SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
Under the Securities Exchange Act of 1934
(Amendment No. 3)*
Griffon Corporation
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(Name of Issuer)
Common Stock, par value $0.25 per share
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(Title of Class of Securities)
398433102
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(CUSIP Number)
Marc Weingarten, Esq.
Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
(212) 756-2000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 4, 2007
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(Date of Event which Requires
Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box. [ ]
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other parties
to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 10 Pages)
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* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP NO. 398433102 SCHEDULE 13D PAGE 2 OF 10 PAGES
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
CLINTON GROUP, INC.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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7 SOLE VOTING POWER
-0-
----------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 2,476,811
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH -0-
----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,476,811
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
2,476,811
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.3%
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14 TYPE OF REPORTING PERSON*
IA; CO
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* SEE INSTRUCTIONS
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CUSIP NO. 398433102 SCHEDULE 13D PAGE 3 OF 10 PAGES
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
CLINTON MULTISTRATEGY MASTER FUND, LTD.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
CAYMAN ISLANDS
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7 SOLE VOTING POWER
-0-
----------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 2,193,331
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH -0-
----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,193,331
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
2,193,331
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.3%
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14 TYPE OF REPORTING PERSON*
CO
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* SEE INSTRUCTIONS
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CUSIP NO. 398433102 SCHEDULE 13D PAGE 4 OF 10 PAGES
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
CLINTON SPECIAL OPPORTUNITIES MASTER FUND, LTD.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
CAYMAN ISLANDS
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7 SOLE VOTING POWER
-0-
----------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 283,480
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH -0-
----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
283,480
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
283,480
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.0%
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14 TYPE OF REPORTING PERSON*
CO
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* SEE INSTRUCTIONS
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CUSIP NO. 398433102 SCHEDULE 13D PAGE 5 OF 10 PAGES
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
GEORGE E. HALL
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
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7 SOLE VOTING POWER
-0-
----------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 2,476,811
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH -0-
----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,476,811
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
2,476,811
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.3%
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14 TYPE OF REPORTING PERSON*
IN
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* SEE INSTRUCTIONS
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CUSIP NO. 398433102 SCHEDULE 13D PAGE 6 OF 10 PAGES
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
CONRAD BRINGSJORD
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
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7 SOLE VOTING POWER
-0-
----------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 2,476,811
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH -0-
----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,476,811
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
2,476,811
- --------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.3%
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14 TYPE OF REPORTING PERSON*
IN
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* SEE INSTRUCTIONS
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CUSIP NO. 398433102 SCHEDULE 13D PAGE 7 OF 10 PAGES
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The Schedule 13D filed on December 20, 2006 by Clinton Group, Inc., a Delaware
corporation ("CGI"), Clinton Multistrategy Master Fund, Ltd., a Cayman Islands
company ("CMSF"), Clinton Special Opportunities Master Fund, Ltd., a Cayman
Islands company ("CSO"), George E. Hall and Conrad Bringsjord (collectively, the
"Reporting Persons"), with respect to the shares of Common Stock, par value
$0.25 per share (the "Shares"), of Griffon Corporation, a Delaware corporation
(the "Issuer"), as previously amended by Amendment No. 1 dated February 7, 2007
and Amendment No. 2 dated March 15, 2007, is hereby amended as set forth herein
by this Amendment No. 3.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 of the Schedule 13D is hereby amended and restated as follows:
Funds for the purchase of the Shares reported herein were derived from
available capital of CMSF and CSO. A total of approximately $59.2 million was
paid to acquire such Shares.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 of the Schedule 13D is hereby amended by the addition of the
following:
On May 9, 2007, CGI delivered a letter to the Issuer's board of directors
expressing disappointment over the extent of the Issuer's decline in earnings
and its inability to responsively adjust cost structures, particularly in light
of the performance of other industry participants during the same period. CGI
urged the Issuer's management to effect significant restructuring savings. GCI
noted the Issuer's belated retention of Goldman Sachs to explore strategic
alternatives, but urged that its mandate be narrowed to either a sale of the
Issuer's business in whole or in parts or a form of public recapitalization
aided by a qualified financial sponsor. In addition, CGI observed that the
Issuer's board of directors has yet to address any of the "management
entrenching" issues outlined in previous letters sent by CGI. CGI stated that it
would be compelled to seek a change through direct shareholder means in the
event that the Issuer failed to address CGI's concerns and maximize shareholder
value. A copy of this letter is attached hereto as Exhibit D and is
incorporated herein by reference.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Paragraphs (a), (b) and (c) of Item 5 of the Schedule 13D are hereby amended and
restated as follows:
(a) As of the close of business on May 8, 2007, the Reporting Persons
beneficially owned an aggregate of 2,476,811 Shares, constituting approximately
8.3% of the Shares outstanding.
