SCHEDULE 14A INFORMATION
STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<Table>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12.
</Table>
GRIFFON CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
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(1) Title of each class of securities to which transaction applies:
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GRIFFON CORPORATION
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 6, 2002
------------------------
To our Stockholders:
An annual meeting of stockholders will be held at the Garden City Hotel,
Garden City, New York on Wednesday, February 6, 2002 beginning at 10:00 a.m. At
the meeting, you will be asked to vote on the following matters:
1. Election of four directors, each for a term of three years.
2. Any other matters that properly come before the meeting.
The above matters are set forth in the proxy statement attached to this
notice to which your attention is directed.
If you are a stockholder of record at the close of business on December 26,
2001, you are entitled to vote at the meeting or at any adjournment or
postponement of the meeting. This notice and proxy statement are first being
mailed to stockholders on or about December 28, 2001.
By Order of the Board of Directors,
EDWARD I. KRAMER
Secretary
Dated: December 28, 2001
Jericho, New York
GRIFFON CORPORATION
100 JERICHO QUADRANGLE
JERICHO, NEW YORK 11753
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, FEBRUARY 6, 2002
------------------------
Our annual meeting of stockholders will be held on Wednesday, February 6,
2002 at the Garden City Hotel, Garden City, New York at 10:00 a.m. This proxy
statement contains information about the matters to be considered at the meeting
or any adjournments or postponements of the meeting.
ABOUT THE MEETING
WHAT IS BEING CONSIDERED AT THE MEETING?
You will be voting on the following:
- election of directors.
In addition, our management will report on our performance during fiscal 2001
and respond to your questions.
WHO IS ENTITLED TO VOTE AT THE MEETING?
You may vote if you owned stock as of the close of business on December 26,
2001. Each share of stock is entitled to one vote.
HOW DO I VOTE?
You can vote in two ways:
- by attending the meeting or
- by completing, signing and returning the enclosed proxy card.
CAN I CHANGE MY MIND AFTER I VOTE?
Yes, you may change your mind at any time before the vote is taken at the
meeting. You can do this by (1) signing another proxy with a later date and
returning it to us prior to the meeting or filing with our corporate secretary a
written notice revoking your proxy, or (2) voting again at the meeting.
WHAT IF I RETURN MY PROXY CARD BUT DO NOT INCLUDE VOTING INSTRUCTIONS?
Proxies that are signed and returned but do not include voting instructions
will be voted FOR the election of the nominee directors.
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?
It means that you have multiple accounts with brokers and/or our transfer
agent. Please vote all of these shares. We recommend that you contact your
broker and/or our transfer agent to consolidate as many accounts as possible
under the same name and address. Our transfer agent is American Stock Transfer &
Trust Company, 800-937-5449.
WILL MY SHARES BE VOTED IF I DO NOT PROVIDE MY PROXY?
If you hold your shares directly in your own name, they will not be voted
if you do not provide a proxy. Your shares may be voted under certain
circumstances if they are held in the name of a brokerage firm. Brokerage firms
generally have the authority to vote customers' unvoted shares on certain
"routine" matters, including the election of directors. When a brokerage firm
votes its customer's unvoted shares, these shares are counted for purposes of
establishing a quorum. At our meeting these shares will be counted as voted by
the brokerage firm in the election of directors.
HOW MANY VOTES MUST BE PRESENT TO HOLD THE MEETING?
Your shares are counted as present at the meeting if you attend the meeting
and vote in person or if you properly return a proxy by mail. In order for us to
conduct our meeting, a majority of our outstanding shares as of December 26,
2001 must be present at the meeting. This is referred to as a quorum. On
December 26, 2001, there were 32,842,010 shares outstanding and entitled to
vote.
WHAT VOTE IS REQUIRED TO ELECT DIRECTORS?
The affirmative vote of the holders of a majority of the shares represented
in person or by proxy and voting on the item will be required to elect each
director. Shares not voted will have no effect on the vote for election of
directors.
2
PROPOSAL 1 -- ELECTION OF DIRECTORS
Our certificate of incorporation provides for a board of directors
consisting of not less than twelve nor more than fourteen directors, classified
into three classes as nearly equal in number as possible, whose terms of office
expire in successive years. Our board of directors now consists of twelve
directors as set forth below.
<Table>
<Caption>
CLASS I CLASS II CLASS III
(TO SERVE UNTIL THE (TO SERVE UNTIL THE (TO SERVE UNTIL THE
ANNUAL MEETING OF ANNUAL MEETING OF ANNUAL MEETING OF
STOCKHOLDERS IN 2002) STOCKHOLDERS IN 2003) STOCKHOLDERS IN 2004)
- ----------------------- ------------------------ -------------------------
Bertrand M. Bell (2)(3) Robert Balemian Henry A. Alpert (2)
Martin S. Sussman (1) Harvey R. Blau Abraham M. Buchman (1)(2)
Joseph J. Whalen (1)(4) Ronald J. Kramer Rear Admiral Clarence A.
Lester L. Wolff Lieutenant General James Hill, Jr. (Ret.)(2)(4)
W. Stansberry (Ret.) William H. Waldorf (1)(3)
</Table>
- ---------------
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
(3) Member of Ethics Oversight Committee.
(4) Member of Nominating Committee.
Bertrand M. Bell, Martin S. Sussman, Joseph J. Whalen and Lester L. Wolff,
directors in Class I, are to be elected at this Annual Meeting of Stockholders
to hold office until the Annual Meeting of Stockholders in 2005, or until their
successors are chosen and qualified.
Unless you indicate otherwise, shares represented by executed proxies in
the form enclosed will be voted, if authority to do so is not withheld, for the
election as directors of the aforesaid nominees (each of whom is now a director)
unless any such nominee shall be unavailable, in which case such shares will be
voted for a substitute nominee designated by the board of directors. We have no
reason to believe that any of the nominees will be unavailable or, if elected,
will decline to serve.
NOMINEE BIOGRAPHIES
DR. BERTRAND M. BELL (72) has been a director since 1976. Dr. Bell has been
Professor of Medicine at Albert Einstein College of Medicine for more than the
past five years and was appointed Distinguished Professor in September 1992.
