Exhibit 10.1


 


EXECUTION COPY


 


EMPLOYMENT AGREEMENT


 


THIS EMPLOYMENT AGREEMENT (this “Agreement”), is made
and entered into as of August 6, 2009 (the “Effective Date”), by
and between Griffon Corporation, a Delaware corporation, with its principal
office located at 100 Jericho Quadrangle, Jericho, New York 11753-2794
(together with its successors and assigns permitted under this Agreement, “Griffon”) and Douglas
J. Wetmore (“Wetmore”).


 


W I T N E S S E T H:


 


WHEREAS, Griffon has determined
that it is in the best interests of Griffon and its stockholders to employ
Wetmore as its Executive Vice-President and Chief Financial Officer; and


 


WHEREAS, Griffon
wishes to assure itself of the services of Wetmore for the period hereinafter
provided, and Wetmore is willing to be employed by Griffon for said period,
upon the terms and conditions provided in this Agreement;


 


NOW, THEREFORE, in
consideration of the premises and mutual covenants contained herein and for
other good and valuable consideration, the receipt and sufficiency of which is
mutually acknowledged, Griffon and Wetmore (individually a “Party” and together
the “Parties”)
agree as follows:


 


1.                                      DEFINITIONS.


 


(a)                                  “Affiliate”
means any person or entity controlling, controlled by or under common control
with Griffon.


 


(b)                                 “Board” shall mean the
Board of Directors of Griffon.


 


(c)                                  “Cause” shall mean:


 


(i)                                     Wetmore’s willful refusal to perform his material duties as defined herein
(other than as a result of total or partial incapacity due to physical or
mental illness),


 


(ii)                                  theft or embezzlement of Griffon property or dishonesty in the performance
of Wetmore’s duties,


 


(iii)                               Wetmore’s conviction of, or plea of guilty or nolo contendere to (x) a
felony under the laws of the United States or any state thereof or (y) a
crime involving moral turpitude,


 


(iv)                              Wetmore’s willful
malfeasance or willful misconduct in connection with Wetmore’s duties hereunder
or any act or omission which is materially injurious to the financial condition
or business reputation of Griffon or any of its Subsidiaries or
Affiliates.  For purposes of Section 1(c)(i) and
(iv), no act or failure to act on the part of Wetmore shall be considered “willful”
unless it is committed, or omitted to 


 

















 


be done, by him in bad faith or
without reasonable belief that his action or omission was in the best interests
of Griffon, and/or


 


(v)                                 any material breach of the Agreement by
Wetmore.


 


Notwithstanding the
foregoing, no act or failure to act (to the extent curable) shall constitute Cause
unless Griffon gives Wetmore written
notice after becoming aware of the occurrence of the act or failure to act
which Griffon believes constitutes the basis for Cause, specifying the
particular act or failure to act which Griffon believes constitutes the basis
for Cause.  If Wetmore fails to cure such
act or failure to act within thirty (30) days after receipt of such notice,
Wetmore’s employment shall be deemed terminated for Cause.


 


(d)                                 “Change in Control”
shall mean the occurrence of any of the following events during the Employment
Term:


 


(i)                                     any person, or
more than one person acting as a group within the meaning of Code Section 409A
and the regulations issued thereunder, acquires ownership of stock of Griffon
that, together with stock held by such person or group, constitutes more than
50 percent of the total fair market value or total voting power of the stock of
Griffon; provided, however, that for purposes of this subsection
(i), the following acquisitions shall not be deemed to result in
a Change in Control: (A) any acquisition directly from Griffon, (B) any
acquisition by Griffon or any Affiliate, or (C) any acquisition by (x) any
employee benefit plan (or related trust) intended to be qualified under Section 401(a) of
the Code or (y) any trust established in connection with any broad-based
employee benefit plan sponsored or maintained, in each case, by Griffon or any
corporation controlled by Griffon;


 


(ii)                                  any person, or
more than one person acting as a group within the meaning of Code Section 409A
and the regulations issued thereunder, acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition) ownership of
stock of Griffon possessing 30 percent or more of the total voting power of
Griffon’s stock; provided, however, that for
purposes of this subsection (ii), the following acquisitions
shall not be deemed to result in a Change in Control: (A) any acquisition
directly from Griffon, (B) any acquisition by Griffon or any Affiliate, or
(C) any acquisition by (x) any employee benefit plan (or related
trust) intended to be qualified under Section 401(a) of the Code or (y) any
trust established in connection with any broad-based employee benefit plan
sponsored or maintained, in each case, by Griffon or any corporation controlled
by Griffon;


 


(iii)                               a majority of
the members of the Board is replaced during any 12-month period by directors
whose appointment or election is not endorsed by a majority of the members of
the Board before the date of the appointment or election, but excluding any new director whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of any
individual, 


 


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entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934 as amended) (a “Person”) other than the Board; or


 


(iv)                              a person, or
more than one person acting as a group within the meaning of Code Section 409A
and the regulations issued thereunder (other than a subsidiary or an Affiliate
of Griffon), acquires (or has acquired during the 12-month period ending on the
date of the most recent acquisition) all or substantially all of the assets of
Griffon.


