SEPARATION AGREEMENT

THIS SEPARATION AGREEMENT (the “Agreement”) is made and entered into as of
October 30, 2009 (the “Effective Date”) by and between GRIFFON CORPORATION, a
Delaware corporation with its principal office located at 100 Jericho
Quadrangle, Suite 224, Jericho, New York  11753 (together with its subsidiaries,
affiliates, successors and assigns) (referred to as the “Company”) and FRANKLIN
H. SMITH, who resides at 6555 Adams Avenue, Cincinnati, Ohio  45253 (the
“Executive”) (each a “Party”) (the Company and the Executive are referred to
herein as the “Parties”).  The Parties acknowledge that the terms and conditions
of this Agreement have been voluntarily agreed to and that such terms are final
and binding.
 
W I T N E S S E T H:
 
WHEREAS, Executive was employed by the Company as Executive Vice President; and
 
WHEREAS, Executive has expressed a desire to resign as an officer and employee
of the Company and the Company has accepted such resignation effective October
9, 2009; and
 
WHEREAS, the Company and Executive intend that this Agreement supersedes and
replaces all other agreements between the Company and Executive, including,
without limitation, the Severance Agreement between the Parties dated November
2, 2007 and effective November 30, 2007 (the “Severance Agreement”); and
 
WHEREAS, the Company accepts Executive's resignation in accordance with and as
provided in this Agreement; and

 
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WHEREAS, in recognition of Executive's service to the Company and for such
consideration as set forth herein, the Company desires to provide Executive the
Special Separation Package defined below; and
 
WHEREAS, as a condition to receiving the Special Separation Package, Executive
has agreed to execute and deliver the General Release Agreement (the “Release”),
annexed hereto as Exhibit A, simultaneously with the execution of this
Agreement.
 
NOW, THEREFORE, in consideration of the covenants and promises made herein, the
Parties hereby agree as follows:
 
1.           Executive's employment with the Company terminated on October 9,
2009 (the “Termination Date”).
 
2.           Executive hereby resigns as Executive Vice President, officer and
employee of the Company and each of its subsidiaries and affiliates effective as
of the Termination Date.  Executive agrees to sign such documents, as may be
requested by the Company at any time, to evidence his resignation as set forth
above.
 
3.           Conditioned upon, and in consideration for, Executive's execution
of this Agreement and the Release and compliance with the promises made therein,
and provided Executive does not revoke all or any portion of this Agreement
and/or Release, and all revocation periods have lapsed, Executive shall receive
the Special Separation Package set forth below in subparagraphs 3(a), (b) and
(c):
 
(a)           The Company will pay Executive severance pay equal to the gross
amount of Four Hundred Seventy Five Thousand and 00/100 ($475,000.00) Dollars,
less applicable federal, state and local withholding and taxes, representing
twelve (12) months of base salary.  Such amount shall be paid to Executive in
two (2) equal lump sum payments of Two Hundred Thirty Seven Thousand Five
Hundred and 00/100 ($237,500.00) Dollars each, less applicable federal, state
and local withholding and taxes, no later than November 15, 2009 and March 15,
2010, respectively, but in no event before any applicable revocation period has
lapsed;

 
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(b)           The Company will pay to the Executive a one-time lump sum payment
in the amount of Two Hundred Thousand and 00/100 ($200,000.00) Dollars, less
applicable federal, state and withholding and taxes, no later than May 15, 2010,
but in no event before any applicable revocation period has lapsed;
 
(c)           The Company will pay to the Executive the amount of Eighty Five
Thousand and 00/100 ($85,000.00) Dollars, less applicable federal, state and
withholding taxes, representing Executive's bonus for the Company's fiscal year
2009, consistent with the Company's normal payroll practices for payment of
annual bonuses, but in no event before any applicable revocation period has
lapsed;
 
(d)           The Company will pay the amount of Fifteen Thousand and 00/100
($15,000.00) Dollars to Freking and Betz, LLC, attorneys for Executive, in
payment of counsel fees incurred by Executive in connection with the negotiation
and settlement of this Separation Agreement, no later than November 15, 2009,
but in no event before any applicable revocation period has lapsed; and
 
(e)           Executive's present medical coverage remained in force through
October 9, 2009.  Thereafter, COBRA regulations apply.  The Company will
continue Executive's presently existing medical coverage through COBRA and will
pay Executive's COBRA premiums at the Company's expense, for a period of up to
eighteen (18) months from the Termination Date or until Executive elects
coverage through a new employer, but in no event before any applicable
revocation period has lapsed.  If Executive elects to continue COBRA benefits
after eighteen (18) months, he may do so, as long as permitted by applicable
law, at Executive's own cost.

