STOCKHOLDERS' EQUITY AND EQUITY COMPENSATION

12 Months Ended

Sep. 30, 2012

Stockholders' Equity Note Disclosure [Text Block]

NOTE 13 – STOCKHOLDERS’ EQUITY AND EQUITY COMPENSATION

On November 17, 2011, the Company began declaring quarterly dividends. No cash dividends on Common Stock were declared or paid during the four years ended September 30, 2011. During 2012, the Company declared and paid dividends totaling $0.08 per share. The Company currently intends to pay dividends each quarter; however, the payment of dividends is determined by the Board of Directors at its discretion based on various factors, and no assurance can be provided as to future dividends.

Compensation expense for restricted stock is recognized ratably over the required service period based on the fair value of the grant calculated as the number of shares granted multiplied by the stock price on the date of grant, and for performance shares, the likelihood of achieving the performance criteria. 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 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 September 30, 2012, 1,802,159 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, 2012, 2011 and 2010 is as follows:

	Options
	Shares			Weighted Average Exercise Price		Aggregated Intrinsic Value		Weighted Average Contractual Term (Years)
Outstanding at September 30, 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 September 30, 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		1,667		3.7
Exercisable at September 30, 2011		1,169,661			17.50		1,667		3.7
Outstanding at September 30, 2011		1,169,661			17.50
Granted		—
Exercised		—
Forfeited/Expired		(239,900	)		12.74
Outstanding at September 30, 2012		929,761			18.73		—		3.4
Exercisable at September 30, 2012 through:
September 30, 2013		215,526			14.01				0.5
September 30, 2014		129,750			19.88				1.6
September 30, 2015		147,035			18.50				2.7
September 30, 2016		73,450			25.66				3.6
September 30, 2017		14,000			14.78				4.8
September 30, 2018		—
September 30, 2019		350,000			20.00				6.0
Total Exercisable		929,761		$	18.73				3.4

		Options Outstanding & Exercisable
Range of Exercises Prices		Shares		Weighted Average Exercise Price		Aggregated Intrinsic Value		Weighted Average Contractual Term (Years)
Minimum	Maximum
$12.39	$14.78		189,526	$	12.78	$	—		0.8
$17.23	$19.49		185,535		17.69		—		2.2
$20.00	$26.06		554,700		21.11		—		4.6
Totals			929,761			$	—

All stock options were fully vested at September 30, 2012 and no options vested during 2012. The fair value of options vested during the years ended September 30, 2011 and 2010 were $270 and $585, respectively.

A summary of restricted stock activity, inclusive of restricted stock units, for the years ended September 30, 2012, 2011 and 2010 is as follows:

	Shares			Weighted Average Grant Price		Aggregated Intrinsic Value*		Weighted Average Contractual Term (Years)
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
Granted		439,500			9.33		4,101
Fully Vested		(41,045	)		11.35		428
Forfeited		(65,400	)		11.13		728
Outstanding at September 30, 2012		3,443,002			10.38		2,828		1.5

*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 $15,100 at September 30, 2012 and will be recognized over a weighted average vesting period of 1.3 years.

At September 30, 2012, a total of approximately 6,174,922 shares of Griffon’s authorized Common Stock were reserved for issuance in connection with stock compensation plans.

For the years ended September 30, 2012, 2011 and 2010, stock based compensation expense totaled $10,439, $8,956 and $5,778, respectively.

In August 2011, Griffon’s Board of Directors authorized the repurchase of up to $50,000 of Griffon’s outstanding common stock; this was 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 remained under the $50,000 authorization. During 2012, Griffon purchased 1,187,066 shares of common stock under the plan for a total of $10,379, or $8.74 per share; $38,312 remains under the $50,000 authorization.