GRIFFIN LAND & NURSERIES INC (Form: 10-K, Received: 02/13/2014 11:22:13)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K


ý		ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended November 30, 2013
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-12879

GRIFFIN LAND & NURSERIES, INC.
(Exact name of registrant as specified in its charter)


Delaware (State or Other Jurisdiction of Incorporation or Organization)		06-0868496 (I.R.S. Employer Identification No.)
One Rockefeller Plaza New York, New York (Address of principal executive offices)		10020 (Zip Code)

(212) 218-7910
(Registrant's telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12 (b) OF THE ACT:

Title of Each Class		Name of Each Exchange on Which Registered

Common Stock $0.01 par value		The NASDAQ Stock Market LLC

SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE ACT: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act. Yes o No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer o		Accelerated filer ý		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No ý

The aggregate market value of the Common Stock held by non-affiliates of the registrant was approximately $79,989,000 based on the closing sales price on The NASDAQ Stock Market LLC on May 31, 2013, the last business day of the registrant's most recently completed second quarter. Shares of Common Stock held by each executive officer, director and persons or entities known to the registrant to be affiliates of the foregoing have been excluded in that such persons may be deemed to be affiliates. This assumption regarding affiliate status is not necessarily a conclusive determination for other purposes.

As of February 5, 2014, 5,146,366 shares of common stock were outstanding.

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). For this purpose, any statements contained in this Annual Report on Form 10-K that relate to future events or conditions, including without limitation, the statements in Part I, Item 1. "Business" and Item 1A. "Risk Factors" and in Part II under Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" as well as located elsewhere in this annual report regarding industry prospects or Griffin's plans, expectations, or prospective results of operations or financial position, may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," and similar expressions are intended to identify forward-looking statements. Such forward-looking statements represent management's current expectations and are inherently uncertain. There are a number of important factors that could materially impact the value of Griffin's common stock or cause actual results to differ materially from those indicated by such forward-looking statements. Such factors include: adverse economic conditions and credit markets; a downturn in the residential real estate market; risks associated with concentration of real estate holdings; risks associated with entering new real estate markets; potential environmental liabilities; competition and governmental regulations; inadequate insurance coverage; risks of environmental factors; risks associated with the cost of raw materials or energy costs; regulatory risks; risks of investing in a foreign company; litigation risks; and the concentrated ownership of Griffin common stock by members of the Cullman and Ernst families. These and the important factors discussed under the caption "Risk Factors" in Part 1, Item 1A of this Form 10-K for the fiscal year ended November 30, 2013, among others, could cause actual results to differ materially from those indicated by forward-looking statements made in this Form 10-K and presented elsewhere by management from time to time. Any such forward-looking statements represent management's estimates as of the date of this Annual Report on Form 10-K. While Griffin may elect to update such forward-looking statements at some point in the future, Griffin disclaims any obligation to do so, even if subsequent events cause Griffin's views to change. These forward-looking statements should not be relied upon as representing Griffin's views as of any date subsequent to the date of this Annual Report on Form 10-K.

PART I

ITEM 1. BUSINESS.

Griffin Land & Nurseries, Inc. ("Griffin") operates a real estate business through its wholly-owned subsidiary, Griffin Land, LLC ("Griffin Land") that is principally engaged in the development, management and leasing of commercial and industrial properties. Griffin Land also seeks to add to its industrial and commercial property portfolio through the acquisition and development of land or purchase of buildings. Periodically, Griffin Land may sell certain portions of its undeveloped land that it has owned for an extended time period and the use of which is not consistent with Griffin Land's core development and leasing strategy. The headquarters for Griffin Land is in Bloomfield, Connecticut.

Through January 8, 2014, Griffin also operated a landscape nursery business through its wholly-owned subsidiary, Imperial Nurseries, Inc. ("Imperial"). Imperial was engaged in the growing of containerized plants for sale principally to independent retail garden centers and rewholesalers, whose main customers are landscape contractors. On January 8, 2014, Griffin and Imperial entered into an Asset Purchase Agreement (the "Purchase Agreement") pursuant to which Imperial's inventory and certain of its assets were sold to Monrovia Connecticut LLC ("Monrovia"), a subsidiary of Monrovia Nursery Company, for approximately $840,000 in cash (subject to certain adjustments) and a non-interest bearing note receivable of $4.25 million (the "Imperial Sale"). Concurrently with the entry into the Purchase Agreement, Imperial and River Bend Holdings, LLC, a wholly-owned subsidiary of Griffin, entered into a Lease and Option Agreement and an Addendum to such agreement (the "Imperial Lease", and together with the Imperial Sale, the "Imperial Transaction") with Monrovia, pursuant to which Monrovia agreed to lease Imperial's Connecticut production nursery for a ten-year period, with options to extend for up to an additional fifteen years exercisable by Monrovia. The Lease also grants Monrovia an option to purchase the land, land improvements and other operating assets that were used by Imperial in its Connecticut growing operations during the first thirteen years of the lease period.

All of Griffin Land's real estate assets, including buildings and undeveloped land, were located in the Hartford, Connecticut area, primarily in the north submarket of Hartford through fiscal 2009. In fiscal 2010, Griffin Land completed its first acquisitions of real estate assets outside of the Hartford area by purchasing a fully leased 120,000 square foot industrial building in Breinigsville, Pennsylvania and a 51 acre parcel of undeveloped land in Lower Nazareth Township, Pennsylvania. Both the building and undeveloped land acquired are located in the Lehigh Valley region of Pennsylvania. In fiscal 2012, Griffin Land built an approximately 228,000 square foot industrial building on 18 acres of the Lower Nazareth land and in fiscal 2013 signed a five-year full building lease for that building. In the fiscal 2013 fourth quarter, Griffin Land started construction (on speculation) of an approximately 303,000 square foot industrial building on the balance of the 51 acre parcel of land in Lower Nazareth. Also in fiscal 2013, Griffin Land acquired an approximately 49 acre parcel of undeveloped land in Hanover Township, also in the Lehigh Valley region of Pennsylvania. Griffin Land expects to continue to seek to acquire and develop properties not presently owned that are consistent with its core strategy of developing and leasing industrial and commercial properties. Griffin Land expects that such potential acquisitions of either undeveloped land or land and buildings are likely to be located outside of the Hartford area.

In the greater Hartford area, there are a number of warehouse facilities and office buildings, some of which are fully or partially vacant, that are competitive with Griffin Land's industrial/warehouse buildings and office/flex buildings. Additional capacity or an increase in vacancies in either the industrial or office market could adversely affect Griffin Land's operating results from its leasing operations by potentially resulting in longer times to lease vacant space, eroding lease rates in Griffin Land's properties or hindering renewals by existing tenants.

The greater Hartford industrial market had been slow in recent years, but experienced some recovery in 2012 and 2013. Market activity for office/flex space in the north submarket of Hartford was slow in 2013, with overall vacancy, availability and asking rates remaining relatively flat. Griffin Land believes that it benefits from its reputation as a stable company with sufficient resources to meet its obligations and deliver space to tenants timely and in accordance with the terms of their lease agreements. The warehouse/industrial market in the Lehigh Valley region of Pennsylvania has had a fairly strong level of leasing activity the past several years and reported vacancy levels are fairly low. As a result of the relatively strong market, there has been an increase in industrial/warehouse space in the Lehigh Valley. There can be no assurances as to the directions of the Hartford and Lehigh Valley real estate markets in the near future.

As of November 30, 2013, Griffin Land owned thirty buildings comprising approximately 2.5 million square feet. Approximately 76% of this square footage is comprised of industrial/warehouse space, with the balance principally being office/flex space. As of November 30, 2013, approximately 74% of Griffin Land's industrial/warehouse space was leased and approximately 94% of Griffin Land's office/flex space was leased. Griffin Land uses nonrecourse mortgages to finance some of its real estate development activities, and as of November 30, 2013, approximately $66.7 million was outstanding under such loans. In fiscal 2013, Griffin Land's rental revenue, less operating expenses of rental properties, was approximately $12.7 million, while debt service on Griffin Land's nonrecourse mortgages was approximately $5.5 million.

In fiscal 2013, Griffin Land entered into three new leases of industrial space for an aggregate of approximately 259,000 square feet and several new leases for an aggregate of approximately 49,000 square feet of office/flex space. The new leasing of industrial space included a five-year full building lease of the approximately 228,000 square foot industrial building in the Lehigh Valley that was completed at the end of the fiscal 2012 third quarter. New leases of industrial space in Griffin Land's Connecticut industrial/warehouse properties in 2013 aggregated approximately 31,000 square feet. In fiscal 2013, several leases of industrial space aggregating approximately 168,000 square feet expired and were not renewed. The net effect of these transactions was an increase of approximately 92,000 square feet of industrial space under lease as of November 30, 2013 as compared to December 1, 2012. In fiscal 2013, two leases for office/flex space aggregating approximately 24,000 square feet expired and were not renewed or terminated early. In fiscal 2013, Griffin Land renewed and extended several leases aggregating approximately 116,000 square feet of industrial space and approximately 20,000 square feet of office/flex space. Included in the fiscal 2013 lease renewals was a full building lease of approximately 100,000 square feet that was scheduled to expire in fiscal 2014 but was extended for ten years.

In fiscal 2012, Griffin Land entered into three new leases of industrial/warehouse space for an aggregate of approximately 151,000 square feet and two new leases of office/flex space for an aggregate of approximately 32,000 square feet. The new leases for industrial/warehouse space included a three-year lease (with two one-year renewal options) for an entire building, approximately 127,000 square feet, in New England Tradeport ("Tradeport"), Griffin Land's industrial park in Windsor and East Granby, Connecticut. In connection with this new full building lease, Griffin Land entered into a lease termination agreement with an existing tenant that had leased approximately 42,000 square feet in that building, but had previously vacated its space and was seeking to sublease. Griffin Land received $325,000 in connection with the early termination of that lease, which was scheduled to expire in 2014. In fiscal 2012, Griffin Land renewed and extended several leases aggregating approximately 87,000 square feet of industrial space and approximately 70,000 square feet of office/flex space. In fiscal 2012, leases aggregating approximately 98,000 square feet expired and were not renewed. Of such space, approximately 85,000 square feet is industrial space (including the approximately 42,000 square foot lease that was terminated early and is now subject to a new, full building lease) and approximately 13,000 square feet is office/flex space.

In fiscal 2011, Griffin Land entered into two new leases of previously vacant office/flex space for an aggregate of approximately 29,000 square feet and a new lease for approximately 10,000 square feet of industrial space that had just become vacant due to the early termination of a lease for that space. Griffin Land also renewed and/or extended several leases of industrial space aggregating approximately 207,000 square feet and three leases of office/flex space aggregating approximately 46,000 square feet in fiscal 2011. Most of the leases that were renewed were scheduled to expire in fiscal 2011, except for leases aggregating approximately 43,000 square feet that were scheduled to expire subsequent to fiscal 2011.

Periodically, Griffin Land may sell certain portions of its undeveloped land that it has owned for an extended time period and the use of which does not fit into Griffin Land's core strategy of developing and leasing industrial and commercial properties. Such sale transactions may take place either before or after obtaining development approvals and either before or after basic infrastructure is built.

In fiscal 2013, Griffin Land completed three land sales, the principal one of which was the sale of approximately 90 acres of undeveloped land in Windsor, Connecticut (the "Windsor Land Sale") for cash proceeds of approximately $9.0 million, before transaction expenses. The land sold under the Windsor Land Sale is part of an approximately 268 acre parcel of undeveloped land that had been held by Griffin Land for an extended time period. Under the terms of the Windsor Land Sale, Griffin Land and the buyer will construct roadways connecting the land parcel that was sold to existing town roads. The roads to be built will also provide access to the remaining acreage in Griffin Land's land parcel. As a result of Griffin Land's continuing involvement with the land sold, the Windsor Land Sale is being accounted for under the percentage of completion method, under which the revenue and gain on sale are recognized as the total costs related to the property sold are incurred. At the closing of the Windsor Land Sale, the cash proceeds were placed in escrow for the purchase of a replacement property under a Section 1031 like-kind exchange. As of the date of this Annual Report on Form 10-K, a replacement property has not been acquired. Griffin Land also closed on two smaller land sales in fiscal 2013 for aggregate net cash proceeds of approximately $0.3 million.

In fiscal 2012, Griffin Land completed three property sales. The largest of these was the fiscal 2012 first quarter sale of its fully leased 308,000 square foot warehouse building in Manchester, Connecticut (the "Raymour Building"). Under the terms of the full building lease with Raymour & Flanigan ("Raymour") for that building, Griffin Land gave notice to Raymour in the fiscal 2011 fourth quarter that Griffin Land was exercising the put option under its lease to sell the facility to Raymour. The proceeds of approximately $16.0 million from that sale were placed in escrow for the potential acquisition of a replacement property as part of a Section 1031 like-kind exchange for income tax purposes. As Griffin Land did not identify a property it considered to be a suitable replacement property during the time period for purchasing a replacement property under IRS regulations, the proceeds from the sale of the Raymour Building were disbursed from the escrow account to Griffin Land in the fiscal 2012 second quarter. The sale of this property and all operating results for this property are reported as a discontinued operation for all periods presented in Griffin's consolidated statements of operations in this Annual Report on Form 10-K.

Also in fiscal 2012, Griffin Land sold approximately 93 acres of undeveloped land in Tradeport that Griffin Land had held for an extended time period to Dollar Tree Distribution, Inc. for cash proceeds of $7.0 million (the "Dollar Tree Sale") as the buyer required ownership of its facility. Because Griffin Land was required, under the terms of the Dollar Tree Sale, to construct a sewer line to service the land sold, the Dollar Tree Sale was accounted for under the percentage of completion method, under which the revenue and gain on sale were recognized as the total costs related to the property sold were incurred. The proceeds from the Dollar Tree Sale were placed in escrow for the purchase of a replacement property under a Section 1031 like-kind exchange. On December 28, 2012, Griffin Land closed on the purchase of an approximately 49 acre parcel of undeveloped land in the

Lehigh Valley of Pennsylvania using the proceeds from the Dollar Tree Sale that had been held in escrow to complete the Section 1031 like-kind exchange. In fiscal 2012, Griffin Land also completed the sale of approximately 14 acres of undeveloped land in Windsor, Connecticut for cash proceeds of approximately $1.0 million.

In fiscal 2011, Griffin Land received total cash proceeds of approximately $4.0 million from three property sales that closed during that year. The largest of these was the sale of approximately 165 acres of undeveloped land in Suffield and Granby, Connecticut to a local farmer for cash proceeds of $3.0 million. In connection with that sale, the state of Connecticut acquired the development rights on that land from the farmer who purchased the property. In fiscal 2011, Griffin Land also closed on the sale of approximately 57 acres of undeveloped land (much of which is wetlands) in Granby to a local homebuilder and closed on the sale of approximately 10 acres of land in Southwick, Massachusetts.

The weakness in the residential real estate market has adversely affected Griffin Land's real estate development activities for this industry sector. The continued weakness of the residential real estate market could result in lower selling prices for Griffin Land's land intended for residential use or delay the sale of such land.

Griffin Land's development of its land is affected by regulatory and other constraints. Subdivision and other residential development issues may also be affected by the potential adoption of initiatives meant to limit or concentrate residential growth. Commercial and industrial development activities of Griffin Land's undeveloped land may also be affected by traffic considerations, potential environmental issues, community opposition and other restrictions to development imposed by governmental agencies.

Griffin does not maintain a corporate website. Griffin's annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and the proxy statement for Griffin's Annual Meeting of Stockholders can be accessed through the SEC website at www.sec.gov. Griffin will provide electronic or paper copies of its foregoing filings free of charge upon request. Griffin was incorporated in 1970.

Commercial and Industrial Developments

New England Tradeport

A significant portion of Griffin Land's commercial and industrial development effort has been focused on New England Tradeport ("Tradeport"), a 600 acre industrial park near Bradley International Airport and Interstate 91, located in Windsor and East Granby, Connecticut. Within Tradeport, Griffin Land built and currently owns approximately 1,465,000 square feet of warehouse and light manufacturing space in thirteen buildings, of which approximately 67% was leased as of November 30, 2013. Tradeport also contains a bottling and distribution plant built by the Pepsi Bottling Group ("Pepsi") on land sold to Pepsi by Griffin Land in the early 1990s, and large distribution facilities built by Walgreen and Dollar Tree on land parcels purchased from Griffin Land in fiscal 2006 and fiscal 2012, respectively. The current State Traffic Certificate ("STC") covering Tradeport allows for total development of approximately 4,390,000 square feet within Tradeport. Of that total capacity, approximately 3,594,000 square feet currently is used by existing development, including approximately 2,129,000 square feet in the three buildings owned by others and approximately 1,465,000 square feet in existing Griffin Land-owned buildings.

Griffin Land holds the remaining approximately 796,000 square feet of unbuilt capacity under the STC Certificate which relates to four approved building sites and an approved addition to one of Griffin Land's existing buildings. Griffin Land also owns all of the remaining undeveloped land within Tradeport, which consists of two contiguous parcels totaling approximately 95 acres, 60 acres of which are located in Windsor and the abutting 35 acres located in East Granby. There are no STC or other approvals currently in place (other than zoning in the case of Windsor) for the development of this

remaining undeveloped land, and Griffin Land believes that additional infrastructure improvements, which may be significant, may be required to obtain approvals to develop portions of this land. As part of the Dollar Tree Sale, a sewer line was brought to an accessible point near the edge of this 95 acre combined parcel. Griffin Land intends to continue to direct much of its real estate efforts in Connecticut on the construction and leasing of its warehouse and light manufacturing facilities at Tradeport.

In fiscal 2013, Griffin Land leased approximately 31,000 square feet of previously vacant space in Tradeport and renewed leases for approximately 115,000 square feet in Tradeport, while leases totaling 168,000 square feet expired and were not renewed. As of November 30, 2013, approximately $55.5 million was invested (net book value) in buildings owned by Griffin Land that are located in Tradeport and approximately $4.4 million was invested (net book value) by Griffin Land in the undeveloped land there. As of November 30, 2013, ten of Griffin Land's Tradeport buildings were mortgaged for an aggregate of approximately $43.5 million. Two Tradeport buildings built in fiscal 2007 and an older Tradeport building, aggregating approximately 373,000 square feet, are currently not mortgaged. A summary of Griffin Land's square footage owned and leased in Tradeport at the end of each of the past three fiscal years and leases in Tradeport scheduled to expire during each of the next three fiscal years are as follows:



December 3, 2011	1,465,000	1,052,000	72	%
December 1, 2012	1,465,000	1,117,000	76	%
November 30, 2013	1,465,000	981,000	67	%

	2014			2015			2016

Square footage of leases expiring		90,000			238,000			78,000
Percentage of leased space at Nov. 30, 2013		9	%		24	%		8	%
Number of tenants with leases expiring		4			3			2
Annual rental revenue of expiring leases	$	853,000		$	1,979,000		$	691,000
Annual rental revenue of expiring leases as a percentage of Griffin Land's annual rental revenue		4	%		10	%		4	%

*: The square footage leased in the three years presented above does not include approximately 47,000 square feet of space on which Tire Rack pays operating expenses and is required to occupy no later than August 2014, the beginning of the sixth year of its lease.

Griffin Center and Griffin Center South

Griffin Land's other substantial commercial development in Connecticut is the combination of its buildings in Griffin Center in Windsor and Bloomfield, Connecticut and Griffin Center South in Bloomfield. Together, these master planned developments comprise approximately 600 acres and as of November 30, 2013, approximately 63% of the acreage has been used to develop approximately 2,165,000 square feet of office and industrial space. Griffin Land owns approximately 617,000 of the 2,165,000 square feet of developed space.

Griffin Center

Currently in Griffin Center there are eleven office buildings, a flex building and a small restaurant. Griffin Land owns two multi-story office buildings that have an aggregate of approximately 161,000

square feet, a single story office building of approximately 48,000 square feet, a 165,000 square foot flex building (the "NU Building"), which is used principally as office, data center and call center space and the small restaurant building.

In fiscal 2013, Griffin Land leased approximately 42,000 square feet of previously vacant office space in Griffin Center and renewed one lease for approximately 5,000 square feet, while one tenant that leased approximately 5,000 square feet in one of Griffin Land's multi-story office buildings negotiated an early termination of that lease in connection with a ten-year early renewal and lease extension of its lease of 32,000 square feet in Griffin Land's single story office building in Griffin Center. Currently there are approximately 207 acres of undeveloped land in Griffin Center.

As of November 30, 2013, approximately $18.0 million was invested (net book value) in Griffin Land's buildings in Griffin Center and approximately $1.2 million was invested by Griffin Land in the undeveloped land there. Griffin Land's two multi-story office buildings and the NU Building in Griffin Center are separately mortgaged for an aggregate of approximately $10.2 million, and Griffin Land's single story office building is included as collateral under Griffin's $12.5 million revolving line of credit. There were no borrowings under the revolving line of credit as of November 30, 2013.

As of November 30, 2013, approximately 373,000 square feet of Griffin Land's buildings in Griffin Center were leased, comprising approximately 98% of Griffin Land's total space in Griffin Center. A summary of Griffin Land's square footage owned and leased in Griffin Center at the end of each of the past three fiscal years and leases in Griffin Center scheduled to expire during each of the next three fiscal years are as follows:



December 3, 2011	382,000	335,000	88	%
December 1, 2012	382,000	335,000	88	%
November 30, 2013	382,000	373,000	98	%

	2014			2015			2016

Square footage of leases expiring		16,000			29,000			25,000
Percentage of leased space at Nov. 30, 2013		4	%		8	%		7	%
Number of tenants with leases expiring		1			3			1
Annual rental revenue of expiring leases	$	283,000		$	512,000		$	395,000
Annual rental revenue of expiring leases as a percentage of Griffin Land's annual rental revenue		1	%		3	%		2	%

Griffin Center South

Griffin Center South is a 130 acre tract with sixteen buildings of single story office, flex and storage space totaling approximately 1,152,000 square feet. Griffin Land currently owns nine buildings in Griffin Center South with an aggregate of approximately 235,000 square feet, of which approximately 217,000 square feet is single story office and flex space and approximately 18,000 square feet is storage space. In fiscal 2013, Griffin Land leased approximately 7,500 square feet in Griffin Center South and renewed two leases with an aggregate of approximately 16,000 square feet, while a tenant that leased approximately 19,000 square feet exercised its option to terminate its lease effective August 31, 2013, two years earlier than the lease's scheduled expiration date.

As of November 30, 2013, approximately $7.3 million was invested (net book value) in Griffin Land's buildings in Griffin Center South and approximately $0.4 million was invested by Griffin Land in the undeveloped land there. As of November 30, 2013, Griffin Land's nine properties in Griffin

Center South are included as collateral under Griffin's $12.5 million revolving line of credit. There were no borrowings under the revolving line of credit as of November 30, 2013. Griffin Land believes that the undeveloped land remaining in Griffin Center South is sufficient to build at least two additional buildings aggregating approximately 175,000 square feet.

As of November 30, 2013, approximately 207,000 square feet of space in the Griffin Center South buildings owned by Griffin Land was leased, comprising 88% of Griffin Land's total space in Griffin Center South. A summary of Griffin Land's square footage owned and leased in Griffin Center South at the end of each of the past three fiscal years and leases in Griffin Center South scheduled to expire during each of the next three fiscal years are as follows:



December 3, 2011	235,000	199,000	85	%
December 1, 2012	235,000	219,000	93	%
November 30, 2013	235,000	207,000	88	%

	2014			2015			2016

Square footage of leases expiring		10,000			62,000			37,000
Percentage of leased space at Nov. 30, 2013		5	%		30	%		18	%
Number of tenants with leases expiring		2			5			3
Annual rental revenue of expiring leases	$	101,000		$	656,000		$	436,000
Annual rental revenue of expiring leases as a percentage of Griffin Land's annual rental revenue		1	%		3	%		2	%

Lehigh Valley Industrial Properties and Other Property

In fiscal 2010, Griffin Land completed its first acquisition of property outside of the Hartford, Connecticut area, when it acquired a fully leased 120,000 square foot industrial building (the "Olympus Building") in Breinigsville, Pennsylvania, which is located in the Lehigh Valley. Subsequent to the purchase of the Olympus Building, Griffin Land and the tenant in that building agreed on a nine year extension of the lease, which now runs through 2025. Also in fiscal 2010, Griffin Land acquired approximately 51 acres of undeveloped land in Lower Nazareth, Pennsylvania, which was renamed Lehigh Valley Tradeport, and is located in a major industrial area of the Lehigh Valley. The land acquired had approvals for the development of two industrial buildings totaling approximately 530,000 square feet. In fiscal 2012, Griffin Land completed construction on the first of two buildings to be built in Lehigh Valley Tradeport, an approximately 228,000 square foot industrial building. This building was built on speculation and, in fiscal 2013, Griffin Land entered into a five-year full building lease of this building. The work completed in Lehigh Valley Tradeport for the construction of this building included a portion of the site work necessary for the construction of the second building. In the fiscal 2013 fourth quarter, Griffin Land started construction of the second building planned for Lehigh Valley Tradeport, an approximately 303,000 square foot industrial building. Completion of the construction of this building is expected to be in the fiscal 2014 second quarter. In addition to the costs of the site work for this new building discussed above, Griffin Land has invested approximately $1.4 million in the construction of this new building through November 30, 2013, and expects total construction costs, excluding site costs, to be approximately $9.5 million. These costs do not include leasing related costs.

As of November 30, 2013, Griffin Land owned three industrial buildings aggregating approximately 379,000 square feet that are located outside of its core Connecticut office and industrial parks, including the Olympus Building and the newly built industrial building in Lehigh Valley Tradeport discussed above, which are a combined approximately 348,000 square feet. The third industrial building

not located in one of Griffin Land's Connecticut industrial parks is a 31,000 square foot warehouse building in Bloomfield, Connecticut. All of these buildings are fully leased. The site of the Bloomfield building has approximately 24 acres of undeveloped land and abuts an approximately 244 acre parcel of undeveloped land located partly in Bloomfield and partly in Windsor, Connecticut that is also owned by Griffin Land. This 268 acre parcel is known as Phoenix Crossing. In fiscal 2013, Griffin Land sold approximately 90 acres of the Phoenix Crossing land in the Windsor Land Sale. Approximately $18.5 million was invested (net book value) in these three buildings at that date. The Olympus Building in Pennsylvania is mortgaged for approximately $4.0 million as of November 30, 2013, and the 228,000 square foot building in Lehigh Valley Tradeport is mortgaged for approximately $9.1 million as of November 30, 2013.

On December 28, 2012, Griffin Land acquired a 49 acre parcel of undeveloped land in Hanover Township, Pennsylvania, also in the Lehigh Valley, for approximately $7.1 million in cash. Griffin Land expects to develop two industrial buildings totaling approximately 530,000 square feet on the land acquired. In late 2013, Griffin Land received final approvals for such development. The funds used to acquire this land were principally the proceeds from the Dollar Tree Sale that had been held in escrow since the closing of that transaction in order to qualify for a Section 1031 like-kind exchange for income tax purposes.

Griffin Land may seek to acquire additional properties and/or undeveloped land parcels to expand the industrial/warehouse portion of its real estate business. Griffin Land continues to examine potential properties in the northeast and mid-Atlantic areas for potential acquisition.

Residential Developments

Simsbury

Several years ago, Griffin Land filed plans for the creation of a residential community, called Meadowood, on a 363 acre site in the Town of Simsbury, Connecticut ("Simsbury"). After several years of litigation with the town regarding this proposed residential development, a settlement was reached. The settlement terms included, among other things, approval for up to 296 homes, certain remediation measures and offsite road improvements to be performed by Griffin Land and the purchase by Simsbury of a portion of the Meadowood land for open space. The sale of land to Simsbury closed in fiscal 2008. In fiscal 2012, Griffin Land performed a portion of the required remediation work on the site and completed the required offsite road improvements. Griffin Land expects to spend approximately $1.4 million in fiscal 2014 to complete the remaining required remediation work on the site. Such work is expected to be completed in the fiscal 2014 second quarter. As of November 30, 2013, the book value of the land for this development, including design, development and legal costs, was approximately $6.6 million.

Griffin Land owns another approximate 432 acres of undeveloped land in Simsbury, portions of which are zoned for residential use and other portions of which are zoned for industrial use. Not all of this land is developable. The land currently zoned for industrial use is probably more suited to commercial or mixed-use development. Griffin Land may seek to develop or sell such land.