 
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4.           Executive acknowledges that he has received payment in full for any
and all wages, SERP and benefit payments, expense reimbursements, accrued unused
vacation time, sick days and personal days.  Executive further acknowledges that
there is no further payment or time due to him for wages, SERP and benefit
payments, expense reimbursements, vacation time, sick days and/or personal days.
 
5.             (a)           Executive shall retain all previous grants of
options to purchase shares of stock of the Company, which shall be vested to the
extent provided in, and exercisable in accordance with and pursuant to, the
plans and agreements covering such options;
 
(b)           Executive hereby confirms and agrees that 20,000 shares of the
50,000 shares of restricted stock granted to him on August 3, 2006, pursuant to
the Company's 2006 Equity Incentive Plan (the “Plan”) have not vested and were
forfeited by Executive upon his resignation on the Termination Date in
accordance with the terms of the Plan;
 
(c)           Executive shall retain all rights, benefits and payments due him
under Clopay Corporation's Supplemental Executive Retirement Plan (the “Clopay
SERP”), and the Company's 401K retirement plan; and
 
(d)           Executive shall retain all rights, benefits and payments due him
under the Griffon Corporation Employee Stock Ownership Plan.
 
(e)           Executive shall retain all rights, benefits and payments due him
under the Clopay Corporation Pension Plan, formerly known as the Clopay
Corporation Salaried Employees Pension Plan.
 
(f)           After the Termination Date, Executive may continue any term life
insurance policy at his own expense.

 
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6.           Executive confirms that he has delivered to the Company all keys,
E-Z Pass and other toll payment devices, Company credit card(s), memoranda,
records, computers, computer programs, computer files, computer disks, drawings,
plans, manuals, letters, notes, notebooks, reports, and all other materials and
property, including without limitation, those of a secret or confidential nature
relating to the Company's business that were in Executive's possession, custody
or control and all copies thereof, whether made or compiled by Executive alone
or with others or made available to Executive while employed by the Company.
 
7.           Executive agrees that at all times after the Termination Date
(except as otherwise required by applicable law, regulation or legal process),
Executive will hold in strictest confidence and not to use for his own benefit
or the benefit of any other person, or to disclose to any person without
authorization from the Company, any trade secrets or confidential or proprietary
information gained through Executive's employment with the Company.  This
includes, but is not limited to, non-public financial and operational
information, business plans, software and technology, networks, business
methodologies, contracts, pricing and product profitability, customer lists,
supplier lists, marketing or sales prospect lists, and data developed by the
Company or any subsidiary, affiliate or division thereof.  This does not include
any information which is or becomes publicly known or available other than as a
result of wrongful disclosure by Executive.  Executive agrees that any breach of
this Section 7 would cause the Company substantial and irreparable damages that
may not be quantifiable and therefore, in the event of any such breach, in
addition to other remedies that may be available, the Company shall have the
right to seek specific performance and other injunctive and equitable
relief.  Moreover, Executive agrees to assume the cost of all attorney fees
incurred by the Company as a result of the Company's enforcement of this Section
7.

 
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8.           For a period of six (6) months following the Termination
Date,  Executive will not, without the prior written consent of the Company,
engage in “Competition” (as defined below) with the Company.  For purposes of
this Agreement, if Executive takes any of the following actions, Executive will
be engaged in “Competition”:  if Executive is engaging in or carrying on,
directly or indirectly, any enterprise, whether as an advisor, principal, agent,
partner, officer, director, employee, stockholder, associate or consultant to
any person, partnership, corporation or any other business entity, that is
engaged in a business that is competitive with any material business that the
Company is engaged in as of the Termination Date.  Notwithstanding anything
herein to the contrary, “Competition” will not include the ownership of less
than a one (1%) percent equity interest in a publicly held company and exercise
of rights appurtenant thereof.  If a court holds that the duration, scope, area
or other restrictions stated herein are unreasonable under circumstances then
existing, the Company and the Executive agree that the maximum duration, scope,
area or other restrictions reasonable under such circumstances will be
substituted for the stated duration, scope, area or other restrictions.  The
Parties acknowledge that any violation of this Section 8 can cause substantial
and irreparable harm to the Company.  Therefore, the Company will be entitled to
pursue any and all legal and equitable remedies, including but not limited to
injunctive relief.
 
9.           For a period of twelve (12) months following the Termination Date,
Executive agrees not to solicit any customer or employee of the Company.
 