MR. MARTIN S. SUSSMAN (64) has been a director since 1989. He has been a
practicing attorney in the State of New York since 1961, and has been a member
of the law firm of Seltzer, Sussman & Habermann LLP for more than the past five
years.
MR. JOSEPH J. WHALEN (69) has been a director since July 1999. He was a
partner at Arthur Andersen LLP for more than five years prior to his retirement
in 1994. Mr. Whalen is also a director of Interpool, Inc., a company engaged in
the leasing of transportation equipment.
MR. LESTER L. WOLFF (82) has been a director since 1987. He has been
President of Lester Wolff Enterprises Limited, a public relations firm, since
1981. Mr. Wolff served as a member of the U.S. House of Representatives from
1964 to 1981. Mr. Wolff is a director of U.S. Asia International Publications,
Inc., a
3
magazine publisher. In fiscal 2001, Telephonics Corporation, our wholly-owned
subsidiary, paid $42,000 to Lester Wolff Enterprises Limited in consulting fees.
STANDING DIRECTOR BIOGRAPHIES
MR. HENRY A. ALPERT (54) has been a director since February 1995. Mr.
Alpert has been President of Spartan Petroleum Corp., a real estate investment
firm and a distributor of petroleum products, for more than the past five years.
Mr. Alpert is also a director of Boyar Value Fund, a mutual fund.
MR. ROBERT BALEMIAN (62) has been President and a director since 1982. Mr.
Balemian was Vice President from February 1976 through December 1978 and Vice
President of Finance from December 1978 until March 1982.
MR. HARVEY R. BLAU (66) has been Chairman of the Board since 1983. Mr. Blau
also is Chairman of the Board of Aeroflex Incorporated, a diversified
manufacturer of military and industrial products, a director of Nu Horizons
Electronics Corp., a distributor of electronic components, and a director of
Reckson Associates Realty Corp., a real estate investment trust. See
"Management -- Certain Transactions."
MR. ABRAHAM M. BUCHMAN (85) has been a director since 1966. Mr. Buchman has
been a practicing attorney in the State of New York for more than the past five
years and is a partner in the law firm of Buchman & O'Brien.
REAR ADMIRAL CLARENCE A. HILL, JR. (RET.) (81) has been a director since
1982. Rear Admiral Hill was an officer in the United States Navy for more than
thirty-five years prior to his retirement in 1973. Since retirement, Rear
Admiral Hill has been acting as an independent consultant with respect to the
utilization of advanced concepts of system modeling and manpower survey
techniques. From 1975 to date, Rear Admiral Hill has been Vice President,
Treasurer and a director of the Naval Aviation Foundation which supports Naval
Aviation plans and programs.
MR. RONALD J. KRAMER (43) has been a director since 1993. Mr. Kramer has
been a private investor since October 2001. From July 1999 until October 2001,
Mr. Kramer was a Managing Director of Wasserstein Perella & Co., Inc. an
investment banking firm. From June 1995 to July 1999, Mr. Kramer was Chairman
and CEO of Ladenburg, Thalmann Group Inc., an investment banking firm. Mr.
Kramer is a director of TMP Worldwide, Inc., New Valley Corp. and Lakes Gaming
Inc. Mr. Kramer is the son-in-law of Mr. Harvey R. Blau.
LIEUTENANT GENERAL JAMES W. STANSBERRY (RET.) (74) has been a director
since 1991. He was an officer in the United States Air Force for thirty-five
years prior to his retirement in 1984. Since 1984, Lieutenant General Stansberry
has been President of Stansberry Associates International, Inc., an independent
consultant specializing in strategic planning for aerospace and defense firms.
In fiscal 2001, Telephonics Corporation, our wholly-owned subsidiary, paid
$42,000 to Stansberry Associates International, Inc. in consulting fees.
MR. WILLIAM H. WALDORF (63) has been a director since 1963. He has been
President of Landmark Capital, Inc., an investment firm, for more than the past
five years. Mr. Waldorf is also a director of Kayne Anderson Mutual Funds.
4
DIRECTORS' COMPENSATION AND BOARD COMMITTEES
Directors who are not our employees receive an annual fee of $15,000 and a
fee of $1,200 for each board of directors or committee meeting attended. In
addition, under our Outside Director Stock Award Plan, each non-employee
director receives at the time of the Annual Meeting of Stockholders each year,
shares of our common stock having a market value of $10,000. All shares awarded
under this plan vest over a period of three years. In 2001, an aggregate of
15,631 shares were granted under this plan.
During the fiscal year ended September 30, 2001 there were
- four meetings of the board of directors,
- four meetings of the Audit Committee,
- three meetings of the Compensation Committee, and
- one meeting of the Ethics Oversight Committee
Our Audit Committee is involved in discussions with management and our
independent public accountants with respect to financial reporting and our
internal accounting controls. The committee recommends to the board the
appointment of our independent auditors. The independent auditors periodically
meet alone with the committee and always have unrestricted access to the
committee. Our Compensation Committee awards stock options to officers and
employees and recommends executive compensation. See "Compensation Committee
Report on Executive Compensation." Our Ethics Oversight Committee is responsible
for establishing and maintaining procedures for receipt, investigating and
reporting of information and reports concerning alleged violations of our Code
of Business Ethics and Standards of Conduct. We also have a Nominating Committee
which was formed on November 7, 2001 and consists of Joseph J. Whalen and
Clarence A. Hill, Jr. This committee has nominated the directors to be elected
at this meeting. Each director attended or participated in at least 75% of the
meetings of the board of directors and the committees on which he served.
5
STOCK OWNERSHIP
The following information, including stock ownership, is submitted with
respect to our directors, each executive officer named in the "Summary
Compensation Table," for all executive officers and directors as a group, and,
based solely on filings with the Securities and Exchange Commission, except as
otherwise indicated, for each holder of more than five percent of our common
stock as of November 30, 2001. On September 4, 2001, a 10% common stock dividend
was paid to all holders of record as of August 20, 2001. The information
provided herein and elsewhere in this proxy statement is adjusted to reflect
this stock dividend.