Suffield

In fiscal 2006, Griffin Land completed the infrastructure for a fifty lot residential subdivision in Suffield, Connecticut called Stratton Farms. Griffin Land sold twenty-five residential lots in Stratton Farms to a local homebuilder in fiscal 2006 and fiscal 2007. That homebuilder did not exercise its option to purchase additional residential lots, thus canceling the option to acquire the remaining Stratton Farms lots. The homebuilder's decision not to purchase any lots after 2007 was attributed to the weakening of the residential real estate market. In 2009, the homebuilder that purchased the twenty-five Stratton Farms lots entered into bankruptcy proceedings, and the remaining unsold lots held by that homebuilder were foreclosed on by a local bank and sold to a privately owned regional homebuilder.

In fiscal 2010, Griffin Land entered into an agreement with that privately owned regional homebuilder under which in exchange for a payment of $100,000, the homebuilder obtained an option to purchase the remaining twenty-five residential lots of Stratton Farms. Under the agreement's lot takedown schedule, Griffin Land closed on the sale of the first four lots in fiscal 2010. The option was terminated in fiscal 2012 without any purchases of additional lots by the homebuilder. Griffin Land sold one Stratton Farms residential lot in fiscal 2013 to the homebuilder that previously was a party to the option agreement that terminated in 2012. As of November 30, 2013, Griffin Land held twenty Stratton Farms residential lots. The book value for Griffin Land's Stratton Farms holdings, including land, design, development and legal costs, was approximately $1.1 million at November 30, 2013.

Other

In fiscal 2013, Griffin Land leased approximately 512 acres of undeveloped land in Connecticut and Massachusetts to local farmers. Approximately 542 acres and 600 acres were leased to local farmers in fiscal 2012 and fiscal 2011, respectively. The revenue generated from the leasing of farmland is not material to Griffin Land's total revenue.

Griffin Land is evaluating its other properties for development or sale in the future. Griffin Land anticipates that obtaining subdivision approvals for residential development in many of the towns where it owns land will be an extended process.

Landscape Nursery Business

As indicated above, Griffin and Imperial entered into the Purchase Agreement with Monrovia, effective January 8, 2014, pursuant to which Imperial's inventory and certain of its assets were sold to Monrovia for approximately $840,000 in cash (subject to certain adjustments) and a non-interest bearing note receivable (the "Promissory Note") of $4.25 million, with payments of $2.75 million due on June 1, 2014 and $1.5 million due on June 1, 2015. Pursuant to the Purchase Agreement, Griffin and Imperial agreed to indemnify Monrovia for any potential environmental liabilities relating to periods prior to the effective date of the Purchase Agreement.

Concurrently with the entry into the Purchase Agreement, Imperial and River Bend Holdings, LLC, a wholly-owned subsidiary of Griffin, entered into the Imperial Lease with Monrovia, pursuant to which Monrovia agreed to lease Imperial's Connecticut production nursery for a ten-year period, with an option to extend for up to an additional fifteen years exercisable by Monrovia. The Imperial Lease provides for a net annual rent payable to Griffin of $500,000 for each of the first five years, with rent for subsequent years determined in accordance with the Imperial Lease. The Imperial Lease also grants Monrovia an option to purchase the land, land improvements and other operating assets that were used by Imperial in its Connecticut growing operations, during the first thirteen years of the lease period.

Imperial's Florida farm is also being leased to another private company grower of landscape nursery plants. Imperial shut down its growing operations on its Florida farm in 2009 and entered into a six-year lease of that facility. The annual rent payable is $600,000 and the tenant has an option to purchase the facility any time during the lease term.

Investments

Centaur Media plc

Centaur Media plc ("Centaur Media") is a publicly traded company listed on the London Stock Exchange. As of November 30, 2013, Griffin held 2,452,462 shares of Centaur Media and accounts for its investment in Centaur Media as an available-for-sale security. Accordingly, changes in the fair value of Griffin's investment in Centaur Media, including both changes in the stock price and changes in the

foreign currency exchange rate, are not included in Griffin's net income but are included in Griffin's other comprehensive income. In fiscal 2013, Griffin sold 2,824,688 shares of its Centaur Media common stock, for total cash proceeds of approximately $2.5 million. Subsequent to the end of fiscal 2013, Griffin sold an additional 250,000 shares of Centaur Media for proceeds of approximately $250,000.

Shemin Nurseries Holding Corp.

Shemin Nurseries Holding Corp. ("SNHC") is a privately held company that operates a landscape nursery distribution business. As of December 1, 2012, Griffin held an approximately 14% equity interest in SNHC and accounted for its investment in SNHC under the cost method of accounting for investments. On January 18, 2013, Griffin sold its entire investment in SNHC for cash proceeds of approximately $3.4 million.

Employees

As of November 30, 2013, Griffin employed 99 people on a full-time basis, including 72 employees in its landscape nursery business, 21 employees in its real estate business and 6 corporate employees. As a result of the Imperial Transaction, the employees of the landscape nursery business are no longer employed by Griffin. Most of the employees of the landscape nursery business were hired by Monrovia. Presently, none of Griffin's employees are represented by a union. Griffin believes that its relations with its employees are satisfactory.

Competition

Numerous real estate developers operate in the portions of Connecticut, Massachusetts and the Lehigh Valley region of Pennsylvania in which Griffin's real estate holdings are concentrated. Some of these competitors have greater financial resources than Griffin. Griffin's real estate business competes on the bases of location, price, availability of space, convenience and amenities.

Regulation: Environmental Matters

Under various federal, state and local laws, ordinances and regulations, an owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances or petroleum product releases at such property and may be held liable to a governmental entity or to third parties for property damage and for investigation and clean-up costs incurred by such parties in connection with contamination. The cost of investigation, remediation or removal of such substances may be substantial, and the presence of such substances, or the failure to remediate properly such substances, may adversely affect the owner's ability to sell or rent such property or to borrow using such property as collateral. In connection with the ownership (direct or indirect), operation, management and development of real estate properties, Griffin Land may be considered an owner or operator of such properties or as having arranged for the disposal or treatment of hazardous or toxic substances and, therefore, potentially liable for removal or remediation costs, as well as certain other related costs, including governmental fines and injuries to persons and property. The value of Griffin's land may be affected by the presence of residual chemicals from the prior use of the land for farming, principally on a portion of the land that is intended for residential use. In the event that Griffin Land is unable to remediate adequately any of its land intended for residential use, Griffin Land's ability to develop such property for its intended purposes would be materially affected.

Griffin Land periodically reviews its properties for the purpose of evaluating such properties' compliance with applicable state and federal environmental laws. In connection with the Imperial Transaction, Griffin expects to incur some costs to remediate a small area of the Connecticut farm that will be leased to Monrovia under the Imperial Lease. At this time, Griffin Land does not anticipate experiencing, in the next twelve months, any material expense in complying with such laws. Griffin

Land may incur remediation costs in the future in connection with its development operations. Such costs are not expected to be significant as compared to expected proceeds from development projects or property sales.

ITEM 1A. RISK FACTORS.

Griffin's real estate business has a number of risk factors. The risk factors discussed below are those that management deems to be material, but they may not be the only risks facing Griffin. Additional risks not currently known or currently deemed not to be material may also impact Griffin.

Adverse Economic Conditions and Credit Markets

Griffin Land's real estate business may be affected by market conditions and economic challenges experienced by the U.S. economy as a whole, conditions in the credit markets or by local economic conditions in the markets in which its properties are located. Such conditions may impact Griffin's results of operations, financial condition or ability to expand its operations as a result of the following:

•: The financial condition of Griffin Land's tenants may be adversely affected, which may result in tenant defaults under leases due to bankruptcy, lack of liquidity, operational failures or for other reasons;
•: Significant job losses may occur, which may decrease demand for Griffin Land's office and industrial space, causing market rental rates and property values to be negatively impacted;
•: Griffin's ability to borrow on terms and conditions that it finds acceptable, or at all, may be limited, which could reduce its ability to pursue acquisition and development opportunities, refinance existing debt, and/or increase future interest expense;
•: Reduced values of Griffin Land's properties may limit its ability to obtain debt financing collateralized by its properties or may limit the proceeds from such potential financings; and
•: A weak economy may limit sales of land intended for commercial/industrial use.

Downturn in the Residential Real Estate Market

Weakness in the residential real estate market may adversely affect Griffin Land's real estate development activities, including delaying the development and/or sale of Griffin Land's undeveloped land intended for residential use.

Risks Associated with Concentration of Real Estate Holdings

Griffin Land's real estate operations are concentrated primarily in the Hartford, Connecticut area, with additional operations in the Lehigh Valley of Pennsylvania. Adverse changes in the local economies, state or local governmental regulations or real estate markets could impact Griffin Land's real estate operations, including the market's ability to absorb newly constructed space, Griffin Land's ability to retenant vacant space and have an adverse effect on rental rates.

Griffin Land's real estate operations compete with other properties in the areas where it operates. The construction of new facilities by competitors would increase capacity in the marketplace, and an increase in the amount of vacancies in competitors' properties and negative absorption of space could result in Griffin Land experiencing longer times to lease vacant space, eroding lease rates or hindering renewals by existing tenants.

Risks Associated with Entering New Real Estate Markets

In fiscal 2010, Griffin Land acquired a fully-leased 120,000 square foot industrial building in Breinigsville, Pennsylvania and a 51 acre parcel of undeveloped land in Lower Nazareth, Pennsylvania, known as Lehigh Valley Tradeport. In fiscal 2012, Griffin Land built, on speculation, a 228,000 square foot industrial building on a portion of Lehigh Valley Tradeport and in the fiscal 2013 fourth quarter, Griffin Land started construction on a 303,000 square foot industrial building in Lehigh Valley Tradeport. On December 28, 2012, Griffin Land completed the acquisition of approximately 49 acres of undeveloped land in Hanover Township, Pennsylvania. These acquisitions were Griffin Land's first purchases of properties outside of the Hartford, Connecticut market where Griffin Land's core real estate holdings are located. Griffin Land expects to continue to seek to acquire properties outside of the Hartford, Connecticut market. Operating in a real estate market that is new for Griffin Land creates additional risks and uncertainties to Griffin's operations.

Potential Environmental Liabilities

Griffin Land has extensive land holdings in Connecticut and Massachusetts, and, in fiscal 2010 began acquiring properties in the Lehigh Valley of Pennsylvania. Under federal, state and local environmental laws, ordinances and regulations, Griffin Land may be required to investigate and clean up the effects of releases of hazardous substances or petroleum products at its properties because of its current or past ownership or operation of the real estate. If previously unidentified environmental problems arise, Griffin Land may have to make substantial payments, which could adversely affect its cash flow. As an owner or operator of properties, Griffin Land may have to pay for property damage and for investigation and clean-up costs incurred in connection with a contamination. The law typically imposes clean-up responsibility and liability regardless of whether the owner or operator knew of or caused the contamination. Changes in environmental regulations may impact the development potential of Griffin Land's undeveloped land or could increase operating costs due to the cost of complying with new regulations.

Governmental Regulations

Griffin Land's real estate operations are subject to governmental regulations that affect real estate development, such as local zoning ordinances. Any changes in such regulations may impact the ability of Griffin Land to develop its properties or increase Griffin Land's costs of development.

Insurance Coverage Does Not Include All Potential Losses in the Real Estate Business

Griffin Land carries comprehensive insurance coverage, including property, fire, terrorism and loss of rental revenue. The insurance coverage contains policy specifications and insured limits. Griffin Land believes its properties are adequately insured. However, there are certain losses that are not generally insured against or that are not fully insured against. If an uninsured loss or a loss in excess of insured limits occurs with respect to one or more of Griffin Land's properties, Griffin Land could experience a significant loss of capital invested and potential revenue from the properties affected.

Risks Associated with the Cost of Raw Materials and Energy Costs

Griffin Land's construction activities could be adversely affected by increases in raw materials or energy costs. As petroleum and other energy costs increase, products used in the construction of Griffin Land's facilities, such as steel, masonry, asphalt, cement and building products may increase. An increase in the cost of building new facilities could negatively impact Griffin Land's future operating results through increased depreciation expense. An increase in construction costs would also require increased investment in Griffin Land's real estate assets, which may lower the return on investment in new facilities in the real estate business. An increase in energy costs could increase Griffin's building operating expenses and thereby lower Griffin Land's operating results.

Investment in a Foreign Company

Griffin has an investment in Centaur Media plc, a public company based in the United Kingdom. The ultimate liquidation of that investment and conversion of proceeds into United States currency is subject to future foreign currency exchange rates.

Griffin is Subject to Litigation That May Adversely Impact Operating Results

Griffin is, and may in the future be, a party to a number of legal proceedings and claims arising in the ordinary course of business which could become significant. Given the inherent uncertainty of litigation, we can offer no assurance that a future adverse development related to existing litigation or any future litigation will not have a material adverse impact on Griffin's business, consolidated financial position, results of operations or cash flows.

The Concentrated Ownership of Griffin Common Stock by Members of the Cullman and Ernst Families

Members of the Cullman and Ernst families (the "Cullman and Ernst Group"), which include David M. Danziger, a director of Griffin, Frederick M. Danziger, Griffin's Chairman and Chief Executive Officer, Michael S. Gamzon, Griffin's President and Chief Operating Officer and John J. Kirby, Jr., a director of Griffin who is married to a member of the Cullman family, members of their families and trusts for their benefit, partnerships in which they own substantial interests and charitable foundations on whose boards of directors they sit, owned, directly or indirectly, approximately 46.6% of the outstanding common stock of Griffin as of November 30, 2013. There is an informal understanding that the persons and entities included in the Cullman and Ernst Group will vote together the shares owned by each of them. As a result, the Cullman and Ernst Group may effectively control the determination of Griffin's corporate and management policies and may limit other Griffin stockholders' ability to influence Griffin's corporate and management policies.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

Not applicable.

ITEM 2. PROPERTIES.

Land Holdings

Griffin is a major landholder in the state of Connecticut, owning approximately 3,015 acres. Griffin also owns approximately 416 acres of land in Massachusetts, approximately 117 acres of land in Pennsylvania and approximately 1,066 acres in northern Florida. At November 30, 2013, the book value of land holdings owned by Griffin was approximately $30.2 million. Griffin believes the fair market value of such land is substantially in excess of its book value.

Listings of the locations of Griffin's land holdings, a portion of which, principally in Bloomfield, East Granby and Windsor, Connecticut and Breinigsville, Lower Nazareth Township and Hanover Township, Pennsylvania have been developed, are as follows:

Land Holdings

Location	Land Area

	(in acres)
Connecticut
Bloomfield		320
East Granby		554	(a)
East Windsor		115
Granby		339	(a)
Simsbury		795
Suffield		74
Windsor		818
Florida
Quincy		1,066	(b)
Massachusetts
Southwick		416
Pennsylvania
Lower Nazareth Township		51
Hanover Township		49
Breinigsville		17

(a): Includes approximately 424 acres of land in East Granby and 305 acres of land in Granby that were used by Imperial in its growing operation. Effective January 9, 2014, most of such acreage is leased to Monrovia under the Imperial Lease.
(b): The acreage in Florida was used in Imperial's landscape nursery business prior to fiscal 2009. Imperial shut down that facility in fiscal 2009 and now leases that facility to another nursery grower. That lease agreement includes an option for the tenant to purchase the Florida farm.

Developed Properties

As of November 30, 2013, Griffin Land owned thirty buildings, comprised of seventeen industrial/warehouse buildings, twelve office/flex buildings and a small restaurant building. A listing of those facilities is as follows:


Griffin Center
1985 Blue Hills Avenue, Windsor, CT*	Flex building	165,000 sq. ft.
5 Waterside Crossing, Windsor, CT*	Office building	80,500 sq. ft.
7 Waterside Crossing, Windsor, CT*	Office building	80,500 sq. ft.
21 Griffin Road North, Windsor, CT*	Office building	48,300 sq. ft.
1936 Blue Hills Avenue, Windsor, CT	Restaurant building	7,200 sq. ft.


Griffin Center South
29 - 35 Griffin Road South, Bloomfield, CT*	Flex building	57,500 sq. ft.
55 Griffin Road South, Bloomfield, CT*	Office/flex building	40,300 sq. ft.
340 West Newberry Road, Bloomfield, CT*	Office/flex building	39,000 sq. ft.
206 West Newberry Road, Bloomfield, CT*	Office/flex building	23,300 sq. ft.
204 West Newberry Road, Bloomfield, CT*	Office/flex building	22,300 sq. ft.
210 West Newberry Road, Bloomfield, CT*	Warehouse building	18,400 sq. ft.
330 West Newberry Road, Bloomfield, CT*	Office/flex building	11,900 sq. ft.
310 West Newberry Road, Bloomfield, CT*	Office/flex building	11,400 sq. ft.
320 West Newberry Road, Bloomfield, CT*	Office/flex building	11,100 sq. ft.


New England Tradeport
100 International Drive, Windsor, CT*	Industrial building	304,200 sq. ft.
755 Rainbow Road, Windsor, CT	Industrial building	148,500 sq. ft.
758 Rainbow Road, Windsor, CT*	Industrial building	137,000 sq. ft.
754 Rainbow Road, Windsor, CT*	Industrial building	136,900 sq. ft.
759 Rainbow Road, Windsor, CT	Industrial building	126,900 sq. ft.
75 International Drive, Windsor, CT*	Industrial building	117,000 sq. ft.
20 International Drive, Windsor, CT*	Industrial building	99,800 sq. ft.
40 International Drive, Windsor, CT*	Industrial building	99,800 sq. ft.
35 International Drive, Windsor, CT	Industrial building	97,600 sq. ft.
16 International Drive, East Granby, CT*	Industrial building	58,400 sq. ft.
25 International Drive, Windsor, CT*	Industrial building	57,200 sq. ft.
15 International Drive, East Granby, CT*	Industrial building	41,600 sq. ft.
14 International Drive, East Granby, CT*	Industrial building	40,100 sq. ft.


Lehigh Valley and Other Properties
4275 Fritch Drive, Lower Nazareth, PA*	Industrial building	228,000 sq. ft.
871 Nestle Way, Breinigsville, PA*	Industrial building	119,900 sq. ft.
1370 Blue Hills Avenue, Bloomfield, CT	Industrial building	30,700 sq. ft.

*: Included as collateral under one of Griffin's nonrecourse mortgages or Griffin's revolving line of credit.

Griffin leases approximately 2,300 square feet in New York City for its executive offices.

As with many companies engaged in real estate investment and development, Griffin holds its real estate portfolio subject to mortgage debt. See Note 10 to Griffin's consolidated financial statements for information concerning the mortgage debt associated with Griffin's properties.

ITEM 3. LEGAL PROCEEDINGS.

Griffin is involved, as a defendant, in various litigation matters arising in the ordinary course of business. In the opinion of management, based on the advice of legal counsel, the ultimate liability, if any, with respect to these matters is not expected to be material to Griffin's financial position, results of operations or cash flows.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information

The following are the high and low prices of common shares of Griffin Land & Nurseries, Inc. as traded on The NASDAQ Stock Market LLC:

	1st Quarter				2nd Quarter				3rd Quarter				4th Quarter

	High		Low		High		Low		High		Low		High		Low
2013	$	30.56	$	25.05	$	30.60	$	27.90	$	32.59	$	27.06	$	33.00	$	30.30
2012	$	28.99	$	24.86	$	27.58	$	23.40	$	29.16	$	23.77	$	33.73	$	24.30

On February 5, 2014, the number of record holders of common stock of Griffin was approximately 214, which does not include beneficial owners whose shares are held of record in the names of brokers or nominees. The closing market price as quoted on The NASDAQ Stock Market LLC on such date was $27.36 per share.

Dividend Policy

In fiscal 2011, Griffin declared quarterly cash dividends of $0.10 per share. In the fourth quarter of fiscal 2011, Griffin's Board of Directors decided to change Griffin's dividend policy for succeeding years. Beginning in fiscal 2012, rather than continuing to pay a quarterly dividend, Griffin intends to consider the payment of an annual dividend at the end of its fiscal year. This change permits the Board to evaluate better both Griffin's prior full year results and its cash needs for the succeeding year when determining whether to declare an annual dividend. In fiscal 2012 and fiscal 2013, Griffin declared an annual dividend of $0.20 per share in each year.

Stock Performance Graph

The following graph compares the total percentage changes in the cumulative total stockholder return (assuming the reinvestment of dividends) on Griffin's Common Stock with the cumulative total return of the Russell 2000 Index from November 29, 2008 to November 30, 2013. It is assumed in the graph that the value of each investment was $100 at November 29, 2008. Griffin is not aware of any other company that substantially participated in both the landscape nursery and real estate businesses during that period, and would therefore be suitable for comparison to Griffin as a "peer issuer" within Griffin's lines of business.

ITEM 6. SELECTED FINANCIAL DATA.

The following table sets forth selected statement of operations data for fiscal years 2009 through 2013 and balance sheet data as of the end of each fiscal year. The selected statement of operations data for fiscal 2011, fiscal 2012 and fiscal 2013 and the selected balance sheet data for fiscal 2012 and fiscal 2013 are derived from the audited consolidated financial statements included in Item 8 of this report. The selected statement of operations data for fiscal 2009 and fiscal 2010 and the balance sheet data for fiscal 2009, fiscal 2010 and fiscal 2011 were derived from the audited consolidated financial statements for those years.

	2013			2012		2011			2010			2009

	(dollars in thousands, except per share data)
Statement of Operations Data:
Total revenue	$	25,526		$	24,215	$	22,657		$	18,386		$	15,686
Operating income (loss)		2,436			3,386		2,366			(1,949	)		(3,715	)
Income (loss) from continuing operations		1,910			196		(1,308	)		(3,730	)		(4,520	)
Loss (income) from discontinued operations(1)		(7,731	)		770		(1,166	)		(757	)		(993	)
Net (loss) income		(5,821	)		966		(2,474	)		(4,487	)		(5,513	)
Basic income (loss) per share from continuing operations		0.37			0.04		(0.25	)		(0.73	)		(0.89	)
Basic (loss) income per share from discontinued operations(1)		(1.50	)		0.15		(0.23	)		(0.15	)		(0.20	)
Basic net (loss) income per share		(1.13	)		0.19		(0.48	)		(0.88	)		(1.09	)
Diluted income (loss) per share from continuing operations		0.37			0.04		(0.25	)		(0.73	)		(0.89	)
Diluted(loss) income per share from discontinued operations(1)		(1.50	)		0.15		(0.23	)		(0.15	)		(0.20	)
Diluted net (loss) income per share		(1.13	)		0.19		(0.48	)		(0.88	)		(1.09	)
Balance Sheet Data:
Total assets		184,727			180,114		176,675			183,151			188,736
Working capital		13,176			19,807		21,439			24,400			35,533
Long-term debt (including current portion)		66,793			59,561		61,181			63,037			62,598
Stockholders' equity		98,115			104,146		103,305			109,067			114,746
Cash dividends declared per common share		0.20			0.20		0.40			0.40			0.40

(1): In all years presented reflects the results from the growing operations of the landscape nursery business. Fiscal 2009 through fiscal 2012, also reflects the results from the operations of the 308,000 square foot warehouse facility in Manchester, Connecticut. Fiscal 2012 results of discontinued operations also include the gain on the sale of the Manchester warehouse, which closed in the fiscal 2012 first quarter.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Overview

The consolidated financial statements of Griffin Land & Nurseries, Inc. ("Griffin") reflect Griffin's real estate business which is conducted through its wholly-owned subsidiary, Griffin Land, LLC ("Griffin Land"), and Griffin's wholly-owned subsidiary in the landscape nursery business, Imperial Nurseries, Inc. ("Imperial"). Imperial's growing operations are reflected as a discontinued operation in Griffin's consolidated financial statements for all periods presented as a result of the sale (the "Imperial Sale") of Imperial's growing operations to Monrovia Connecticut, LLC ("Monrovia") and the lease of Imperial's Connecticut farm to Monrovia (the "Imperial Lease", and together with the Imperial Sale the "Imperial Transaction") that became effective January 8, 2014. In addition to the growing operations of Imperial, Griffin's results of discontinued operations also include the operating results and gain on the sale of the warehouse building that was owned by Griffin Land and sold in fiscal 2012.

The notes to Griffin's consolidated financial statements included in Item 8 contain a summary of the significant accounting policies and methods used in the preparation of Griffin's consolidated financial statements. In the opinion of management, because of the relative magnitude of Griffin's real estate assets and inventories, accounting methods and estimates related to those assets are critical to the preparation of Griffin's consolidated financial statements. Generally, Griffin must use an accounting policy or method because it is the only policy or method permitted under accounting principles generally accepted in the United States of America ("U.S. GAAP"). The following are the critical accounting estimates and methods used by Griffin:

Accounts receivable: Management estimates future recoverability of its accounts receivable based on an account's aging, payment history and financial condition.

Inventories: In applying the principle of the lower of cost or fair value using the average cost method for nursery stock, management may need to estimate the future recoverability of certain parts of the inventory that have not matured as planned. As of November 30, 2013, the fair value was the net realizable value based on the terms of the Imperial Sale.

Investments: Griffin classifies its investments in equity securities that have readily determinable fair values as either available-for-sale or trading securities, based upon management's intent regarding each security. If there is a decline in fair value of available-for-sale securities, Griffin evaluates whether such decline is other than temporary, and if the decline is deemed to be other than temporary, Griffin would record the decline in its consolidated statement of operations.

Income taxes: In accounting for income taxes under Financial Accounting Standards Board ("FASB") ASC 740, "Income Taxes," management estimates future taxable income from operations, the sale of appreciated assets, the remaining years before the expiration of loss credit carryforwards, future reversals of existing temporary differences and tax planning strategies in determining if it is more likely than not that Griffin will realize the benefits of its deferred tax assets.

Impairment of long-lived assets: Griffin reviews annually, as well as when conditions may indicate, its long-lived assets to determine if there are any indications of impairment, such as a prolonged vacancy in one of Griffin Land's rental properties. If indications of impairment are present, Griffin evaluates the carrying value of the assets in relation to undiscounted cash flows or the estimated fair value of the underlying assets. In connection with Griffin's real estate business, development costs that have been capitalized are reviewed periodically for future recoverability.

Revenue and gain recognition: In the real estate business, revenue includes rental revenue from Griffin Land's commercial and industrial properties and proceeds from property sales. Rental revenue is accounted for on a straight-line basis over the applicable lease term in accordance with the Lease Topic (FASB ASC 840). Gains on property sales are recognized in accordance with the Property, Plant and Equipment-Real Estate Sales Topic (FASB ASC 360-20) based on the specific terms of each sale. When the percentage of completion method is used to account for a sale of real estate, costs included in determining the percentage of completion include the costs of the land sold, allocated master planning costs, selling and transaction costs and estimated future costs related to the land sold.

Stock based compensation: Griffin determines stock based compensation based on the estimated fair values of stock options as determined on their grant dates using the Black-Scholes option-pricing model. In determining the estimated fair values of stock options issued, Griffin makes assumptions on expected volatility, risk free interest rates, expected option terms and dividend yields.

Derivative instruments: Griffin evaluates each interest rate swap agreement to determine if it qualifies as an effective cash flow hedge. Changes in the fair value of each interest rate swap agreement that management determines to be an effective cash flow hedge are recorded as a component of other comprehensive income. The fair value of each interest rate swap agreement is determined based on observable market participant data, such as yield curves, as of the fair value measurement date.

Summary

In fiscal 2013, Griffin incurred a net loss of approximately $5.8 million as compared to net income of approximately $1.0 million in fiscal 2012. The net loss in fiscal 2013 as compared to net income in fiscal 2012 reflects a significant loss from discontinued operations partially offset by improved results from Griffin's continuing operations. Griffin incurred a loss from discontinued operations of approximately $7.7 million in fiscal 2013 as compared to income from discontinued operations of approximately $0.8 million in fiscal 2012. Griffin's income from continuing operations increased from approximately $0.2 million in fiscal 2012 to approximately $1.9 million in fiscal 2013.

The increase of approximately $1.7 million in income from continuing operations in fiscal 2013 as compared to fiscal 2012 is principally due to gains in fiscal 2013 from the sale of Griffin's investment in Shemin Nurseries Holding Corp. ("SNHC") and from the sale of a portion of the common stock of Centaur Media plc ("Centaur") of approximately $3.4 million and approximately $1.1 million, respectively. The gains on the sale of these investments in fiscal 2013 were partially offset by a decrease in operating income of approximately $0.9 million in fiscal 2013 as compared to fiscal 2012. The lower operating income principally reflects a lower gain on property sales and higher general and administrative expenses in fiscal 2013 as compared to fiscal 2012, partially offset by higher profit from leasing operations in fiscal 2013 as compared to fiscal 2012.