10.         Except as otherwise required by law or regulation, Executive hereby
agrees that he shall not make any statement, written or verbal, in any form or
media or take any action in disparagement of the Company or any of its
subsidiaries, affiliates or divisions, including, but not limited to, references
to the Company's products, services, corporate policies, officers, directors and
employees or any other action which may disparage the Company to the general
public and the Company's employees, customers, suppliers, and business and
financial relations.  Except as otherwise required by law or regulation, the
Company agrees that it shall not make any statements which may disparage the
Executive to the general public, the Company's customers, suppliers, and
business and financial relations.

 
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11.           It is the intent of the Parties that payments under this Agreement
are in conformance and comply with Section 409A of the Internal Revenue Code
(“Section 409A”) and, specifically, that such payments as set forth herein are
in accordance with the provisions of the Separation Pay Exception of Section
409A.  Accordingly, to the maximum extent permitted, this Agreement shall be
interpreted and administered to be in compliance therewith.  If current or
future regulations or guidance from the Internal Revenue Service dictates, or
the Company's counsel determines, that any payments or benefits due to Executive
hereunder would otherwise cause the application of an accelerated or additional
tax under Section 409A, amounts that would otherwise be payable and benefits
that would otherwise be provided pursuant to this Agreement during the six-month
period immediately following Executive's “separation from service” (as defined
in Section 409A and the regulations issued thereunder) shall instead be payable
in a single lump sum on the first business day after the date that is six (6)
months following Executive's separation from service.
 
12.           Executive acknowledges that Executive will not be eligible to
receive the Special Separation Package if Executive is found to have committed
or condoned during Executive's employment any acts of fraud against the Company
or fraud against the government.  Executive hereby confirms that: Executive (a)
has not committed or condoned any such fraudulent activity; (b) has complied in
all material respects with the Company's Code of Business Ethics (the “Code”)
during his employment and has not participated in or knowingly permitted others
to engage in any conduct prohibited by the Code; and (c) understands that
Executive has a duty under the Code to notify the Company's Corporate Ethics
Officer of any knowledge of violation of the Code.  Executive confirms that
Executive has complied with the duties and obligations outlined in this Section,
and Executive acknowledges that such compliance is a condition to Executive's
eligibility to receive the Special Separation Package described in this
Agreement.

 
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13.           No provision in this Agreement may be amended unless such
amendment is agreed to in writing and signed by both Executive and an authorized
officer of the Company.  No waiver by either Party of any breach by the other
Party of any condition or provision contained in this Agreement to be performed
by such other Party shall be deemed a waiver of a similar or dissimilar
condition or provision at the same or any prior or subsequent time.  Any waiver
must be in writing and signed by the Party to be charged with the waiver.  No
delay by either Party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof.
 
14.           In the event that any provision or portion of this Agreement shall
be determined to be invalid or unenforceable for any reason, in whole or in
part, the remaining provisions of this Agreement shall be unaffected thereby and
shall remain in full force and effect to the fullest extent permitted by law.
 
 15.           This Agreement shall be governed by and construed and interpreted
in accordance with the laws of New York, without reference to principles of
conflict of laws.  The Parties agree that the appropriate forum and venue of any
disputes arising out of this Agreement shall be any State or Federal Court in
the counties of Nassau or Suffolk, State of New York, and each of the Parties
hereto submits to the personal jurisdiction of any such Court.  The foregoing
shall not limit the right of any Party to obtain execution of judgment in any
other jurisdiction.

 
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16.           Any notice given to either Party shall be in writing and shall be
deemed to have been given when delivered either personally, by fax, or by
nationally recognized overnight courier service (such as Federal Express), duly
addressed to the Party concerned at the address indicated below or to such
changed address as the Party may subsequently give notice of.
 
If to the Company:
 
Griffon Corporation
Attention:  Chief Executive Officer
100 Jericho Quadrangle, Suite 224
Jericho, New York  11753
Fax:  (516) 938-5644

With required copy to:

Lonnie Coleman, Esq.
Moomjian, Waite, Wactlar & Coleman, LLP
100 Jericho Quadrangle, Suite 225
Jericho, New York  11753
Fax: (516) 937-5050

If to Executive:

Franklin H. Smith
6555 Adams Avenue
Cincinnati, Ohio  45243
Fax: __________________

With required copy to:

Randolph H. Freking, Esq.
Freking and Betz, LLC
525 Vine Street
Cincinnati, Ohio  45243
Fax:  (513) 651-2570

 
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17.           The Parties respectively represent and warrant that each is fully
authorized and empowered to enter into this Agreement and that the performance
of its or his obligations, as the case may be, under this Agreement will not
violate any agreement between such Party and any other person, firm or
organization.  The Company represents and warrants that this Agreement has been
duly authorized by all necessary corporate action and is valid, binding and
enforceable in accordance with its terms.
 