The aggregate percentage of Shares beneficially owned by the Reporting
Persons is based upon 29,845,689 Shares outstanding, which is the total number
of Shares outstanding as of January 31, 2007 as reported in the Issuer's
Quarterly Report on Form 10-Q for the period ended December 31, 2006.
(b) By virtue of investment management agreements with each of CMSF and
CSO, CGI has the power to vote or direct the voting, and to dispose or direct
the disposition, of all of the 2,193,331 Shares held by CMSF and the 283,480
Shares held by CSO. By virtue of his direct and indirect control of CGI, George
E. Hall is deemed to have shared voting power and shared dispositive power with
respect to all Shares as to which CGI has voting power or dispositive power. By
virtue of his position as managing director and senior portfolio manager of CGI,
Conrad Bringsjord is also deemed to have shared voting power and shared
dispositive power with respect to all Shares as to which CGI has voting power or
dispositive power. Accordingly, CGI, George E. Hall and Conrad Bringsjord are
deemed to have shared voting and shared dispositive power with respect to an
aggregate of 2,476,811 Shares.
(c) Information concerning transactions in the Shares effected by the
Reporting Persons since the most recent filing on Schedule 13D is set forth in
Schedule B hereto and is incorporated herein by reference. Unless otherwise
indicated, all of such transactions were effected in the open market.
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CUSIP NO. 398433102 SCHEDULE 13D PAGE 8 OF 10 PAGES
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Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Item 6 of the Schedule 13D is hereby amended and restated as follows:
The Reporting Persons may, from time to time, enter into and dispose of
cash-settled equity swap or other similar derivative transactions with one or
more counterparties that are based upon the value of Shares, which transactions
may be significant in amount. The profit, loss and/or return on such contracts
may be wholly or partially dependent on the market value of the Shares, the
relative value of Shares in comparison to one or more other financial
instruments, indexes or securities, a basket or group of securities in which
Shares may be included, or a combination of any of the foregoing. In addition to
the Shares that they beneficially own without reference to these contracts, the
Reporting Persons currently have long economic exposure to 162,000 Shares
through such contracts. These contracts do not give the Reporting Persons direct
or indirect voting, investment or dispositive control over any securities of the
Issuer and do not require the counterparties thereto to acquire, hold, vote or
dispose of any securities of the Issuer. Accordingly, the Reporting Persons
disclaim any beneficial ownership in any securities that may be referenced in
such contracts or that may be held from time to time by any counterparties to
such contracts.
Except as otherwise set forth herein, the Reporting Persons do not have any
contract, arrangement, understanding or relationship with any person with
respect to the securities of the Issuer.
Item 7. MATERIAL TO BE FILED AS EXHIBITS
Item 7 of the Schedule 13D is hereby amended and restated as follows:
Exhibit A - Joint Filing Agreement dated December 20, 2006 (previously filed)
Exhibit B - Letter to Issuer dated December 20, 2006 (previously filed)
Exhibit C - Letter to Issuer dated March 15, 2007 (previously filed)
Exhibit D - Letter to Issuer dated May 9, 2007
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CUSIP NO. 398433102 SCHEDULE 13D PAGE 9 OF 10 PAGES
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SIGNATURES
After reasonable inquiry and to the best of his or its knowledge and
belief, each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: May 9, 2007
CLINTON GROUP, INC.
By: /s/ Francis Ruchalski
---------------------------
Name: Francis Ruchalski
Title: Comptroller
CLINTON MULTISTRATEGY MASTER FUND, LTD.
By: Clinton Group, Inc. its investment
manager
By: /s/ Francis Ruchalski
---------------------------
Name: Francis Ruchalski
Title: Comptroller
CLINTON SPECIAL OPPORTUNITIES MASTER FUND, LTD.
By: Clinton Group, Inc. its investment
manager
By: /s/ Francis Ruchalski
---------------------------
Name: Francis Ruchalski
Title: Comptroller
/s/ George E. Hall
------------------------------
George E. Hall
/s/ Conrad Bringsjord
------------------------------
Conrad Bringsjord
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CUSIP NO. 398433102 SCHEDULE 13D PAGE 10 OF 10 PAGES
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SCHEDULE B
TRANSACTIONS IN THE SHARES BY THE REPORTING PERSONS SINCE THE MOST RECENT FILING
ON SCHEDULE 13D6
Clinton Multistrategy Master Fund, Ltd.