Griffin's discontinued operations in fiscal 2013 reflect the results of the growing operations of Imperial's landscape nursery business. The results from discontinued operations in fiscal 2012 and fiscal 2011 reflect Imperial's landscape nursery growing operations along with the results of operations and gain on the sale of Griffin Land's 308,000 square foot warehouse building (the "Manchester Warehouse") that was sold in January 2012. The loss from discontinued operations in fiscal 2013 as compared to income from discontinued operations in fiscal 2012 reflects a pretax charge of $10.4 million in fiscal 2013 to reduce the carrying value of Imperial's inventories to fair value, which is the net realizable value based on the terms of the Imperial Sale. Income from discontinued operations in fiscal 2012 includes a gain from the sale of the Manchester Warehouse that was sold in the fiscal 2012 first quarter partially offset by a loss from Imperial's landscape nursery business. The Manchester

Warehouse was sold for cash proceeds of $16.0 million and a gain, before taxes, of approximately $2.9 million. Griffin Land had an operating profit from the Manchester Warehouse of approximately $0.2 million, before taxes, in fiscal 2012 prior to its sale.

Results of Operations

Fiscal 2013 Compared to Fiscal 2012

Griffin's revenue increased from approximately $24.2 million in fiscal 2012 to approximately $25.5 million in fiscal 2013, reflecting an increase of approximately $1.6 million in rental revenue in fiscal 2013 as compared to fiscal 2012, partially offset by a decrease of approximately $0.3 million of revenue from property sales in fiscal 2013 as compared to fiscal 2012. The increase in rental revenue in fiscal 2013 as compared to fiscal 2012 is almost entirely due to higher occupancy in Griffin Land's rental properties in fiscal 2013 as compared to fiscal 2012. The net increase in rental revenue principally reflects: (a) an increase of approximately $2.1 million of rental revenue in fiscal 2013 due to leasing previously vacant space in buildings that were in service the entire year in both fiscal 2013 and fiscal 2012; and (b) an increase of approximately $0.5 million of rental revenue in fiscal 2013 from the commencement of a full building lease of the Lehigh Valley industrial building that was completed at the end of the fiscal 2012 third quarter; partially offset by (c) a decrease of approximately $0.9 million in rental revenue from leases that expired and were not renewed or terminated early.

A summary of the square footage of Griffin Land's real estate portfolio is as follows:



As of December 1, 2012	2,460,000	1,822,000	74	%
As of November 30, 2013	2,460,000	1,939,000	79	%

The increase in square footage leased as of November 30, 2013, as compared to December 1, 2012, reflects a new full building lease in fiscal 2013 for the approximately 228,000 square foot Lehigh Valley industrial building and the leasing of several other previously vacant spaces aggregating approximately 81,000 square feet (approximately 50,000 square feet of office/flex space and approximately 31,000 square feet of industrial/warehouse space) in fiscal 2013, partially offset by leases aggregating approximately 192,000 square feet that expired in fiscal 2013 and were not renewed or terminated early. The greater Hartford industrial market had been slow in recent years, but experienced some recovery in 2012 and 2013. Market activity for office/flex space in the north submarket of Hartford was slow in 2013, with overall vacancy, availability and asking rates remaining relatively flat. Griffin Land believes that it has been able to secure new leases for office/flex space because of its reputation as a stable, well capitalized company that maintains its properties to a high standard, meets its obligations and is able to deliver space to tenants timely and in accordance with the tenant's requirements and budget.

Revenue from property sales decreased from approximately $5.8 million in fiscal 2012 to approximately $5.5 million in fiscal 2013. Property sales occur periodically, and changes in revenue from year to year from those transactions may not be indicative of any trends in the real estate business. Property sales in fiscal 2013 include the closing of the sale of approximately 90 acres of undeveloped land in Windsor, Connecticut (the "Windsor Land Sale") for cash proceeds of approximately $9.0 million (before transaction expenses) in the fiscal 2013 fourth quarter. Griffin Land is required, under the terms of the Windsor Land Sale, to construct roadways that will connect the land sold to existing town roadways. Accordingly, because of Griffin Land's continuing involvement with the land that was sold, the Windsor Land Sale is being accounted for under the percentage of completion method, under which the revenue and the gain on sale are recognized as the total costs related to the property sale are incurred. In fiscal 2013, Griffin Land recognized approximately $2.7 million of revenue from the Windsor Land Sale. The balance of the revenue from the Windsor Land Sale will be recognized as the costs of the

required roadway construction are incurred, which is expected to be mostly in fiscal 2014. In addition to the revenue from the Windsor Land Sale, revenue from property sales in fiscal 2013 also included the recognition of approximately $2.3 million of previously deferred revenue from the sale of approximately 93 acres of undeveloped land in New England Tradeport ("Tradeport"), Griffin Land's industrial park in Windsor and East Granby, Connecticut, to Dollar Tree Distribution, Inc. (the "Dollar Tree Sale") that closed in fiscal 2012. As Griffin Land was required, under the terms of the Dollar Tree Sale, to construct a sewer line to service the property sold, Griffin Land accounted for the Dollar Tree Sale under the percentage of completion method. In addition to the recognition of previously deferred revenue on the Dollar Tree Sale, Griffin Land reported approximately $0.2 million of additional revenue from the Dollar Tree Sale in fiscal 2013 and also had a total of approximately $0.3 million of revenue from two smaller land sales. Property sales revenue in fiscal 2012 principally included the recognition of approximately $4.7 million of revenue from the Dollar Tree Sale and approximately $1.0 million of revenue from the sale of approximately 14 acres of undeveloped land in Windsor for cash.

Operating expenses of rental properties increased from approximately $6.7 million in fiscal 2012 to approximately $7.5 million in fiscal 2013. The increase of approximately $0.8 million in operating expenses of rental properties principally reflects an increase of approximately $0.3 million of snow removal expenses and increases of approximately $0.1 million in both real estate taxes on rental properties and repair and maintenance expenses. The increase in snow removal expenses reflects the effect of the relatively mild winter weather in fiscal 2012, when there was a minimal amount of snowfall, as compared to a higher amount of snowfall in fiscal 2013.

Depreciation and amortization expense increased from approximately $6.3 million in fiscal 2012 to approximately $6.7 million in fiscal 2013. The increase in depreciation and amortization expense of approximately $0.4 million in fiscal 2013 as compared to fiscal 2012 was due principally to an increase of approximately $0.3 million in fiscal 2013 on the 228,000 square foot Lehigh Valley industrial building that was completed and placed in service at the end of the fiscal 2012 third quarter, an increase of approximately $0.1 million related to new tenant improvements in several of Griffin Land's buildings and an increase of approximately $0.1 million in fiscal 2013 from accelerating depreciation on tenant improvements as a result of a tenant exercising its early lease termination option effective at the end of the fiscal 2013 third quarter. These increases in depreciation expense were partially offset by a decrease in depreciation expense of approximately $0.1 million in fiscal 2013 from certain tenant improvements becoming fully depreciated.

Griffin's general and administrative expenses include both expenses that had previously been reflected as general corporate expense when Griffin's continuing operations included both the real estate and landscape nursery businesses and general and administrative expenses of Griffin Land. Griffin's general and administrative expenses increased from approximately $6.8 million in fiscal 2012 to approximately $7.8 million in fiscal 2013. The increase of approximately $1.0 million in general and administrative expenses principally reflects an increase of approximately $0.5 million in expenses related to Griffin's non-qualified deferred compensation plan, an increase of approximately $0.2 million in real estate taxes on undeveloped land and smaller increases in other general and administrative expenses that aggregate to approximately $0.3 million. The higher expenses of the non-qualified deferred compensation plan reflect the effect on participant balances of higher stock market performance in fiscal 2013 as compared to fiscal 2012.

In fiscal 2013, the sale of Griffin's investment in SNHC was completed, with Griffin receiving cash proceeds of approximately $3.4 million. Because of the low carrying cost of its investment in SNHC, Griffin's gain on sale was approximately $3.4 million, essentially equal to the cash proceeds received. Also in fiscal 2013, Griffin sold 2,824,688 shares of its common stock of Centaur Media for cash proceeds of approximately $2.5 million. Griffin's gain from the sale of its Centaur Media common stock in fiscal 2013 was approximately $1.1 million. After the sales of Centaur Media common stock, Griffin owned 2,452,462 shares of Centaur Media common stock as of November 30, 2013. There were no sales of investments in fiscal 2012, however; fiscal 2012 did include investment income of approximately $0.6 million principally from a cash distribution from SNHC.

Griffin's interest expense increased from approximately $3.5 million in fiscal 2012 to approximately $3.8 million in fiscal 2013, principally due to approximately $0.6 million of interest being capitalized in fiscal 2012 as compared to only approximately $0.1 million of interest capitalized in fiscal 2013 and interest expense of approximately $0.1 million on a new nonrecourse mortgage loan entered into in fiscal 2013 on the new Lehigh Valley industrial building that became fully leased in fiscal 2013. Partially offsetting these increases was a decrease in interest expense of approximately $0.2 million in fiscal 2013 as compared to fiscal 2012 due to lower interest rates on mortgage loans with Webster Bank and First Niagara Bank that were refinanced in the fiscal 2012 fourth quarter and fiscal 2013 second quarter, respectively. Interest capitalized in fiscal 2012 was on the construction projects ongoing during that year, principally the Lehigh Valley industrial building that was built by Griffin Land.

In fiscal 2013, Griffin incurred a loss on debt extinguishment of approximately $0.3 million, related to a loan modification agreement on a mortgage loan with First Niagara Bank due in January 2020 (the "2020 First Niagara Mortgage"). On April 1, 2013, Griffin Land and First Niagara Bank entered into an agreement that reduced the interest rate on the 2020 First Niagara Mortgage from a fixed rate of 5.25% to a variable rate of the one month LIBOR rate plus 2.5%. Because the difference between the present value of the future payments under the existing loan was greater than 10% of the present value of the payments under the modified loan, the loan modification was accounted for as a debt extinguishment. As such, all deferred costs related to the existing 2020 First Niagara Mortgage (approximately $0.2 million) and the fee paid to First Niagara Bank for the loan modification (approximately $0.1 million) are reflected as a loss on debt extinguishment. Concurrent with that agreement, Griffin also entered into an interest rate swap agreement with First Niagara Bank to fix the interest rate on the 2020 First Niagara Mortgage at 3.91% for the remainder of the loan term.

Griffin's effective tax rate was 34.2% in fiscal 2013 as compared to an effective tax rate of 57.9% in fiscal 2012. The lower effective tax rate in fiscal 2013 as compared to fiscal 2012 reflects the impact of permanent differences between pretax income for book purposes and tax purposes being greater in fiscal 2012 than fiscal 2013 due to the lower amount of pretax income in fiscal 2012 as compared to fiscal 2013.

The loss from discontinued operations, net of tax, of approximately $7.7 million in fiscal 2013, is entirely from the growing operations of the landscape nursery business. The income from discontinued operations, net of tax, of approximately $0.7 million in fiscal 2012 principally reflected the gain, net of tax, of approximately $1.5 million on the sale of the Manchester Warehouse and income from operations, net of tax, before the Manchester Warehouse was sold, partially offset by a loss, net of tax, from the growing operations of the landscape nursery business of approximately $0.9 million. The higher loss from the growing operations of the landscape nursery business in fiscal 2013 as compared to fiscal 2012 principally reflects a pretax charge of $10.4 million incurred in fiscal 2013 to reduce inventory that will be sold in the Imperial Sale to fair value, which is the net realizable value based on the terms of the Imperial Sale.

Fiscal 2012 Compared to Fiscal 2011

Griffin's revenue increased from approximately $22.7 million in fiscal 2011 to approximately $24.2 million in fiscal 2012, reflecting an increase of approximately $1.8 million in revenue from property sales in fiscal 2012 as compared to fiscal 2011 partially offset by a decrease of approximately $0.2 million in rental revenue in fiscal 2012 as compared to fiscal 2011.

The net decrease of approximately $0.2 million in rental revenue principally reflects: (a) a decrease of approximately $0.6 million of rental revenue in fiscal 2012 as compared to fiscal 2011 from leases that expired and were not renewed; and (b) a decrease of approximately $0.2 million of rental revenue in fiscal 2012 as compared to fiscal 2011 from lower billings for common area maintenance charges to tenants; partially offset by (c) an increase of approximately $0.5 million of rental revenue from space

under lease in fiscal 2012 that was vacant in fiscal 2011; and (d) an increase of approximately $0.1 million of rental revenue related to agreements with tenants to terminate leases earlier than scheduled.

A summary of the square footage of Griffin Land's real estate portfolio, excluding the 308,000 square foot warehouse in Manchester, Connecticut that was sold in the fiscal 2012 first quarter and is accounted for as a discontinued operation in Griffin's consolidated statements of operations in both fiscal 2012 and fiscal 2011, is as follows:



As of December 3, 2011	2,232,000	1,736,000	78	%
As of December 1, 2012	2,460,000	1,822,000	74	%

The increase in total square footage of Griffin Land's real estate portfolio in fiscal 2012 reflected the construction, on speculation, of a 228,000 square foot industrial building in the Lehigh Valley of Pennsylvania in fiscal 2012. Excluding the new industrial building in the Lehigh Valley that was not leased as of December 1, 2012, Griffin Land's percentage of space leased as of December 1, 2012 would have been 82%. The increase in square footage leased in fiscal 2012 reflects several new leases aggregating approximately 183,000 square feet entered into during fiscal 2012, partially offset by leases aggregating approximately 98,000 square feet that expired and were not renewed or terminated early. Approximately 151,000 square feet of the new leasing in fiscal 2012 was industrial space, including a three-year full building lease for approximately 127,000 square feet of industrial space in one of Griffin Land's New England Tradeport buildings. In connection with this full building lease, Griffin Land entered into a lease termination agreement with an existing tenant that had leased approximately 42,000 square feet in that building, but had previously vacated its space and was seeking to sublease. In fiscal 2012, Griffin Land also renewed and extended several leases aggregating approximately 157,000 square feet, approximately 56% of which was industrial space, with the balance being office/flex space. Also, in fiscal 2012, Griffin Land received notice that a tenant was exercising an option to terminate its lease for approximately19,000 square feet in one of Griffin Land's flex buildings in Griffin Center South effective August 31, 2013, two years earlier than the scheduled lease expiration.

Property sales revenue in fiscal 2012 included the recognition of approximately $4.7 million of revenue from the Dollar Tree Sale, which is being accounted for under the percentage of completion method, and approximately $1.0 million from the sale of approximately 14 acres of undeveloped land in Windsor for cash. Property sales in fiscal 2011 reflected approximately $3.0 million from the sale of approximately 165 acres of undeveloped land in Suffield and Granby, Connecticut and two smaller sales of undeveloped land for a total of approximately $1.0 million. Property sales occur periodically, and changes in revenue from year to year from those transactions may not be indicative of any trends in the real estate business.

Operating expenses of rental properties decreased from approximately $7.2 million in fiscal 2011 to approximately $6.7 million in fiscal 2012. The decrease of approximately $0.5 million in operating expenses of rental properties principally reflected a decrease in snow removal expenses due to the relatively mild winter weather in fiscal 2012 as compared to the more severe winter weather in fiscal 2011.

Depreciation and amortization expense of approximately $6.3 million in fiscal 2012 was essentially unchanged from fiscal 2011, as depreciation expense of approximately $0.1 million on the 228,000 square foot Lehigh Valley industrial building that was completed and placed in service at the end of the 2012 third quarter and an increase in depreciation expense of approximately $0.1 million related to new tenant improvements in several of Griffin Land's buildings were offset by a decrease in depreciation expense from certain tenant improvements becoming fully depreciated.

Griffin's general and administrative expenses were approximately $6.8 million in both fiscal 2012 and fiscal 2011. An increase of approximately $0.1 million in expenses related to Griffin's non-qualified deferred compensation plan in fiscal 2012 as compared to fiscal 2011 was offset by a net decrease of approximately $0.1 million in other general and administrative expenses.

Griffin's interest expense decreased from approximately $4.2 million in fiscal 2011 to approximately $3.5 million in fiscal 2012. The decrease of approximately $0.7 million principally reflects approximately $0.6 million of interest capitalized in fiscal 2012 as compared to approximately $0.1 million of interest capitalized in fiscal 2011. Interest capitalized in fiscal 2012 was on the construction projects ongoing during that year, principally the Lehigh Valley industrial building that was being built by Griffin Land. Griffin's average outstanding debt in fiscal 2012 was approximately $60.3 million as compared to approximately $62.2 million in fiscal 2011, reflecting principal payments made on Griffin's nonrecourse mortgages in fiscal 2012.

Griffin's effective tax rate was 57.9% in fiscal 2012 as compared to an effective tax rate of 17.8% in fiscal 2011. The higher effective tax rate in fiscal 2012 as compared to fiscal 2011 reflects: (a) the impact of permanent differences between book income and taxable income in fiscal 2012 being greater because of the relatively small amount of pretax income in fiscal 2012; and (b) the effect in fiscal 2011 of adjustments to certain state deferred tax assets as a result of changes in the apportionment rates of Griffin's taxable income to the different jurisdictions in which Griffin operated.

The income from discontinued operations of approximately $0.8 million in fiscal 2012 principally reflected a gain of approximately $1.5 million, net of tax, on the sale of the Manchester Warehouse and income from operations of approximately $0.1 million, net of tax, before the Manchester Warehouse was sold in fiscal 2012, partially offset by a loss of approximately $0.9 million, net of tax, from the growing operations of the landscape nursery business. The loss, net of tax, from discontinued operations of approximately $1.2 million in fiscal 2011 reflected a loss of approximately $1.7 million, net of tax, from the growing operations the landscape nursery business partially offset by income from operations of approximately $0.5 million, net of tax, of the Manchester Warehouse.

Off Balance Sheet Arrangements

Griffin does not have any off balance sheet arrangements.

Liquidity and Capital Resources

Net cash used in operating activities was approximately $0.6 million in fiscal 2013 as compared to net cash provided by operating activities of approximately $1.9 million in fiscal 2012, principally reflecting a decrease of approximately $1.1 million from the net loss in fiscal 2013 as compared to net income in fiscal 2012 after factoring in the adjustments to reconcile net (loss) income to net cash used in or provided by operating activities, and approximately $1.4 million more cash used in operating activities as a result of changes in assets and liabilities in fiscal 2013 as compared to fiscal 2012. The increase in cash used as a result of changes in assets and liabilities principally reflects the timing of cash receipts and payments, including other current assets remaining essentially unchanged in fiscal 2013 as compared to a reduction in other current assets of approximately $1.4 million in fiscal 2012. The change in other current assets principally reflects fiscal 2012 including cash proceeds of approximately $0.7 million from the collection of a note receivable related to a land sale several years earlier and cash proceeds of approximately $0.5 million collected in fiscal 2012 from an insurance claim that was settled in fiscal 2011.

Net cash used in investing activities was approximately $1.2 million in fiscal 2013 as compared to net cash provided by investing activities of approximately $3.0 million in fiscal 2012. The net cash used in investing activities in fiscal 2013 principally reflects approximately $13.5 million of cash used for additions to real estate assets, a net of approximately $2.8 million of cash deposited in escrow and

approximately $0.1 million of cash used for additions to property and equipment, offset by approximately $9.4 million of proceeds from property sales, approximately $3.4 million of proceeds from the sale of SNHC and approximately $2.5 million of proceeds from the sale of Centaur Media common stock. The cash deposited into escrow reflects the approximately $8.9 million of proceeds from the Windsor Land Sale that were placed in escrow for a potential Section 1031 like-kind exchange and approximately $0.9 million of cash deposited in escrow that will be used for a portion of the road construction related to the Windsor Land Sale, offset by approximately $6.9 million of cash that was returned from escrow from the Dollar Tree Sale. The funds returned from escrow from the Dollar Tree Sale were used for the acquisition of undeveloped land in the Lehigh Valley of Pennsylvania (see below). In addition to the acquisition of undeveloped land in fiscal 2013, Griffin Land's additions to its real estate assets included approximately $2.9 million for tenant improvements related to new leases, approximately $1.4 million towards construction of a 303,000 square foot industrial building in the Lehigh Valley and approximately $0.8 million of expenditures for the construction of the sewer line related to the Dollar Tree Sale. The Lehigh Valley building under construction is expected to be completed in the fiscal 2014 second quarter, and a total of approximately $8.1 million is expected to be spent in fiscal 2014 to complete construction of this facility. In fiscal 2013, Griffin had approximately $0.1 million of additions to property and equipment, mostly for purchases of equipment at both Imperial and Griffin Land.

The 49 acre parcel of undeveloped land acquired in fiscal 2013 will support the development of two industrial buildings totaling approximately 530,000 square feet. Griffin Land has recently received final approvals for such development plans.

Net cash provided by investing activities of approximately $3.0 million in fiscal 2012 reflected net cash proceeds of approximately $23.4 million from property sales, which included approximately $15.5 million from the sale of the Manchester Warehouse and approximately $6.9 million from the Dollar Tree Sale. The proceeds from the Dollar Tree Sale were placed in escrow to acquire a replacement property as part of a Section 1031 like-kind exchange, which was completed in fiscal 2013 with the acquisition of the land parcel in the Lehigh Valley (see above). Also in fiscal 2012, Griffin received cash of approximately $0.7 million from SNHC, approximately $0.4 million of which was reflected as dividend income and included in operating activities with the remaining balance of approximately $0.3 million reflected as a return of capital and included in investing activities. Partially offsetting the cash received from property sales and the return of capital from SNHC was approximately $13.2 million of additions to real estate assets, principally for Griffin Land's construction, on speculation, of the 228,000 square foot industrial building on an undeveloped land parcel (known as Lehigh Valley Tradeport) in the Lehigh Valley of Pennsylvania that was acquired in 2010 and the site work for the second industrial building to be built in Lehigh Valley Tradeport. Griffin Land started construction of the second Lehigh Valley Tradeport industrial building in the fiscal 2013 fourth quarter (see above). In fiscal 2012 Griffin also had approximately $0.2 million of additions to property and equipment, mostly for purchases of equipment at Griffin Land and Imperial.

Net cash provided by financing activities was approximately $5.7 million in fiscal 2013 as compared to net cash of approximately $2.2 million used in financing activities in fiscal 2012. The net cash provided by financing activities in fiscal 2013 reflects proceeds of $9.1 million from a new nonrecourse mortgage loan that closed in fiscal 2013 (see below) and cash of approximately $0.1 million received from the exercise of stock options. These were partially offset by approximately $1.9 million for payments of principal on Griffin Land's nonrecourse mortgages, a dividend payment of approximately $1.0 million for the dividend on Griffin's common stock that was declared in the fiscal 2012 fourth quarter and paid in the fiscal 2013 first quarter, approximately $0.4 million of debt issuance costs related to a new revolving credit agreement (see below) and the new nonrecourse mortgage loan, both of which closed in fiscal 2013, and approximately $0.1 million related to the modification of a mortgage loan with First Niagara Bank (see below). Net cash used in financing activities in fiscal 2012 reflected

approximately $1.7 million for payments of principal on Griffin Land's nonrecourse mortgages, approximately $0.5 million for the payment of dividends and approximately $0.1 million of debt issuance costs, partially offset by approximately $0.1 million received from the exercise of stock options in fiscal 2012.

On April 1, 2013, Griffin Land entered into a loan modification agreement for its 5.25% nonrecourse mortgage loan with First Niagara Bank due in January 2020 (the "2020 First Niagara Mortgage"). The loan modification agreement changed the interest rate on the 2020 First Niagara Mortgage from a fixed rate of 5.25% to a variable rate of the one month LIBOR rate plus 2.5%. The loan modification did not change the loan's collateral or maturity date. Griffin Land paid approximately $0.1 million for the loan modification, which included a fee paid to First Niagara and third party transaction costs. Concurrent with the loan modification, Griffin Land entered into an interest rate swap agreement with First Niagara Bank to fix the interest rate on the 2020 First Niagara Mortgage at 3.91% for the duration of the loan.

On April 24, 2013, Griffin closed on a new $12.5 million revolving credit agreement with Webster Bank (the "Webster Credit Line"). The Webster Credit Line is for two years with an option for Griffin to extend the credit line for a third year. The Webster Credit Line replaced Griffin's $12.5 million credit line with Doral Bank (the "Doral Credit Line") that was scheduled to expire on May 1, 2013. Interest on the outstanding borrowings under the Webster Credit Line will be at the one month LIBOR rate plus 2.75%. Interest on outstanding borrowings under the Doral Credit Line was the higher of the prime rate plus 1.5% or 5.875%. The Webster Credit Line is collateralized by Griffin Land's properties in Griffin Center South, aggregating approximately 235,000 square feet and an approximately 48,000 square foot single-story office building in Griffin Center. These are the same properties that collateralized the Doral Credit Line. There were no borrowings under the Doral Credit Line in fiscal 2012 and fiscal 2013, and there have been no amounts borrowed under the Webster Credit Line as of the date of this Annual Report on Form 10-K.

On August 28, 2013, a subsidiary of Griffin closed on a $9.1 million nonrecourse mortgage with First Niagara Bank (the "2023 First Niagara Mortgage"), collateralized by the 228,000 square foot Lehigh Valley industrial building that was constructed in fiscal 2012 and fully leased in fiscal 2013. Although this mortgage is nonrecourse, Griffin and its subsidiary entered into a master lease that is coterminous with the 2023 First Niagara Mortgage which would become effective if the full building tenant in that industrial building does not renew its five-year lease when it is scheduled to expire in fiscal 2018. The 2023 First Niagara Mortgage has a ten-year term with payments based on a twenty-five year amortization schedule. The interest rate for the 2023 First Niagara Mortgage is a floating rate of the one month LIBOR rate plus 1.95%. At the time Griffin closed on the First Niagara Mortgage, Griffin also entered into an interest rate swap agreement with First Niagara Bank for a notional principal amount of $9.1 million at inception to fix the interest rate on the 2023 First Niagara Mortgage at 4.79% for the term of the loan.

Griffin expects to use substantially all of the proceeds from the 2023 First Niagara Mortgage for the construction, on speculation, of the approximately 303,000 square foot industrial building in the Lehigh Valley of Pennsylvania. Construction started in the fiscal 2013 fourth quarter with completion expected in the fiscal 2014 second quarter. This new building will be located in Lehigh Valley Tradeport on land contiguous to the 228,000 square foot industrial building that was built in fiscal 2012 and fully leased in fiscal 2013. Much of the site work for this new building was done in conjunction with the site work for the first building in Lehigh Valley Tradeport. Griffin Land expects to spend approximately $9.5 million on the construction of the shell of this new building.

On January 8, 2014, Griffin and Imperial entered into the Purchase Agreement pursuant to which Imperial's inventory and certain of its assets were sold to Monrovia for approximately $840,000 in cash (subject to certain adjustments) and a non-interest bearing note receivable of $4.25 million, with

payments of $2.75 million due on June 1, 2014 and $1.5 million due on June 1, 2015. The Promissory Note is secured by an irrevocable letter of credit. Concurrent with the entry into the Purchase Agreement, Imperial and River Bend Holdings, LLC, a wholly-owned subsidiary of Griffin, entered into the Imperial Lease with Monrovia, pursuant to which Monrovia agreed to lease Imperial's Connecticut production nursery for a ten-year period, with an option to extend for up to an additional fifteen years exercisable by Monrovia. The Imperial Lease grants Monrovia an option to purchase the land, land improvements and other operating assets that were used by Imperial in its Connecticut growing operations during the first thirteen years of the lease period for $10.5 million, or $7.0 million if only a certain portion of the land is purchased, subject in each case to certain adjustments and provisions as provided for in the Imperial Lease.

The landscape nursery business is highly seasonal, with sales peaking in the spring during Griffin's fiscal second quarter. As a result of the seasonality of the landscape nursery business, Griffin's working capital requirements would increase each spring as Imperial required seasonal working capital to fund its operations. Imperial would generate cash in the second half of the year, principally due to the collection of accounts receivable from its spring sales. The absence of the need to fund Imperial's seasonal working capital needs as a result of the Imperial Transaction is expected to result in smaller seasonal changes in Griffin's working capital requirements.