<Table>
<Caption>
COMMON STOCK
BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED(1)
- ------------------------ -----------------
Dimensional Fund Advisors, Inc.(2).......................... 2,610,880 (8.0%)
Patrick L. Alesia(3)........................................ 205,388
Henry A. Alpert(5)(6)....................................... 26,593
Robert Balemian(3)(4)(7).................................... 2,532,489 (6.4%)
Bertrand M. Bell(5)......................................... 14,878
Harvey R. Blau(3)(4)(8)(9).................................. 3,666,245 (9.3%)
Abraham M. Buchman(5)....................................... 14,252
Rear Admiral Clarence A. Hill, Jr. (Ret.)(5)................ 16,707
Edward I. Kramer(3)(9)(10).................................. 137,152
Ronald J. Kramer(5)(11)..................................... 51,486
Lieutenant Gen. James W. Stansberry (Ret.)(5)(12)........... 23,018
Martin S. Sussman(5)........................................ 11,028
William H. Waldorf(5)....................................... 12,895
Joseph J. Whalen(5)......................................... 5,086
Lester L. Wolff(5).......................................... 11,358
Griffon Corporation Employee Stock Ownership Plan(13)....... 2,784,950 (8.5%)
Directors and executive officers as a group (14
persons)(14).............................................. 6,728,575 (17%)
</Table>
- ---------------
(1) No officer or director beneficially owns more than one percent of the
issued and outstanding shares of our common stock unless otherwise
indicated. Ownership represents sole voting and investment power, except
where otherwise indicated.
(2) Reflects shares beneficially owned by Dimensional Fund Advisors, Inc.
("Dimensional"). Dimensional holds sole dispositive power and sole voting
power with respect to 2,610,880 shares. The address for Dimensional is 1299
Ocean Avenue, 11th Floor, Santa Monica, California 90401.
(3) Includes for Messrs. Blau, Balemian, Alesia and Edward I. Kramer,
2,711,500, 1,897,500, 143,000 and 90,750 shares, respectively, issuable
with respect to options currently exercisable and options which become
exercisable within 60 days under our stock option plans. See
"Management -- Stock and Compensation Plans."
6
(4) Includes for Messrs. Blau and Balemian, 256,951 shares of common stock
credited to each of them in deferred stock under our Senior Management
Incentive Compensation Plan. See "Management -- Stock and Compensation
Plans."
(5) Includes shares of common stock granted pursuant to our Outside Director
Stock Award Plan. See "Management -- Stock and Compensation
Plans -- Outside Director Stock Award Plan."
(6) Includes 18,400 shares owned by the Spartan Petroleum Profit Sharing Trust
of which Mr. Alpert is one of two trustees.
(7) Includes 3,300 shares owned by Mr. Balemian's son.
(8) Includes 322,809 shares owned by Mr. Blau's wife.
(9) The Blau, Kramer, Wactlar & Lieberman, P.C. Profit Sharing Plan, of which
Mr. Blau and Mr. Edward I. Kramer are two of three trustees, owns 71,186
shares of common stock of the company. Included in common stock
beneficially owned are 63,311 and 5,926 shares allocated to Mr. Blau and
Mr. Kramer, respectively.
(10) Includes 326 shares owned by Mr. Edward I. Kramer's wife.
(11) Includes 22,880 shares owned by Mr. Ronald J. Kramer's wife and daughters
and 8,800 shares owned by a limited partnership of which Mr. Kramer is a
general partner, as to which Mr. Kramer disclaims beneficial ownership of
such shares which are in excess of his pecuniary interest.
(12) Includes 11,715 shares owned by Lieutenant General Stansberry's wife and
1,925 shares owned by the Stansberry Associates Money Purchase Plan of
which Mr. Stansberry and his wife are the trustees.
(13) The address for the Griffon Corporation Employee Stock Ownership Plan is
c/o U.S. Trust Company, N.A., as Trustee, 515 South Flower Street, Los
Angeles, California 90071. See "Management -- Stock and Compensation
Plans -- Employee Stock Ownership Plan."
(14) Includes 4,842,750 shares issuable with respect to options currently
exercisable and options which become exercisable within 60 days granted to
executive officers under our stock option plans. See "Management -- Stock
and Compensation Plans."
7
MANAGEMENT
OUR OFFICERS
Our officers are:
<Table>
<Caption>
NAME AGE OFFICE HELD
- ---- --- -----------
Harvey R. Blau....................... 66 Chairman of the Board and Chief
Executive Officer
Robert Balemian...................... 62 President and Chief Financial
Officer
Patrick L. Alesia.................... 53 Vice President and Treasurer
Edward I. Kramer..................... 67 Vice President, Administration
and Secretary
</Table>
Mr. Patrick L. Alesia has been our Vice President since May 1990 and has
been our Treasurer since April 1979.
Mr. Edward I. Kramer has been our Vice President, Administration since
February 1997 and our Secretary since February 1998. He has been a member of the
law firm of Blau, Kramer, Wactlar & Lieberman, P.C., our general counsel, for
more than the past five years. Mr. Kramer is also a member of our Ethics
Oversight Committee.
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation with
respect to the Chairman/ Chief Executive Officer and each of our other executive
officers who earned more than $100,000 for services rendered during the fiscal
years ended September 30, 2001, 2000 and 1999:
8
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
LONG-TERM
COMPENSATION
----------------------
ANNUAL COMPENSATION NUMBER OF LONG-TERM
--------------------------------------- SHARES INCENTIVE
FISCAL OTHER ANNUAL UNDERLYING PLAN ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION(2) OPTIONS PAYOUTS COMPENSATION(3)
- --------------------------- ------ -------- ---------- --------------- ---------- --------- ---------------
Harvey R. Blau............ 2001 $834,000 $2,696,000 -- 330,000 -- $190,533
Chairman and Chief 2000 818,000 1,734,000 -- -- -- 83,949
Executive Officer 1999 789,000 1,136,000 -- 429,000 -- 82,855
Robert Balemian........... 2001 $753,000 $2,638,000 -- 220,000 -- $ 46,542
President and Chief 2000 739,000 1,676,000 -- -- -- 46,908
Financial Officer 1999 713,000 1,078,000 -- 319,000 -- 45,855
Patrick L. Alesia......... 2001 $288,000 $ 110,000 -- 22,000 -- $ 16,640
Vice President 2000 273,000 95,000 -- 44,000 -- 16,797
and Treasurer 1999 258,000 95,000 -- 27,500 -- 16,792
Edward I. Kramer.......... 2001 $125,000 -- -- 11,000 -- $ 7,386
Vice President, 2000 125,000 -- -- 16,500 -- 7,771
Administration 1999 125,000 -- -- 16,500 -- 7,691
and Secretary
</Table>
- ---------------
(1) Represents for Messrs. Blau and Balemian cash incentive bonus under our
Senior Management Incentive Compensation Plan. The bonus amounts for each of
Messrs. Blau and Balemian do not include $500,000 which was deferred under
such Plan and will be paid in the form of shares of our common stock.