 


Notwithstanding the
foregoing, a Change in Control shall not include any event, circumstance or
transaction that results from an action of any Person, entity or group which
includes, is affiliated with or is wholly or partly controlled by one or more
executive officers of Griffon and in which Wetmore participates directly or
actively (other than a renegotiation of his employment arrangements or in his
capacity as an employee of Griffon or any successor entity thereto or to the
business of Griffon).


 


(e)                                  “Code” shall mean the
Internal Revenue Code of 1986, as amended from time to time.


 


(f)                                    “Committee” shall mean
the Compensation Committee of the Board.


 


(g)                                 “Employment Term” shall
mean the period specified in Section 2(b) below.


 


(h)                                 “Fiscal Year” shall
mean the 12-month period beginning on October 1 and ending on the next
subsequent September 30, or such other 12-month period as may constitute
Griffon’s fiscal year at any time hereafter.


 


(i)                                     “Good Reason” shall
mean the occurrence of any of the following events without Wetmore’s prior
written consent:


 


(i)                                     the failure of Griffon to pay Wetmore’s base salary or annual bonus when
due and if earned, other than an inadvertent administrative error or failure,


 


(ii)                                  a reduction by Griffon in Wetmore’s Salary or Target Bonus, other than a
percentage reduction applied equally  to all senior
executives,


 


(iii)                               a material diminution in Wetmore’s authority or responsibilities from those
described herein, including the appointment of another person to the position
of Chief Financial Officer,


 


(iv)                              failure of Griffon to maintain its principal headquarters within
thirty-five (35) miles of New York City,


 


(v)                                 any material breach of the Agreement by
Griffon, or


 


(vi)                              a failure of Griffon to have any
successor assume in writing the obligations under the Agreement.


 


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Notwithstanding the
foregoing, none of these events shall constitute Good Reason unless Wetmore
gives Griffon written notice within ninety (90) days after the occurrence of
the event which Wetmore believes constitutes the basis for Good Reason,
specifying the particular act or failure to act which Wetmore believes
constitutes the basis for Good Reason. 
If Griffon fails to cure such act or failure to act within thirty (30)
days after receipt of such notice, Wetmore may terminate his employment for
Good Reason.


 


(j)                                     “Salary” shall mean the
annual salary provided for in Section 3
below, as adjusted from time to time.


 


2.                                      EMPLOYMENT
TERM, POSITIONS AND DUTIES.


 


(a)                                  Employment of Wetmore. Griffon hereby employs Wetmore,
and Wetmore hereby accepts employment with Griffon, in the
positions and with the duties and responsibilities set forth below and upon
such other terms and conditions as are hereinafter stated.  Wetmore shall render services to
Griffon principally at Griffon’s corporate headquarters, but he shall do such
traveling on behalf of Griffon as shall be reasonably required in the course of
the performance of his duties hereunder.


 


(b)                                 Employment Term. Unless earlier terminated
under Section 9 hereof, the term of employment hereunder shall
commence as of September 1, 2009 (the “Commencement Date”), and shall
continue until the fourth anniversary of the Commencement Date (the “Initial
Term”) and shall automatically renew for one year periods commencing on the
fourth anniversary of the Commencement Date (each such one-year period, a “Renewal
Term”), unless either Party provides notice of non-renewal at least ninety (90) days prior to the
end of the Initial Term or any Renewal Term (the Initial Term and any
Renewal Term shall hereinafter be referred to as the “Employment Term”).


 


(c)                                  Titles and Duties.  During the Employment Term, Wetmore shall (i) have
the titles of Executive Vice-President and Chief Financial Officer, (ii) be
responsible for, and, along with Griffon’s Chief Executive Officer, have
authority over, Griffon’s internal controls, Sarbanes Oxley compliance,
investor relations, finance, accounting and treasury functions, (iii) have
such other duties and responsibilities as are assigned to Wetmore by Griffon’s
Chief Executive Officer or the Board (not inconsistent in any significant
respect with the duties and responsibilities typically assigned to the chief
financial officer of a publicly-traded corporation), and (iv) report to
Griffon’s Chief Executive Officer and/or his designees.


 


(d)                                 Time and Effort.  Wetmore shall devote his best efforts
and abilities, and all of his business time, to the performance of his duties
under the Agreement; provided that he shall, to the extent same does not
substantially interfere with the performance of his duties hereunder, be
permitted to: (i) serve on civic boards and committees and, with the prior
written consent of the Board, corporate boards, provided, however, that Board
consent shall not be required to continue Wetmore’s current membership on the
board of Arch Chemicals, Inc.. (ii) deliver lectures, fulfill
speaking engagements or teach at educational institutions, and (iii) manage
personal and family investments.


 


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3.                                      SALARY.


 


(a)                                  Wetmore shall
receive from Griffon a Salary, payable in accordance with the regular payroll
practices of Griffon, in an amount of $500,000 per annum.  During the Employment Term, Wetmore shall be
eligible for periodic annual increases in Salary commencing October 1,
2010, in the sole discretion of the Committee.