Griffin's payments (including principal and interest) under contractual obligations as of November 30, 2013 are as follows:

	Total		Due Within One Year		Due From 1 - 3 Years		Due From 3 - 5 Years		Due in More Than 5 Years

	(in millions)
Mortgages	$	82.5	$	5.9	$	29.8	$	16.6	$	30.2
Revolving Line of Credit		—		—		—		—		—
Capital Lease Obligations		0.1		—		0.1		—		—
Operating Lease Obligations		0.5		0.2		0.3				—
Purchase Obligations(1)		9.2		9.2		—		—		—
Other(2)		3.8		—		—		—		3.8


	$	96.1	$	15.3	$	30.2	$	16.6	$	34.0

(1): Includes obligations for the development of Griffin Land's properties, principally for construction of the new warehouse/industrial building in the Lehigh Valley.
(2): Includes Griffin's deferred compensation plan and other postretirement benefit liabilities.

In the near-term, Griffin plans to continue to invest in its real estate business, including the construction of buildings on its undeveloped land, the construction of new roads as required under land sale agreements, expenditures to build out interiors of its buildings as new leases are signed, infrastructure improvements required for future development of its real estate holdings and the potential acquisition of additional properties and/or undeveloped land parcels in New England or the mid-Atlantic states to expand the industrial/warehouse portion of Griffin Land's real estate business. Griffin does not expect to commence any speculative construction projects for its Connecticut real estate portfolio until a substantial portion of Griffin Land's currently vacant space there is leased.

As of November 30, 2013, Griffin had cash and cash equivalents of approximately $14.2 million and proceeds held in escrow of approximately $8.9 million. Management believes that its cash and cash equivalents, funds held in escrow and borrowing capacity under the Webster Credit Line will be sufficient to meet Griffin's working capital requirements, the continued investment in Griffin's real estate assets and the payment of future dividends on its common stock, when and if declared by the Board of Directors. Griffin may also continue to seek other nonrecourse mortgage placements on its

properties. Griffin Land's real estate portfolio currently includes five buildings located in Connecticut aggregating approximately 411,000 square feet that are not mortgaged.

Forward-Looking Information

The above information in Management's Discussion and Analysis of Financial Condition and Results of Operations includes "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Although Griffin believes that its plans, intentions and expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such plans, intentions or expectations will be achieved, particularly with respect to the expected timing and costs of the construction of the new industrial building in the Lehigh Valley, leasing of currently vacant space, construction and leasing of additional facilities in the real estate business, mortgage financing on Griffin Land's unleveraged properties and Griffin's anticipated future liquidity. The projected information disclosed herein is based on assumptions and estimates that, while considered reasonable by Griffin as of the date hereof, are inherently subject to significant business, economic, competitive and regulatory uncertainties and contingencies, many of which are beyond the control of Griffin.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of changes in the value of a financial instrument, derivative or non-derivative, caused by fluctuations in interest rates, foreign exchange rates and equity prices. Changes in these factors could cause fluctuations in earnings and cash flows.

For fixed rate mortgage debt, changes in interest rates generally affect the fair market value of the debt instrument, but not earnings or cash flows. Griffin does not have an obligation to prepay any fixed rate debt prior to maturity and, therefore, interest rate risk and changes in the fair market value of fixed rate debt should not have a significant impact on earnings or cash flows until such debt is refinanced, if necessary. Griffin's mortgage interest rates and related principal payment requirements are described in Note 10 to the consolidated financial statements.

For variable rate debt, changes in interest rates generally do not impact the fair market value of the debt instrument, but do affect future earnings and cash flows. As of November 30, 2013, Griffin had a total of approximately $38.6 million of variable rate debt outstanding, for which Griffin has entered into interest rate swap agreements which effectively fix the interest rate on that debt. There were no other variable rate borrowings outstanding as of November 30, 2013.

Griffin is exposed to market risks from fluctuations in interest rates and the effects of those fluctuations on the market values of Griffin's cash equivalents. These investments generally consist of overnight investments that are not significantly exposed to interest rate risk.

Griffin does not have foreign currency exposure in operations. However, Griffin does have an investment in a public company, Centaur Media plc, based in the United Kingdom. The ultimate liquidation of that investment and conversion of proceeds into United States currency is subject to future foreign currency exchange rates involving the UK pound sterling. A 10% decrease in the foreign currency exchange rate at November 30, 2013 would have resulted in an approximately $0.2 million reduction of the fair value of that investment.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

GRIFFIN LAND & NURSERIES, INC.

Consolidated Balance Sheets

(dollars in thousands, except per share data)

	Nov. 30, 2013			Dec. 1, 2012

ASSETS
Current Assets
Cash and cash equivalents	$	14,179		$	10,181
Accounts receivable, less allowance of $134 and $128		1,409			1,846
Inventories, net (2013 subject to bulk sale, see Notes 2 and 4)		4,116			14,206
Deferred income taxes		4,231			525
Prepaid real estate taxes		1,486			1,376
Other current assets		2,165			2,188


Total current assets		27,586			30,322
Real estate assets, net		131,190			123,927
Proceeds held in escrow		8,860			6,934
Available for sale securities—Investment in Centaur Media plc		2,208			4,226
Property and equipment, net		1,950			2,125
Deferred income taxes		1,744			2,222
Real estate held for sale, net		1,104			1,186
Other assets		10,085			9,172


Total assets	$	184,727		$	180,114




LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt	$	2,101		$	1,869
Accounts payable and accrued liabilities		4,808			4,904
Deferred revenue		7,501			3,742


Total current liabilities		14,410			10,515
Long-term debt		64,692			57,692
Other noncurrent liabilities		7,510			7,761


Total liabilities		86,612			75,968


Commitments and Contingencies (Note 16)
Stockholders' Equity
Common stock, par value $0.01 per share, 10,000,000 shares authorized, 5,534,687 and 5,527,911 shares issued, respectively, and 5,146,366 and 5,139,590 shares outstanding, respectively		55			55
Additional paid-in capital		107,603			107,056
Retained earnings		4,372			11,222
Accumulated other comprehensive loss, net of tax		(449	)		(721	)
Treasury stock, at cost, 388,321 shares		(13,466	)		(13,466	)


Total stockholders' equity		98,115			104,146


Total liabilities and stockholders' equity	$	184,727		$	180,114

See Notes to Consolidated Financial Statements.

GRIFFIN LAND & NURSERIES, INC.

Consolidated Statements of Operations

(dollars in thousands, except per share data)

	For the Fiscal Years Ended,

	Nov. 30, 2013			Dec. 1, 2012			Dec. 3, 2011
Rental revenue	$	20,053		$	18,456		$	18,657
Revenue from property sales		5,473			5,759			4,000


Total revenue		25,526			24,215			22,657


Operating expenses of rental properties		7,456			6,694			7,198
Depreciation and amortization expense		6,673			6,303			6,339
Costs related to property sales		1,171			989			458
General and administrative expenses		7,790			6,843			6,775
Gain on insurance recoveries		—			—			(479	)


Total expenses		23,090			20,829			20,291


Operating income		2,436			3,386			2,366
Gain on sale of investment in Shemin Nurseries Holding Corp.		3,397			—			—
Gain on sale of common stock in Centaur Media plc		1,088			—			—
Interest expense		(3,848	)		(3,533	)		(4,167	)
Loss on debt extinguishment		(286	)		—			—
Investment income		115			613			210


Income (loss) before income tax provision		2,902			466			(1,591	)
Income tax (provision) benefit		(992	)		(270	)		283


Income (loss) from continuing operations		1,910			196			(1,308	)


Discontinued operations, net of tax:
Loss from landscape nursery business, net of tax		(7,731	)		(877	)		(1,689	)
Income from warehouse building, net of tax		—			117			523
Gain on sale of warehouse building, net of tax		—			1,530			—


Total (loss) income from discontinued operations, net of tax		(7,731	)		770			(1,166	)


Net (loss) income	$	(5,821	)	$	966		$	(2,474	)




Basic net (loss) income per common share:
Income (loss) from continuing operations	$	0.37		$	0.04		$	(0.25	)
(Loss) income from discontinued operations		(1.50	)		0.15			(0.23	)


Basic net (loss) income per common share	$	(1.13	)	$	0.19		$	(0.48	)




Diluted net (loss) income per common share:
Income (loss) from continuing operations	$	0.37		$	0.04		$	(0.25	)
(Loss) income from discontinued operations		(1.50	)		0.15			(0.23	)


Diluted net (loss) income per common share	$	(1.13	)	$	0.19		$	(0.48	)

See Notes to Consolidated Financial Statements.

GRIFFIN LAND & NURSERIES, INC.

Consolidated Statements of Comprehensive (Loss) Income

(dollars in thousands)

	For the Fiscal Years Ended,

	Nov. 30, 2013			Dec. 1, 2012			Dec. 3, 2011
Net (loss) income	$	(5,821	)	$	966		$	(2,474	)
Other comprehensive income (loss), net of tax:
Increase (decrease) in fair value of Centaur Media plc		310			794			(1,362	)
Reclassifications included in net income		(206	)		420			460
Unrealized gain (loss) on cash flow hedges		100			(909	)		(1,048	)
Net actuarial gain (loss) and prior service cost for other postretirement benefits		68			(48	)		(35	)


Total other comprehensive income (loss), net of tax		272			257			(1,985	)


Total comprehensive (loss) income	$	(5,549	)	$	1,223		$	(4,459	)

See Notes to Consolidated Financial Statements.

GRIFFIN LAND & NURSERIES, INC.

Consolidated Statements of Changes in Stockholders' Equity

For the Fiscal Years Ended November 30, 2013, December 1, 2012 and December 3, 2011

(dollars in thousands)

		Common Stock		Additional Paid-in Captial		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total

Balance at November 27, 2010	5,510,503	$	55	$	105,620	$	15,811		$	1,007		$	(13,426	)	$	109,067
Exercise of employee stock options	10,667		—		186		—			—			—			186
Stock-based compensation	—		—		564		—			—			—			564
Dividends declared, $0.40 per share	—		—		—		(2,053	)		—			—			(2,053	)
Net actuarial loss and prior service cost for other postretirement benefits, net of tax	—		—		—		—			(35	)		—			(35	)
Other comprehensive loss from cash flow hedging transactions, net of tax	—		—		—		—			(1,048	)		—			(1,048	)
Other comprehensive loss from Centaur Media plc, net of tax	—		—		—		—			(1,362	)		—			(1,362	)
Total reclassifications included in net loss, net of tax	—		—		—		—			460			—			460
Net loss	—		—		—		(2,474	)		—			—			(2,474	)


Balance at December 3, 2011	5,521,170		55		106,370		11,284			(978	)		(13,426	)		103,305
Exercise of employee stock options, net of reversal of tax benefit on forfeited stock options of $38	6,741		—		82		—			—			(40	)		42
Stock-based compensation	—		—		604		—			—			—			604
Dividend declared, $0.20 per share	—		—		—		(1,028	)		—			—			(1,028	)
Net actuarial loss and prior service cost for other postretirement benefits, net of tax	—		—		—		—			(48	)		—			(48	)
Other comprehensive loss from cash flow hedging transactions, net of tax	—		—		—		—			(909	)		—			(909	)
Other comprehensive income from Centaur Media plc, net of tax	—		—		—		—			794			—			794
Total reclassifications included in net income, net of tax	—		—		—		—			420			—			420
Net income	—		—		—		966			—			—			966


Balance at December 1, 2012	5,527,911		55		107,056		11,222			(721	)		(13,466	)		104,146
Exercise of employee stock options	6,776		—		80		—			—			—			80
Stock-based compensation	—		—		467		—			—			—			467
Dividend declared, $0.20 per share	—		—		—		(1,029	)		—			—			(1,029	)
Net actuarial gain and prior service cost for other postretirement benefits, net of tax	—		—		—		—			68			—			68
Other comprehensive income from cash flow hedging transactions, net of tax	—		—		—		—			100			—			100
Other comprehensive income from Centaur Media plc, net of tax	—		—		—		—			310			—			310
Total reclassifications included in net loss, net of tax	—		—		—		—			(206	)		—			(206	)
Net loss	—		—		—		(5,821	)		—			—			(5,821	)


Balance at November 30, 2013	5,534,687	$	55	$	107,603	$	4,372		$	(449	)	$	(13,466	)	$	98,115

See Notes to Consolidated Financial Statements.

GRIFFIN LAND & NURSERIES, INC.

Consolidated Statements of Cash Flows

(dollars in thousands)

	For the Fiscal Years Ended,

	Nov. 30, 2013			Dec. 1, 2012			Dec. 3, 2011
Operating activities:
Net (loss) income	$	(5,821	)	$	966		$	(2,474	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Provision for inventory losses		10,900			380			1,187
Depreciation and amortization		6,673			6,303			6,761
Gain on sales of properties		(4,302	)		(7,656	)		(3,542	)
Gain on sale of investment in Shemin Nurseries Holding Corp.		(3,397	)		—			—
Deferred income taxes		(3,414	)		763			(976	)
Gain on sale of common stock in Centaur Media plc		(1,088	)		—			—
Stock based compensation expense		467			604			564
Amortization of debt issuance costs		270			298			277
Loss on debt extinguishment		286			—			—
Provision for bad debts		37			26			1
(Income) loss from equity investment		(5	)		(7	)		7
Changes in assets and liabilities:
Accounts receivable		400			(155	)		(45	)
Inventories		(810	)		(891	)		646
Income taxes receivable		(5	)		(128	)		(18	)
Prepaid real state taxes		(110	)		3			189
Other current assets		25			1,357			(869	)
Accounts payable and accrued liabilities		32			163			(154	)
Deferred revenue		(234	)		(67	)		(397	)
Other noncurrent assets and noncurrent liabilities, net		(458	)		(14	)		253


Net cash (used in) provided by operating activities		(554	)		1,945			1,410


Investing activities:
Additions to real estate assets		(13,538	)		(13,188	)		(2,832	)
Proceeds from sales of properties, net of expenses		9,366			23,376			3,939
Proceeds from the sale of investment in Shemin Nurseries Holding Corp.		3,418			—			—
Proceeds from the sale of common stock in Centaur Media plc		2,487			—			—
Cash (deposited in) returned from escrow, net		(2,797	)		(6,934	)		—
Deposit for purchase of real estate assets		—			(360	)		—
Additions to property and equipment		(113	)		(188	)		(264	)
Return of capital from Shemin Nurseries Holding Corp.		—			309			—
Investment in Novalis LLC		—			—			(60	)


Net cash (used in) provided by investing activities		(1,177	)		3,015			783


Financing activities:
Proceeds from debt		9,100			—			—
Payments of debt		(1,916	)		(1,674	)		(1,894	)
Dividends paid to stockholders		(1,028	)		(513	)		(2,052	)
Debt issuance costs		(437	)		(103	)		(262	)
Exercise of stock options		80			80			186
Debt modification costs		(70	)		—			—


Net cash provided by (used in) financing activities		5,729			(2,210	)		(4,022	)


Net increase (decrease) in cash and cash equivalents		3,998			2,750			(1,829	)
Cash and cash equivalents at beginning of year		10,181			7,431			9,260


Cash and cash equivalents at end of year	$	14,179		$	10,181		$	7,431

See Notes to Consolidated Financial Statements.

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements

(dollars in thousands unless otherwise noted, except per share data)

1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements of Griffin Land & Nurseries, Inc. ("Griffin") reflect Griffin's real estate business, which is conducted through its wholly-owned subsidiary, Griffin Land, LLC ("Griffin Land") and Griffin's landscape nursery business, which is conducted through its wholly-owned subsidiary, Imperial Nurseries, Inc. ("Imperial"). Griffin Land is principally engaged in the development, management and leasing of industrial and commercial properties. Periodically, Griffin Land may sell certain portions of its undeveloped land that it has owned for an extended time period and the use of which is not consistent with Griffin Land's core development and leasing strategy. Imperial was engaged in growing landscape nursery plants in containers for sale to independent retail garden centers and rewholesalers, whose main customers are landscape contractors. Imperial's growing operations are reflected in the accompanying consolidated statements of operations as a discontinued operation due to the sale, effective January 8, 2014, of its inventory and certain of its assets (the "Imperial Sale") to Monrovia Connecticut LLC ("Monrovia"), a subsidiary of Monrovia Nursery Company (see Notes 2 and 4). Concurrently with the Imperial Sale a subsidiary of Griffin and Imperial entered into a long-term lease with Monrovia for Imperial's Connecticut production nursery. As the growing operations of Imperial are reflected as a discontinued operation in Griffin's consolidated statements of operations, Griffin's continuing operations presented in the accompanying financial statements entirely reflect its real estate business and, therefore, industry segment information is not presented. Accordingly, certain amounts in Griffin's consolidated statements of operations have been reclassified to better reflect Griffin's real estate business. Certain parts of Imperial's prior year results, such as rental revenue and expense related to the leasing of Imperial's Florida farm to another grower and certain expenses related to the property and equipment of Imperial's Connecticut farm which will continue to be owned by Griffin and leased to Monrovia are included in Griffin's continuing operations. All intercompany transactions have been eliminated.

Fiscal Year

Through fiscal 2013, Griffin reported on a 52-53 week fiscal year that ended on the Saturday nearest November 30. Fiscal years 2013 and 2012 each contained 52 weeks and ended on November 30, 2013 and December 1, 2012, respectively. Fiscal year 2011 contained 53 weeks and ended on December 3, 2011. Prospectively, starting in fiscal 2014, Griffin will report on a twelve month fiscal year that will end on November 30.

Cash and Cash Equivalents

Cash equivalents are composed of highly liquid investments with maturity of three months or less at the date of purchase, and are recorded at fair value. At both November 30, 2013 and December 1, 2012, $175 of the cash and cash equivalents included on Griffin's consolidated balance sheets were held in the form of money market funds invested in U.S. Treasury obligations.

Investments

Griffin's investment in the common stock of Centaur Media plc ("Centaur Media") is accounted for as an available-for-sale security under Financial Accounting Standards Board ("FASB") ASC 320-10, "Investments—Debt and Equity Securities" ("ASC 320-10"), whereby increases or

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

1. Summary of Significant Accounting Policies (Continued)

decreases in the fair value of this investment, net of income taxes, along with the effect of changes in the foreign currency exchange rate, net of income taxes, are recorded as a component of other comprehensive income (loss).

Griffin's investment in Shemin Nurseries Holding Corp. ("SNHC") was accounted for under the cost method of accounting for investments. Griffin sold its entire investment in SNHC in fiscal 2013 (see Note 7).

Inventories

Griffin's inventories reflect nursery stock and material and supplies of Imperial and are stated at the lower of cost, using the average cost method, or market. Abnormal costs of idle facility expenses, freight, handling costs and spoilage have been treated as period costs. As of November 30, 2013, the carrying value of inventory was reduced to its fair value, which is the net realizable value based on the sale of the inventories, effective January 8, 2014, under the terms of the Imperial Sale (see Notes 2 and 4).

Stock-Based Compensation

Griffin accounts for stock options at fair value in accordance with FASB ASC 718, "Compensation—Stock Compensation" and FASB ASC 505-50, "Equity—Equity-Based Payments to Non-Employees." For stock options that have graded vesting features, Griffin recognizes compensation cost over the requisite service period separately for each tranche of the award as though they were, in substance, multiple awards. Griffin determines its accumulated windfall tax benefits using the short-cut method.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is recorded over the estimated useful asset lives on a straight-line basis for financial reporting purposes and principally on accelerated methods for tax purposes. Repair and maintenance costs are expensed as incurred.

Upon disposal of property and equipment, the accounts are reduced by the related costs and accumulated depreciation. The resulting gains or losses are reflected in the consolidated statements of operations.

Real Estate Assets

Real estate assets are recorded at cost, except when real estate assets are acquired that meet the definition of a business combination in accordance with FASB ASC 805-10, "Business Combinations," they are recorded at fair value. Interest, property taxes, insurance and other costs directly related to a project are capitalized during the construction period of major facilities and land improvements. The capitalized costs are recorded as part of the asset to which they relate and are amortized over the asset's useful life. Depreciation is determined on a straight-line basis over the estimated useful asset lives for financial reporting purposes and principally on accelerated methods for tax purposes. Repair and maintenance costs are expensed as incurred.

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

1. Summary of Significant Accounting Policies (Continued)

Griffin classifies a property as "held for sale" when all of the following criteria for a plan of sale have been met: (1) management, having the authority to approve the action, commits to a plan to sell the property; (2) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary; (3) an active program to locate a buyer and other actions required to complete the plan to sell, have been initiated; (4) the sale of the property is probable and is expected to be completed within one year or the property is under a contract to be sold; (5) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (6) actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. When all of these criteria have been met, the property is classified as "held for sale." When a property classified as held for sale has separate cash inflows and outflows, its operations, including any interest expense directly attributable to it, are classified as a discontinued operation in Griffin's consolidated statements of operations, and amounts for all prior periods presented are reclassified from continuing operations to discontinued operations. Depreciation of assets ceases upon designation of a property as "held for sale."

Postretirement Benefits

Griffin accounts for postretirement benefits in accordance with FASB ASC 715-10, "Compensation—Retirement Benefits" ("ASC 715-10"). This guidance requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through other comprehensive income. This guidance also requires an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions.

Impairment of Investments in Long-Lived Assets

Griffin reviews annually, as well as when conditions may indicate, its long-lived assets to determine if there are indicators of impairment, such as a prolonged vacancy in one of its properties. If indicators of impairment are present, Griffin evaluates the carrying value of the assets in relation to the operating performance and expected future undiscounted cash flows or the estimated fair value based on expected future cash flows of the underlying assets. If the undiscounted cash flows are less than the carrying value of an asset, Griffin would reduce the carrying value of a long-lived asset to its fair value if that asset's fair value is determined to be less than its carrying value.

Griffin also reviews annually, as well as when conditions may indicate, the recoverability of its development costs, including expected remediation costs on projects that are included in real estate assets. To the extent that the carrying value exceeds the fair value of a project, including development costs, an impairment loss would be recorded.

There were no impairment losses recorded in the fiscal years ended November 30, 2013, December 1, 2012 and December 3, 2011.

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

1. Summary of Significant Accounting Policies (Continued)

Revenue and Gain Recognition

In the real estate business, revenue includes rental revenue from Griffin Land's commercial and industrial properties and proceeds from property sales other than those that are reported as a discontinued operation. Rental revenue is accounted for on a straight line basis over the applicable lease term in accordance with the FASB ASC 840-10, "Leases." Gains on property sales are recognized in accordance with FASB ASC 360-20, "Property, Plant, and Equipment—Real Estate Sales," based on the specific terms of each sale. When the percentage of completion method is used to account for a sale of real estate, costs included in determining the percentage of completion include the costs of the land sold, allocated master planning costs, selling and transaction costs and estimated future costs related to the land sold.

The growing operations of the landscape nursery business are reflected as a discontinued operation in the consolidated statements of operations. Sales and the related costs of sales are recognized upon shipment of products. Sales returns are not material.

Income Taxes

Griffin provides for income taxes utilizing the asset and liability method, and records deferred tax assets and liabilities based on the difference between the financial statement and tax bases of assets and liabilities as measured by the tax rates that are anticipated to be in effect when these differences reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is established when it is necessary to reduce deferred tax assets to amounts for which realization is more likely than not. Griffin and its subsidiaries file a consolidated federal income tax return.

Griffin evaluates each tax position taken in its tax returns and recognizes a liability for any tax position deemed less likely than not to be sustained under examination by the relevant taxing authorities. Griffin has analyzed its federal and significant state filing positions with respect to FASB ASC 740-10, "Income Taxes" ("ASC 740-10"). Griffin believes that its income tax filing positions will be sustained on examination and does not anticipate any adjustments that would result in a material change on its financial statements. As a result, no accrual for uncertain income tax positions has been recorded pursuant to ASC 740-10.

Griffin's policy for recording interest and penalties, related to uncertain tax positions, is to record such items as part of its provision for federal and state income taxes.

Goodwill and Other Intangible Assets

Griffin accounts for intangible assets in accordance with FASB ASC 350-10 "Intangibles—Goodwill and Other." Griffin does not have any goodwill on its balance sheet. Griffin's other intangible assets consist of: (i) the value of in-place leases; and (ii) the value of the associated relationships with tenants. These intangible assets were recorded in connection with Griffin's acquisitions of real estate assets. Amortization of the value of in-place leases, included in costs related to rental revenue, is on a straight-line basis over the lease terms. Amortization of the value of customer relationships with tenants, included in costs related to rental revenue, is on a straight-line basis over the lease terms and anticipated renewal periods.

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

1. Summary of Significant Accounting Policies (Continued)

Environmental Matters

Environmental expenditures related to land and buildings are expensed or capitalized as appropriate, depending upon their future economic benefit. Expenditures that relate to an existing condition caused by past operations, and that do not have future economic benefit, are expensed. Expenditures that create future benefit or contribute to future revenue generation are capitalized. Liabilities related to future remediation costs are recorded when environmental assessments and/or cleanups are probable, and the costs can be reasonably estimated.

Interest Rate Swap Agreements

As of November 30, 2013, Griffin is a party to several interest rate swap agreements to hedge its interest rate exposures. Griffin does not use derivatives for speculative purposes. Griffin applied FASB ASC 815-10, "Derivatives and Hedging," ("ASC 815-10") as amended, which establishes accounting and reporting standards for derivative instruments and hedging activities. ASC 815-10 requires Griffin to recognize all derivatives as either assets or liabilities on its consolidated balance sheet and measure those instruments at fair value. The changes in the fair values of the interest rate swap agreements are measured in accordance with ASC 815-10 and reflected in the carrying values of the interest rate swap agreements on Griffin's consolidated balance sheet. The estimated fair values are based primarily on projected future swap rates.

Griffin applies cash flow hedge accounting to its interest rate swap agreements that are designated as hedges of the variability of future cash flows from floating rate liabilities based on the benchmark interest rates. The changes in fair values of Griffin's interest rate swap agreements are recorded as components of accumulated other comprehensive income (loss) ("AOCI") in stockholders' equity, to the extent they are effective. Any ineffective portions of the changes in fair values of these instruments would be recorded as interest expense.

Conditional Asset Retirement Obligations

Griffin accounts for its conditional asset retirement obligations in accordance with FASB ASC 410-10, "Asset Retirement and Environmental Obligations," which requires an entity to recognize a liability for the fair value of a conditional asset retirement obligation if the fair value can be reasonably estimated even though uncertainty exists about the timing and/or method of settlement. The conditional asset retirement obligations relate principally to tobacco barns and other structures on Griffin's land holdings that contain asbestos, primarily in roofing materials. These structures remain from the tobacco growing operations of former affiliates of Griffin, are not material to Griffin's operations and do not have any book value.

Treasury Stock

Treasury stock is recorded at cost as a reduction of stockholders' equity on Griffin's consolidated balance sheets.

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

1. Summary of Significant Accounting Policies (Continued)

Income (Loss) Per Share

Basic income (loss) per common share is calculated by dividing income (loss) from continuing and discontinued operations by the weighted average number of common shares outstanding during the year. The calculation of diluted income (loss) per common share reflects adjusting Griffin's outstanding shares assuming the exercise of all potentially dilutive Griffin stock options.

Risks and Uncertainties

Griffin's future results of operations involve a number of risks and uncertainties. Factors that could affect Griffin's future operating results and cause actual results to vary materially from historical results include, but are not limited to, the geographical concentration of Griffin Land's real estate holdings, credit risk and market risk.

Griffin Land's real estate holdings are mostly concentrated in the Hartford, Connecticut area. In fiscal 2010, Griffin Land acquired a fully-leased 120,000 square foot industrial building and a 51 acre parcel of undeveloped land in the Lehigh Valley region of Pennsylvania. In fiscal 2012, Griffin Land completed construction on the first of two buildings to be built on the Lehigh Valley land acquired, a 228,000 square foot warehouse/industrial building built on speculation and fully leased in fiscal 2013. In fiscal 2013, Griffin Land started construction on the second warehouse/industrial building to be built on the 51 acre land parcel and acquired a 49 acre parcel of undeveloped land in the Lehigh Valley. The market and economic challenges experienced by the U.S. economy as a whole or the local economic conditions in the markets in which Griffin holds properties may affect Griffin Land's real estate business. Griffin's results of operations, financial condition or ability to expand may be adversely affected as a result of: (i) unfavorable financial changes to Griffin Land's tenants which may result in tenant defaults under leases; (ii) significant job losses impacting the demand for rental space causing market rental rates and property values to be negatively impacted; (iii) the ability of Griffin to borrow on terms and conditions that it finds acceptable; and (iv) possibly reduced values of Griffin Land's properties potentially limiting the proceeds from a sale of its properties or from debt financing collateralized by its properties.