Accordingly, there has been reserved 46,840, 71,226 and 75,439 shares of our
common stock in respect of each of Messrs. Blau and Balemian's incentive
compensation for fiscal 2001, 2000 and 1999, respectively. See
"Management -- Employment Agreements -- and -- Stock and Compensation
Plans."
(2) Other Annual Compensation excludes certain perquisites and other non-cash
benefits provided by us since such amounts do not exceed the lesser of
$50,000 or 10% of the total annual compensation disclosed in this table for
the respective officer.
(3) All Other Compensation in fiscal 2001 includes: (a) $166,480, $26,280 and
$7,590 of premiums paid by us in respect of certain split-dollar life
insurance policies on the lives of Messrs. Blau, Balemian and Alesia,
respectively. We are the beneficiary to the extent of the premiums paid; (b)
$16,083, $12,292, $1,080 and $1,080 paid by us for term life insurance
policies on Messrs. Blau, Balemian, Alesia and Kramer, respectively; (c) our
contributions under the Griffon Corporation 401(k) Retirement Plan of $6,970
paid by us for each of Messrs. Blau, Balemian and Alesia and $5,306 for Mr.
Kramer; and (d) $1,000 in company contributions allocated under our Employee
Stock Ownership Plan on behalf of each of Messrs. Blau, Balemian, Alesia and
Kramer.
9
EMPLOYMENT AGREEMENTS
In May 2001, we entered into amended and restated employment agreements
with each of Messrs. Blau and Balemian. The term of the agreements expires
December 1, 2006. Pursuant to these agreements, Messrs. Blau and Balemian
receive a base salary and an annual bonus calculated in accordance with our
Senior Management Incentive Compensation Plan.
The employment agreements further provide for a five year consulting period
after the termination of employment during which each executive will receive
consulting payments in an annual amount equal to two-thirds of his last annual
base salary. The employment agreements also provide for cost of living
adjustments, life insurance and for the continuation of certain benefits
following death or disability.
The employment agreements further provide that in the event there is a
change in the control of the company, as defined therein, each executive has the
option, exercisable within one year after such event, to terminate his
employment agreement. Upon such termination, he has the right to receive as a
lump sum payment the compensation (including incentive bonus, if any) remaining
to be paid for the balance of the term of the agreement. In addition, the
company will provide the executive with a tax gross-up payment to cover any
excise tax due.
10
STOCK AND COMPENSATION PLANS
STOCK OPTION PLANS
The Company maintains various stock option plans under which options
generally vest 50% one year after date of grant and 100% two years after date of
grant. The purchase price of the shares subject to each option granted is not
less than 100% of the fair market value at the date of grant. The terms of each
option are generally ten years and are determined at the time of grant by the
board of directors or its Compensation Committee. The participants in these
plans are officers and employees of the company and its subsidiaries or
affiliates, except that our 1998 Employee and Director Stock Option Plan may
also include directors and consultants.
<Table>
<Caption>
NUMBER OF SHARES SHARES ISSUABLE
SHARES ISSUABLE FOR UNDER OPTIONS
UNDERLYING EXERCISABLE AVAILABLE
OPTIONS OPTIONS AS OF FOR GRANT AT
AUTHORIZED NOVEMBER 30, RANGE OF EXERCISE NOVEMBER 30,
NAME OF PLAN FOR GRANT 2001 PRICES 2001
- ------------ ---------- ------------- ----------------- ---------------
2001 Stock Option Plan..................... 1,375,000 -- -- 675,100
1998 Employee and Director Stock Option
Plan..................................... 1,925,000 1,336,800 $5.45 to $13.41 37,675
1998 Stock Option Plan..................... 1,100,000 1,100,000 $10.11 --
1997 Stock Option Plan..................... 1,650,000 1,563,650 $12 to $14.32 --
1995 Stock Option Plan..................... 1,100,000 1,023,000 $6.82 to $12 --
1992 Non-Qualified Stock Option Plan....... 1,100,000 1,094,500 $6.02 to $12 --
1988 Non-Qualified Stock Option Plan
(Expired May 1998)....................... 1,100,000 111,100 $6.82 to $8.52 --
</Table>
COMPENSATION PLANS
Senior Management Incentive Compensation Plan. Our Senior Management
Incentive Compensation Plan (the "Incentive Plan"), which was adopted by the
board of directors in November 1997 and approved by the stockholders in February
1998, provides for annual bonuses to Messrs. Blau and Balemian based upon
company performance. Under the Incentive Plan, each of Messrs. Blau and Balemian
is entitled to receive a bonus based upon our consolidated pretax earnings, as
defined, for each fiscal year. In the case of Mr. Blau, the annual bonus equals
4% of the first $5,000,000 of consolidated pretax earnings, plus 5% of the
amount of consolidated pretax earnings in excess of $5,000,000. In the case of
Mr. Balemian, the annual bonus equals 2.5% of the first $3,000,000 of
consolidated pretax earnings, plus 3.5% of the next $2,000,000 of consolidated
pretax earnings, plus 5% of the amount of consolidated pretax earnings in excess
of $5,000,000. The first $500,000 of the annual bonus payable for any fiscal
year to Messrs. Blau and Balemian is payable in deferred shares of common stock.
There are 550,000 shares of common stock authorized under the Incentive Plan of
which 513,902 shares have been reserved for issuance.