 


4.                                      BONUSES.


 


(a)                                  Annual Bonus. Commencing with the Fiscal
Year ending September 30, 2010 and for each Fiscal Year thereafter during
the Employment Term, Wetmore shall be eligible to receive a performance based
bonus of between 0% and 150% of Salary, with a target bonus of 75% of Salary
(the “Target Bonus”), in accordance with Griffon’s 2006 Performance Bonus Plan
or another plan or plans providing annual award opportunities.  Any such bonus shall be based on the
achievement of performance objectives to be established and certified by the
Committee.  Such performance criteria
shall be communicated to Wetmore in writing within ninety (90) days after the
commencement of the applicable performance period.  Such performance-based bonus shall be paid
within seventy-five (75) days of the end of the Fiscal Year during which it is
earned.


 


(b)                                 Discretionary
Bonus.  Wetmore shall be eligible to
receive a bonus for the Fiscal Year ending September 30, 2009, and each
Fiscal Year thereafter during the Employment Term.  The amount and the occasion for payment of
such bonus, if any, shall be determined by the Committee in its sole
discretion.


 


5.                                      EQUITY
AWARDS.


 


(a)                                  Restricted
Stock.  As soon as practicable
following the Commencement Date, Wetmore shall receive, pursuant to the Griffon
Corporation 2006 Equity Incentive Plan (the “Plan”) and an award agreement
issued thereunder, a restricted stock grant of 200,000 shares of common stock
(the “Restricted Stock Grant”) of Griffon. 
The Restricted Stock Grant shall vest in full on the fourth anniversary
of the date of grant, provided that Wetmore is then still employed by Griffon
(unless prior thereto Wetmore’s employment is terminated by Griffon without
Cause or due to Wetmore’s disability or by Wetmore for Good Reason, in which
case the Restricted Stock Grant shall vest in accordance with subsection (i) (in
the case of a termination without Cause or for Good Reason) or (ii) (in
the case of disability) of Section 9(h)).  The award agreement for the Restricted Stock
Grant shall permit Wetmore to satisfy his withholding obligations by having
Griffon withhold a sufficient number of shares to satisfy such obligations.


 


(b)                                 Subsequent
Grants.  The Board (or the Committee)
shall consider making additional equity grants to Wetmore, the amount and
frequency of which shall be determined by the Board or Committee in its sole
discretion.


 


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6.                                      BUSINESS
AND TRAVEL EXPENSE REIMBURSEMENT; CERTAIN OTHER COSTS.


 


(a)                                  Business
Expenses.  Wetmore
shall be entitled to prompt reimbursement by Griffon for all reasonable
business expenses incurred by him during the Employment Term in performing
services under this Agreement, upon his proper submission of such accounts and
records as may be reasonably required by Griffon.


 


(b)                                 Other Costs.  Griffon shall reimburse Wetmore for
reasonable attorneys fees incurred in connection with the negotiation of this
Agreement, up to a maximum of $10,000.00.


 


All reimbursements under
this Section 6 shall be made as soon as practicable following
submission of a reimbursement request, but no later than the end of the year
following the year during which the underlying expense was incurred.


 


7.                                      PERQUISITES.


 


During the Employment Term, Griffon shall provide
Wetmore with the use of an automobile, such as
a BMW X5 or similar model and reimbursement or payment of all related
expenses, including, without limitation, lease payments, insurance, maintenance
and parking, subject to Wetmore’s prompt submission of such accounts and
records as may be reasonably required by Griffon.  All reimbursements or
payments under this Section 7 shall be made as soon as practicable
following submission of a reimbursement request, but no later than the end of
the year following the year during which the underlying expense was incurred.


 


8.                                      BENEFITS.


 


(a)                                  General. 
During the Employment Term, Wetmore will be eligible to participate in
all welfare benefit plans and tax-qualified pension plans of Griffon as are
generally available to Griffon’s other similarly situated executives in
accordance with the terms and provisions of such plans, including without
limitation, profit-sharing plans, savings and similar plans, group life
insurance, accidental death and dismemberment insurance, travel accident
insurance, hospitalization insurance, surgical insurance, major medical
insurance, dental insurance, short-term and long-term disability insurance,
sick leave, holidays, vacation (four weeks per calendar year, to be taken in
accordance with Griffon’s policy) and any other employee benefit plans or
programs that may be sponsored by Griffon from time to time; provided, however,
that Wetmore shall not be eligible to receive benefits or payments under any
severance plan, program or arrangement of Griffon other than those benefits
Wetmore may become entitled to receive, as the case may be, under this Agreement.


 


(b)                                 Life Insurance Benefit.  In addition to the group life insurance
available to employees generally, Griffon shall provide Wetmore with
company-paid term life insurance coverage with a face amount equal to three
times his Salary.


 


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9.                                      TERMINATION
OF EMPLOYMENT.


 


(a)                                  Voluntary Termination. Wetmore may terminate his
employment voluntarily at any time during the Employment Term. If he does so,
except for Good Reason, he shall be entitled to receive only the compensation
and benefits specified in Section 9(b).


 


(b)                                 General. Notwithstanding anything to the contrary
herein, in the event of any termination of Wetmore’s employment during the
Employment Term (including by reason of his death), he shall be entitled to
receive as soon as administratively feasible following such termination, but in
any event, except as provided below, within fifteen (15) days thereafter (in
addition to the applicable payments and benefits he may also be entitled to
receive under subsections (c) through (h) below,
as applicable):


 


(i)                                     accrued but
unpaid Salary through the date of termination;


 


(ii)                                  any accrued but
unused vacation;


 


(iii)                               any annual
bonus earned for the Fiscal Year completed prior to the year of termination but
not yet paid to him; and


 


(iv)                              reimbursement
in accordance with Section 6 above of
any expenses incurred by him through the date of termination but not yet paid
to him.