Griffin Land conducts business based on evaluations of its prospective tenants financial condition and generally does not require collateral. These evaluations require significant judgment and are based on multiple sources of information.

Griffin does not use derivatives for speculative purposes. Griffin applies ASC 815-10, which established accounting and reporting standards for derivative instruments and hedging activities. This accounting guidance requires Griffin to recognize all derivatives as either assets or liabilities on its consolidated balance sheets and to measure those instruments at fair value. The estimated fair value is based primarily on projected future swap rates.

Griffin applies cash flow hedge accounting to its interest rate swap agreements designated as hedges of the variability of future cash flows from floating rate liabilities due to the benchmark interest rates. Changes in the fair value of these interest rate swaps are recorded as a component of AOCI in stockholders' equity, to the extent they are effective. Amounts recorded to AOCI are then reclassified to interest expense as interest on the hedged borrowing is recognized. Any ineffective portion of the change in fair value of these instruments would be recorded to interest expense.

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

1. Summary of Significant Accounting Policies (Continued)

Griffin's cash equivalents consist of overnight investments that are not significantly exposed to interest rate risk.

Reclassifications

Certain prior year balances have been reclassified to conform to the current year's presentation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and revenue and expenses during the periods reported. Actual results could differ from those estimates. Griffin's significant estimates include the allowance for doubtful accounts receivable, inventory reserves, impairment evaluation of long-lived assets, deferred income taxes, derivative financial instruments, revenue and gain recognition including the estimated costs to complete required offsite improvements related to land sold and assumptions used in determining stock compensation.

Recent Accounting Pronouncements

In February 2013, the FASB issued Accounting Standards Update No. 2013-02, "Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income," which amends the presentation of comprehensive income. This update creates new presentation requirements related to amounts reclassified out of accumulated other comprehensive income. More specifically, this update requires: (a) disclosure of the changes in the components of accumulated other comprehensive income; (b) disclosure of the effects on the individual line items in net income for each item of accumulated other comprehensive income that is reclassified in its entirety to net income; and (c) cross-references to other disclosures that provide additional details for other comprehensive income items that are not reclassified in their entirety to net income. For items that are required to be reclassified to net income in their entirety, this new guidance requires an entity to present this information either on the face of the statement where net income is presented or in the footnotes to the financial statements. For items that are not required to be reclassified in their entirety to net income, this new guidance requires cross-references to other disclosures that provide additional information about those amounts. This update was required to be adopted by Griffin no later than the fiscal 2013 second quarter; however, Griffin adopted the new presentation requirements in the fiscal 2013 first quarter. The adoption of this guidance requires new disclosures related to amounts reclassified out of accumulated other comprehensive income but did not have an impact on Griffin's financial position or results of operations.

In July 2013, the FASB issued Accounting Standards Update No. 2013-10, "Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate, "OIS") as a Benchmark Interest Rate for Hedge Accounting Purposes," which permits the Fed Funds Effective Swap Rate (also referred to as the Overnight Index Swap Rate) to be used as a U.S. benchmark interest rate for hedge accounting purposes, in addition to interest rates on direct Treasury obligations of the U.S. government and the London Interbank Offered Rate ("LIBOR"). This update also removes the restriction on using

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

1. Summary of Significant Accounting Policies (Continued)

different benchmark rates for similar hedges. This update is required prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. The adoption of this guidance did not have an impact on Griffin's financial position or results of operations.

In July 2013, the FASB issued Accounting Standards Update No. 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists," which provides guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. Specifically, this update requires that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with certain exceptions. This update will be effective for Griffin in the fiscal 2014 second quarter. Griffin is evaluating the impact that the application of this update will have on its consolidated financial statements.

2. Discontinued Operations

Imperial

Effective January 8, 2014, in accordance with the terms of the Imperial Sale (see Notes 1 and 4), Imperial sold its inventory and certain assets for approximately $840 in cash (subject to certain adjustments) and a non-interest bearing note receivable of $4,250 (the "Promissory Note"). The Promissory Note is due in two installments: $2,750 is due on June 1, 2014 and $1,500 is due on June 1, 2015. The Promissory Note is secured by an irrevocable letter of credit. Under the terms of the Imperial Sale, Griffin and Imperial have agreed to certain non-competition restrictions for a four-year period. Griffin and Imperial have also agreed to indemnify Monrovia for any potential environmental liabilities relating to periods prior to the effective date of the Imperial Sale.

Concurrently with the Imperial Sale, Imperial and River Bend Holdings, LLC, a wholly owned subsidiary of Griffin, entered into a Lease and Option Agreement and an Addendum to such agreement (the "Imperial Lease", and together with the Imperial Sale, the "Imperial Transaction") with Monrovia, pursuant to which Monrovia agreed to lease Imperial's Connecticut production nursery for a ten-year period, with options to extend for up to an additional fifteen years exercisable by Monrovia. The Lease provides for net annual rent payable to Griffin of $500 for each of the first five years with rent for subsequent years determined in accordance with the Imperial Lease. The Imperial Lease also grants Monrovia an option to purchase most of the land, land improvements and other operating assets that were used by Imperial in its Connecticut growing operations during the first thirteen years of the lease period for $10,500, or $7,000 if only a certain portion of the land is purchased, subject in each case to certain adjustments as provided for in the Imperial Lease. Accordingly, the operating results of Imperial's growing operations are reflected as a discontinued operation in Griffin's consolidated statements of operations for all periods presented.

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

2. Discontinued Operations (Continued)

Sales revenue and the pretax loss from Imperial's growing operations were as follows:

	For the Fiscal Years Ended,

	Nov. 30, 2013			Dec. 1, 2012			Dec. 3, 2011
Net sales	$	13,220		$	12,376		$	14,536




Pretax loss	$	(12,142	)	$	(1,260	)	$	(2,591	)

Griffin Land

On January 31, 2012, Griffin Land closed on the sale of its Manchester, Connecticut warehouse to its full building tenant in that building, an affiliate of Raymour & Flanigan ("Raymour"). Net cash proceeds from the sale, after selling expenses of $438 paid out of proceeds at closing and $25 paid separately, were $15,537, and a pretax gain of $2,886 is included in the results of discontinued operations in fiscal 2012. Upon completion of the sale, Griffin deposited the cash of $15,562 received from the sale at closing into an escrow account for the potential purchase of a replacement property under a Section 1031 like-kind exchange. As Griffin Land did not identify a replacement property within the time frame required under the tax rules and regulations governing a Section 1031 like-kind exchange, on March 19, 2012 the cash being held in escrow was released to Griffin Land.

In the fiscal 2011 fourth quarter, Griffin Land gave notice to Raymour that Griffin Land was exercising the put option under its lease with Raymour to sell the Manchester warehouse to Raymour for $16,000. The operating results of the Manchester warehouse are reflected as a discontinued operation in Griffin's consolidated statements of operations for fiscal 2012 and fiscal 2011. Rental revenue and pretax income from the operations of the Manchester warehouse were as follows:

	For the Fiscal Years Ended,

	Nov. 30, 2013		Dec. 1, 2012		Dec. 3, 2011
Rental revenue	$	—	$	273	$	1,632




Pretax income	$	—	$	221	$	897

3. Fair Value

Griffin applies the provisions of FASB ASC 820, "Fair Value Measurement" ("ASC 820"), which establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset or liability's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value, as follows:

Level 1 applies to assets or liabilities for which there are quoted market prices in active markets for identical assets or liabilities. Griffin's available-for-sale securities are considered Level 1 within the fair value hierarchy.

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

3. Fair Value (Continued)

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, such as quoted prices for similar assets or liabilities in active markets; quoted prices for assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 2 liabilities include Griffin's interest rate swap derivatives (see Note 10). Beginning in the fiscal 2013 first quarter, the fair values of Griffin's interest rate swap derivative instruments were based on discounted cash flow models that incorporate the cash flows of the derivatives as well as the current OIS rate and swap curve along with other market data. Prior to the beginning of fiscal 2013, the fair values of Griffin's interest rate swap derivative instruments were based on discounted cash flow models that incorporated the cash flows of the derivatives as well as the current LIBOR rate and swap curve along with other market data. The change to using the OIS rate from the LIBOR rate is consistent with current industry best practices. The OIS rate is now considered the best discount rate to utilize since it is the best proxy for the risk-free rate. These inputs are readily available in public markets or can be derived from information available in publicly quoted markets, therefore, Griffin has categorized these derivative instruments as Level 2 within the fair value hierarchy.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

During fiscal 2013, Griffin did not transfer any assets or liabilities in or out of Levels 1 and 2. The following are Griffin's financial assets and liabilities carried at fair value and measured at fair value on a recurring basis:

	November 30, 2013

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable equity securities	$	2,208	$	—	$	—




Interest rate swap asset	$	—	$	63	$	—




Interest rate swap liabilities	$	—	$	2,285	$	—

	December 1, 2012

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable equity securities	$	4,226	$	—	$	—




Interest rate swap liabilities	$	—	$	3,191	$	—

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

3. Fair Value (Continued)

The carrying and estimated fair values of Griffin's financial instruments are as follows:

			November 30, 2013				December 1, 2012

	Fair Value Hierarchy Level		Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial assets:
Cash and cash equivalents		1	$	14,179	$	14,179	$	10,181	$	10,181
Available-for-sale securities		1		2,208		2,208		4,226		4,226
Interest rate swap		2		63		63		—		—
Financial liabilities:
Mortgage debt		2	$	66,708	$	67,931	$	59,489	$	61,781
Interest rate swaps		2		2,285		2,285		3,191		3,191

The amounts included in the financial statements for cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair values because of the short-term maturity of these instruments. The fair values of the available-for-sale securities are based on quoted market prices. The fair values of the mortgage debt are estimated based on current rates offered to Griffin for similar debt of the same remaining maturities and, additionally, Griffin considers its credit worthiness in determining the fair value of its debt. The fair values of the interest rate swaps (used for purposes other than trading) are determined based on discounted cash flow models that incorporate the cash flows of the derivatives as well as the current OIS rate and swap curve along with other market data, taking into account current interest rates and the credit worthiness of the counterparty for assets and the credit worthiness of Griffin for liabilities.

At November 30, 2013 and December 1, 2012, the fair values of Griffin's fixed rate mortgages were approximately $29,300 and approximately $35,600, respectively. The fair values were based on the present values of future cash flows discounted at estimated borrowing rates for similar loans and the credit worthiness of Griffin.

4. Inventories

Inventories consist of:

	Nov. 30, 2013		Dec. 1, 2012

Nursery stock	$	3,410	$	13,058
Materials and supplies		706		1,148


	$	4,116	$	14,206

In fiscal 2013, a charge of $10,400 to inventory was included in costs of landscape nursery sales to reduce Imperial's nursery inventories to fair value, which is the net realizable value based on the terms of the Imperial Sale (see Notes 1 and 2). Also during fiscal 2013, a charge of $500 was included in costs of landscape nursery sales to increase inventory reserves for plants that were expected to be sold below cost as seconds.

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

4. Inventories (Continued)

In fiscal 2012, a charge of $380 was included in costs of landscape nursery sales to increase reserves for unsaleable inventories and plants that are expected to be sold below cost as seconds.

In fiscal 2011, a charge of $1,187 was included in costs of landscape nursery sales and was comprised of the following: (a) $517 to reserve for plants with disease issues, mostly for boxwood plants that became unsaleable after being infected with boxwood blight, a fungal disease; (b) $370 to increase inventory reserves for plants that became unsaleable or were expected to be sold below cost as seconds; and (c) $300 for plants lost due to the collapse, from snow load during the fiscal 2011 first quarter, of some of Imperial's hoop houses in which the plants were stored.

These charges are included in the results of discontinued operations in Griffin's consolidated statements of operations. Imperial's inventories were sold to Monrovia, effective January 8, 2014, in connection with the Imperial Transaction (see Note 2).

5. Real Estate Assets

Real estate assets consist of:

	Estimated Useful Lives	Nov. 30, 2013			Dec. 1, 2012

Land		$	17,507		$	10,267
Land improvements	10 to 30 years		15,529			15,138
Buildings and improvements	10 to 40 years		126,245			125,971
Tenant improvements	Shorter of useful life or terms of related lease		16,126			14,738
Development costs			16,861			14,557


			192,268			180,671
Accumulated depreciation			(61,078	)		(56,744	)


		$	131,190		$	123,927

Total depreciation expense and capitalized interest related to real estate assets, net were as follows:

	For the Fiscal Years Ended,

	Nov. 30, 2013		Dec. 1, 2012		Dec. 3, 2011
Depreciation expense	$	5,545	$	5,237	$	5,632




Capitalized interest	$	71	$	596	$	134

On November 21, 2013, Griffin Land completed the sale of approximately 90 acres of undeveloped land for approximately $9,000 in cash, before transaction costs (the "Windsor Land Sale"). The land sold is in Windsor, Connecticut and is part of an approximately 268 acre parcel of undeveloped land that straddles the town line between Windsor and Bloomfield, Connecticut. Under the terms of the sale, Griffin Land and the buyer will each construct roadways connecting the land parcel sold with

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

5. Real Estate Assets (Continued)

existing town roads. The roads to be built will become new town roads, thereby providing public access to the remaining acreage in Griffin Land's land parcel. As a result of Griffin Land's continuing involvement with the land sold, the Windsor Land Sale is being accounted for under the percentage of completion method, whereby the revenue and gain on sale are recognized as the total costs related to the property sold are incurred. At the closing of the Windsor Land Sale, cash proceeds of $8,860 were placed in escrow for the purchase of a replacement property under a Section 1031 like-kind exchange, which is reflected in Proceeds Held in Escrow on Griffin's consolidated balance sheet as of November 30, 2013.

As of November 30, 2013, approximately 30% of the total costs related to the Windsor Land Sale have been incurred; therefore, 30% of the total revenue and pretax gain on the sale have been recognized in Griffin's consolidated statement of operations for fiscal 2013. Griffin's consolidated statement of operations for fiscal 2013 includes revenue of $2,668 and a pretax gain of $1,990 from the Windsor Land Sale. The balance of the revenue and pretax gain on sale will be recognized when the remaining costs are incurred, which is expected to take place mostly in fiscal 2014. Included on Griffin's consolidated balance sheet as of November 30, 2013 is deferred revenue of $6,300 that will be recognized as the remaining costs are incurred. Including the pretax gain on sale of $1,990 recognized in fiscal 2013, the total gain on the Windsor Land Sale is expected to be approximately $6,688 after all revenue is recognized and all costs are incurred. While management has used its best estimates, based on industry knowledge and experience, in projecting the total costs of the required roadways, increases or decreases in future costs as compared with current estimated amounts would reduce or increase the gain recognized in future periods (see Note 14).

In fiscal 2012, Griffin Land sold 93 acres of undeveloped land in New England Tradeport ("Tradeport"), Griffin Land's industrial park located in Windsor and East Granby, Connecticut, to Dollar Tree Distribution, Inc. for cash proceeds of $7,000, before transaction costs (the "Dollar Tree Sale"). Under the terms of the Dollar Tree Sale, Griffin Land was required to construct a sewer line to service the land that was sold. As a result of Griffin Land's continuing involvement with the land sold, the Dollar Tree Sale was accounted for under the percentage of completion method. Accordingly, the revenue and the pretax gain on sale were recognized on a pro rata basis in a ratio equal to the percentage of the total costs incurred to the total anticipated costs of sale, including the costs of the required construction of the sewer line. Costs included in determining the percentage of completion included the cost of the land sold, allocated master planning costs of Tradeport, selling and transaction costs and the cost to construct the required sewer line. Upon completion of the sale, Griffin Land deposited the cash of $6,929 received from the Dollar Tree Sale at closing into an escrow account, included in Proceeds Held in Escrow on Griffin's consolidated balance sheet as of December 1, 2012, for the potential purchase of a replacement property under a Section 1031 like-kind exchange. In fiscal 2013, Griffin Land closed on the acquisition of a parcel of undeveloped land to complete the Section 1031 like-kind exchange (see below).

In fiscal 2013, all of the remaining costs related to the Dollar Tree Sale were incurred; therefore, from the date of the Dollar Tree Sale through the end of fiscal 2013, all of the revenue and the pretax gain on sale have been recognized in Griffin's consolidated statements of operations. Griffin's consolidated statement of operations for fiscal 2013 includes revenue of $2,474 and a pretax gain of $2,109 from the Dollar Tree Sale. Included in the pretax gain in fiscal 2013 is $177 from an amended

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

5. Real Estate Assets (Continued)

agreement related to the Dollar Tree Sale whereby Griffin Land received $177 upon completion of the sewer line to service the land that was sold (see Note 14). Including the pretax gain on sale of $3,942 recognized in fiscal 2012, the total pretax gain on the Dollar Tree Sale was $6,051.

On December 28, 2012, Griffin Land closed on the acquisition of approximately 49 acres of undeveloped land in the Lehigh Valley region of Pennsylvania for $7,119 in cash, using the proceeds from the Dollar Tree Sale that were being held in escrow to complete the Section 1031 like-kind exchange. The land acquired will support the development of two industrial buildings totaling approximately 530,000 square feet. Griffin Land has received final plan approvals for its development plans for the land acquired.

Real estate assets held for sale consist of:

	Nov. 30, 2013		Dec. 1, 2012

Land	$	30	$	35
Development costs		1,074		1,151


	$	1,104	$	1,186

6. Intangible Assets

Griffin's intangible assets relate to the fiscal 2010 acquisition of an industrial building, the fiscal 2007 acquisition of a warehouse building and the fiscal 2003 acquisition of a controlling interest in a joint venture that owned two multi-story office buildings. The intangible assets consist of: (i) the value of in-place leases; and (ii) the value of the associated relationships with tenants.

Intangible assets are included in other assets on Griffin's consolidated balance sheets and are as follows:

	Nov. 30, 2013			Dec. 1, 2012

Intangible assets	$	1,757		$	1,757
Accumulated amortization		(1,073	)		(902	)


Intangible assets, net	$	684		$	855

Amortization expense of intangible assets is as follows:

	For the Fiscal Years Ended,

	Nov. 30, 2013		Dec. 1, 2012		Dec. 3, 2011
Amortization expense	$	171	$	200	$	178

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

6. Intangible Assets (Continued)

Estimated amortization expense of intangible assets over each of the next five fiscal years is:


2014	$	172
2015		172
2016		77
2017		44
2018		27

7. Investments

Centaur Media plc

Griffin's investment in the common stock of Centaur Media is accounted for as an available-for-sale security under FASB ASC 320. Accordingly, changes in the value of Centaur Media, reflecting both changes in the stock price and changes in the foreign currency exchange rate, are included, net of income taxes, in accumulated other comprehensive income (see Note 12). Griffin reported dividend income from Centaur Media of $110, $188 and $169 in fiscal 2013, fiscal 2012 and fiscal 2011, respectively.

As of December 1, 2012, Griffin held 5,277,150 shares of Centaur Media common stock. In fiscal 2013, Griffin sold 2,824,688 shares of its Centaur Media common stock for total cash proceeds of $2,487, after transaction costs. The sale of Centaur Media common stock resulted in a pretax gain of $1,088 in fiscal 2013. Griffin held 2,452,462 shares of Centaur Media common stock as of November 30, 2013.

The fair value, cost and unrealized gain of Griffin's investment in Centaur Media are as follows:

	Nov. 30, 2013		Dec. 1, 2012

Fair value	$	2,208	$	4,226
Cost		1,274		2,613


Unrealized gain	$	934	$	1,613

Subsequent to November 30, 2013, Griffin sold an additional 250,000 shares of its holdings in Centaur Media for proceeds of approximately $250.

Shemin Nurseries Holding Corp.

As of December 1, 2012, Griffin held an approximate 14% equity interest in SNHC, which operated a landscape nursery distribution business through its subsidiary. Griffin accounted for its investment in SNHC under the cost method of accounting for investments. In fiscal 2012, Griffin received a cash distribution from SNHC which was treated as investment income and return of investment. Accordingly, Griffin did not have any remaining book value in its investment in SNHC as of December 1, 2012. On January 18, 2013, Griffin completed the sale of its investment in SNHC for total cash proceeds of $3,418, resulting in a pretax gain of $3,397.

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

8. Property and Equipment

Property and equipment consist of:

	Estimated Useful Lives	Nov. 30, 2013			Dec. 1, 2012

Land		$	437		$	437
Land improvements	10 to 20 years		1,561			1,561
Buildings and improvements	10 to 40 years		1,865			1,857
Machinery and equipment	3 to 20 years		12,135			12,300


			15,998			16,155
Accumulated depreciation			(14,048	)		(14,030	)


		$	1,950		$	2,125

Land improvements are primarily depreciated over 15 to 20 years, however, items such as nursery bed construction are depreciated over 10 years. Buildings are primarily depreciated over 40 years and smaller structures and building improvements are primarily depreciated over 10 to 20 years. Machinery and equipment includes equipment which is primarily depreciated over 5 to 15 years. Furniture and fixtures are primarily depreciated over an average of 7 years, vehicles are primarily depreciated over 4 to 5 years and computers are primarily depreciated over 3 to 5 years. In connection with the Imperial Transaction, most of the property and equipment will be reclassified into real estate assets.

Total depreciation expense related to property and equipment in fiscal 2013, fiscal 2012 and fiscal 2011 was $335, $362 and $417, respectively.

As a result of winter storms early in fiscal 2011, some of Imperial's hoop houses collapsed and a portion of the plants stored in the damaged hoop houses became unsaleable. There was no charge to earnings for the damaged hoop houses because they were fully depreciated prior to the start of fiscal 2011. A gain on insurance recovery of $479 related to the insurance proceeds received for the damaged hoop houses is included in Griffin's fiscal 2011 consolidated statement of operations (see Note 14).

9. Income Taxes

The income tax (provision) benefit in continuing operations for fiscal 2013, fiscal 2012 and fiscal 2011 is summarized as follows:

	For the Fiscal Years Ended,

	Nov. 30, 2013			Dec. 1, 2012			Dec. 3, 2011
Current federal	$	—		$	—		$	—
Current state and local		—			—			(113	)
Deferred federal		(1,076	)		(172	)		648
Deferred state and local		84			(98	)		(252	)


Total income tax (provision) benefit	$	(992	)	$	(270	)	$	283

Griffin did not recognize a current tax benefit in fiscal 2013, fiscal 2012 or fiscal 2011 from the exercise of employee stock options. A benefit was not recorded in fiscal 2012 because Griffin utilized

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

9. Income Taxes (Continued)

net operating loss carryforwards to offset taxable income. In fiscal 2013 and fiscal 2011, Griffin did not have taxable income. As of November 30, 2013, Griffin has an unrecognized tax benefit of $1,166 for the effect of employee stock options exercised in fiscal years 2006 through 2013. In fiscal 2012, the deferred tax asset related to non-qualified stock options was reduced by $38 as a result of exercises and forfeitures of those options. There were no adjustments to deferred tax assets for exercises and forfeitures of non-qualified stock options in fiscal 2013 and fiscal 2011.

Included in the loss from Griffin's discontinued operations are income tax benefits of $4,411 and $528 for fiscal 2013 and fiscal 2011, respectively. Included in the income of Griffin's discontinued operations is income tax expense of $1,077 for fiscal 2012.

The income tax (provision) benefit for discontinued operations in fiscal 2013, fiscal 2012 and fiscal 2011 is net of the effect of recording valuation allowances on certain state deferred tax assets for state net operating losses of Imperial. The effect on the income tax provision for the valuation allowances in fiscal 2013 and fiscal 2012 were charges of $93 and $44, respectively, less federal income tax benefits of $33 and $15, respectively. The effect on the income tax benefit for the valuation allowance in fiscal 2011 was a credit of $23, less federal income tax expense of $8. The establishment of the valuation allowances reflects management's determination that it is more likely than not that Imperial will not generate sufficient taxable income in the future to fully utilize certain state net operating loss carryforwards.

Other comprehensive (loss) income includes deferred tax (expense) benefit as follows:

	For the Fiscal Years Ended,

	Nov. 30, 2013			Dec. 1, 2012			Dec. 3, 2011
Mark to market adjustment on Centaur Media plc	$	213		$	(427	)	$	735
Measurement of the funded status of the defined postretirement plan		(40	)		29			21
Fair value adjustment of Griffin's cash flow hedges		(359	)		287			346


Total income tax (expense) benefit included in other comprehensive (loss) income	$	(186	)	$	(111	)	$	1,102

The differences between the income tax benefit at the United States statutory income tax rates and the actual income tax benefit on continuing operations for fiscal 2013, fiscal 2012 and fiscal 2011 are as follows:

	For the Fiscal Years Ended,

	Nov. 30, 2013			Dec. 1, 2012			Dec. 3, 2011
Tax (provision) benefit at statutory rate	$	(1,016	)	$	(163	)	$	557
State and local taxes, including valuation allowance, net of federal tax effect		55			(64	)		(237	)
Permanent items		(39	)		(50	)		(47	)
Other		8			7			10


Total income tax (provision) benefit	$	(992	)	$	(270	)	$	283

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

9. Income Taxes (Continued)

The state and local income tax expense, net of federal tax effect, principally reflects deferred tax expense due to the variations in income apportionment among Griffin's multiple state filings.

The significant components of Griffin's deferred tax assets and deferred tax liabilities are as follows:

	Nov. 30, 2013			Dec. 1, 2012

Deferred tax assets:
Inventories	$	4,397		$	371
Federal net operating loss carryforwards		1,507			521
Retirement benefit plans		1,500			1,222
State net operating loss carryforwards		937			855
Cash flow hedges		821			1,180
Non-qualified stock options		733			608
Deferred revenue		485			710
Charitable contributions		243			154
Conditional asset retirement obligations		114			117
Allowance for doubtful accounts receivable		52			50
Investment in Centaur Media plc		45			310
Investment in Shemin Nurseries Holding Corp.		—			301
Other		372			194


Total deferred tax assets		11,206			6,593
Valuation allowances		(379	)		(319	)


Net deferred tax assets		10,827			6,274


Deferred tax liabilities:
Real estate assets		(3,272	)		(2,211	)
Deferred rent		(926	)		(787	)
Prepaid insurance		(180	)		(147	)
Property and equipment		(104	)		(105	)
Other		(370	)		(277	)


Total deferred tax liabilities		(4,852	)		(3,527	)


Net total deferred tax assets	$	5,975		$	2,747

Deferred income taxes on Griffin's consolidated balance sheets at November 30, 2013 and December 1, 2012 are classified as follows:

	November 30, 2013									December 1, 2012

	Current			Noncurrent			Total			Current			Noncurrent			Total
Asset	$	4,508		$	6,319		$	10,827		$	722		$	5,552		$	6,274
Liability		(277	)		(4,575	)		(4,852	)		(197	)		(3,330	)		(3,527	)


	$	4,231		$	1,744		$	5,975		$	525		$	2,222		$	2,747

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

9. Income Taxes (Continued)

At November 30, 2013, Griffin had federal net operating loss carryforwards of approximately $4,305 with expirations ranging from seventeen to twenty years. At November 30, 2013, Griffin had state net operating loss carryforwards of approximately $22,819, principally in Connecticut, with expirations ranging from nine to twenty years. Management has determined that a valuation allowance is required for net operating loss carryforwards in certain states (other than Connecticut) related to Imperial. Realization of the tax benefits related to the Connecticut state net operating loss carryforwards, which are not subject to valuation allowances, and the state effective tax rates at which those benefits will be realized is dependent upon future results of operations. Differences between forecasted and actual future operating results could adversely impact Griffin's ability to realize tax benefits from Connecticut state net operating losses. Therefore, the deferred tax assets relating to Connecticut state net operating loss carryforwards could be reduced in the future if estimates of future taxable income are reduced. Griffin has evaluated the likelihood that it will realize the benefits of its deferred tax assets. Based on a significant amount of appreciated assets, primarily real estate, held by Griffin and the significant length of time expected before Griffin's deferred tax assets would expire, Griffin believes that it is more likely than not that it will utilize the benefit of its deferred tax assets.