The amount of the bonus for each of Messrs. Blau and Balemian for a fiscal
year that is payable in deferred shares of common stock (the "Stock Portion") is
converted to a hypothetical number of shares of common stock and credited to a
bookkeeping account in his name. The number of shares will equal (i) the amount
of the Stock Portion divided by (ii) the "Value" of a share of common stock as
of the last day of the fiscal year for which the bonus is paid. The "Value" of a
share of common stock as of a given date is defined as
11
the average of the closing prices of a share of common stock on the New York
Stock Exchange composite tape (or, if the common stock is not listed on such
exchange, on any other national securities exchange on which the common stock is
listed) for each trading day during the period of 20 trading days ending with
such date. If the common stock is not traded on any national securities
exchange, the Value of the common stock is to be determined in good faith by the
committee administering the Incentive Plan. The deferred stock credited to the
accounts of Messrs. Blau and Balemian will be delivered in the form of shares of
common stock when he ceases to be our employee, either all at once or in up to
five annual installments. However, the committee administering the incentive
plan has the power, in its discretion, to accelerate delivery of the deferred
stock. Upon a Change in Control of the company (as defined in the Incentive
Plan), bonuses will be paid, entirely in cash, with respect to the portion of
our then current fiscal year before the Change in Control, based upon
performance for that portion of the year, and the deferred stock credited to
participants' accounts will be paid to them in the form of cash based upon the
Change in Control Consideration (as defined in the Incentive Plan).
Outside Director Stock Award Plan. We have an Outside Director Stock Award
Plan (the "Outside Director Plan"), which was approved by the stockholders in
1994, under which 330,000 shares may be issued to non-employee directors.
Annually, at the time of each annual meeting of stockholders, each eligible
director is awarded shares of our common stock having a value of $10,000, which
shares vest in equal installments over a three-year period. During fiscal 2001,
15,631 shares were issued under the Outside Director Plan. As of November 30,
2001, an aggregate of 236,214 shares remained available for future grants under
the Outside Director Plan.
Employee Stock Ownership Plan. In May 1983, we adopted an Employee Stock
Ownership Plan, as amended, ("ESOP" or "Plan"). Our employees and employees of
our subsidiaries are eligible to participate in the Plan, provided they are not
members of a collective bargaining unit. The ESOP has a Trustee, U.S. Trust
Company, N.A. (the "Trustee"), who votes the securities held by the Plan (other
than securities of the company which have been allocated to employees'
accounts).
The annual contributions to the Plan are to be in such amounts as the board
of directors in its sole discretion shall determine. Each employee who
participates in the Plan has a separate account and the annual contribution by
us to an employee's account is not permitted to exceed the lesser of $30,000 (or
such other limit as may be the maximum permissible pursuant to the provisions of
Section 415 of the Internal Revenue Code and Regulations issued thereunder) or
25% of such employee's annual compensation, as defined under the Plan. No
contributions are required of, nor are any accepted from, any employee.
Contributions to the Plan are invested primarily in the company's
securities. The Trustee has the right to purchase the company's securities on
behalf of employees. The Trustee is considered the shareholder for the purpose
of exercising all owners' and shareholders' rights, with respect to the
company's securities held in the Plan, except for voting rights, which inure to
the benefit of each participant who can vote all shares held in his account,
even if said shares are not vested. As of November 30, 2001, there were
2,784,950 shares in the Plan, of which 2,547,658 were allocated to employees and
237,292 were unallocated.
12
The Trustee is empowered to borrow funds for the purpose of purchasing the
company's securities. The securities so purchased are required to be held in an
acquisition indebtedness account, to be released and made available for
allocation as principal and interest are repaid. In December 1996 and June 2001,
the ESOP entered into a $3,000,000 loan agreement and a $2,000,000 loan
agreement, respectively, the proceeds of which were used to purchase our common
stock. The loans provide for repayment in quarterly installments through 2006.
Both loans are guaranteed by us. As of November 30, 2001, the Plan had
outstanding borrowings of $2,500,000.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth all stock option grants to the executive
officers named in the "Summary Compensation Table" during the fiscal year ended
September 30, 2001:
<Table>
<Caption>
INDIVIDUAL GRANTS(1) POTENTIAL REALIZED VALUE AT ASSUMED
--------------------------------------------------- ANNUAL RATES OF STOCK PRICE
NUMBER % OF APPRECIATION FOR OPTION TERMS(5)
OF SHARES TOTAL SHARES ----------------------------------------------
UNDERLYING GRANTED TO EXERCISE STOCK STOCK
OPTIONS EMPLOYEES IN PRICE EXPIRATION PRICE 5% DOLLAR PRICE 10% DOLLAR
NAME GRANTED(2) FISCAL YEAR(3) ($/SH) DATE ($)(4) GAIN(1) ($)(4) GAIN(1)
- ---- ---------- -------------- -------- ---------- -------- ---------- --------- ----------
Harvey R. Blau............ 330,000 28.48% $8.35 05-02-11 $13.59 $1,731,000 $21.65 $4,390,000
Robert Balemian........... 220,000 18.98 8.35 05-02-11 13.59 1,154,000 21.65 2,927,000
Patrick L. Alesia......... 22,000 1.90 6.82 11-09-10 11.11 94,000 17.69 239,000
Edward I. Kramer.......... 5,500 .47 6.82 11-09-10 11.11 24,000 17.69 60,000
Edward I. Kramer.......... 5,500 .47 6.45 02-06-11 10.50 22,000 16.72 57,000
</Table>
- ---------------
(1) All grants are under our stock option plans. Dollar gains are based on the
assumed annual rates of appreciation above the exercise price of each option
for the term of the option.
(2) Grants were made at the fair market value of our common stock on the date of
grant. Grants vest 50% one year after date of grant and 100% two years after
the date of grant.
(3) Total options granted to employees in fiscal 2001 were for 1,158,850 shares
of common stock.
(4) The stock price represents the price of our common stock if the assumed
annual rates of stock price appreciation are achieved over the term of each
of the options.
(5) The increase in market value of our common stock for all stockholders as of
November 30, 2001, assuming annual rates of stock appreciation from
September 30, 2001 (stock price of $12.20 per share) over the ten year
period used in this table, aggregate $251,800,000 at a 5% rate and
$638,125,000 at a 10% rate.
