STOCKHOLDERS' EQUITY AND EQUITY COMPENSATION

12 Months Ended

Sep. 30, 2011

Shareholders' Equity and Share-based Payments [Text Block]

NOTE 13 – STOCKHOLDERS’ EQUITY AND EQUITY COMPENSATION

Griffon expenses the fair value of equity compensation grants over the related vesting period. Compensation cost related to stock-based awards with graded vesting are amortized using the straight-line attribution method.

In February 2011, shareholders approved the Griffon Corporation 2011 Equity Incentive Plan (“Incentive Plan”) under which awards of performance shares, performance units, stock options, stock appreciation rights, restricted shares, deferred shares and other stock-based awards may be granted. Options granted under the Incentive Plan may be either “incentive stock options” or nonqualified stock options, generally expire ten years after the date of grant and are granted at an exercise price of not less than 100% of the fair market value at the date of grant. The maximum number of shares of common stock available for award under the Incentive Plan is 3,000,000 (600,000 of which may issued as incentive stock options) plus any shares underlying awards outstanding on the effective date of the Incentive Plan under the 2006 Incentive Plan that are subsequently cancelled or forfeited. As of September 30, 2011, 2,162,009 shares were available for grant.

All grants outstanding under the Griffon Corporation 2001 Stock Option Plan, 2006 Equity Incentive Plan and Outside Director Stock Award Plan will continue under their terms; no additional awards will be granted under such plans.

A summary of stock option activity for the years ended September 30, 2011, 2010 and 2009 is as follows:

	Options
	Shares			Weighted Average Exercise Price		Aggregated Intrinsic Value		Weighted Average Contractual Term (Years)
Outstanding at October 1, 2008		1,400,891		$	13.87
Granted		350,000			20.00
Exercised		(33,000	)		6.12	$	109
Forfeited/expired		(27,552	)		20.55
Outstanding at September 30, 2009		1,690,339			15.18		980		4.6
Exercisable at September 30, 2009		1,420,381			14.21		980		3.9
Outstanding at October 1, 2009		1,690,339			15.18
Granted		—
Exercised		(54,075	)		6.33		337
Forfeited/expired		(92,043	)		16.46
Outstanding at September 30, 2010		1,544,221			15.42		1,667		3.9
Exercisable at September 30, 2010		1,421,930			15.04		1,667		3.5
Outstanding at October 1, 2010		1,544,221			15.42
Granted		—
Exercised		(333,125	)		7.74		1,848
Forfeited/expired		(41,435	)		18.34
Outstanding at September 30, 2011		1,169,661			17.50		—		3.7
Exercisable at September 30, 2011 through:
September 30, 2012		200,500
September 30, 2013		172,526
September 30, 2014		123,000
September 30, 2015		214,035
September 30, 2016		91,600
September 30, 2017		18,000
September 30, 2018		—
September 30, 2019		350,000
Total Exercisable		1,169,661		$	17.50	$	—		3.7

	Options Outstanding							Options Exercisable
Range of Exercises Prices	Shares	Weighted Average Exercise Price		Aggregated Intrinsic Value		Weighted Average Contractual Term (Years)		Shares		Weighted Average Exercise Price		Aggregated Intrinsic Value		Weighted Average Contractual Term (Years)
$7.75 to $11.14	175,000	$	11.14	$	—		0.1		175,000	$	11.14	$	—		0.1
$12.39 to $17.23	393,978		14.88		—		2.6		393,978		14.88		—		2.6
$19.49 to $26.06	600,683		21.07		—		5.5		600,683		21.07		—		5.5
Totals	1,169,661			$	—				1,169,661			$	—

All stock options have been fully vested at September 30, 2011. The fair value of options vested during the years ended September 30, 2011, 2010 and 2009 were $270, $585 and $631, respectively.

A summary of restricted stock activity for the years ended September 30, 2011, 2010 and 2009 is as follows:

	Restricted Stock
	Shares			Weighted Average Grant Price		Aggregated Intrinsic Value*		Weighted Average Contractual Term (Years)
Outstanding at October 1, 2008		475,540		$	14.26	$	11		2.8
Granted		1,215,232			8.39		10,195
Fully Vested		(61,387	)		23.07		594
Forfeited		(6,000	)		9.30		56
Outstanding at September 30, 2009		1,623,385			9.55		2,422		3.0
Granted		713,637			11.36		8,108
Fully Vested		(52,998	)		21.90		707
Forfeited		(52,500	)		14.79		776
Outstanding at September 30, 2010		2,231,524			9.71		6,281		2.5
Granted		1,415,700			12.68		17,946
Fully Vested		(407,268	)		10.67		5,209
Forfeited		(130,009	)		11.75		1,527
Outstanding at September 30, 2011		3,109,947			10.85	$	493		2.8

*Aggregated intrinsic value at the date the shares were outstanding, granted, vested or forfeited, as applicable.

Unrecognized compensation expense related to non-vested shares of restricted stock was $22,000 at September 30, 2011 and will be recognized over a weighted average vesting period of 3.5 years.

In connection with the ATT acquisition, Griffon entered into certain retention arrangements with the ATT senior management team. Under these arrangements, on September 30, 2010, Griffon issued 239,145 shares of common stock to the ATT senior management team, and for each share of common stock purchased, the ATT senior management team received one share of restricted stock that vests in full after four years, subject to the attainment of a specified performance measure.

At September 30, 2011, a total of approximately 6,441,617 shares of Griffon’s authorized Common Stock were reserved for issuance in connection with stock compensation plans.

Using historical data as of the grant dates, the fair value of the 2009 option grant was estimated as of the grant dates using the Black-Scholes option pricing model with the following weighted average assumptions:

	2009 Grant
Risk-free interest rate		3.04	%
Dividend yield		0.00	%
Expected life (years)		7.0
Volatility		38.98	%
Option exercise price	$	20.00
Fair value of options granted	$	2.06

For the years ended September 30, 2011, 2010 and 2009, stock based compensation expense totaled $8,956, $5,778 and $4,145, respectively.

In August 2011, Griffon’s Board of Directors authorized the repurchase of up to $50,000 of Griffon’s outstanding common stock; this is in addition to the 1,366,000 shares of common stock authorized for repurchase under an existing buyback program. Under the repurchase programs, the Company may, from time to time, purchase shares of its common stock, depending upon market conditions, in open market or privately negotiated transactions, including pursuant to a 10b5-1 plan. During 2011, Griffon purchased 1,531,379 shares of common stock, for a total of $12,367, or $8.08 per share, exhausting the shares under the original program; $48,690 remains under the $50,000 authorization.