Griffin evaluates each tax position taken in its tax returns and recognizes a liability for any tax position deemed less likely than not to be sustained under examination by the relevant taxing authorities. Griffin believes that its income tax filing positions will be sustained on examination and does not anticipate any adjustments that would result in a material change on its financial statements. As a result, no accrual for uncertain income tax positions has been recorded pursuant to FASB ASC 740-10.

Griffin's federal income tax return for fiscal 2009 was examined by the Internal Revenue Service and accepted as filed. Federal income tax returns for fiscal 2010, fiscal 2011 and fiscal 2012 are subject to examination by the Internal Revenue Service. Examinations of Griffin's fiscal 2007, fiscal 2008 and fiscal 2009 New York state income tax returns are currently being performed. In fiscal 2012, the state of Connecticut completed an examination of Griffin's fiscal 2007 tax return. There were no significant adjustments made as a result of that examination. The remaining periods subject to examination for Griffin's significant state return, which is Connecticut, are fiscal 2008 through fiscal 2012.

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

10. Long-Term Debt

Long-term debt includes:

	Nov. 30, 2013			Dec. 1, 2012

Nonrecourse mortgages:
6.30%, due May 1, 2014	$	99		$	289
5.73%, due August 1, 2015		18,615			19,018
8.13%, due April 1, 2016		3,603			3,943
7.0%, due October 1, 2017		5,779			6,016
Variable rate mortgage, due October 2, 2017*		6,563			6,726
Variable rate mortgage, due February 1, 2019*		11,150			11,396
Variable rate mortgage, due August 1, 2019*		7,869			8,034
Variable rate mortgage, due January 27, 2020*		3,961			4,067
Variable rate mortgage, due September 1, 2023*		9,069			—


Total nonrecourse mortgages		66,708			59,489
Revolving line of credit		—			—
Capital leases		85			72


Total		66,793			59,561
Less: current portion		(2,101	)		(1,869	)


Total long-term debt	$	64,692		$	57,692

*: Griffin entered into interest rate swap agreements to effectively fix the interest rates on these loans (see below).

The annual principal payment requirements under the terms of the nonrecourse mortgage loans for the fiscal years 2014 through 2018 are $2,066, $19,828, $4,144, $11,877 and $936, respectively. The aggregate book value of land and buildings that are collateral for the nonrecourse mortgage loans was approximately $71,100 at November 30, 2013. The aggregate book value of land and buildings that are collateral for the revolving line of credit was approximately $10,600 at November 30, 2013.

On August 28, 2013, a subsidiary of Griffin closed on a $9,100 nonrecourse mortgage loan with First Niagara Bank (the "2023 First Niagara Mortgage"), collateralized by a 228,000 square foot industrial building in Lower Nazareth, Pennsylvania that was constructed in fiscal 2012 and fully leased in fiscal 2013. Although this mortgage is nonrecourse, Griffin and its subsidiary entered into a master lease that is coterminous with the 2023 First Niagara Mortgage which would become effective if the full building tenant in that building does not renew its five-year lease when it is scheduled to expire in fiscal 2018. The 2023 First Niagara Mortgage has a ten-year term with monthly payments based on a twenty-five year amortization schedule. The interest rate for the 2023 First Niagara Mortgage is a floating rate of the one month LIBOR rate plus 1.95%. At the time Griffin closed on the 2023 First Niagara Mortgage, Griffin also entered into an interest rate swap agreement with First Niagara Bank for a notional principal amount of $9,100 at inception to fix the interest rate of the 2023 First Niagara Mortgage at 4.79%.

On April 24, 2013, Griffin closed on a new $12,500 revolving credit line with Webster Bank (the "Webster Credit Line"). The Webster Credit Line is for two years with an option for Griffin to extend

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

10. Long-Term Debt (Continued)

the credit line for a third year. The Webster Credit Line replaced Griffin's $12,500 credit line with Doral Bank (the "Doral Credit Line") that was scheduled to expire on May 1, 2013. Interest on the outstanding borrowings under the Webster Credit Line are at the one month LIBOR rate plus 2.75%. Interest on outstanding borrowings under the Doral Credit Line was the higher of the prime rate plus 1.5% or 5.875%. The Webster Credit Line is collateralized by Griffin Land's properties in Griffin Center South, aggregating approximately 235,000 square feet, and an approximately 48,000 square foot single-story office building in Griffin Center. These are the same properties that collateralized the Doral Credit Line. There were no borrowings under the Doral Credit Line in fiscal 2013 or fiscal 2012 and there were no borrowings under the Webster Credit Line as of November 30, 2013.

On April 1, 2013, a subsidiary of Griffin entered into a modification agreement for its 5.25% nonrecourse mortgage loan with First Niagara Bank due January 27, 2020 (the "2020 First Niagara Mortgage"). The modification agreement changed the interest rate of the 2020 First Niagara Mortgage from a fixed rate of 5.25% to a variable rate of the one month LIBOR rate plus 2.5%. The loan modification did not change the loan's collateral or maturity date. Griffin Land paid $70 to First Niagara Bank for the loan modification, plus transaction costs. Because the difference between the present values of the future payments under the existing loan and the modified loan is greater than 10%, the loan modification was accounted for as a debt extinguishment. As such, all deferred costs related to the 2020 First Niagara Mortgage ($216) and the fee paid to First Niagara Bank for the modification agreement are reflected as a loss on debt extinguishment on Griffin's consolidated statement of operations. Concurrent with the completion of the loan modification agreement, Griffin Land entered into an interest rate swap agreement with First Niagara Bank to fix the interest rate on the 2020 First Niagara Mortgage at 3.91% for the duration of the loan.

On June 15, 2012, Griffin and two of its wholly-owned subsidiaries entered into the Third Modification Agreement (the "Modification Agreement") to the mortgage loan originally due January 1, 2013 with Webster Bank (the "Webster Mortgage"). The Modification Agreement extended the maturity of the Webster Mortgage to October 2, 2017. In accordance with the Modification Agreement, the interest rate under the Webster Mortgage, which was fixed at 6.08% through September 30, 2012, changed, effective October 1, 2012, to a floating rate of one month LIBOR plus 2.75%. In anticipation of entering into the Modification Agreement, on June 7, 2012, Griffin entered into an interest rate swap agreement with Webster Bank to effectively fix the interest rate on the Webster Mortgage at 3.86% from October 1, 2012 through the maturity of the Webster Mortgage. Pursuant to the Modification Agreement, effective on October 1, 2012, principal payments on the Webster Mortgage are based on a twenty-five year amortization schedule. The Webster Mortgage is collateralized by Griffin Land's two multi-story office buildings in Windsor, Connecticut. The Modification Agreement did not alter the collateral for the Webster Mortgage.

As of November 30, 2013, Griffin was a party to several interest rate swap agreements related to its variable rate nonrecourse mortgages on certain of its real estate assets. Griffin accounts for its interest rate swap agreements as effective cash flow hedges (see Note 3). No ineffectiveness on the cash flow hedges was recognized as of November 30, 2013 and none is anticipated over the term of the agreements. Amounts in other comprehensive income (loss) will be reclassified into interest expense over the term of the swap agreements to achieve fixed rates on each mortgage. None of the interest rate swap agreements contain any credit risk related contingent features. In fiscal 2013, Griffin

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

10. Long-Term Debt (Continued)

recognized a net gain (included in other comprehensive income) before taxes of $969 on its interest rate swap agreements. In fiscal 2012 and fiscal 2011, Griffin recognized net losses (included in other comprehensive loss) before taxes of $776 and $934, respectively, on its interest rate swap agreements.

As of November 30, 2013, $998 is expected to be reclassified over the next twelve months from accumulated other comprehensive loss to interest expense. As of November 30, 2013, the net fair value of Griffin's interest rate swap agreements was $2,222, with $63 included in other noncurrent assets and $2,285 included in other noncurrent liabilities on Griffin's consolidated balance sheet. As of December 1, 2012, the value of Griffin's interest rate swap agreements was $3,191 and is included in other noncurrent liabilities on Griffin's consolidated balance sheet.

Future minimum lease payments under capital leases held by Griffin as lessee, principally for vehicles, and the present value of such payments as of November 30, 2013 were:


2014	$	39
2015		33
2016		17
2017		3


Total minimum lease payments		92
Less: amounts representing interest		(7	)


Present value of minimum lease payments(a)	$	85

(a): Includes current portion of $35 at November 30, 2013.

Assets subject to capital leases, with Griffin as lessee, that are included in machinery and equipment were as follows:

	Nov. 30, 2013			Dec. 1, 2012

Machinery and equipment, at cost	$	371		$	406
Accumulated amortization		(288	)		(334	)


Machinery and equipment, net	$	83		$	72

Amortization expense relating to capital leases was:

	For the Fiscal Years Ended,

	Nov. 30, 2013		Dec. 1, 2012		Dec. 3, 2011
Amortization expense	$	36	$	36	$	39

11. Retirement Benefits

Savings Plan

Griffin maintains the Griffin Land & Nurseries, Inc. 401(k) Savings Plan (the "Griffin Savings Plan") for its employees, a defined contribution plan whereby Griffin matches 60% of each employee's

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

11. Retirement Benefits (Continued)

contribution, up to a maximum of 5% of base salary. Griffin's contributions to the Griffin Savings Plan in fiscal 2013, fiscal 2012 and fiscal 2011 were $137, $139 and $146, respectively.

Deferred Compensation Plan

Griffin maintains a non-qualified deferred compensation plan (the "Deferred Compensation Plan") for certain of its employees who, due to Internal Revenue Service guidelines, cannot take full advantage of the Griffin Savings Plan. Griffin's liability under its Deferred Compensation Plan at November 30, 2013 and December 1, 2012 was $3,399 and $2,571, respectively. These amounts are included in other noncurrent liabilities on Griffin's consolidated balance sheets. The expense for Griffin's matching benefit to the Deferred Compensation Plan in fiscal 2013, fiscal 2012 and fiscal 2011 was $29, $29 and $31, respectively.

The Deferred Compensation Plan is unfunded, with benefits to be paid from Griffin's general assets. The liability for the Deferred Compensation Plan reflects the amounts withheld from employees, Griffin's matching benefit and any gains or losses on participant account balances based on the assumed investment of amounts credited to participants' accounts in certain mutual funds. Participant balances are tracked and any gain or loss is determined based on the performance of the mutual funds as selected by the participants.

Postretirement Benefits

Griffin maintains a postretirement benefits program that provides principally health and life insurance benefits to certain of its employees. Only those employees who were employed by Griffin's predecessor company as of December 31, 1993 are eligible to participate in the postretirement benefits program. The liability for postretirement benefits is included in other noncurrent liabilities on Griffin's consolidated balance sheets.

Griffin accounts for postretirement benefits in accordance with ASC 715-10, which requires recognition of the funded status on Griffin's consolidated balance sheet of its postretirement benefits program. The effect of ASC 715-10 in fiscal 2013 was a decrease in noncurrent liabilities of $116 and a decrease of $68, after tax, in accumulated other comprehensive loss. The effect in fiscal 2012 and fiscal 2011 was an increase in noncurrent liabilities of $77 and $56, respectively, and increases of $48 and $35, respectively, after tax, in accumulated other comprehensive loss.

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

11. Retirement Benefits (Continued)

Griffin's liability for postretirement benefits, which is included in other noncurrent liabilities on its consolidated balance sheets, as determined by the plan's actuary, is shown below. The program's liability is unfunded.

	Nov. 30, 2013			Dec. 1, 2012

Change in benefit obligation:
Benefit obligation at beginning of year	$	488		$	426
Actuarial (gain) loss		(108	)		77
Interest cost		16			17
Service cost		9			11
Benefits paid		—			(4	)
Amortization of actuarial gain		(33	)		(39	)


Benefit obligation at end of year	$	372		$	488

Approximately $47 of the estimated net actuarial gain will be amortized from Griffin's accumulated other comprehensive loss into net periodic benefit cost in fiscal 2014.

Griffin's liability for postretirement benefits as of November 30, 2013 and December 1, 2012 is attributed to the following:

	Nov. 30, 2013		Dec. 1, 2012

Amounts recognized in the consolidated balance sheets consist of:
Retirees	$	—	$	16
Fully eligible active participants		230		273
Other active participants		142		199


Liability for postretirement benefits	$	372	$	488

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

11. Retirement Benefits (Continued)

The components of Griffin's postretirement benefits (income) expense are as follows:

	For the Fiscal Years Ended,

	Nov. 30, 2013			Dec. 1, 2012			Dec. 3, 2011
Service cost	$	9		$	11		$	10
Interest		16			17			18
Amortization of actuarial gain		(33	)		(39	)		(46	)


Total income		(8	)		(11	)		(18	)
Other changes in benefit obligations recognized in other comprehensive loss:
Actuarial (gain) loss		(108	)		77			56


Total recognized in net periodic benefit (income) expense and other comprehensive loss	$	(116	)	$	66		$	38

An assumed health care cost trend of 7.2% has been utilized for the next year, with an ultimate assumed rate of 4.5% being reached in 2027. A one-percentage-point change in assumed health care cost trend rates would have the following effects:

	One-Percentage- Point Increase		One-Percentage- Point Decrease

Effect on total of service and interest cost	$	1	$	(1	)
Effect on postretirement benefit obligation		10		(9	)

Discount rates of 4.60% and 3.59% were used to compute the accumulated postretirement benefit obligations at November 30, 2013 and December 1, 2012, respectively. The discount rates used are based on the spot rate of the Citigroup Pension Discount Curve, which is used to discount the projected cash flows of the plan. Discount rates of 3.59%, 4.50% and 5.23% were used to compute the net periodic benefit expense for fiscal 2013, fiscal 2012 and fiscal 2011, respectively.

The following benefit payments, which reflect expected future service as appropriate, are expected to be paid as follows:


2014	$	9
2015		9
2016		12
2017		12
2018		15
2019 - 2023		113

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

12. Stockholders' Equity

Per Share Results

Basic and diluted results per share were based on the following:

	For the Fiscal Years Ended,

	Nov. 30, 2013			Dec. 1, 2012		Dec. 3, 2011
Income (loss) from continuing operations for computation of basic and diluted per share results, net of tax	$	1,910		$	196	$	(1,308	)
(Loss) income from discontinued operations for computation of basic and diluted per share results, net of tax		(7,731	)		770		(1,166	)


Net (loss) income	$	(5,821	)	$	966	$	(2,474	)




Weighted average shares outstanding for computation of basic per share results		5,144,000			5,138,000		5,130,000
Incremental shares from assumed exercise of Griffin stock options(a)		8,000			5,000		—


Adjusted weighted average shares for computation of diluted per share results		5,152,000			5,143,000		5,130,000

(a): Incremental shares from the assumed exercise of Griffin stock options are not included in periods where inclusion of such shares would be anti-dilutive. Such assessment is based on income (loss) from continuing operations when net income includes discontinued operations. For the fiscal year ended December 3, 2011, the incremental shares from the assumed exercise of stock options would have been 8,000 shares.

Griffin Stock Option Plan

The Griffin Land & Nurseries, Inc. 2009 Stock Option Plan (the "2009 Stock Option Plan") makes available options to purchase 386,926 shares of Griffin common stock, including 161,926 options to purchase the 161,926 shares that were available for issuance under Griffin's prior stock option plan. The Compensation Committee of Griffin's Board of Directors administers the 2009 Stock Option Plan. Options granted under the 2009 Stock Option Plan may be either incentive stock options or non-qualified stock options granted at fair market value on the date approved by Griffin's Compensation Committee. Vesting of all of Griffin's stock options is solely based upon service requirements and does not contain market or performance conditions.

Stock options granted will expire ten years from the grant date. In accordance with the 2009 Stock Option Plan, stock options granted to non-employee directors upon their initial election to the board of directors are fully exercisable immediately upon the date of the option grant. Stock options granted to non-employee directors upon their reelection to the board of directors vest on the second anniversary from the date of grant. Stock options granted to employees vest in equal installments on the third, fourth and fifth anniversaries from the date of grant. None of the stock options outstanding at November 30, 2013 may be exercised as stock appreciation rights.

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

12. Stockholders' Equity (Continued)

The following options were granted by Griffin under the 2009 Stock Option Plan to non-employee directors either upon their initial election or their reelection to Griffin's Board of Directors and to Griffin's employees:

	For the Fiscal Years Ended,

	November 30, 2013				December 1, 2012			December 3, 2011
	Number of Shares		Fair Value per Option at Grant Date		Number of Shares		Fair Value per Option at Grant Date	Number of Shares		Fair Value per Option at Grant Date
Non-employee directors		8,112	$	12.94		10,996	$10.66 - $14.89		8,712	$12.03
Employees		—				—			104,500	$10.37 - $12.88


Total		8,112				10,996			113,212

The fair values were estimated as of the date of each grant using the Black-Scholes option-pricing model. The following assumptions were used in determining the fair values of each option:

	For the Fiscal Years Ended,

	Nov. 30, 2013			Dec. 1, 2012	Dec. 3, 2011
Expected volatility		40.3	%	39.6% - 41.1%	42.0% - 43.4%
Range of risk free interest rates		1.33	%	1.02% - 1.19%	2.06% - 2.81%
Expected option term (in years)		8.5		8.5	5 to 8.5
Annual dividend yield		0.7	%	0% - 0.7%	1.4%

Compensation expense and related tax benefits for stock options were as follows:

	For the Fiscal Years Ended,

	Nov. 30, 2013		Dec. 1, 2012		Dec. 3, 2011
Compensation expense	$	467	$	604	$	564




Related tax benefit	$	114	$	148	$	138

For all years presented, forfeiture rates of 0%, 22.6% and 41.1%, respectively, were utilized based on the historical activity of the grantees, including the groups in which the grantees are part of, such as directors, executives and employees.


Number of option holders at November 30, 2013			17

As of November 30, 2013, the unrecognized compensation expense related to nonvested stock options that will be recognized during future periods is as follows:


Fiscal 2014	$	262
Fiscal 2015	$	111
Fiscal 2016	$	12

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

12. Stockholders' Equity (Continued)

The total grant date fair value of options vested during fiscal 2013, fiscal 2012 and fiscal 2011 was $466, $523 and $269, respectively. The intrinsic value of options exercised in fiscal 2013, fiscal 2012 and fiscal 2011 was $114, $49 and $137, respectively. A summary of the activity under the 2009 Griffin Stock Option Plan is as follows:

			Weighted Avg. Exercise Price

Outstanding at November 27, 2010	149,611		$	29.69
Granted in 2011	113,212			28.68
Exercised in 2011	(10,667	)		17.45
Forfeited in 2011	(7,638	)		28.47


Outstanding at December 3, 2011	244,518			29.79
Granted in 2012	10,996			25.45
Exercised in 2012	(6,741	)		17.80
Forfeited in 2012	(4,932	)		32.43


Outstanding at December 1, 2012	243,841			29.88
Granted in 2013	8,112			29.58
Exercised in 2013	(6,776	)		11.81
Forfeited in 2013	(5,500	)		31.12


Outstanding at November 30, 2013	239,677		$	30.35

Range of Exercise Prices		Weighted Avg. Exercise Price			Total Intrinsic Value

$23.00 - $28.00	21,276	$	25.37	6.0		162
$28.00 - $32.00	127,826	$	28.96	6.9		517
$32.00 - $35.00	90,575	$	33.48	4.9		2


	239,677	$	30.35	6.1	$	681

Accumulated Other Comprehensive Loss

As of November 30, 2013, Griffin held 2,452,462 shares of common stock in Centaur Media and accounts for its investment in Centaur Media as an available-for-sale security under ASC 320-10. Accordingly, the investment in Centaur Media is carried at its fair value on Griffin's consolidated balance sheet, with increases or decreases recorded, net of tax, as a component of other comprehensive income. Upon the sale of shares in Centaur Media, the change, net of tax, in the value of the shares of Centaur Media that were sold during the time Griffin held those shares is reclassified from accumulated other comprehensive income and included in Griffin's consolidated statement of operations. In fiscal 2013, $716 was reclassified from accumulated other comprehensive loss for the sale of 2,824,688 shares of Centaur common stock. There were no sales of Centaur common stock in either fiscal 2012 or fiscal 2011.

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

12. Stockholders' Equity (Continued)

Griffin complies with ASC 715-10 which requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability on its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. As a result, in fiscal 2013, noncurrent liabilities decreased by $116 and other comprehensive income increased by $68, after tax. In fiscal 2012 and fiscal 2011, noncurrent liabilities increased by $62 and $37, respectively, and other comprehensive income decreased by $48 and $35, respectively, after tax.

Accumulated other comprehensive loss, and activity for the period, is comprised of the following:

	Unrealized loss on cash flow hedges			Unrealized gain on investment in Centaur Media			Actuarial gain on postretirement benefit plan		Total

Balance December 1, 2012	$	(2,011	)	$	1,054		$	236	$	(721	)
Other comprehensive income (loss) before reclassfications		100			310			68		478
Amounts reclassified		510			(716	)		—		(206	)


Net current period activity for other comprehensive loss		610			(406	)		68		272


Balance November 30, 2013	$	(1,401	)	$	648		$	304	$	(449	)

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

12. Stockholders' Equity (Continued)

Changes in accumulated other comprehensive income (loss) are as follows:

	For the Fiscal Years Ended,

	November 30, 2013									December 1, 2012									December 3, 2011
	Pre-Tax			Tax (Expense) Benefit			Net-of-Tax			Pre-Tax			Tax (Expense) Benefit			Net-of-Tax			Pre-Tax			Tax (Expense) Benefit			Net-of-Tax
Reclassifications included in net (loss) income:
Realized gain on sale of Centaur Media (gain on sale)	$	(1,099	)	$	383		$	(716	)	$	—		$	—		$	—		$	—		$	—		$	—
Loss on cash flow hedges (interest expense)		810			(300	)		510			666			(246	)		420			730			(270	)		460


Total reclassifications included in net (loss) income		(289	)		83			(206	)		666			(246	)		420			730			(270	)		460


Mark to market adjustment on Centaur Media for the increase (decrease) in fair value		481			(169	)		312			1,111			(389	)		722			(2,098	)		735			(1,363	)
Mark to market adjustment on Centaur Media for the increase (decrease) in exchange gain		(1	)		(1	)		(2	)		110			(38	)		72			1			—			1
Increase (decrease) in fair value adjustment on Griffin's cash flow hedges		159			(59	)		100			(1,442	)		533			(909	)		(1,664	)		616			(1,048	)
Actuarial gain (loss) on postretirement benefits program		108			(40	)		68			(77	)		29			(48	)		(56	)		21			(35	)


Total change in other comprehensive income (loss)		747			(269	)		478			(298	)		135			(163	)		(3,817	)		1,372			(2,445	)


Total other comprehensive income (loss)	$	458		$	(186	)	$	272		$	368		$	(111	)	$	257		$	(3,087	)	$	1,102		$	(1,985	)

Cash Dividends

In November 2011, Griffin's Board of Directors considered its dividend policy for succeeding years and decided that, beginning in fiscal 2012, rather than continuing to pay a quarterly dividend, it will consider the payment of an annual dividend at the end of its fiscal year. This change permits the Board to evaluate better both Griffin's prior full year results and its cash needs for the succeeding year when determining whether to declare an annual dividend.

In fiscal 2013 and fiscal 2012, Griffin declared annual dividends of $0.20 per common share, which were paid in the fiscal 2014 first quarter and fiscal 2013 first quarter, respectively. In fiscal 2011, Griffin declared dividends of $0.10 per common share for each quarter which were paid in the last three quarters of fiscal 2011 and in the fiscal 2012 first quarter to its common stockholders.

Treasury Stock

In fiscal 2013 and fiscal 2011, Griffin did not receive any shares of its common stock in connection with the exercise of stock options. In fiscal 2012, Griffin received 1,355 shares of its common stock in connection with the exercise of stock options. The shares received were recorded as treasury stock, which resulted in an increase in treasury stock of $40.

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

13. Operating Leases

Griffin's rental revenue reflects the leasing of industrial, flex and office space by Griffin Land and the lease of the farm in Florida previously used by Imperial. Future minimum rentals, including tenant reimbursements, to be received under noncancelable leases as of November 30, 2013 were:


2014	$	17,925
2015		15,357
2016		12,298
2017		11,282
2018		8,644
Later years		22,034


	$	87,540

All future minimum rental payments, principally for Griffin's corporate headquarters, under noncancelable leases, as lessee, as of November 30, 2013 were:


2014	$	179
2015		173
2016		145


Total minimum lease payments	$	497

Total rental expense for all operating leases, as lessee, in fiscal 2013, fiscal 2012 and fiscal 2011 was $242, $247 and $249, respectively.

14. Supplemental Financial Statement Information

Deferred Revenue on Land Sale

On November 21, 2013, Griffin Land completed the Windsor Land Sale. Under the terms of the sale, Griffin Land and the buyer will each construct roadways connecting the land parcel sold with existing town roads. Because Griffin Land is required to construct the roadways, the Windsor Land Sale is being accounted for under the percentage of completion method, under which the revenue and gain on sale are recognized as the total costs related to the property sold are incurred.

In fiscal 2013, approximately 30% of the total costs related to the Windsor Land Sale were incurred; therefore, 30% of the total revenue and pretax gain on the sale have been recognized in Griffin's fiscal 2013 consolidated statement of operations. Griffin's consolidated statement of operations for fiscal 2013 includes revenue of $2,668 and a pretax gain of $1,990 from the Windsor Land Sale. The balance of the revenue and pretax gain on sale will be recognized when the remaining costs are incurred, which is expected to take place mostly in fiscal 2014. Included on Griffin's consolidated balance sheet as of November 30, 2013 is deferred revenue of $6,300 that will be recognized as the remaining costs are incurred. Including the pretax gain on sale of $1,990 recognized in fiscal 2013, the total gain on the Windsor Land Sale is expected to be approximately $6,688 after all revenue is recognized and all costs incurred. While management has used its best estimates, based on industry knowledge and experience, in projecting the total costs of the required roadways, increases or decreases

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

14. Supplemental Financial Statement Information (Continued)

in future costs as compared with current estimated amounts would reduce or increase the gain recognized in future periods (see Note 5).

In fiscal 2012, Griffin Land closed on the Dollar Tree Sale. Under the terms of the Dollar Tree Sale, Griffin Land was required to construct a sewer line to service the land that was sold. As a result of Griffin Land's continuing involvement with the land sold, this transaction was accounted for under the percentage of completion method, under which the revenue and the pretax gain on sale were recognized on a pro rata basis in a ratio equal to the percentage of the total costs incurred to the total anticipated costs of sale, including the costs of the required construction of the sewer line. In fiscal 2013, all of the remaining costs related to the Dollar Tree Sale were incurred; therefore, from the date of the transaction through the end of fiscal 2013, all of the revenue and pretax gain on sale have been recognized in Griffin's consolidated statements of operations. Griffin's consolidated statement of operations for fiscal 2013 includes revenue of $2,474 and a pretax gain on sale of $2,109 from the Dollar Tree Sale. Including the pretax gain on sale of $3,942 recognized in fiscal 2012, the total pretax gain on the Dollar Tree Sale was $6,051 (see Note 5).

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consist of:

	Nov. 30, 2013		Dec. 1, 2012

Dividend payable	$	1,029	$	1,028
Trade payables		865		690
Accrued construction costs		781		668
Accrued salaries, wages and other compensation		629		407
Prepaid rent		532		634
Retainage		32		274
Other accrued liabilities		940		1,203


	$	4,808	$	4,904

Supplemental Cash Flow Information

Increases of $480 and $1,221 in fiscal 2013 and fiscal 2012, respectively, in the fair value of Griffin's Investment in Centaur Media reflect the mark to market adjustment of this investment and did not affect Griffin's cash. A decrease of $2,097 in fiscal 2011 in the fair value of Griffin's Investment in Centaur Media reflects the mark to market adjustment of this investment and did not affect Griffin's cash.

Griffin incurred new capital lease obligations of $48, $54 and $38 in fiscal 2013, fiscal 2012 and fiscal 2011, respectively.

Accounts payable and accrued liabilities related to additions to real estate assets decreased by $129 in fiscal 2013 and increased by $400 in fiscal 2012.

In fiscal 2012, Griffin received, as consideration for the exercise of employee stock options, 1,355 shares of its common stock, but did not receive any shares of its common stock from employees in

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

14. Supplemental Financial Statement Information (Continued)

payment for required income tax withholdings. The common stock received is included in Treasury Stock on Griffin's consolidated balance sheets as of November 30, 2013 and December 1, 2012. In fiscal 2013 and fiscal 2011, Griffin did not receive any shares of its common stock either as consideration for the exercise of employee stock options or for payment of required income tax withholdings.