13
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table sets forth stock options exercised during fiscal 2001
and all unexercised stock options of the executive officers named in the
"Summary Compensation Table" as of September 30, 2001:
<Table>
<Caption>
NUMBER OF SHARES UNDER VALUE OF OUTSTANDING
OUTSTANDING OPTIONS IN-THE-MONEY OPTIONS AT
SHARES AT FISCAL YEAR-END FISCAL YEAR-END(1)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
Harvey R. Blau................ -- -- 2,711,500 330,000 $7,234,700 $1,272,000
Robert Balemian............... -- -- 1,897,500 220,000 5,227,900 848,000
Patrick L. Alesia............. -- -- 110,000 44,000 341,300 240,600
Edward I. Kramer.............. -- -- 79,750 19,250 151,900 106,000
</Table>
- ---------------
(1) Values are calculated by subtracting the exercise price from the fair market
value of the stock as of September 30, 2001.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Effective October 1, 1996 we adopted the Griffon Corporation Supplemental
Executive Retirement Plan ("SERP") for certain of its officers.
The normal retirement age under the SERP is 72. No benefit is payable
unless a participant is vested at the time of termination of employment. A
participant's right to receive a benefit vests after 20 years of service and one
year of participation in the SERP, or upon a Change of Control as defined in the
SERP.
The SERP provides an annual benefit upon termination equal to the sum of
.25% of Average Base Salary and 1.5% of Average Bonus/Incentive Compensation
multiplied by completed years of service (up to a maximum of 30). "Average"
means the average of the three highest paid years out of the last ten prior to
retirement. The benefit is reduced by any Social Security benefit attributable
to the employment of the participant. Benefits are adjusted for early retirement
and retirement after the normal retirement date. Retirement benefits are payable
for life, with a guarantee of 10 years of payments. In addition, the SERP
provides a pre-retirement death benefit payable for 10 years to the
participant's beneficiary.
A trust will be established to which contributions will be made to provide
for the benefits under the SERP.
14
The following tables show the projected annual benefits payable at age 72
under the SERP before the reduction for Social Security benefits. A
participant's SERP benefit would be the total of the applicable amounts from
each table, minus the Social Security benefit attributable to the participant's
employment. The number of years of service of the participants as of September
30, 2001 are: Mr. Blau, 29; Mr. Balemian, 28; and Mr. Alesia, 28.
<Table>
<Caption>
BASE SALARY BONUS/INCENTIVE COMPENSATION
- ------------------------------------------- ---------------------------------------
YEARS OF SERVICE YEARS OF SERVICE
WITH THE COMPANY ASSUMED AVERAGE WITH THE COMPANY
ASSUMED AVERAGE ------------------- BONUS/INCENTIVE ---------------------
ANNUAL BASE SALARY(1) 25 YEARS 30 YEARS COMPENSATION(2) 25 YEARS 30 YEARS
- --------------------- -------- -------- --------------- -------- ----------
$200,000 $12,500 $15,000 $ 100,000 $ 37,500 $ 45,000
300,000 18,750 22,500 250,000 93,750 112,500
400,000 25,000 30,000 500,000 187,500 225,000
500,000 31,250 37,500 1,000,000 375,000 450,000
600,000 37,500 45,000 1,500,000 562,500 675,000
700,000 43,750 52,500 2,000,000 750,000 900,000
800,000 50,000 60,000 2,500,000 937,500 1,125,000
</Table>
- ---------------
(1) Average of a participant's base salary for the highest three years out of
the last ten prior to retirement.
(2) Average of a participant's bonus/incentive compensation for the highest
three years out of the last ten prior to retirement.
CERTAIN TRANSACTIONS
Harvey R. Blau, our Chairman of the Board, and Edward I. Kramer, our Vice
President, Administration and Secretary are members of the law firm of Blau,
Kramer, Wactlar & Lieberman, P.C., our general counsel. For the fiscal year
ended September 30, 2001, we paid $673,000 in legal fees to Blau, Kramer,
Wactlar & Lieberman, P.C. Legal fees paid by us to Blau, Kramer, Wactlar &
Lieberman, P.C. are reviewed and approved by a committee of independent
non-employee directors. In addition, Blau, Kramer, Wactlar & Lieberman, P.C.
subleases from us approximately 3,700 square feet of office space at our
corporate headquarters. The rental under this sublease agreement is the same
rental per square foot that we are paying on our prime lease, including any
escalations, and aggregated approximately $100,000 for the fiscal year ended
September 30, 2001.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 2001, our Compensation Committee consisted of Messrs. Henry
A. Alpert, Abraham M. Buchman, Bertrand M. Bell and Rear Admiral Clarence A.
Hill, Jr. (Ret.). None of these persons were our officers or employees during
fiscal 2001 nor had any relationship requiring disclosure in this Proxy
Statement.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation of our executive officers is generally determined by the
Compensation Committee of the board of directors, subject to applicable
employment agreements and incentive plans. Each member of the Compensation
Committee is a director who is not employed by us or any of our affiliates. The
following report with respect to certain compensation paid or awarded to our
executive officers during fiscal 2001 is furnished by the directors who
comprised the Compensation Committee during fiscal 2001.
15
EXECUTIVE COMPENSATION OBJECTIVES
Our compensation programs are intended to enable us to attract, motivate,
reward and retain the management talent required to achieve corporate
objectives, and thereby increase shareholder value. It is our policy to provide
incentives to its senior management to achieve both short-term and long-term
objectives and to reward exceptional performance and contributions to the
development of our businesses. To attain these objectives, our executive
compensation program includes a competitive base salary, cash incentive bonuses
and stock-based compensation. See "Management -- Employment
Agreements -- and -- Stock and Compensation Plans."
Stock options are granted to employees, including our executive officers,
by the Compensation Committee under our stock option plans. The Committee
believes that stock options provide an incentive that focuses the executive's
attention on managing our company from the perspective of an owner with an
equity stake in the business. Options are awarded with an exercise price equal
to the fair market value of common stock on the date of grant, have a maximum
term of ten years and generally become exercisable for half of the option shares
one year from the date of grant and for all of the option shares two years from
the date of grant. Among our executive officers, the number of shares subject to
options granted to each individual generally depends upon the level of that
officer's responsibility. The largest grants are generally awarded to the most
senior officers who, in the view of the Compensation Committee, have the
greatest potential impact on our profitability and growth. Previous grants of
stock options are reviewed but are not considered the most important factor in
determining the size of any executive's stock option award in a particular year.