 


Additionally, Wetmore shall
receive any other compensation or benefits, including, without limitation,
benefits under any outstanding equity grants and awards granted pursuant to Section 5 above and employee benefits under
plans described in Section 8 above,
that have vested through the date of termination or to which he may then be
entitled in accordance with the applicable terms and conditions of each grant,
award or plan.


 


(c)                                  Termination Due to Disability. If, during the Employment
Term, Wetmore’s employment is terminated by Griffon due to disability, he shall
be entitled, in addition to the compensation and benefits specified in Section 9(b), to receive:


 


(i)                                     a pro-rata
bonus for the year of termination equal to the Target Bonus multiplied by a
fraction, the numerator of which is the number of completed days in the Fiscal
Year of Wetmore’s termination of employment during which Wetmore was employed
by Griffon and the denominator of which is 365, as soon as administratively
feasible following such termination, but in any event within fifteen (15) days
thereafter;


 


(ii)                                  severance equal
to six months’ Salary payable in six (6) equal monthly installments and
commencing on the first payroll period following such termination; provided,
however, that, if and to the extent necessary to avoid the imposition of any
taxes imposed under Section 409A of the Code, such six months of continued
Salary shall be payable over eighteen months (instead of over six months); and


 


(iii)                               if Wetmore (or
his beneficiaries) elects continued medical coverage under COBRA, Griffon shall
pay for coverage under COBRA for six (6) months following such
termination.


 


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(d)                                 Termination due to Death. 
If, during the Employment Term, Wetmore’s employment is terminated due
to Wetmore’s death, he shall be entitled, in addition to the compensation and
benefits specified in Section 9(b), to receive a pro-rata bonus for
the year of termination equal to the Target Bonus multiplied by a fraction, the
numerator of which is the number of completed days in the Fiscal Year of
Wetmore’s termination of employment during which Wetmore was employed by
Griffon and the denominator of which is 365, as soon as administratively
feasible following such termination, but in any event within fifteen (15) days
thereafter.


 


(e)                                  Termination by
Griffon for Cause.  Griffon may
terminate Wetmore’s employment hereunder for Cause.  In the event that Wetmore’s employment is
terminated for Cause, he shall be entitled to receive only the compensation and
benefits specified in Section 9(b).


 


(f)                                    Termination by Griffon Without Cause or by Wetmore for Good Reason.  Griffon may terminate Wetmore’s employment
hereunder without Cause and Wetmore may terminate his employment hereunder for
Good Reason.  If, during the Employment
Term, Griffon terminates Wetmore’s employment without Cause or Wetmore
terminates his employment for Good Reason, in either such case, other than
within two years after a Change in Control, he shall be entitled to receive,
subject to the execution and non-revocation of a release substantially in the form
attached hereto as Exhibit A and to Wetmore’s continued compliance
with the restrictive covenants contained in Sections 12 and 13,
commencing no later than forty-five (45) days after such termination, in
addition to the compensation and benefits specified in Section 9(b):


 


(i)                                     continued
Salary for eighteen (18) months payable in eighteen (18) equal monthly
installments and commencing as soon as practicable following such termination;


 


(ii)                                  a performance
bonus payment (at no less than the Target Bonus) which would have otherwise
been paid for the year of termination had Wetmore’s employment not been
terminated, to be paid at such time as such bonus would otherwise have been
paid; and


 


(iii)                               if Wetmore (or
his beneficiaries) elect continued medical coverage under COBRA, Griffon will
pay for coverage under COBRA for 18 months following such termination.


 


(g)                                 Termination by Griffon Without Cause or by Wetmore for Good Reason
Within Two Years After a Change in Control.  If, during the Employment Term, Griffon terminates
Wetmore’s employment without Cause or Wetmore terminates his employment for
Good Reason, in either such case, within two years after a Change in Control,
he shall be entitled to receive, subject to the execution and non-revocation of
a release substantially in the form attached hereto as Exhibit A
and to Wetmore’s continued compliance with the restrictive covenants contained
in Sections 12 and 13, commencing no later than forty-five (45) days
after such termination, in addition to the compensation and benefits specified
in Section 9(b):


 


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(i)                                     a lump sum
payment, as soon as administratively feasible following such termination, but
in any event within ten (10) days thereafter, equal to two and one-half
(2.5) times the sum of (A) the Salary (but in no event less than Wetmore’s
Salary in effect immediately prior to the Change in Control) plus (B) the
average of the annual bonuses hereof paid to Wetmore under Section 4(a) in
the three-year period immediately prior to such termination; provided that,
until Wetmore has received an annual bonus under Section 4(a), his
Target Bonus shall be used for purposes of this subsection (B);


 


(ii)                                  a pro-rata
portion of the higher of (A) the earned annual bonus for the most recently
completed fiscal year; or (B) the Target Bonus, to be paid as soon as
administratively feasible following such termination, but in any event within
ten (10) days thereafter; and


 


(iii)                               continued
medical coverage under Griffon’s medical and health plans until the earlier of December 31
of the second calendar year following the year of termination of Wetmore’s
employment or Wetmore’s commencement of employment with another employer, at
the same cost as is paid by similarly situated continuing employees.