In fiscal 2008, Griffin completed a sale of land to the Town of Simsbury and recognized $2,500 in revenue. The sale was related to the settlement of litigation in connection with Griffin's proposed residential development in that town. Cash of $500 was received at the closing and $500 (including interest) was received in fiscal 2011, fiscal 2010 and fiscal 2009. The final payment of $700 was received in fiscal 2012.

Griffin received an income tax refund of $56 in fiscal 2013. Griffin did not receive any income tax refunds in fiscal 2012 or fiscal 2011. Interest payments in fiscal 2013, fiscal 2012 and fiscal 2011 were $3,664, $3,560 and $4,307, respectively, including capitalized interest of $71, $596 and $134 in fiscal 2013, fiscal 2012 and fiscal 2011, respectively.

Gain on Insurance Recoveries

In the first quarter of fiscal 2011, snow load from winter storms caused the collapse of some of Imperial's hoop houses and, as a result, some of the plants stored in those hoop houses became unsaleable. A charge of $300 was included in costs of landscape nursery sales in fiscal 2011 for the book value of the inventory that became unsaleable and is now included in results from discontinued operations. There was no charge to earnings related to the damage to the hoop houses because they were fully depreciated prior to fiscal 2011. Insurance proceeds of $479, related to the hoop house damage, were received and are reflected as a gain on insurance recovery on Griffin's fiscal 2011 consolidated statement of operations (see Note 8).

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

15. Quarterly Results of Operations (Unaudited)

Summarized quarterly financial data are presented below:

2013 Quarters	1st			2nd			3rd			4th			Total

Total revenue	$	5,625		$	6,388		$	5,504		$	8,009		$	25,526
Operating income (loss)		(380	)		581			269			1,966			2,436
Income (loss) from continuing operations		1,684			(394	)		(490	)		1,110			1,910
(Loss) income from discontinued operation, net of tax		(374	)		282			(439	)		(7,200	)		(7,731	)
Net (loss) income		1,310			(112	)		(929	)		(6,090	)		(5,821	)
Per share results:
Basic:
Income (loss) from continuing operations		0.33			(0.08	)		(0.10	)		0.22			0.37
(Loss) income from discontinued operation, net of tax		(0.08	)		0.06			(0.08	)		(1.40	)		(1.50	)
Basic net (loss) income per common share		0.25			(0.02	)		(0.18	)		(1.18	)		(1.13	)
Diluted:
Income (loss) from continuing operations		0.33			(0.08	)		(0.10	)		0.22			0.37
(Loss) income from discontinued operation, net of tax		(0.08	)		0.06			(0.08	)		(1.40	)		(1.50	)
Diluted net (loss) income per common share		0.25			(0.02	)		(0.18	)		(1.18	)		(1.13	)

2012 Quarters	1st			2nd			3rd			4th			Total

Total revenue	$	4,531		$	4,593		$	9,983		$	5,108		$	24,215
Operating income (loss)		(687	)		(282	)		4,375			(20	)		3,386
Income (loss) from continuing operations		(741	)		(617	)		2,173			(619	)		196
Income (loss) from discontinued operations, net of tax		1,263			205			(291	)		(407	)		770
Net income (loss)		522			(412	)		1,882			(1,026	)		966
Per share results:
Basic:
Income (loss) from continuing operations		(0.14	)		(0.12	)		0.42			(0.12	)		0.04
Income (loss) from discontinued operations, net of tax		0.24			0.04			(0.05	)		(0.08	)		0.15
Basic net income (loss) per common share		0.10			(0.08	)		0.37			(0.20	)		0.19
Diluted:
Income (loss) from continuing operations		(0.14	)		(0.12	)		0.42			(0.12	)		0.04
Income (loss) from discontinued operations, net of tax		0.24			0.04			(0.05	)		(0.08	)		0.15
Diluted net income (loss) per common share		0.10			(0.08	)		0.37			(0.20	)		0.19

In the fiscal 2013 fourth quarter, based on the terms of the Imperial Sale, Griffin recorded an inventory charge of $10,400 which is reflected in the loss from discontinued operations. Also, property sales revenue in Griffin's fiscal 2013 fourth quarter consolidated statement of operations reflects $2,668 from the Windsor Land Sale.

In the 2012 fourth quarter, as a result of an increase in the estimated costs to complete the required improvements related to the Dollar Tree Sale, Griffin recorded a reduction in revenue of $657 for the Dollar Tree Sale. The increase in estimated costs was due to changes to the location of the sewer line to be constructed that was required by the governmental authority responsible for such matters. As a result, the estimated costs to complete the sewer construction increased from the

GRIFFIN LAND & NURSERIES, INC.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands unless otherwise noted, except per share data)

15. Quarterly Results of Operations (Unaudited) (Continued)

estimate made at the end of the fiscal 2012 third quarter, thus the estimated percentage of completion was lower at the end of fiscal 2012 than what was estimated at the end of the fiscal 2012 third quarter.

The sum of the four quarters earnings per share data may not equal the annual earnings per share data due to the requirement that each period be calculated separately.

16. Commitments and Contingencies

As of November 30, 2013, Griffin had committed purchase obligations of approximately $9,200, principally for the construction of Griffin Land's approximately 303,000 square foot industrial building in the Lehigh Valley region of Pennsylvania and the development of other Griffin properties.

Griffin is involved, as a defendant, in various litigation matters arising in the ordinary course of business. In the opinion of management, based on the advice of legal counsel, the ultimate liability, if any, with respect to these matters is not expected to be material, individually or in the aggregate, to Griffin's consolidated financial position, results of operations or cash flows.

17. Subsequent Events

In accordance with FASB ASC 855, "Subsequent Events," Griffin has evaluated all events or transactions occurring after November 30, 2013, the balance sheet date, and noted that there have been no such events or transactions which would require recognition or disclosure in the consolidated financial statements as of and for the year ended November 30, 2013, other than the following disclosures.

See Note 2 for disclosure of subsequent events related to the Imperial Transaction. Also, see Note 7 for disclosure of the subsequent sale of Centaur shares.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders
Griffin Land & Nurseries, Inc.

We have audited the consolidated financial statements of Griffin Land & Nurseries, Inc. and subsidiaries (the "Company") as of November 30, 2013 and December 1, 2012 and for each of the three fiscal years in the period ended November 30, 2013 listed in the index appearing under Item 15(a)(1). Our audits also included the financial statement schedules of Griffin Land & Nurseries, Inc. listed in Item 15(a)(2). These financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Griffin Land & Nurseries, Inc. and subsidiaries as of November 30, 2013 and December 1, 2012, and the results of their operations and their cash flows for each of the three fiscal years in the period ended November 30, 2013, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Griffin Land & Nurseries, Inc. and subsidiaries' internal control over financial reporting as of November 30, 2013, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 1992, and our report dated February 13, 2014 expressed an unqualified opinion on the effectiveness of Griffin Land & Nurseries, Inc.'s internal control over financial reporting.

New Haven, Connecticut
February 13, 2014

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A. CONTROLS AND PROCEDURES.

Changes in Internal Control Over Financial Reporting: There have been no changes in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Disclosure Controls and Procedures: The Company maintains disclosure controls and procedures designed to ensure that the information the Company must disclose in its filings with the Securities and Exchange Commission ("SEC") is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and such information is accumulated and communicated to management, as appropriate to allow timely decisions regarding required disclosure. The Company's principal executive officer and principal financial officer have reviewed and evaluated, with the participation of the Company's management, the Company's disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") as of the end of the period covered by this report (the "Evaluation Date"). Based on such evaluation, such officers have concluded that, as of the Evaluation Date, the Company's disclosure controls and procedures are effective.

Management's Report on Internal Control Over Financial Reporting: Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Management of the Company, including its chief executive officer and chief financial officer, has assessed the effectiveness of its internal control over financial reporting as of November 30, 2013, based on the criteria established in "Internal Control—Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in 1992. Based on its assessment and those criteria, management of the Company has concluded that, as of November 30, 2013, the Company's internal control over financial reporting was effective.

The Company's independent registered public accounting firm, McGladrey LLP, has audited the effectiveness of the Company's internal control over financial reporting as of November 30, 2013, as stated in their attestation report appearing below.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of the effectiveness to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders
Griffin Land & Nurseries, Inc.

We have audited Griffin Land & Nurseries, Inc.'s (the "Company") internal control over financial reporting as of November 30, 2013, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 1992. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Griffin Land & Nurseries, Inc. maintained, in all material respects, effective internal control over financial reporting as of November 30, 2013, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 1992.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements of Griffin Land & Nurseries, Inc. as of November 30, 2013 and December 1, 2012 and for each of the three fiscal years in the period ended November 30, 2013 listed in the index appearing under Item 15(a)(1) and our report dated February 13, 2014 expressed an unqualified opinion.

New Haven, Connecticut
February 13, 2014

ITEM 9B. OTHER INFORMATION.

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The following table sets forth the information called for in this Item 10:

Name		Position

Frederick M. Danziger	73	Chairman of the Board of Directors and Chief Executive Officer
Winston J. Churchill, Jr.	73	Director
David M. Danziger	47	Director
Thomas C. Israel	69	Director
John J. Kirby, Jr.	74	Director
Jonathan P. May	47	Director
Albert H. Small, Jr.	57	Director
Michael S. Gamzon	44	President and Chief Operating Officer
Scott Bosco	47	Vice President of Construction, Griffin Land, LLC
Anthony J. Galici	56	Vice President, Chief Financial Officer and Secretary
Thomas M. Lescalleet	51	Senior Vice President, Griffin Land, LLC

Griffin's directors are each elected for a term of one year.

Frederick M. Danziger has been the Chairman of the Board of Directors and Chief Executive Officer since May 2012. Mr. Frederick M. Danziger was a Director and the President and Chief Executive Officer of Griffin from April 1997 to May 2012, and was a Director of Culbro Corporation from 1975 until 1997. He was previously involved in the real estate operations of Griffin in the early 1980s. Mr. Frederick M. Danziger was Of Counsel to the law firm of Latham & Watkins from 1995 until 1997. From 1974 until 1995, Mr. Frederick M. Danziger was a Member of the law firm of Mudge Rose Guthrie Alexander & Ferdon. Mr. Frederick M. Danziger also is a Director of Monro Muffler Brake, Inc. and Bloomingdale Properties, Inc. Frederick M. Danziger is the father of David M. Danziger, the father-in-law of Michael S. Gamzon and the brother-in-law of John J. Kirby, Jr. Mr. Danziger's background as a lawyer and his extensive experience and knowledge with respect to real estate and real estate financing, which is a significant part of Griffin's business, provides a unique perspective to the Board.

Winston J. Churchill, Jr. has been a Director of Griffin since April 1997. Mr. Churchill, Jr. is also a Director of Amkor Technology, Inc., Innovative Solutions and Support, Inc., Rodman & Renshaw Capital Group, Inc. and Cyalume Technologies Holdings, Inc. He is managing general partner of SCP Partners, which manages venture capital and private equity investments for institutional investors, and is Chairman of CIP Capital Management, Inc. Mr. Churchill, Jr. is the brother-in-law of Albert H. Small, Jr. Mr. Churchill, Jr. has significant experience as a member of Griffin's Board of Directors, has many years of general business experience and expertise as a managing general partner and board member of publicly held companies.

David M. Danziger has been a Director of Griffin since May 2006. He was an Executive Vice President of General Cigar Holdings, Inc. from January 1999 through April 2005. David M. Danziger is a managing member of Culbro LLC. David M. Danziger is the son of Frederick M. Danziger and the brother-in-law of Michael S. Gamzon. Mr. Danziger has many years of general business experience and expertise as an executive of a publicly held company.

Thomas C. Israel has been a Director of Griffin since July 2000. Mr. Israel was a Director of Asbury Automotive Group, Inc. from 2003 through 2005. Mr. Israel was a Director of Culbro

Corporation from 1989 until 1997 and a Director of General Cigar Holdings, Inc. from December 1996 until May 2000. Mr. Israel is Chairman of A.C. Israel Enterprises, Inc., an investment company. Mr. Israel has significant experience as a member of Griffin's Board of Directors, many years of general business experience, finance experience, and expertise as an executive and board member of publicly held companies.

John J. Kirby, Jr. has been a Director since November 2012. Mr. Kirby, Jr. retired in 2007 as a partner of Latham & Watkins, LLP and was head of litigation of that firm's New York office from 1996 to 2004. Mr. Kirby, Jr. is the brother-in-law of Mr. Frederick M. Danziger. Mr. Kirby, Jr.'s background as a lawyer and his general business experience and knowledge provides an additional perspective to the Board.

Jonathan P. May has been a Director since September 2012. Mr. May has been the Chief Operating Officer and Chief Financial Officer and a Director of The CarbonNeutral Company, a private company that is a leading provider of carbon reduction programs for corporations since 2008. Mr. May was the founder and managing Director of Catalytic Capital, LLC from 2004 to 2008. Mr. May has significant general business experience, finance experience, and expertise as an executive.

Albert H. Small, Jr. has been a Director of Griffin since January 2009. Mr. Small, Jr. was President of Renaissance Housing Corporation, a private company involved in residential real estate development from 1984 through March 2005, and President of WCI Communities Mid-Atlantic Division from March 2005 through March 2008. From March 2008 through the present, Mr. Small, Jr. has been active in the development and management of several commercial and office developments in Washington D.C. Mr. Small, Jr. is the brother-in-law of Winston J. Churchill, Jr. Mr. Small, Jr. has significant experience in real estate development and management which gives him unique insights into Griffin's challenges, opportunities and operations.

Michael S. Gamzon has been the President and Chief Operating Officer since May 2012. Mr. Gamzon was Executive Vice President and Chief Operating Officer of Griffin from September 2010 to May 2012 and was a Vice President of Griffin from January 2008 through August 2010. Mr. Gamzon was an investment analyst with Alson Capital Partners, LLC from April 2005 until January 2008 and an investment analyst with Cobalt Capital Management, LLC from March 2002 until March 2005. Mr. Gamzon is the son-in-law of Frederick M. Danziger and the brother-in-law of David M. Danziger.

Scott Bosco has been the Vice President of Construction of Griffin Land, LLC division since July 2005.

Anthony J. Galici has been the Vice President, Chief Financial Officer and Secretary of Griffin since April 1997.

Thomas M. Lescalleet has been the Senior Vice President of Griffin Land, LLC since March 2002.

Code of Ethics

Griffin has adopted a Code of Ethics that applies to all of its directors, officers and employees including its principal executive officer and principal financial officer. In the event that Griffin grants any waiver of a provision of the code of ethics to its directors or executive officers, Griffin will disclose the waiver and the reasons it was granted. A copy of Griffin's Code of Ethics is available without charge upon written request to: Griffin Land & Nurseries, Inc., One Rockefeller Plaza, Suite 2301, New York, New York, 10020, Attention: Corporate Secretary.

Audit Committee

Griffin's Audit Committee consists of Thomas C. Israel, Chairman, Jonathan P. May and Albert H. Small, Jr. All members of the Audit Committee meet the NASDAQ composition requirements, including the requirements regarding financial literacy, and the Board has determined that each member is independent under the listing standards of NASDAQ and the rules of the SEC, regarding audit committee membership. In addition, Mr. Israel's employment experience in finance results in his financial sophistication under NASDAQ rules, although none of the members of the Audit Committee are considered a financial expert as defined by Item 407(d)(5) of Regulation S-K of the Securities and Exchange Act of 1934 (an "audit committee financial expert"). Griffin does not have an audit committee financial expert because it believes the members of its Audit Committee have sufficient financial expertise and experience to provide effective oversight of Griffin's accounting and financial reporting processes and the audits of Griffin's financial statements in accordance with NASDAQ rules. In addition, through January 31, 2012, the Audit Committee engaged an accounting and auditing firm as an advisor to the Audit Committee in carrying out its responsibilities, represented by a partner who is a certified public accountant with extensive experience in auditing the financial statements of public and private companies. Subsequent to January 31, 2012, the Audit Committee directly engaged the former partner of the accounting and auditing firm that had provided service to Griffin to advise the Audit Committee. The Audit Committee believes that its engagement of the former audit partner as an advisor provides it with additional expertise that is equivalent to that provided by an audit committee financial expert. The Audit Committee approves all auditing and non-auditing services, reviews audit reports and the scope of audit by Griffin's independent registered public accountants and related matters pertaining to the preparation and examination of Griffin's financial statements. From time to time, the Audit Committee makes recommendations to the Board of Directors with respect to the foregoing matters. The Audit Committee held 4 meetings in fiscal 2013.

Board of Directors' Role in Oversight of Risk

Management is responsible for Griffin's day-to-day risk management activities, and the Board's role is to engage in informed risk oversight. In fulfilling this oversight role, Griffin's Board of Directors focuses on understanding the nature of Griffin's enterprise risks, including operations and strategic direction, as well as the adequacy of Griffin's overall risk management system. There are a number of ways the Board performs this function, including the following:

•: at its regularly scheduled meetings, the Board receives management updates on Griffin's business operations, financial results and strategy, and discusses risks related to its businesses;
•: the Audit Committee assists the Board in its oversight of risk management by discussing with management, particularly the Chief Executive Officer and the Chief Financial Officer, Griffin's major risk exposures and the steps management has taken to monitor and control such exposures; and
•: through management updates and committee reports, the Board monitors Griffin's risk management activities, including the risk management process, risks relating to Griffin's compensation programs, and financial and operational risks being managed by Griffin.

The Board does not believe that its role in the oversight of Griffin's risk affects the Board's leadership structure.

Compensation Risk

The Compensation Committee reviews compensation policies and practices affecting employees in addition to those applicable to executive officers. The Compensation Committee has determined that it

is not reasonably likely that Griffin's compensation policies and practices for its employees would have a material adverse effect on Griffin.

Nominating Committee

Griffin's Nominating Committee consists of Thomas C. Israel, Chairman, Winston J. Churchill, Jr. and Albert H. Small, Jr. The three members of the Nominating Committee are independent directors. The Nominating Committee reviews candidates for appointment to the Griffin Board of Directors. In searching for qualified director candidates for election to Griffin's Board of Directors and to fill vacancies on the Board, the Board may solicit current directors for the names of potentially qualified candidates and may ask directors to pursue their own business contacts for the names of potentially qualified candidates. The Nominating Committee may also consult with outside advisors or retain search firms to assist in the search for qualified candidates and will consider suggestions from shareholders for nominees for election as directors. The Nominating Committee does not have a policy on the consideration of board nominees recommended by stockholders. The Board believes such a policy is not necessary in that the Nominating Committee will consider nominees based on a nominee's qualifications, regardless of whether the nominee is recommended by stockholders. The Nominating Committee does not have a charter. The Nominating Committee held 1 meeting in fiscal 2013.

Board Diversity; Selection and Evaluation of Director Candidates

The Board does not have a formal policy with respect to Board nominee diversity. There are no specific minimum qualifications that the Nominating Committee believes must be met for a person to serve on the Board. When identifying nominees for director, the Nominating Committee focuses on relevant subject matter expertise, depth of knowledge in key areas that are important to Griffin, and the background, perspective and experience of the nominee. The Nominating Committee is charged with building and maintaining a board that has an ideal mix of talent and experience to achieve Griffin's business objectives in the current environment. Any stockholder who wishes to recommend a candidate to the Nominating Committee for consideration as a director nominee should submit the recommendation in writing to the Secretary of the Company sufficiently in advance of the Company's annual meeting to permit the Nominating Committee to complete its review in a timely fashion.

Board Leadership Structure

Prior to the death of Mr. Edgar Cullman, Griffin's Chairman of the Board, in August 2011, the Board had been led by a Non-Executive Chairman since 1997. Separate individuals held the positions of Chairman of the Board and Chief Executive Officer, and the Chairman was not an employee. In May 2012, the Board appointed Mr. Frederick M. Danziger Chairman of the Board and Chief Executive Officer. In making that appointment, the Board concluded that, based on Griffin's present circumstances, Griffin and its stockholders are best served by having Mr. Danziger serve as Chairman of the Board and Chief Executive Officer. Mr. Danziger's combined role as Chairman of the Board and Chief Executive Officer promotes unified leadership and direction for Griffin, which allows for a single, clear focus for management to execute Griffin's strategy and business plans, particularly in light of Mr. Danziger's service as Griffin's Chief Executive Officer since 1997.

Communication with the Board of Directors or Nominating Committee

Stockholders who wish to communicate with the Board of Directors or the Nominating Committee should address their communications to Thomas C. Israel, Chairman of the Nominating Committee, via first class mail, at Griffin Land & Nurseries, Inc., One Rockefeller Plaza, Suite 2301, New York, New York, 10020. Such communication will be distributed to the specific Director(s) requested by the stockholders, or if generally to the Board of Directors, to other members of the Board of Directors as may be appropriate depending on the material outlined in the stockholder communication.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires Griffin's officers and directors, and persons who own more than ten percent of its Common Stock, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Such persons are required by regulation to furnish Griffin with copies of all Section 16(a) forms they file. Based on its involvement in the preparation of certain such forms, and a review of copies of other such forms received by it, Griffin believes that with respect to fiscal 2013, all such Section 16(a) filing requirements were satisfied.

ITEM 11. EXECUTIVE COMPENSATION.

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis describes the material elements of compensation awarded to, earned by, or paid to each of Griffin's named executive officers (the "Named Executive Officers") during the last completed fiscal year. The Named Executive Officers for the fiscal year ended November 30, 2013 are as follows:


Frederick M. Danziger		Chairman of the Board and Chief Executive Officer ("CEO") of Griffin
Michael S. Gamzon		President and Chief Operating Officer ("COO") of Griffin
Anthony J. Galici		Vice President, Chief Financial Officer and Secretary of Griffin
Thomas M. Lescalleet		Senior Vice President of Griffin Land, LLC
Gregory M. Schaan		Former President and Chief Executive Officer of Imperial Nurseries, Inc.

Compensation Philosophy and Overview

Griffin's compensation programs are designed to attract, motivate and retain the management talent that Griffin believes is necessary to achieve its financial and strategic goals. Griffin's Compensation Committee strives to pay for performance by rewarding each of its Named Executive Officers for team results and their individual contributions to Griffin's success. In this way, Griffin believes that the interests of its executives align with the interests of its stockholders.

Design and Implementation

With these objectives in mind, Griffin's Compensation Committee has built an executive compensation program that consists of three principal elements:

1.: Base Salary
2.: Annual Incentive Compensation Programs
3.: Long-Term Incentive Program

Griffin also contributes to a 401(k) savings plan and deferred compensation plan on behalf of its Named Executive Officers. These contributions, however, comprise a relatively minor portion of Griffin's Named Executive Officers' compensation packages.

Base Salary

Griffin pays base salaries to its Named Executive Officers in order to provide a consistent, minimum level of pay that sustained individual performance warrants. Griffin also believes that a

competitive annual base salary is important to attract and retain an appropriate caliber of talent for each position over time.

The annual base salaries of Griffin's Named Executive Officers are determined by its Chairman and CEO (except with regard to his salary) and approved annually by the Compensation Committee. The annual base salary of Griffin's Chairman and CEO is determined by the Compensation Committee. All salary decisions are based on each Named Executive Officer's level of responsibility, experience and recent and past performance, as determined by the Chairman and CEO and the Compensation Committee, as applicable. Griffin does not benchmark its base salaries in any way, nor does Griffin employ the services of a compensation consultant.

Annual Incentive Compensation Programs

Griffin's annual incentive programs are designed to recognize short-term performance against established annual performance goals for each of its operating businesses, as explained below. These performance goals are developed by the Chairman and CEO and approved or modified, as necessary, by the Compensation Committee. Additionally, the Compensation Committee retains the discretion to adjust any awards made to Griffin's executives, including making awards in the absence of the attainment of any of the performance goals under Griffin's annual incentive compensation plans. Any such adjustment may only be to the benefit of the participants. The Compensation Committee made a discretionary increase in the amount of $158,344 to the incentive compensation pool for fiscal 2013 under the Griffin Land Incentive Compensation Plan. Griffin makes annual incentive payments, if any, in the year following the year in which they are earned.

Griffin Land

Under the Griffin Land Incentive Compensation Plan for Fiscal Year 2013 (the "Griffin Land Incentive Plan"), incentive compensation is awarded based on certain defined components, including: (i) profit from property sales in Connecticut and Massachusetts (10% of the pretax profit on property sales, as defined in the Griffin Land Incentive Plan, with a maximum of an aggregate $150,000 of incentive compensation that could have been accrued under this component); (ii) value generated from build-to-suit buildings in Connecticut and Massachusetts entered into in fiscal 2013 (10% of the incremental value created, as defined in the Griffin Land Incentive Plan, with a maximum of an aggregate $200,000 of incentive compensation that could have been accrued under this component); (iii) value generated from the leasing of buildings built on speculation in Connecticut or Massachusetts (10% of the incremental value generated, as defined in the Griffin Land Incentive Plan, with a maximum of an aggregate $200,000 of incentive compensation that could have been accrued under this component); (iv) the leasing of currently vacant space in Connecticut (with a maximum of an aggregate $185,000 of incentive compensation that could have been accrued under this component); (v) the renewal of leases expiring in Connecticut in fiscal 2013 (with a maximum of an aggregate $80,000 of incentive compensation that could have been accrued under this component); and (vi) value generated from build-to-suit buildings in Pennsylvania entered into in fiscal 2013 (10% of the incremental value created, as defined in the Griffin Land Incentive Plan, with a maximum of an aggregate $200,000 of incentive compensation could have been accrued under this component); (vii) value generated from the leasing of buildings built on speculation in Pennsylvania (10% of the incremental value generated, as defined in the Griffin Land Incentive Plan, with a maximum of an aggregate $200,000 of incentive compensation could have been accrued under this component); and (viii) the leasing of currently vacant industrial space in Pennsylvania (with a maximum of an aggregate $75,000 of incentive compensation that could have been accrued under this component). Any amounts of incentive compensation earned under components (iv) and (v) are subject to adjustment based on the amount of funds from operations, as defined in the Griffin Land Incentive Plan, achieved by Griffin Land. Any amounts of incentive compensation earned under components (vi), (vii) and (viii), as defined in the Griffin Land

Incentive Plan, resulted in 50% of such amount being added to the incentive compensation pool applicable to Griffin Land employees with the remaining 50% of incentive compensation earned to be distributed at the discretion of the Compensation Committee. These objectives are designed to reward management for increasing the operating cash flow of the real estate business. Amounts earned under each objective are accrued into an incentive compensation pool up to a maximum incentive compensation amount, which in fiscal 2013 was $1,052,500 [($815,000 related to components (i), (ii), (iii), (iv) and (v) and $237,500 (50% of the maximum of $475,000) related to components (vi), (vii) and (viii))] for Griffin Land employees and $237,500 [(50% of the maximum of $475,000 related to components (vi), (vii) and (viii))] to be distributed at the discretion of the Compensation Committee if all targets were achieved at their maximum amounts. The incentive compensation pool is divided among executives and employees of Griffin Land. The amounts earned by Griffin Land employees under the Griffin Land Incentive Plan may be increased at the discretion of the Compensation Committee. The Compensation Committee increased the incentive compensation pool of the Griffin Land Incentive Plan for fiscal 2013 by $158,344 principally due to the completion of the sale of approximately 90 acres of undeveloped land for $9.0 million in fiscal 2013. Incentive compensation on that transaction was specifically excluded from the component of the Griffin Land Incentive Plan for property sales and left to the discretion of the Compensation Committee.

Over the past three years, achievement of the components of the Griffin Land Incentive Plan has been as follows:

Incentive Plan Component	Fiscal 2013	Fiscal 2012	Fiscal 2011

Profit from property sales	Achieved	Achieved	Achieved
Value generated from buildings built on speculation	Achieved	Not Achieved	Not Applicable
Value generated from build-to-suit projects	Not Achieved	Not Achieved	Not Achieved
Leasing of currently vacant space	Achieved	Achieved	Achieved
Renewal of expiring leases	Achieved	Achieved	Achieved

The achievement of profit from property sales, value generated from buildings built on speculation, leasing of currently vacant space and renewal of expiring leases resulted in $131,656 being accrued into the incentive compensation pool for the Griffin Land Incentive Plan for fiscal 2013. Subsequently, the Compensation Committee, at its discretion, increased the incentive compensation pool by $158,344 bringing the total amount accrued into the Griffin Land incentive compensation pool for fiscal 2013 to $290,000. Per the Griffin Land Incentive Plan for fiscal 2013, achievement of the value generated from the leasing of buildings built on speculation in Pennsylvania component resulted in $55,243, 50% of the incremental value generated, available for distribution at the discretion of the Compensation Committee. The Compensation Committee, at its discretion, authorized distribution of $27,500 of the $55,243. The $27,500 was distributed as follows: $2,500 to Griffin Land's Senior Vice President; $5,000 Griffin Land's Vice-President of Construction; and $20,000 to Griffin's President and COO. No other Named Executive Officer received a discretionary allocation from the Compensation Committee.