From time to time, the Compensation Committee utilizes the services of
independent consultants to perform analyses and to make recommendations to the
Committee relative to executive compensation matters. No compensation consultant
is paid on a retainer basis.
DETERMINING EXECUTIVE OFFICER COMPENSATION
The Compensation Committee annually establishes, subject to the approval of
the board of directors and any applicable employment agreements and our Senior
Management Incentive Plan ("Incentive Plan"), the salaries which will be paid to
our executive officers during the coming year. In setting salaries, the
Compensation Committee takes into account several factors, including competitive
compensation data, the extent to which an individual may participate in the
stock plans maintained by us, and qualitative factors bearing on an individual's
experience, responsibilities, management and leadership abilities, and job
performance.
For fiscal 2001, pursuant to the terms of his employment agreement with us
and the Incentive Plan, Mr. Robert Balemian, our President and Chief Financial
Officer, received a base salary and an incentive bonus based on our Consolidated
Pretax Earnings. See "Management -- Employment Agreements -- and -- Senior
Management Incentive Compensation Plan." During fiscal 2001, the Compensation
Committee recommended the amendment of this agreement which extended the
expiration date for three years and reduced annual compensation by eliminating
accrued cost of living adjustments. Mr. Balemian was also granted stock options
for the same reasons as are set forth under "Compensation of Chief Executive
Officer". Mr. Patrick L. Alesia, our Vice President and Treasurer received a
base salary, a cash bonus and a grant of stock options under our 1998 Employee
and Director Stock Option Plan. Mr. Edward I. Kramer, our Vice President,
Administration and Secretary, also received a base salary and grants of stock
options under our
16
1998 Employee and Director Stock Option Plan. The Compensation Committee
determined that the amended employment agreement with Mr. Balemian and the base
salaries, bonus and grant of stock options to Messrs. Balemian, Alesia and
Kramer were appropriate given our financial performance, the substantial
contributions made by them to such performance and the compensation levels of
executives at companies competitive with us.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
For fiscal 2001, pursuant to the terms of his employment agreement with us
and the Incentive Plan, Mr. Harvey R. Blau, our Chairman and Chief Executive
Officer, received a base salary and an incentive bonus based on our Consolidated
Pretax Earnings. See "Management -- Employment Agreements -- and -- Stock and
Compensation Plans." In light of his employment agreement and the Incentive
Plan, the Compensation Committee's only action with respect to Mr. Blau was to
recommend an amendment to his employment agreement which extended the expiration
date for three years and reduced annual compensation by eliminating accrued cost
of living adjustments. The Compensation Committee granted to Mr. Blau options to
purchase common stock under the 2001 Plan. The Compensation Committee believes
that the grant of stock options and the extension was appropriate based on his
performance and to maximize long-term shareholder value.
TAX CONSIDERATIONS
One of our objectives is to maintain cost-effective and tax efficient
executive compensation programs. Section 162(m) of the Internal Revenue Code of
1986, as amended, limits the tax deduction to $1 million for compensation paid
to any one of the named executive officers identified in this proxy statement
unless certain requirements are met. One of the requirements is that
compensation over $1 million must be based upon attainment of performance goals
approved by stockholders. Our plans which have been approved by stockholders are
designed to meet these requirements. The Committee's policy is to preserve
corporate tax deductions attributable to the compensation of executives while
maintaining the flexibility to approve, when appropriate, compensation
arrangements which it deems to be in the best interests of our company and our
stockholders, but which may not always qualify for full tax deductibility.
The Compensation Committee
Abraham M. Buchman (Chairman)
Henry A. Alpert
Bertrand M. Bell
Rear Admiral Clarence A. Hill, Jr.
(Ret.)
17
AUDIT COMMITTEE REPORT
The Audit Committee of the board of directors consists solely of
"independent directors" within the meaning of applicable rules and regulations
of the New York Stock Exchange.
The Audit Committee has reviewed and discussed our audited financial
statements as of and for the year ended September 30, 2001 with management and
representatives of Arthur Andersen LLP.
The Audit Committee has also received and reviewed the written disclosures
and the letter from the independent auditors, Arthur Andersen LLP, required by
Independence Standard No. 1, Independence Discussions with Audit Committees, as
amended, by the Independence Standards Board, and has discussed with the
independent public accountants their independence. Based on these reviews and
discussions, the Audit Committee recommended to the board of directors that the
financial statements referred to above be included in the Company's Annual
Report on Form 10-K for the year ended September 30, 2001 for filing with the
Securities and Exchange Commission.
The Audit Committee:
William H. Waldorf (Chairman)
Abraham M. Buchman
Martin S. Sussman
Joseph J. Whalen
FISCAL 2001 AUDIT FIRM FEE SUMMARY
For fiscal 2001, Arthur Andersen LLP's audit fees were approximately
$463,000. Aggregate fees for all other services rendered by Arthur Andersen LLP
for fiscal 2001 were approximately $266,000 of which $74,000 were audit related
fees primarily incurred in connection with foreign statutory audits and the
remainder was primarily for tax services for foreign operations. Arthur Andersen
LLP did not render any services related to financial information systems design
and implementation during fiscal 2001.
The Audit Committee has also reviewed and discussed the fees paid to Arthur
Andersen LLP during the last fiscal year for audit and non-audit services, which
are set forth herein and has considered whether the provision of the non-audit
services is compatible with maintenance of Arthur Andersen LLP's independence.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP acted as our independent public accountants for the
fiscal year ended September 30, 2001 and has been selected by the board of
directors, upon the recommendation of the Audit Committee, to continue to act as
our independent public accountants for the 2002 fiscal year.
A representative of Arthur Andersen LLP plans to be present at the Annual
Meeting with the opportunity to make a statement if he desires to do so, and
will be available to respond to appropriate questions.
18
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Exchange Act requires our executive officers,
directors and persons who own more than ten percent of a registered class of our
equity securities ("Reporting Persons") to file reports of ownership and changes
in ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission
(the "SEC") and the New York Stock Exchange (the "NYSE"). These Reporting
Persons are required by SEC regulations to furnish us with copies of all Forms
3, 4 and 5 they file with the SEC and the NYSE. Based solely upon our review of
the copies of the forms it has received, we believe that all Reporting Persons
complied on a timely basis with all filing requirements applicable to them with
respect to transactions during fiscal 2001.
