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 000 Xxxxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxx
Xxxx 00000 (together with its subsidiaries, affiliates, successors
and assigns) (referred to as the “Company”) and XXXXXXXX X. XXXXX, who resides
at 0000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000 (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 Xxxxxxx and Xxxx, 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
000
Xxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxxx,
Xxx Xxxx 00000
Fax: (000)
000-0000
With required copy to:
Xxxxxx
Xxxxxxx, Esq.
Moomjian,
Waite, Wactlar & Xxxxxxx, LLP
000
Xxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxxx,
Xxx Xxxx 00000
Fax:
(000) 000-0000
If to Executive:
Xxxxxxxx
X. Xxxxx
0000
Xxxxx Xxxxxx
Xxxxxxxxxx,
Xxxx 00000
Fax:
__________________
With required copy to:
Xxxxxxxx
X. Xxxxxxx, Esq.
Xxxxxxx
and Xxxx, LLC
000 Xxxx
Xxxxxx
Xxxxxxxxxx,
Xxxx 00000
Fax: (000)
000-0000
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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.
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GRIFFON
CORPORATION
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By:
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/s/ Xxxxxxx X. Xxxxxx
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Name:
Xxxxxxx X. Xxxxxx
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Title: Chief
Administrative Officer
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/s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx
X. Xxxxx
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STATE
OF OHIO
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)
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)
.ss:
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COUNTY
OF XXXXXXXX
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)
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On the 30th day of
October, 2009, before me personally came Xxxxxxxx X. Xxxxx, 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.
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/s/ Xxxxxxxxxx X. Xxxxxx
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Notary
Public
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