SHAREHOLDERS' EQUITY

9 Months Ended

Jun. 30, 2012

Stockholders' Equity Note Disclosure [Text Block]

NOTE 9 — SHAREHOLDERS’ EQUITY

During the first, second and third quarters of 2012, the Board of Directors approved three quarterly cash dividends of $0.02 per common share, which were paid on December 27, 2011, March 27, 2012 and June 26, 2012, to holders of common stock as of close of business on November 29, 2011, February 28, 2012 and May 29, 2012, respectively. $1,190 and $3,564 was recorded to retained earnings for the dividend for the three and nine months ended June 30, 2012, respectively. Dividends paid on allocated shares in the ESOP were used to pay down the ESOP loan and were recorded as a reduction in expense. A dividend payable was established for the holders of restricted shares; such payable will be released upon vesting of the underlying restricted shares.

On August 2, 2012, the Board of Directors declared a fourth quarterly cash dividend of $0.02 per share, payable on September 25, 2012 to shareholders of record as of the close of business on August 28, 2012.

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 must be 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 be 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 June 30, 2012, 1,770,509 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.

During the first quarter of 2012, Griffon granted 309,500 restricted shares with three-year cliff vesting, 191,000 of which are also subject to certain performance conditions, with a total fair value of $2,881, or a weighted average fair value of $9.31 per share.

During the second quarter of 2012, Griffon granted 110,000 restricted shares, 82,500 of which are three-year cliff vesting and 27,500 of which vest equally over 3 years; 37,500 of the 110,000 shares are subject to certain performance conditions. The total fair value of these grants is $1,119, or a weighted average fair value of $9.83 per share.

During the third quarter of 2012, Griffon granted 2,000 restricted shares with three-year cliff vesting. The total fair value of these grants is $19, or a weighted average fair value of $9.33 per share.

During the second quarter of 2011, Griffon granted 590,000 performance shares. Prior to the change in the terms of the grant, the performance shares had a fair value of $7,346, or a weighted average fair value of $12.45 per share, and cliff vested when either Griffon’s common stock closed at or above $16 per share for twenty consecutive trading days or 7 years from the date of grant, whichever came first. In January 2012, the terms of the grant were modified such that the price of Griffon common stock must close at or above $16 per share for thirty consecutive trading days on or prior to January 10, 2016 in order for the shares to vest; otherwise, the shares will be forfeited. The unamortized portion of the original fair value of approximately $6,400 will be expensed over the new service period of 32 months beginning January 2012.

For the three and nine months ended June 30, 2012, stock based compensation expense totaled $2,691 and $7,599, respectively. For the three and nine months ended June 30, 2011, stock based compensation expense totaled $2,120 and $6,767, respectively.

In August 2011, Griffon’s Board of Directors authorized the repurchase of up to $50,000 of Griffon’s outstanding common stock. Under this repurchase program, 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. In the first quarter of 2012, Griffon purchased 283,400 shares of common stock, for a total of $2,351, or $8.29 per share. In the third quarter of 2012, Griffon purchased 417,667 shares of common stock, for a total of $3,320, or $7.95 per share; in total, Griffon has purchased 866,446 shares of common stock, for a total of $6,980, or $8.06 per share, under this repurchase program. $43,020 remains under the $50,000 authorization. Subsequent to June 30, 2012, Griffon purchased 66,199 shares of common stock, for a total of $560, or $8.47 per share.