 


(h)                                 Vesting of
Equity Upon Certain Terminations.


 


(i)                                     If, during the Employment Term, Griffon
terminates Wetmore’s employment without Cause or Wetmore terminates his
employment for Good Reason, in either such case, the Restricted Stock Grant
shall vest in full as of the date of termination.


 


(ii)                                  If, during the Employment Term, Griffon
terminates Wetmore’s employment due to his disability, a portion of the
Restricted Stock Grant shall vest in a percentage equal to the number of days
worked by Wetmore from the grant date until the date of termination over 1,460.


 


(i)                                     Specified
Employee. 
Notwithstanding any other provision of this Agreement, if (i) Wetmore
is to receive payments or benefits under Section 9 by reason of his
separation from service (as such term is defined in Section 409A of the
Code) other than as a result of his death, (ii) Wetmore is a “specified
employee” within the meaning of Code Section 409A for the period in which
the payment or benefits would otherwise commence, and/or (iii) such
payment or benefit would otherwise subject Wetmore to any tax, interest or
penalty imposed under Section 409A of the Code (or any regulation
promulgated thereunder) if the payment or benefit would commence within six
months of a termination of Wetmore’s employment, then such payment or benefit
required under Section 9 shall not commence until the first day
which is at least six months and one day after the termination of Wetmore’s
employment.  Each severance installment
contemplated under this Section 9 shall be treated as a separate
payment in a series of separate payments under Treasury Regulation Section 1.409A-2(b)(2)(iii).  Such payments or benefits, together with
simple interest calculated at LIBOR as of the date of such separation from
service, which would otherwise have been required to be made over such six
month period, shall be paid to Wetmore in one lump sum payment or otherwise
provided to Wetmore as soon as administratively feasible after the first day
which is at least six 


 


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months
after the termination of Wetmore’s employment. 
Thereafter, the payments and benefits shall continue, if applicable, for
the relevant period set forth above.  For
purposes of this Agreement, all references to “termination of employment” and
other similar language shall be deemed to refer to Wetmore’s “separation from
service” as defined in Treasury Regulation Section 1.409A-1(h), including,
without limitation, the default presumptions thereof.


 


(j)                                     Miscellaneous.  For the avoidance of doubt, if applicable,
Wetmore shall only be entitled to receive the payments and benefits provided
under Section 9(f) or 9(g), which ever is applicable,
but not under both such sections.


 


10.                               NO
DUTY TO MITIGATE.


 


In the event of a termination
of employment under Sections 9(c), 9(f) or 9(g),
Wetmore shall not be required to mitigate damages or the amount of any payment
provided for under this Agreement by seeking other employment or otherwise, nor
will any payment hereunder be subject to offset in the event Wetmore does
receive compensation for any reason from any other source.


 


11.                               PARACHUTES.


 


Upon
a Change in Control during the Employment Term, notwithstanding any other
provisions of this Agreement to the contrary, in the event that any payments or
benefits received or to be received by Wetmore in connection with his
employment with Griffon (or termination thereof) would subject Wetmore to the
excise tax imposed under Section 4999 of the Code (the “Excise Tax”), and
if the net-after tax amount (taking into account all applicable taxes payable
by Wetmore, including any Excise Tax) that Wetmore would receive with respect
to such payments or benefits does not exceed the net-after tax amount Wetmore
would receive if the amount of such payment and benefits were reduced to the
maximum amount which could otherwise be payable to Wetmore without the
imposition of the Excise Tax, then, to the extent necessary to eliminate the
imposition of the Excise Tax, (a) such cash payments and benefits shall first
be reduced (if necessary, to zero) and (b) all other non-cash payments and
benefits shall next be reduced.


 


12.                               CONFIDENTIAL
INFORMATION.


 


Wetmore
acknowledges that during his employment by Griffon he will be in close contact
with many confidential affairs of Griffon or of any of its affiliates,
including, without limitation, trade secrets, other private or secret
information including secrets and information relating to corporate strategy,
business development plans, product designs, intellectual property, business
contacts, names and addresses of actual and potential customers and/or
suppliers and their requirements, terms of business with such customers and
potential customer and/or suppliers, annual budgets, management accounts, other
financial information, and other business affairs, methods and other
information not readily available to the public (collectively, “Confidential
Information”).  Notwithstanding the
foregoing, Confidential Information does not include any information which (a) is
or becomes publicly known or available other than as a result of wrongful
disclosure by Wetmore, (b) becomes available to Wetmore on a
non-confidential basis from a source which, to his knowledge, is not prohibited
from disclosing such


 


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Confidential Information to
him, or (c) is generally known in the industry in which Griffon or its
Affiliates operate and pertains to activities or business not specific to
Griffon or its Affiliates.  Wetmore
agrees to use all reasonable efforts to protect Griffon’s Confidential
Information and will keep secret all such Confidential Information and will not
intentionally disclose such Confidential Information to anyone outside of
Griffon except (x) as required in the performance of his duties hereunder;
(y) as required by a lawful order of a court of competent jurisdiction,
any governmental authority or agency, or any recognized subpoena power; or (z) with
Griffon’s prior written consent. Additionally, Wetmore will deliver promptly to
Griffon upon any termination of employment, all agreements, memoranda, notes,
records, reports and other documents (and all copies thereof) relating to
Griffon’s business and all other property of Griffon, which he may then possess
or have under your control other than publicly available documents.  Wetmore understands and agrees that the
rights and obligations set forth in this Section 12 shall extend
beyond the Employment Term.


