EXHIBIT 4.1
NON-QUALIFIED STOCK OPTION AGREEMENT
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AGREEMENT made as of the 1st day of March, 2005, between GRIFFON
CORPORATION, a Delaware corporation, (hereinafter called the "Company") and XXXX
XXXXXXXXX (hereinafter called "Optionee").
W I T N E S S E T H:
WHEREAS, concurrently herewith the Company and the Optionee intend to enter
into an employment agreement (the "Employment Agreement") pursuant to which the
Optionee shall be employed as an Executive Vice President and Chief Financial
Officer of the Company; and
WHEREAS, in order to induce Optionee to enter into the Employment
Agreement, the Company has determined that it is advisable to grant to Optionee
an award of certain options to purchase the Company's common stock, par value
$.25 per share (the "Common Stock"); and
WHEREAS, the Optionee is only willing to enter into the Employment
Agreement if the Company enters into this option agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Grant of Option. The Company hereby grants to Optionee an option to
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purchase a total of 250,000 shares of the authorized and unissued Common
Stock of the Company (the "Option") at an exercise price of $22.94 per
share, which is the closing price of the Common Stock on the date hereof.
The within Option is immediately vested and is exercisable in accordance
with Section 2 hereof.
2. Exercisability and Term of Option. The within Option may be exercised at
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any time before the Expiration Date in the following amounts:
As to 50% of the shares of Common Stock, on or after March 1, 2006
As to 100% of the shares of Common Stock, on or after March 1, 2007
The rights represented by this Option are exercisable at the option of the
holder hereof in whole at any time, or in part from time to time, within
the periods above specified at the price specified in Section 1 hereof. The
within Option may be exercised by Optionee at any time prior to February
28, 2012 (the "Expiration Date"); provided, that in the event of the prior
termination or expiration of the Employment Agreement or Optionee's
employment with the Company on or before March 1, 2007, whether under the
Employment Agreement or otherwise, the Optionee shall have until May 1,
2007 to exercise the within Option; provided, further, that in the event of
any termination or expiration of the Employment Agreement or Optionee's
employment with the Company prior to the Expiration Date but after March 1,
2007, whether under the Employment Agreement or otherwise, the Optionee
shall have a period of sixty (60) days from such termination or expiration
to exercise the within Option, but in no event shall the Option be
exercisable after the Expiration Date.
3. Anti-dilution. The price per share at which shares of Common Stock may be
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purchased hereunder, and the number of such shares to be purchased upon
exercise hereof, are subject to change or adjustment as follows:
(A) In case the Company shall, while this Option remains unexercised, in
whole or in part, and in force, effect a recapitalization of such character
that the shares of Common Stock purchasable hereunder shall be changed into
or become exchangeable for a larger or smaller number of shares, then,
after the date of record for effecting such recapitalization, the number of
shares of Common Stock which the holder hereof shall be entitled to
purchase hereunder shall be increased or decreased, as the case may be, in
direct proportion to the increase or decrease in the number of shares of
Common Stock by reason of such recapitalization, and the purchase price
hereunder per share of such recapitalized Common Stock shall, in the case
of an increase in the number of such shares, be proportionately reduced,
and in the case of a decrease in the number of such shares, shall be
proportionately increased. For the purpose of this subsection (A), a stock
dividend, stock split up or reverse split shall be considered as a
recapitalization and as an exchange for a larger or smaller number of
shares, as the case may be.
(B) In the case of any consolidation of the Company with, or merger of the
Company into, any other Company, or in case of any sale or conveyance of
all or substantially all of the assets of the Company in connection with a
plan of complete liquidation of the Company, then, as a condition of such
consolidation, merger or sale or conveyance, adequate provision shall be
made whereby the holder hereof shall thereafter have the right to purchase
and receive, upon the basis and upon the terms and conditions specified in
this Option and in lieu of shares of Common Stock immediately theretofore
purchasable and receivable upon the exercise of the rights represented
hereby, such shares of stock or securities as may be issued in connection
with such consolidation, merger or sale or conveyance with respect to or in
exchange for the number of outstanding shares of Common Stock immediately
therefore purchasable and receivable upon the exercise of the rights
represented hereby had such consolidation, merger or sale or conveyance not
taken place, and in any such case appropriate provision shall be made with
respect to the rights and interests of the holder of this Option to the end
that the provisions hereof shall be applicable as nearly as may be in
relation to any shares of stock or securities thereafter deliverable upon
the exercise hereof.