19
PERFORMANCE GRAPH
The following graph sets forth the cumulative total return to our
stockholders during the five year period ended September 30, 2001 as well as an
overall stock market index (S & P SmallCap 600 Index) and our peer group index
(Dow Jones Industrial-Diversified Index).
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG GRIFFON CORPORATION, THE S & P SMALLCAP 600 INDEX
AND THE DOW JONES INDUSTRIAL, DIVERSIFIED INDEX
[COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN LINE GRAPH]
<Table>
<Caption>
DOW JONES
GRIFFON INDUSTRIAL -
CORPORATION S & P SMALLCAP 600 DIVERSIFIED
----------- ------------------ ------------
9/96 100.000 100.000 100.000
9/97 166.670 136.670 145.510
9/98 89.740 115.950 154.450
9/99 82.005 136.280 229.100
9/00 77.570 169.230 283.020
9/01 137.640 170.920 208.570
</Table>
* $100 INVESTED ON SEPTEMBER 30, 1996 IN STOCK OR INDEX, INCLUDING REINVESTMENT
OF DIVIDENDS
FINANCIAL STATEMENTS
A copy of our Annual Report to Stockholders for the fiscal year ended
September 30, 2001 has been provided to all stockholders as of the Record Date.
Stockholders are referred to the report for financial and other information
about us, but such report is not incorporated in this proxy statement and is not
a part of the proxy soliciting material.
20
MISCELLANEOUS INFORMATION
As of the date of this Proxy Statement, the board of directors does not
know of any business other than that specified above to come before the meeting,
but, if any other business does lawfully come before the meeting, it is the
intention of the persons named in the enclosed Proxy to vote in regard thereto,
in accordance with their judgment.
We will pay the cost of soliciting proxies in the accompanying form. In
addition to solicitation by use of the mails, certain of our officers and
employees may solicit proxies by telephone, telegraph or personal interview. We
may also request brokerage houses and other custodians, and, nominees and
fiduciaries, to forward soliciting material to the beneficial owners of stock
held of record by such persons, and may make reimbursement for payments made for
their expense in forwarding soliciting material to the beneficial owners of the
stock held of record by such persons. We have also retained the firm of
MacKenzie Partners, Inc. to assist in soliciting proxies on our behalf at an
estimated fee of $10,000, plus out-of-pocket expenses.
We must receive stockholder proposals with respect to our next annual
meeting of stockholders no later than August 31, 2002 to be considered for
inclusion in our next Proxy Statement.
By Order of the Board of Directors,
EDWARD I. KRAMER
Secretary
Dated: December 28, 2001
Jericho, New York
21
VOTING INSTRUCTIONS TO
U.S. TRUST COMPANY, N.A., AS TRUSTEE
UNDER THE GRIFFON CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN
I hereby direct that at the Annual Meeting of Stockholders of Griffon
Corporation on February 6, 2002 and at any adjournments thereof, the voting
rights pertaining to the shares of Griffon Corporation Common Stock deemed
allocated to my account under the Griffon Corporation Employee Stock Ownership
Plan solely for the purpose of voting at the Annual Meeting shall be exercised
as checked on this card, or if not checked, shall be voted in the discretion of
the Trustee.
PARTICIPANTS ARE STRONGLY ENCOURAGED TO READ THE ENCLOSED PROXY STATEMENT
CAREFULLY. YOUR VOTING INSTRUCTIONS TO U.S. TRUST ARE STRICTLY CONFIDENTIAL AND
WILL NOT BE DISCLOSED UNLESS REQUIRED BY LAW.
PARTICIPANTS MAY WITHHOLD THE VOTE FOR ONE OR MORE NOMINEE(S) BY WRITING
THE NOMINEE(S) NAME(S) IN THE BLANK SPACE PROVIDED ON THE REVERSE HEREOF. IF NO
SPECIFICATION IS MADE, THE SHARES WILL BE VOTED BY THE TRUSTEE IN ITS
DISCRETION.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
SEE REVERSE SIDE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS.
Election of the following nominees, as set forth in the proxy statement:
NOMINEES: Bertrand M. Bell, Martin S. Sussman, Joseph J. Whalen and Lester
L. Wolff
[ ] FOR all nominees listed [ ] WITHHOLD authority to vote
(Instruction: To withhold authority to vote for any individual nominee,
print the nominee's name on the line provided below)
SIGNATURE ___________________________
DATED: _____________ , 2002
Please sign and date and return this voting instruction card in the
attached envelope. This card must be received by 5:00 p.m. Eastern Time on
February 1, 2002
GRIFFON CORPORATION
BOARD OF DIRECTORS PROXY FOR ANNUAL MEETING
FEBRUARY 6, 2002
The undersigned hereby appoints HARVEY R. BLAU and ROBERT BALEMIAN, or
either of them, attorneys and Proxies with full power of substitution in each of
them, in the name and stead of the undersigned to vote as Proxy all the stock of
the undersigned in GRIFFON CORPORATION, a Delaware corporation, at the Annual
Meeting of Stockholders scheduled to be held on February 6, 2002 and any
adjournments thereof.
THE SHARES REPRESENTED HEREBY SHALL BE VOTED BY PROXIES, AND EACH OF THEM, AS
SPECIFIED AND, IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING. STOCKHOLDERS MAY WITHHOLD THE VOTE FOR ONE OR MORE
NOMINEE(S) BY WRITING THE NOMINEE(S) NAME(S) IN THE BLANK SPACE PROVIDED ON THE
REVERSE HEREOF. IF NO SPECIFICATION IS MADE, THE SHARES WILL BE VOTED FOR THE
ELECTION OF DIRECTORS.
(Continued and to be signed on reverse side)
SEE REVERSE SIDE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS.
1. Election of the following nominees, as set forth in the proxy statement:
NOMINEES: Bertrand M. Bell, Martin S. Sussman, Joseph J. Whalen and Lester
L. Wolff
[ ] FOR all nominees listed [ ] WITHHOLD authority to vote
(Instruction: To withhold authority to vote for any individual nominee,
print the nominee's name on the line provided below)
2. Upon such other business as may properly come before the meeting or any
adjournment thereof.
PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE
SIGNATURE(S)___________________________ ____________________________
DATED: ________________ , 2002