 


13.                               OTHER
RESTRICTIVE COVENANTS.


 


(a)                                  Non-Solicitation
of Employees.  During
Wetmore’s employment by Griffon and for the eighteen (18) month period
following any termination of employment (the “Non-Solicit Period”), Wetmore
will not, for any reason, solicit, assist or encourage the solicitation of, or
employ any person who was a full-time employee of, or independent contractor
to, Griffon at the date of such termination or within six (6) months prior
thereto to work for Griffon or for any entity with which Wetmore is
affiliated.  For this purpose, the term “solicit”
will mean contacting, or providing information to others who may be reasonably
expected to contact, any employee of Griffon regarding such employee’s interest
in seeking employment with Griffon or for any entity with which Griffon is
affiliated.


 


(b)                                 Non-Solicitation
of Clients or Customers/Non-Interference with Vendors.  During
the Non-Solicit Period, Wetmore will not, for any reason, solicit or encourage
any vendor, Client or Prospective Client to cease any relationship with Griffon
or any of its Affiliates, or service in any way any Client or Prospective
Client.  For this purpose, the term “solicit”
will mean contacting, or providing information to others who may be reasonably
expected to contact, any such vendor, Client or Prospective Client of Griffon
regarding such Client or Prospective Client’s interest in receiving Wetmore’s
services or the services of any entity with which Wetmore is affiliated or the
cessation of any such relationship.  The
term “Client” will mean all persons for whom Griffon maintains an active
account or file in the active records of Griffon, or for whom Griffon has
otherwise performed or performs any services or provided products within the
twelve (12) month period preceding Wetmore’s termination of employment.  The term “Prospective Client” means those
persons and entities who have been approached by or on behalf of Griffon to
become a client or who have been entered into the internal records of Griffon
as a prospective or potential client.


 


(c)                                  Non-Compete.  Wetmore expressly covenants and agrees that
during the Non-Solicit Period, he will not directly or indirectly, own, manage,
operate, join, control, receive compensation or benefits from, or participate
in the ownership, management, operation, or control of, or be employed or be
otherwise connected in any manner with, any business which directly or
indirectly competes in any material manner with any of the businesses of
Griffon or 


 


11

















 


any
of its Affiliates, as conducted or planned by Griffon or any Affiliate during
Wetmore’s employment with Griffon.


 


(d)                                 Non-Disparagement.  Wetmore agrees that, during his employment by
Griffon and thereafter, he will not defame, disparage or publicly criticize
Griffon and/or its Affiliates and/or their management to any person or entity.  Subsequent to Wetmore’s termination of
employment for any reason, he will not speak in a negative or disparaging
manner about Griffon (and/or its Affiliates, management and/or its business),
to the media, whether electronic, print or otherwise, without the prior written
approval of Griffon.  Nothing herein,
however, will prohibit Wetmore from making
truthful statements to the extent legally compelled or otherwise
required by applicable laws or governmental regulations or judicial or
regulatory proceedings.


 


(e)                                  Survival.  Wetmore understands and agrees that the
rights and obligations set forth in this Section 13 shall extend
beyond the Employment Term.


 


14.                               REMEDIES/SANCTIONS.


 


Wetmore acknowledges that
the services he is to render under this Agreement are of a unique and special
nature, the loss of which cannot reasonably or adequately be compensated for in
monetary damages, and that irreparable injury and damage may result to Griffon
in the event of any breach of this Agreement or default by Wetmore. Because of
the unique nature of the Confidential Information and the importance of the
prohibitions against competition and solicitation, Wetmore further acknowledges
and agrees that Griffon will suffer irreparable harm if he fails to comply with
his obligations under Section 12 above
and/or Section 13 above and that
monetary damages would be inadequate to compensate Griffon for any such breach.
Accordingly, Wetmore agrees that, in addition to any other remedies available
to either Party at law, in equity or otherwise, Griffon will be entitled to
seek injunctive relief or specific performance to enforce the terms, or prevent
or remedy the violation, of any provisions of this Agreement.


 


15.                               WITHHOLDING
TAXES.


 


Wetmore will be solely
responsible for any applicable federal, state, local or other taxes, resulting
from any taxable income paid to him hereunder or otherwise by Griffon,
including without limitation any taxes imposed under Section 409A or Section 4999
of the Code.  Notwithstanding the
foregoing, Griffon will be entitled to withhold from any payments made to
Wetmore hereunder, and to report to appropriate federal, state and local taxing
authorities, all amounts required to be withheld or reported.


 


16.                               ASSIGNABILITY;
BINDING NATURE.


 


This Agreement shall be
binding upon and inure to the benefit of the Parties and their respective
successors, heirs (in the case of Wetmore) and assigns. No rights or
obligations of the Parties under this Agreement may be assigned without the
written consent of both Parties, except by will or the laws of descent and
distribution.


