltd.
Trade Date Shares Purchased (Sold) Price Per Share ($)
---------- ----------------------- -------------------
10/25/06 200 24.82
11/06/06 (204) 22.14
EXHIBIT A
JOINT FILING AGREEMENT
PURSUANT TO RULE 13d-1(k)
The undersigned acknowledge and agree that the foregoing statement on
Schedule 13D is filed on behalf of each of the undersigned and that all
subsequent amendments to this statement on Schedule 13D may be filed on behalf
of each of the undersigned without the necessity of filing additional joint
filing agreements. The undersigned acknowledge that each shall be responsible
for the timely filing of such amendments, and for the completeness and accuracy
of the information concerning him or it contained herein and therein, but shall
not be responsible for the completeness and accuracy of the information
concerning the others, except to the extent that he or it knows or has reason to
believe that such information is inaccurate.
Dated: December 20, 2006
CLINTON GROUP, INC.
By: /s/ Francis Ruchalski
---------------------------
Name: Francis Ruchalski
Title: Comptroller
CLINTON MULTISTRATEGY MASTER FUND, LTD.
By: Clinton Group, Inc. its investment
manager
By: /s/ Francis Ruchalski
---------------------------
Name: Francis Ruchalski
Title: Comptroller
CLINTON SPECIAL OPPORTUNITIES MASTER FUND, LTD.
By: Clinton Group, Inc. its investment
manager
By: /s/ Francis Ruchalski
---------------------------
Name: Francis Ruchalski
Title: Comptroller
/s/ George Hall
------------------------------
George Hall
/s/ Conrad Bringsjord
------------------------------
Conrad Bringsjord
EXHIBIT B
CLINTON GROUP
December 19, 2006
Mr. Harvey R. Blau
Chairman of the Board and CEO
Griffon Corporation
100 Jericho Quadrangle
Jericho, NY 11753
Dear Mr. Blau:
We greatly appreciate you and Mr. Edelstein taking the time to discuss with us
Griffon Corporation ("Griffon" or the "Company") and its prospects, and we are
pleased with management's willingness to listen to shareholder ideas and
opinions. Currently, funds and accounts managed by Clinton Group Inc.
("Clinton") beneficially own in excess of 5% of the outstanding shares of the
Company.
We have been impressed with the franchise that management has built, and
continue to appreciate management's eye towards returning shareholder value
through steady share repurchases. We have invested in Griffon because we believe
the market price of Griffon shares fails to reflect the true value of the
Company's operating subsidiaries, if they were to be valued on a stand-alone
basis.
Given the apparent disconnect between each segment's intrinsic value and the
Company's current stock price, we were pleased to hear on last quarter's
conference call that management was proactively reviewing strategic alternatives
with respect to the defense segment. We hope to work constructively with
management to continue to evaluate multiple strategic alternatives, including,
but not limited to, a tax-free spin-off or sale to strategic acquirors of one or
more of Griffon's subsidiaries, or a going-private transaction for the Company.
Given the market leading positions of Clopay Corporation's garage door division
and specialty films division, as well as Telephonics Corporation's well
positioned and growing defense segment, we believe any of these initiatives, or
a combination thereof, would unlock significant value for existing shareholders.
Based on our due diligence, we firmly believe that competitors in each
respective segment both hold the Company's subsidiaries in high regard and have
tremendous strategic interest. Additionally, a publicly traded comparable
company analysis as well as our due diligence supports the notion that ample
demand would exist for Telephonics Corporation in the public market as a
stand-alone company.
Our analysis ultimately suggests that fair value for Griffon's stock
approximates $31-$35, prior to certain adjustments as footnoted below.
EST. LTM / /
FY End: September EBITDA / TRADING / TRANSACTION
ENDING / TRADING TRADING VALUE / TRANSACTION TRANSACTION VALUE
S/O (1) 36,611 3/31/07 / MULTIPLE VALUE PER SHARE / MULTIPLE VALUE (3) PER SHARE (3)
--------- / -------- ---------- ---------- / ----------- ----------- -------------
/ /
Garage doors $49,753 / 7.0x $348,274 $9.51 / 8.0x $398,027 $10.87
Installation / /
Services $8,134 / 6.0x $48,805 $1.33 / 7.0x $56,939 $1.56
Defense $50,346 / 10.0x $503,455 $13.75 / 11.0x $553,801 $15.13
Specialty / /
plastic films $42,515 / 7.0x $297,602 $8.13 / 8.0x $340,117 $9.29
-------- / ---------- ------- / ---------- -------
$150,748 / $1,198,136 $32.73 / $1,348,884 $36.84
/ /
Net debt / $64,931 $1.77 / $64,931 $1.77
/ /
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value (2) $1,133,205 $30.95 $1,283,953 $35.07
- ------------------------------------------------------------------------------------------------------------------------------------
(1) - Assumes full conversion of the 4% convertible notes.
(2) - Before taking into account approximately $18 million in unallocated
corporate expenses.
(3) - Before taking into account approximately $2-$3 per share in estimated
tax leakage.
We enjoyed meeting with you and hope to continue an open and constructive
dialogue. To that end, please feel free to call me at 212-377-4224 or Tobin Kim,
Vice President, at 212-739-1830, anytime to discuss any and all issues further
at your convenience.
Sincerely,
/s/ Conrad Bringsjord
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Conrad Bringsjord
Managing Director
Portfolio Manager Event Driven and Activist Investments