18.           Executive understands and acknowledges that he would not receive
any of the Special Separation Package and/or benefits specified herein, except
for Executive's execution of this Agreement, the Release annexed hereto as
Exhibit A, and the fulfillment of the promises and conditions contained therein.
 
19.           This Agreement may be executed in counterparts, each of which when
so executed and delivered shall be an original, but all such counterparts
together shall constitute one and the same instrument.  A signed copy, pdf or
facsimile copy of this Agreement shall be deemed an original.
 
20.           Clawback.
 
(a)           In the event Executive revokes all or a part of this Agreement or
the Release delivered pursuant to this Agreement prior to the expiration of any
applicable revocation periods, the Company shall have the right to terminate any
or all of its commitments herein and to recover any monies or other
consideration previously provided to Executive hereunder and to pursue any other
remedies available to the Company.
 
(b)           In the event that Executive violates this Agreement, the Company
shall have the right to terminate any or all of its commitments herein and to
recover any monies or other consideration previously provided to Executive
hereunder and to pursue any other remedies available to the Company.

 
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EXECUTIVE HAS BEEN ADVISED THAT EXECUTIVE HAS TWENTY-ONE (21) CALENDAR DAYS FROM
THE DATE OF EXECUTIVE'S RECEIPT OF THIS AGREEMENT TO CONSIDER THIS AGREEMENT
BEFORE HE SIGNS IT; EXECUTIVE MAY SIGN IT EARLIER IF HE WISHES, BUT THE DECISION
IS ENTIRELY THE EXECUTIVE'S.  EXECUTIVE MAY REVOKE THIS AGREEMENT FOR A PERIOD
OF SEVEN (7) CALENDAR DAYS FOLLOWING THE DAY EXECUTIVE EXECUTES THE AGREEMENT,
AND THE AGREEMENT SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE EXPIRATION
OF THAT SEVEN (7) CALENDAR DAY PERIOD.

ANY REVOCATION WITHIN THIS PERIOD MUST BE SUBMITTED, IN WRITING, TO THE COMPANY
AND STATE, “I HEREBY REVOKE MY ACCEPTANCE OF THE AGREEMENT.” THE REVOCATION MUST
BE PERSONALLY DELIVERED TO THE COMPANY OR ITS DESIGNEE, OR MAILED TO THE COMPANY
AND POSTMARKED WITHIN SEVEN (7) CALENDAR DAYS OF EXECUTION OF THIS
AGREEMENT.  IF THE LAST DAY OF THE REVOCATION PERIOD IS A SATURDAY, SUNDAY OR
LEGAL HOLIDAY IN NEW YORK, THEN THE REVOCATION PERIOD SHALL NOT EXPIRE UNTIL THE
NEXT FOLLOWING DAY WHICH IS NOT A SATURDAY, SUNDAY OR HOLIDAY.

EXECUTIVE HAS BEEN ADVISED IN WRITING TO CONSULT WITH AN ATTORNEY OF HIS OWN
CHOOSING AND AT HIS OWN EXPENSE PRIOR TO EXECUTING THIS AGREEMENT.  THE
AGREEMENT, AMONG OTHER THINGS, WAIVES RIGHTS THAT EXECUTIVE MAY HAVE UNDER THE
AGE DISCRIMINATION IN EMPLOYMENT ACT (THE “ADEA”).

EXECUTIVE AGREES THAT ANY MODIFICATION, MATERIAL OR OTHERWISE, MADE TO THIS
AGREEMENT DOES NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL TWENTY-ONE DAY
(21) CALENDAR DAY CONSIDERATION PERIOD.

HAVING ELECTED TO EXECUTE THIS AGREEMENT, TO FUFILL THE PROMISES AND TO RECEIVE
THE SUMS AND BENEFITS STATED HEREIN, EXECUTIVE FREELY AND KNOWINGLY, AND AFTER
DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT, INTENDING TO WAIVE, SETTLE AND
RELEASE ALL CLAIMS EXECUTIVE HAS OR MIGHT HAVE AGAINST THE COMPANY AND THE
RELEASED PARTIES.

[signatures immediately following]

 
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first written above.

 

 
GRIFFON CORPORATION
                   
By:
 /s/ Patrick L. Alesia
   
Name: Patrick L. Alesia
   
Title:   Chief Administrative Officer
                         
/s/ Franklin H. Smith
 
Franklin H. Smith

STATE OF OHIO
)
 
) .ss:
COUNTY OF HAMILTON
)

On the 30th day of October, 2009, before me personally came Franklin H. Smith,
to me known, and known to me to be the individual described in, and who executed
the foregoing Separation Agreement, and duly acknowledged to me that he executed
the same.

 
/s/ Jacqueline D. Weaver
 
Notary Public

 
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