 


12

















 


17.                               REPRESENTATIONS.


 


Wetmore represents and
warrants to Griffon that his execution of this Agreement and the performance of
his obligations hereunder will not breach or be in conflict with any other
Agreement to which he is a party or by which he is otherwise bound.  Wetmore further represents and warrants that
he is not currently subject to any covenants against competition or similar
covenants or any court order that could preclude or otherwise affect the
performance of his duties and obligations hereunder.


 


18.                               ENTIRE
AGREEMENT.


 


Except to the extent
otherwise provided herein, this Agreement contains the entire understanding and
agreement between the Parties concerning the subject matter hereof and
supersedes any prior agreements, whether written or oral, between the Parties
concerning the subject matter hereof. Unless otherwise expressly determined by
the Board or the Committee in its sole discretion after the Commencement Date,
payments and benefits provided under this Agreement are in lieu of any payments
or other benefits under any severance program or policy of Griffon to which
Wetmore would otherwise be entitled.


 


19.                               AMENDMENT
OR WAIVER.


 


No provision in this
Agreement may be amended unless such amendment is agreed to in writing and
signed by both Wetmore and an authorized officer of Griffon. 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.


 


20.                               SEVERABILITY.


 


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.


 


21.                               SURVIVAL.


 


The respective rights and
obligations of the Parties hereunder shall survive the termination of this
Agreement, the termination of the Employment Term and the termination of
Wetmore’s employment with Griffon for any reason, to the extent necessary to
the intended provision of such rights and the intended performance of such
obligations.


 


22.                               GOVERNING
LAW/JURISDICTION.


 


This Agreement shall be
governed by and construed and interpreted in accordance with the laws of New
York State, without reference to principles of conflict of laws.


 


13

















 


23.                               NO
CONFLICTS.


 


Wetmore represents that (a) his
employment hereunder and performance of his duties hereunder will not conflict
with or result in the breach by him of any agreement to which he is a party or
by which he may be bound; (b) his employment with Griffon will not violate
any non-solicitation or other similar covenant or agreement by which he is
bound; and (c) in connection with his employment with Griffon, he will not
use any confidential or proprietary information he may have obtained in
connection with his employment with any prior employer.


 


24.                               ARBITRATION;
COSTS OF DISPUTES.


 


If any contest or dispute arising with respect to the terms of
employment under this Agreement, such contest or dispute shall be submitted to
binding arbitration for resolution in New York, New York, in accordance with
the Employment Dispute Resolution Rules of the American Arbitration
Association then in effect; provided, however, that Griffon may bring an action
to specifically enforce any confidentiality, non-compete, non-interference,
non-disparagement or non-solicitation covenant. 
Judgment upon any award rendered by the arbitrators may be entered in
any court having jurisdiction.  The costs
of commencing such arbitration will be borne equally by Wetmore and
Griffon.  Notwithstanding the foregoing
of this Section 24, each of the Parties agrees that, prior to
submitting a dispute under this Agreement to arbitration, the Parties agree to
submit, for a period of 60 days, to non-binding voluntary mediation before a
jointly selected neutral third party mediator under the auspices of JAMS, New
York, NY, Resolutions Center or such other dispute resolution firm as is
mutually agreed upon by the Parties, pursuant to the procedures of JAMS
International Mediation Rules, or the procedures of such other dispute
resolution firm, in each such case to the extent not inconsistent herewith, and
conducted in the State of New York (however, such mediation or obligation to
mediate shall not apply to, or suspend or otherwise delay, any action of
Griffon to specifically enforce any confidentiality, non-compete,
non-interference, non-disparagement or non-solicitation covenant).


 


25.                               INDEMNIFICATION.


 


During the Employment Term,
Griffon will provide Wetmore with indemnification rights and protections to the
same extent as is provided from time to time to the other senior executives of
Griffon, including, without limitation, the advancement of expenses, and on the
same terms and conditions applicable to such senior executive officers.  During the Employment Term, Wetmore will be
covered at all times by such directors’ and officers’ liability insurance as
Griffon will from time to time obtain, if any, and such coverage will be
substantially similar to that provided to the other senior executive officers
of Griffon.


 


26.                               NOTICES.


 


Any notice given to either
Party shall be in writing and shall be deemed to have been given when delivered
either personally, by fax, by overnight delivery service (such as Federal
Express) or sent by certified or registered mail postage prepaid, return
receipt requested, duly addressed to the Party concerned at the address
indicated below or to such changed address as the Party may subsequently give
notice of.


 


14

















 


If
to Griffon or the Board:


 


Griffon
Corporation

100 Jericho Quadrangle

Jericho, NY 11753-2794

Attention: Ronald J. Kramer

FAX:  (516) 938-5644


 


With
a copy to:


 


Stephen W. Skonieczny, Esq.

Dechert LLP


1095
Avenue of the Americas 

New York, NY 10036


 


If
to Wetmore:


 


Mr. Douglas J. Wetmore


39 Knollwood Dr.


Livingston, NJ 07039


 


With
a copy to:


 


Thomas A. Hickey, Esq.