Trade Date Shares Purchased (Sold) Price Per Share ($)
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03/26/07 16,500 24.87
03/27/07 7,190 24.80
03/28/07 23,800 24.70
03/29/07 3,000 24.59
03/29/07 18,101 24.58
03/30/07 2,000 24.63
04/02/07 1,100 24.75
04/02/07 18,800 24.74
04/03/07 100 24.77
04/04/07 10,600 24.73
04/05/07 7,000 24.20
04/09/07 34,700 24.20
04/10/07 5,100 24.18
04/11/07 10,300 23.75
04/12/07 7,200 23.78
04/13/07 774 23.70
04/13/07 1,000 23.85
05/04/07 65,300 23.42
05/08/07 11,300 22.96
05/08/07 8,300 22.09
Clinton Special Opportunities Master Fund, Ltd.
Trade Date Shares Purchased (Sold) Price Per Share ($)
---------- ----------------------- -------------------
03/26/07 5,500 24.87
04/09/07 34,700 24.20
04/10/07 5,000 24.18
04/11/07 3,300 23.75
05/04/07 21,700 23.42
05/08/07 3,700 22.96
05/08/07 2,700 22.09
May 9, 2007
Board of Directors
Griffon Corporation
100 Jericho Quadrangle
Jericho, New York 11753
To Griffon Board Members:
While a decline in Griffon Corporation's ("Griffon" or the "Company") earnings
were widely anticipated due to the currently weak new home construction and home
resale markets, the inability of the Company to responsively adjust its cost
structure within an appropriate time frame was, at a minimum, a huge
disappointment.
The underperformance was particularly disheartening in light of what competitors
facing the same headwinds have accomplished within the same period. When one
peruses the results of other building products related companies, one would find
that in reaction to tough industry conditions, other industry participants have
been engaged in ongoing restructuring and cost rationalization programs,
resulting in a continued and reasonable level of profitability, albeit at a
lower level. For example, Masco Corporation's recently reported operating profit
margins dropped only to 8.9% from the previous year's 11.2%. Its installation
segment generated an operating margin of approximately 5% and its cabinets
business posted an operating margin of over 10%. In stark contrast, Griffon
reported losses in both its Garage Door Segment and Installation Services
Segment.
Further, Griffon's fiscal second quarter unallocated expenses grew year over
year while Masco's SG&A expenses dropped by $20 million. And while Griffon used
cash during the quarter, Masco returned $361 million to shareholders through
share repurchases.
While Griffon management spoke on the earnings call of COMMENCING cost cutting
initiatives in April, Masco announced a COMPLETED 16% cut of its workforce in
the first quarter.
We raised the issue in our previous letter about what we believe to be clearly
an untenable corporate situation. Namely, Mr. Blau continues to serve as
Chairman and CEO of two public companies. Now it seems clear that while Mr. Blau
has been dealing with competing bids relating to Aeroflex Inc, the operations of
Griffon have suffered.
We strongly urge management to undertake demonstrable and tangible cost-cutting
initiatives at the operating segment level AND at corporate. The Company's
bloated unallocated cost structure totaling more than $20 million annually could
be mostly eliminated by a break-up of the Company. At the very least, this cost
base could be dramatically reduced even within the current corporate
configuration by starting with a significant reduction in the Company's
excessive executive compensation.
After raising the issue of shareholder value maximization and strategic
alternatives available to the Company in our first letter in December 2006, only
now, almost 5 months later, do we hear that Goldman Sachs has been officially
retained to explore such alternatives. As management collected millions in cash
and received grants for large amounts of shares, the stock of Griffon has
floundered. During an exceptional bull market, Griffon's stock has actually
declined over a period stretching greater than two years.
Given the distracted management, and "mini-conglomerate" corporate structure
where management ostensibly oversees three unrelated businesses for huge
remuneration, we urge the Board to narrow Goldman Sachs' mandate to be either a
sale of the business in whole or in parts or some form of public
recapitalization aided by a qualified financial sponsor that can lead the
business rationalization and profit improvement for the benefit of all
shareholders. We would be more than happy to look to participate in various
structures that might be contemplated.
Finally, despite the Company's recent poor performance, the Board has not yet
addressed any of the "management entrenching" issues that we outlined in our
most recent letter. Since these governance issues are unrelated to performance
or market conditions, we do not understand why none of our proposed changes have
been implemented. The only positive relates to avoiding reinstituting an
entrenching shareholder rights plan.
Fortunately, management appears to be actively seeking alternatives and we are
waiting for such changes to be announced. However, if management and the Board
fail to ultimately announce significant restructuring savings across the entire
organization and demonstrate a good faith effort in addressing shareholders'
concerns regarding governance, or the Company fails to pursue meaningful
shareholder value enhancing alternatives, we will be compelled to seek a change
through direct shareholder means.
We appreciate management's apparent receptiveness to solutions as articulated on
the recent earnings call and to that end we are happy to discuss our ideas
further. Please feel free to call us any time at 212-377-4224.
CLINTON GROUP, INC.
/s/ Conrad Bringsjord
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Conrad Bringsjord
Managing Director