4. Non-Transferability of Option. The Option granted under this Agreement
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shall not be transferable otherwise than by will or the laws of descent and
distribution or to the extent permitted by the Board of Directors of the
Company or the Compensation Committee of the Board of Directors.
5. Purchase for Investment. To the extent that, at the time of exercise of the
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within Option, the underlying shares have not been registered for sale
under the Securities Act or 1933, as amended, the Optionee represents, on
behalf of himself and any transferees permitted by the terms of the Plan,
that any shares of Common Stock purchased pursuant to this Agreement will
be acquired in good faith for investment and not for resale or
distribution, and Optionee on behalf of himself and said person or persons,
agrees that each notice of the exercise of the within Option shall contain
or be accompanied by a representation in writing signed by him or said
person or persons, as the case may be, in form satisfactory to the Company,
that the shares of Common Stock to be purchased pursuant to such notice are
being so acquired and will not be sold except in compliance with applicable
securities laws.
6. Covenant of the Company. The Company covenants and agrees that all shares
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may be delivered upon the exercise of this Option and will, upon delivery,
be fully paid and non-assessable, and, without limiting the generality of
the foregoing, the Company covenants and agrees that it will at all times
to
reserve or hold available a sufficient number of shares of Common Stock to
cover the number of shares issuable upon the exercise of this Option.
7. Rights as Shareholder. This Option shall not entitle the holder hereof to
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any voting rights or other rights as a shareholder of the Company, or to
any other rights whatsoever except the rights herein expressed, and no
dividends shall be payable or accrue in respect of this Option or the
interest represented hereby or the shares purchasable hereunder until or
unless, and except to the extent that, this Option shall be exercised.
8. Information. The Company will transmit to the holder of this Option such
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information, documents and reports as are generally distributed to
shareholders of the Company concurrently with the distribution thereof to
such shareholders.
9. Notices. Notices to be given to the holder of this Option shall be deemed
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to have been sufficiently given if delivered or mailed, addressed in the
name and at the address of such holder appearing in the records of the
Company, and if mailed, sent first class registered or certified mail,
postage prepaid. The address of the Company is 000 Xxxxxxx Xxxxxxxxxx,
Xxxxxxx, Xxx Xxxx 00000, and the Company shall give written notice of any
change of address to the holder hereof.
10. Applicable Law. This Agreement and the legal relations among the parties
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hereto shall be governed by and construed in accordance with the laws of
the State of New York applicable to contracts made and performed therein.
11. Consent to Jurisdiction and Waivers. The parties hereto irrevocably
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consent that any legal action or proceeding against any of them under,
arising out of or in any manner relating to, this Agreement or any other
document delivered in connection herewith, may be brought in any court of
the State of New York located within Nassau County or in the United States
District Court for the Eastern District of New York. By the execution and
delivery of this Agreement, the parties expressly and irrevocably consent
and submit to the personal jurisdiction of any of such courts in any such
action or proceeding. The parties further irrevocably consent to the
service of any complaint, summons, notice or other process relating to any
such action or proceeding by delivery thereof to it by hand or by any other
manner permitted by law. The parties hereby expressly and irrevocably waive
any claim or defense in any such action or proceeding based on any alleged
lack of personal jurisdiction, improper venue or forum non convenient or
any similar basis.
IN WITNESS WHEREOF, the Company has caused this Option to be executed
and delivered as of the date first above written.
GRIFFON CORPORATION
By: /s/ Xxxxxxx Xxxxxx
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XXXXXXX XXXXXX, Vice President
/s/ Xxxx Xxxxxxxxx
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XXXX XXXXXXXXX, Optionee