Eaton & Van Winkle LLP


3 Park Avenue, 16th Floor


New York, NY 10016


 


27.                               HEADINGS.


 


The headings of the sections
contained in this Agreement are for convenience only and shall not be deemed to
control or affect the meaning or construction of any provision of this
Agreement.


 


28.                               COUNTERPARTS.


 


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.


 


[Remainder
of Page Intentionally Left Blank]


 


15

















 


IN WITNESS WHEREOF, the
undersigned have executed this Agreement as of the date set forth above.


 


 


	
   

  	
  GRIFFON CORPORATION  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Patrick L. Alesia

  
	
   

  	
   

  	
  CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE  

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/ Douglas J. Wetmore

  
	
   

  	
   

  	
  Douglas
  J. Wetmore

  



 

















 


EXHIBIT A


 


General Release


 


IN CONSIDERATION OF good and
valuable consideration, the receipt of which is hereby acknowledged, and in
consideration of the terms and conditions contained in the Employment
Agreement, dated as of August     , 2009, (the “Agreement”)
by and between Douglas J. Wetmore (the “Executive”) and Griffon Corporation
(the “Company”), the Executive on behalf of himself and his heirs, executors,
administrators, and assigns, releases and discharges the Company and its past
present and future subsidiaries, divisions, affiliates and parents, and their
respective current and former officers, directors, employees, agents, and/or
owners, and their respective successors, and assigns and any other person or
entity claimed to be jointly or severally liable with the Company or any of the
aforementioned persons or entities (the “Released Parties”) from any and all
manner of actions and causes of action, suits, debts, dues, accounts, bonds,
covenants, contracts, agreements, judgments, charges, claims, and demands
whatsoever (“Losses”) which the Executive and his heirs, executors,
administrators, and assigns have, had, or may hereafter have, against the
Released Parties or any of them arising out of or by reason of any cause,
matter, or thing whatsoever from the beginning of the world to the date hereof,
relating to the Executive’s employment by the Company and the cessation
thereof, and any and all matters arising under any federal, state, or local
statute, rule, or regulation, or principle of contract law or common law
relating to the Executive’s employment by the Company and the cessation
thereof, including but not limited to, the Family and Medical Leave Act of
1993, as  amended, 29 U.S.C. §§ 2601 et  seq., Title
VII of the Civil Rights Act of 1964, as  amended, 42 U.S.C. §§
2000 et  seq., the Age Discrimination in Employment Act of 1967, as
amended, 29 U.S.C. §§ 621 et  seq. (the “ADEA”), the
Americans with Disabilities Act of 1990, as  amended, 42 U.S.C. §§
12101 et  seq., the Worker Adjustment and Retraining Notification
Act of 1988, as  amended, 29 U.S.C. §§2101 et  seq.,
the Employee Retirement Income Security Act of 1974, as  amended,
29 U.S.C. §§ 1001 et  seq., the New York State and New York City
Human Rights Laws, the New York Labor Laws, and any other equivalent or similar
federal, state, or local statute; provided, however, that the Executive does
not release or discharge the Released Parties from (i) any rights to any
payments, benefits or reimbursements due to the Executive under the Agreement;
or (ii) any rights to any vested benefits due to the Executive under any
employee benefit plans sponsored or maintained by the Company.  It is understood that nothing in this general
release is to be construed as an admission on behalf of the Released Parties of
any wrongdoing with respect to the Executive, any such wrongdoing being
expressly denied.


 


The Executive represents and
warrants that he fully understands the terms of this General Release, that he
has been encouraged to seek, and has sought, the benefit of advice of legal
counsel, and that he knowingly and voluntarily, of his own free will, without
any duress, being fully informed, and after due deliberation, accepts its terms
and signs below as his own free act. Except as otherwise provided herein, the
Executive understands that as a result of executing this General Release, he
will not have the right to assert that the Company or any other of the Released
Parties unlawfully terminated his employment or violated any of his rights in
connection with his employment or otherwise.


 


The
Executive further represents and warrants that he has not filed, and will not
initiate, or cause to be initiated on his behalf any complaint, charge, claim,
or proceeding against any of 


 


17

















 


the Released Parties before any federal, state, or local agency, court,
or other body relating to any claims barred or released in this General Release
thereof, and will not voluntarily participate in such a proceeding.  However, nothing in this General Release
shall preclude or prevent the Executive from filing a claim, which challenges
the validity of this General Release solely with respect to the Executive’s
waiver of any Losses arising under the ADEA. The Executive shall not accept any
relief obtained on his behalf by any government agency, private party, class,
or otherwise with respect to any claims covered by this General Release.


 


The Executive may take
twenty-one (21) days to consider whether to execute this General Release.  Upon the Executive’s execution of this
general release, the Executive will have seven (7) days after such
execution in which he may revoke such execution. In the event of revocation,
the Executive must present written notice of such revocation to the office of
the Company.  If seven (7) days pass
without receipt of such notice of revocation, this General Release shall become
binding and effective on the eighth (8th) day after the execution hereof (the “Effective
Date”).


 


INTENDING
TO BE LEGALLY BOUND, I hereby set my hand below:


 


	
   

  	
   

  
	
   

  	
  Douglas
  J. Wetmore

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  



 


18