Imperial Nurseries

Under the Imperial Nurseries, Inc. Incentive Compensation Plan for Fiscal Year 2013 (the "Imperial Incentive Plan"), incentive compensation is awarded based on the achievement of certain defined components, including operating profit and operating cash flow, by Imperial Nurseries, Inc, ("Imperial").

Operating Profit

The amount to be accrued into Imperial's incentive compensation pool with respect to operating profit is a percentage of Imperial's operating profit achieved. If Imperial incurs an operating loss, no

incentive compensation is accrued. If Imperial achieves an operating profit below $250,000, 30% of the operating profit is accrued into the incentive compensation pool. If Imperial's operating profit is between $250,000 and $500,000, $75,000 plus 40% of the operating profit above $250,000 is accrued into the incentive compensation pool. If Imperial's operating profit is between $500,000 and $750,000, $175,000 plus 50% of the operating profit above $500,000 is accrued into the incentive compensation pool. If Imperial's operating profit is between $750,000 and $1,000,000, $300,000 plus 30% of the operating profit above $750,000 is accrued into the incentive compensation pool. If Imperial's operating profit is above $1,000,000, $375,000 plus 25% of the operating profit above $1,000,000 is accrued into the incentive compensation pool. Because Imperial did not achieve an operating profit in fiscal 2013, no amounts were accrued into Imperial's incentive compensation pool for the operating profit component of the Imperial Incentive Plan.

Operating Cash Flow

The amount to be accrued into Imperial's incentive compensation pool with respect to operating cash flow is $20,000 if operating cash flow, as calculated for incentive compensation purposes, equals $250,000, or $0 if operating cash flow, as calculated for incentive compensation purposes, is below $250,000. If operating cash flow, as calculated for incentive compensation purposes, exceeds $250,000 but is less than $425,000, 12% of the operating cash flow above $250,000 will also be accrued into the incentive compensation pool. For each additional $25,000 increment of operating cash flow, as calculated for incentive compensation purposes, above $425,000, $3,125 of incentive compensation will also be accrued into the incentive compensation pool. Because Imperial's fiscal 2013 operating cash flow, as calculated for incentive compensation purposes, was below $250,000, no amounts were accrued into Imperial's incentive compensation pool for the operating cash flow component of the Imperial Incentive Plan.

No amounts were accrued into Imperial's incentive compensation pool for fiscal 2013 because neither the operating profit component nor the operating cash flow component were met.

Corporate

The 2013 Corporate Incentive Compensation Plan (the "Corporate Incentive Plan") was designed to reward corporate employees, including Griffin's Chairman and CEO, President and COO and the Vice President, Chief Financial Officer and Secretary, based on the results of Griffin's operating businesses, consistent with Griffin's goal to award for performance through team results as discussed above. Under the Corporate Incentive Plan, the amount of corporate incentive compensation was based on the levels of incentive compensation earned at Griffin Land and Imperial. If both the employees at Griffin Land and the senior executives at Imperial had earned incentive compensation under their respective plans, then an amount equal to 80% of the sum of those respective pools would accrue into the Corporate incentive compensation pool. However, because only Griffin Land earned incentive compensation, an amount equal to 30% of the total amount of the Griffin Land incentive compensation pool, including the Compensation Committee's discretionary increase to the Griffin Land incentive compensation pool, or $87,000 ($39,497 attributable to the non-discretionary incentive plan compensation and $47,503 attributable to the Compensation Committee's discretionary increase), was accrued into the Corporate incentive compensation pool, of which the President and COO and the Vice President, Chief Financial Officer and Secretary were beneficiaries. The President and COO was allocated $34,800 (40%) of the total pool with $15,799 attributable to incentive plan compensation and $19,001 attributable to the Compensation Committee's discretionary increase to the incentive compensation pool. The President and COO also received $20,000 of the $55,243 of incentive compensation, distributed at the discretion of the Compensation Committee, related to buildings built on speculation in Pennsylvania under the Griffin Land Incentive Plan for fiscal 2013. The Vice President, Chief Financial Officer and Secretary was allocated $30,450 (35%) of the total pool with

$13,824 attributable to non-discretionary incentive plan compensation and $16,626 attributable to the Compensation Committee's discretionary increase to the incentive compensation pool. The Chairman and CEO received no allocation.

Long-Term Incentive Program—Equity Awards

Griffin believes that equity ownership in Griffin is important to provide its Named Executive Officers with long-term incentives to build value for Griffin's stockholders. In addition, the equity program is designed to attract and retain the executive management team. The Griffin equity program consists entirely of stock option awards. Stock options have value only if the stock price increases over time and, therefore, provide executives with an incentive to build Griffin's value. This characteristic ensures that the Named Executive Officers have a meaningful portion of their compensation tied to future stock price increases. If Griffin's stock price increases, stock options have the potential to provide high returns to its executives, thus helping Griffin to attract and retain management. However, the realizable value of the stock options can fall to zero if the stock price is lower than the exercise price established on the date of grant.

Stock option awards to Named Executive Officers are entirely discretionary. The Chairman and CEO recommends whether and how many stock options should be awarded to the other Named Executive Officers, and the Compensation Committee approves or, if necessary, modifies his recommendations. The Compensation Committee solely determines whether and how many stock options should be awarded to the Chairman and CEO. In making stock option award determinations, the Chairman and CEO and the Compensation Committee consider the prior contribution of participants and their expected future contributions to the growth of Griffin. In fiscal 2013, no stock options were awarded to the Named Executive Officers and no stock options were issued to other employees.

The Griffin Land & Nurseries, Inc. 2009 Stock Option Plan (the "2009 Stock Option Plan") makes available options to purchase 386,926 shares of Griffin common stock, which includes options to purchase the 161,926 shares that were available for issuance under Griffin's prior stock option plan. The Compensation Committee of Griffin's Board of Directors administers the 2009 Stock Option Plan. Options granted under the 2009 Stock Option Plan may be either incentive stock options or non-qualified stock options issued at fair market value of a share of common stock on the date the award is approved by Griffin's Compensation Committee. Vesting of all of Griffin's previously issued stock options is solely based upon service requirements and does not contain market or performance conditions.

In accordance with the 2009 Stock Option Plan, stock options granted to non-employee directors upon their initial election to the board of directors are fully exercisable immediately upon the date of the option grant. Stock options granted to non-employee directors upon their reelection to the board of directors vest on the second anniversary from the date of grant. Stock options granted to employees vest in equal installments on the third, fourth and fifth anniversaries from the date of grant. Stock options granted to employees and non-employee directors have a maximum term of ten years from the date of grant.

Of the 386,926 shares of common stock reserved for issuance under the 2009 Stock Option Plan, as of November 30, 2013, 127,181 shares were subject to outstanding options granted under the 2009 Stock Option Plan. In addition, as of November 30, 2013, 259,745 shares were available for future awards under the 2009 Stock Option Plan (which includes certain shares that again became available following the forfeiture of outstanding options). For more information on stock options, see the Summary Compensation Table, Grants of Plan-Based Awards Table, Outstanding Equity Awards Table and their footnotes.

Perquisites and Other Benefits

Griffin's Named Executive Officers are eligible for the same health and welfare programs and benefits as the rest of its employees in their respective locations. In addition, Griffin's Vice President, Chief Financial Officer and Secretary receives an automobile allowance of $8,000 per year.

Griffin's Named Executive Officers are entitled to participate in and receive employer contributions to Griffin's 401(k) Savings Plan. In addition, Griffin has established a non-qualified Deferred Compensation Plan (the "Deferred Compensation Plan") that allows eligible participants, including the Named Executive Officers, to defer portions of their annual base salary, as well as receive employer matching contributions with respect to deferrals that would exceed IRS limits under the Griffin 401(k) Savings Plan. For more information on employer contributions to the Griffin 401(k) Savings Plan and the Deferred Compensation Plan, see the Summary Compensation Table and its footnotes.

Analysis

Base Salary

The following table presents the base salaries for Griffin's Named Executive Officers in 2013 and the percentage increase over their 2012 base salaries.

	Annual Salary

Mr. Danziger	$	530,500	2	%
Mr. Gamzon	$	338,200	2	%
Mr. Galici	$	278,900	2	%
Mr. Lescalleet	$	244,078	2	%
Mr. Schaan	$	249,700	2	%

Annual Incentive Compensation Program

The following table presents the total annual incentive payments made to the Named Executive Officers for fiscal 2013, the amount of annual incentive compensation awarded under Griffin's respective annual incentive compensation plans, and the amount of any discretionary bonus the Compensation Committee awarded to the Named Executive Officers.

	Incentive Plan Payments		Discretionary Bonus Payments		Total Annual Incentive Payments

Mr. Danziger		—		—		—
Mr. Gamzon	$	35,799	$	19,001	$	54,800
Mr. Galici	$	13,824	$	16,626	$	30,450
Mr. Lescalleet	$	41,997	$	47,503	$	89,500
Mr. Schaan		—		—		—

Griffin Land

Mr. Lescalleet was awarded $89,500 in annual incentive compensation for 2013 based on the formula under the Griffin Land Incentive Plan which included $47,503 of the $158,344 discretionary amount added by the Compensation Committee to the Griffin Land Incentive Plan incentive compensation pool for fiscal 2013 and $2,500 of the $55,243 of incentive compensation, distributed at the discretion of the Compensation Committee, related to buildings built on speculation in Pennsylvania under the Griffin Land Incentive Plan for fiscal 2013.

Imperial Nurseries

Mr. Schaan did not receive an award under the Imperial Incentive Plan because Imperial did not achieve an operating profit or meet the operating cash flow requirements of the Imperial Incentive Plan in fiscal 2013. The Compensation Committee did not exercise its discretion to alter the formula result of the Imperial Incentive Plan.

Corporate

Because only employees at Griffin Land earned incentive compensation for fiscal 2013, under the Corporate Incentive Plan, the President and COO was entitled to receive incentive compensation of $34,800 of which $15,799 is attributable to non-discretionary incentive plan compensation and $19,001 is attributable to the Compensation Committee's discretionary increase to the incentive compensation pool and the Vice President, Chief Financial Officer and Secretary was entitled to receive incentive compensation of $30,450 of which $13,824 is attributable to non-discretionary incentive plan compensation and $16,626 is attributable to the Compensation Committee's discretionary increase to the incentive compensation pool. The Chairman and CEO was not entitled to any incentive compensation. The Compensation Committee did not exercise its discretion to alter the formula result of the Corporate Incentive Plan.

The President and COO also received $20,000 of the $55,243 of incentive compensation, distributed at the discretion of the Compensation Committee, related to buildings built on speculation in Pennsylvania under the Griffin Land Incentive Plan for fiscal 2013. The Chairman and CEO and Vice President, Chief Financial Officer and Secretary received no discretionary allocation from the Compensation Committee.

Shareholder Say-on-Pay Votes

At Griffin's 2013 annual meeting of stockholders, Griffin's stockholders were given the opportunity to cast an advisory vote on Griffin's executive compensation. Approximately 99.5% of the votes cast on this "2013 say-on-pay vote" were voted in favor of the proposal. Griffin has considered the 2013 say-on-pay vote and believes that the overwhelming support of the Griffin stockholders for the 2013 say-on-pay vote proposal indicates that Griffin's stockholders are supportive of the approach to executive compensation. Thus Griffin did not make changes to its executive compensation arrangements in response to the 2013 say-on-pay vote. In the future, Griffin will continue to consider the outcome of the say-on-pay votes when making compensation decisions regarding its Named Executive Officers.

Accounting and Tax Considerations

Griffin does not believe it need now adopt any policy with respect to the $1,000,000 deduction cap of Section 162(m) of the Internal Revenue Code. While the Compensation Committee will give due consideration to the deductibility of compensation payments on compensation arrangements with Griffin's executive officers, the Compensation Committee will make its compensation decisions based on an overall determination of what it believes to be in the best interests of Griffin and its shareholders, and deductibility will be only one among a number of factors used by the Compensation Committee in making its compensation decisions.

Section 4999 and Section 280G of the Internal Revenue Code provide that certain executives could be subject to significant excise taxes if they receive payments or benefits that exceed certain limits in connection with a change in ownership or change in effective control of Griffin and that Griffin or its successors could lose an income tax deduction with respect to the payments subject to the excise tax. Griffin has not entered into any agreements with any executives that provide for a tax "gross up" or other reimbursement for taxes the executive might be required to pay pursuant to Section 4999 of the Internal Revenue Code.

Section 409A of the Internal Revenue Code imposes significant additional taxes and interest on underpayments of taxes in the event an employee or other service provider defers compensation under a plan or agreement that does not meet the requirements of Section 409A of the Internal Revenue Code. Griffin has generally structured its programs and individual arrangements in a manner intended to be exempt from or comply with the requirements of Section 409A of the Internal Revenue Code.

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed with management Griffin's Compensation Discussion and Analysis, and based upon this review and discussion, has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Form 10-K and the Company's Proxy Statement for its 2014 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission.


		Winston J. Churchill, Jr. (Chairman) Thomas C. Israel Albert H. Small, Jr.

Summary Compensation Table

The following table presents information regarding compensation of each of Griffin's Named Executive Officers for services rendered during fiscal years 2013, 2012 and 2011.

Name and Principal Position		Salary(1) ($)		Bonus ($)			Option Awards(2) ($)		Non-Equity Incentive Plan Compensation(8) ($)			All Other Compensation ($)			Total ($)

Frederick M. Danziger	2013	$	529,692	$	—		$	—	$	—		$	15,923	(3)	$	545,615
Chairman and Chief	2012	$	520,000	$	—		$	—	$	—		$	15,858		$	535,858
Executive Officer of Griffin	2011	$	538,846	$	—		$	322,000	$	—		$	15,825		$	876,671
Michael S. Gamzon	2013	$	337,685	$	19,001		$	—	$	35,799		$	10,220	(4)	$	402,705
President and Chief	2012	$	331,000	$	7,260	(10)	$	—	$	8,490	(10)	$	10,078		$	356,808
Operating Officer of Griffin	2011	$	334,615	$	—		$	322,000	$	13,094		$	9,967		$	679,676
Anthony J. Galici	2013	$	278,477	$	16,626		$	—	$	13,824		$	16,618	(5)	$	325,545
Vice President, Chief	2012	$	272,984	$	7,260	(10)	$	—	$	8,490	(10)	$	16,554		$	305,268
Financial Officer and Secretary of Griffin	2011	$	277,673	$	—		$	161,000	$	13,094		$	16,840		$	468,607
Thomas M. Lescalleet	2013	$	243,710	$	47,503		$	—	$	41,997		$	10,709	(6)	$	343,919
Senior Vice President,	2012	$	238,931	$	41,484		$	—	$	48,516		$	10,634		$	339,565
Griffin Land, LLC	2011	$	243,092	$	—		$	161,000	$	74,820		$	10,929		$	489,841
Gregory M. Schaan(9)	2013	$	249,323	$	—		$	—	$	—		$	12,278	(7)	$	261,601
Former President and	2012	$	244,800	$	—		$	—	$	—		$	7,552		$	252,352
Chief Executive Officer of Imperial	2011	$	253,661	$	—		$	161,000	$	—		$	7,670		$	422,331

(1): Fiscal 2011 was a 53-week year.
(2): Option award amounts represent the grant date fair value for options granted to each of the Named Executive Officers in fiscal 2011. The assumptions used in determining the grant date fair value of the option awards are set forth in Note 12 of Griffin's consolidated financial statements. Option awards are made at the discretion of the Compensation Committee. Stock options issued to employees vest in equal installments on the third, fourth and fifth anniversaries of the date of grant. Expense is recognized ratably in monthly increments over the three, four and five year vesting periods, and is based on the grant date fair value of the options. The grant date fair value does not change to reflect any subsequent changes in Griffin's stock price.
(3): Represents life insurance premiums of $192, matching contributions related to the Griffin 401(k) Savings Plan of $4,280 and matching contributions related to the Deferred Compensation Plan of $11,451.
(4): Represents life insurance premiums of $192, matching contributions related to the Griffin 401(k) Savings Plan of $4,666 and matching contributions related to the Deferred Compensation Plan of $5,362.
(5): Represents life insurance premiums of $365, matching contributions related to the Griffin 401(k) Savings Plan of $4,499, matching contributions related to the Deferred Compensation Plan of $3,754 and an automobile allowance of $8,000.

(6): Represents life insurance premiums of $192, matching contributions related to the Griffin 401(k) Savings Plan of $4,869, matching contributions related to the Deferred Compensation Plan of $2,348 and a medical insurance allowance of $3,300.
(7): Represents life insurance premiums of $192, matching contributions related to the Griffin 401(k) Savings Plan of $4,350, matching contributions related to the Deferred Compensation Plan of $3,028 and a payment for unused vacation of $4,708.
(8): Messrs. Gamzon and Galici are beneficiaries of the Corporate Incentive Plan. Mr. Lescalleet is a beneficiary of the Griffin Land Incentive Plan.
(9): Mr. Schaan resigned his position as President and CEO of Imperial effective January 8, 2014 in connection with the Imperial Transaction.
(10): In fiscal 2012, Messrs. Gamzon and Galici received incentive compensation payments from the Corporate Incentive Plan. The Corporate Incentive Plan incentive compensation pool was allocated 15% of the Griffin Land Incentive Plan incentive compensation pool which included an increase made at the discretion of the Compensation Committee. The portion of the Corporate Incentive Plan attributable to the Compensation Committee's discretionary increase is deemed to be a bonus rather than a performance-based incentive award; therefore, the 2012 Non-Equity Incentive Plan Compensation amount reported in Griffin's Annual Report on Form 10-K has been split between Bonus and Non-Equity Incentive Plan Compensation to conform to the fiscal 2013 reporting methodology. Total compensation as previously reported did not change. The Compensation Committee did not exercise its discretion to increase the Griffin Land Incentive Plan incentive compensation pool or the Corporate Incentive Plan compensation pool in fiscal 2011.

Grants of Plan-Based Awards

The following table presents information regarding the incentive awards granted to Griffin's Named Executive Officers for fiscal 2013.

	Estimated Future Payouts Under Non-Equity Incentive Plan Awards

						Option Awards: Number of Securities Underlying Options (#)				Grant Date Fair Value of Stock and Option Awards ($)
								Exercise Price of Option Awards ($/sh)	Closing Market Price on Grant Date ($/sh)
Name	Grant Date		Target ($)		Maximum ($)			Exercise Price of Option Awards ($/sh)	Closing Market Price on Grant Date ($/sh)
Frederick M. Danziger(1)		n/a	$	—	n/a		—	n/a	n/a	n/a
Michael S. Gamzon(1)		n/a	$	15,799	n/a		—	n/a	n/a	n/a
Anthony J. Galici(1)		n/a	$	13,824	n/a		—	n/a	n/a	n/a
Thomas M. Lescalleet(2)		n/a	$	41,997	$315,750		—	n/a	n/a	n/a
Gregory M. Schaan(3)		n/a	$	—	n/a		—	n/a	n/a	n/a

(1): There are no threshold, target or maximum levels under the Corporate Incentive Plan. The amounts of payments to Messrs. Danziger, Gamzon and Galici under the Corporate Incentive Plan, if any, depend on the performance of Griffin's operating businesses during the fiscal year. The amounts shown for Messrs. Danziger, Gamzon and Galici in the Target column reflect the amounts payable to them under the plan based on the performance of Griffin Land and Imperial in fiscal 2013 (excluding the portion of the award pursuant to the Corporate Incentive Plan attributable to Compensation Committee's discretionary increase in the Griffin Land Incentive Plan bonus pool). Mr. Danziger did not receive a formula-based award pursuant to the Corporate Incentive Plan. The Compensation Committee did not exercise its discretion to award Messrs. Danziger or Galici any additional incentive bonus for fiscal 2013.
(2): The Griffin Land Incentive Plan has no threshold or target levels; however, there is a maximum amount payable to Mr. Lescalleet under the Griffin Land Incentive Plan as shown in the

Maximum column. The amount in the Target column for Mr. Lescalleet reflects the amount payable of $39,497 based on Griffin Land's performance during fiscal 2013 and $2,500 of the $55,243 of incentive compensation, distributed at the discretion of the Compensation Committee, related to buildings built on speculation in Pennsylvania under the Griffin Land Incentive Plan for fiscal 2013. Such amount excludes Mr. Lescalleet's portion, $47,503, of the discretionary amount of $158,344 added by the Compensation Committee to the Griffin Land Incentive Plan incentive compensation pool for fiscal 2013. Mr. Lescalleet's maximum of $315,750 is calculated assuming all goals of the Griffin Land Incentive Plan are met at the maximum level of each, which would result in an accrual of $1,052,500 into the incentive compensation pool of the Griffin Land Incentive Plan. Mr. Lescalleet is entitled to 30% of the incentive compensation pool of the Griffin Land Incentive Plan.

(3): There are no threshold, target or maximum levels under the Imperial Incentive Plan. The amounts payable to Mr. Schaan under the Imperial Incentive Plan depend on the operating profit, if any, and achieving an operating cash flow, as calculated under the Imperial Incentive Plan, for the fiscal year. Based on Imperial's performance during fiscal 2013, Mr. Schaan was not eligible to receive any payout pursuant to the Imperial Incentive Plan. Therefore, the representative amount shown under the Target column for Mr. Schaan is $0.

Employment Agreement with Named Executive Officer

On December 30, 2013, Griffin and Imperial entered into an Amended and Restated Employment Agreement (the "Amended Employment Agreement") with Mr. Schaan, pursuant to which he agreed to serve as President of Imperial. The Amended Employment Agreement, which was effective as of November 30, 2013, amended and restated the employment agreement between Imperial and Mr. Schaan dated as of January 1, 2001, as amended on April 7, 2008. The initial term of the Amended Employment Agreement was expected to end on November 30, 2014 and the agreement was to renew automatically for one year on November 30, 2014 and each December 1 occurring in 2015 or thereafter, unless notice was given by either party at least sixty days prior to December 1. However, Mr. Schaan resigned as President and CEO of Imperial effective January 8, 2014 in connection with the Imperial Transaction.

The Amended Employment Agreement stated that Mr. Schaan's annual base salary was $249,700. The Employment Agreement also provided that Mr. Schaan was entitled to receive not less than 30% of Imperial's senior management incentive compensation pool as approved by the Compensation Committee. Mr. Schaan was also entitled to a term life insurance policy in an amount equal to Mr. Schaan's annual base salary. The Employment Agreement also prohibits Mr. Schaan from competing with Imperial for one year after his employment terminated. For a discussion of the termination provisions and payments thereunder, please see the discussion in "Potential Payments Upon Termination or Change in Control" below.

Outstanding Equity Awards at Fiscal Year-End

The following table presents information with respect to each unexercised stock option held by Griffin's Named Executive Officers as of November 30, 2013. There are no restricted stock awards.

	Option Awards(3)

Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price ($)		Option Expiration Date		Value of Unexercised In-the-Money Options at Fiscal Year End(1) ($) Exercisable			Value of Unexercised In-the-Money Options at Fiscal Year End(1) ($) Unexercisable
Frederick M. Danziger		10,000		5,000	$	33.07		1/20/2019	$	—	(2)	$	—	(2)
		—		25,000	$	28.77		1/19/2021	$	—		$	105,750


		10,000		30,000					$	—		$	105,750




Michael S. Gamzon		25,000		—	$	34.04		1/9/2018	$	—	(2)	$	—
		5,000		2,500	$	33.07		1/20/2019	$	—	(2)	$	—	(2)
		—		25,000	$	28.77		1/19/2021	$	—		$	105,750


		30,000		27,500					$	—		$	105,750




Anthony J. Galici		5,000		2,500	$	33.07		1/20/2019	$	—	(2)	$	—	(2)
		—		12,500	$	28.77		1/19/2021	$	—		$	52,875


		5,000		15,000					$	—		$	52,875




Thomas M. Lescalleet		5,000		2,500	$	33.07		1/20/2019	$	—	(2)	$	—	(2)
		—		12,500	$	28.77		1/19/2021	$	—		$	52,875


		5,000		15,000					$	—		$	52,875




Gregory M. Schaan(4)		5,000		2,500	$	33.07		1/20/2019	$	—	(2)	$	—	(2)
		—		12,500	$	28.77		1/19/2021	$	—		$	52,875


		5,000		15,000					$	—		$	52,875

(1): The amounts presented in this column have been calculated based upon the difference between the fair market value of $33.00 per share (the closing price of Griffin's common stock on November 29, 2013, the last business day of the fiscal year) and the exercise price of each stock option.
(2): There is no amount stated because the exercise price of the stock options is greater than the fair market value of $33.00 per share (the closing price of Griffin's common stock on November 29, 2013, the last business day of the fiscal year).
(3): Stock options issued to employees vest in equal installments on the third, fourth and fifth anniversaries from the date of the grant (which is ten years prior to the applicable option expiration date).
(4): Mr. Schaan resigned as President and CEO of Imperial effective January 8, 2014 in connection with the Imperial Transaction. As of the date of his resignation, Mr. Schaan held stock options to acquire 20,000 shares of Griffin's common stock. All such options, vested and not vested, were cancelled upon Mr. Schaan's resignation.

Non-Qualified Deferred Compensation

Griffin maintains a Deferred Compensation Plan for certain of its employees who, due to Internal Revenue Service guidelines, cannot take full advantage of the Griffin 401(k) Savings Plan. A portion of an eligible employee's salary may be deferred. The investment options in the Deferred Compensation Plan mirror those of the Griffin 401(k) Savings Plan. The Deferred Compensation Plan is unfunded, with benefits to be paid from Griffin's general assets. Performance results of an employee's balance in the Deferred Compensation Plan are based on the returns of the mutual funds selected by the employee as if the amounts deferred were invested in the selected mutual funds. Distributions from the Deferred Compensation Plan may occur at termination of employment and/or at the time of qualifying hardship events, as defined. The following table presents information with respect to defined contribution plans or other plans providing for deferral of compensation on a non-tax qualified basis for Griffin's Named Executive Officers as of November 30, 2013.

Name	Executive Contributions for FYE 11/30/2013		Griffin Contributions for FYE 11/30/2013(1)		Aggregate Earnings in FYE 11/30/2013		Aggregate Balance as of FYE 11/30/2013

Frederick M. Danziger	$	41,557	$	11,451	$	345,161	$	1,367,041
Michael S. Gamzon	$	22,530	$	5,362	$	36,610	$	169,638
Anthony J. Galici	$	30,813	$	3,754	$	114,558	$	599,156
Thomas M. Lescalleet	$	1,602	$	2,348	$	17,491	$	100,870
Gregory M. Schaan	$	32,716	$	3,028	$	144,159	$	628,561

(1): Griffin's contributions to the Deferred Compensation Plan are included in the "All Other Compensation" column of the Summary Compensation Table. No earnings from the Deferred Compensation Plan are included in the "All Other Compensation" column of the Summary Compensation Table.

Potential Payments Upon Termination or Change in Control

Mr. Schaan resigned in connection with the Imperial Transaction, effective January 8, 2014, and, under the terms of the Amended Employment Agreement, he was not entitled to any payments as a result of his resignation.

Director Compensation

The following table represents information regarding the compensation paid during fiscal 2013 to members of Griffin's Board of Directors who are not also employees (the "Non-Employee Directors"). The compensation paid to Mr. Frederick M. Danziger is presented above in the Summary Compensation Table and the related explanatory notes.

Name	Fees Earned or Paid in Cash ($)		Option Awards ($)			Total ($)

Winston J. Churchill, Jr.	$	46,796	$	17,495	(1)	$	64,291
David M. Danziger	$	32,000	$	17,495	(1)	$	49,495
Frederick M. Danziger	$	—	$	—		$	—
Thomas C. Israel	$	57,000	$	17,495	(1)	$	74,495
John J. Kirby, Jr.	$	32,000	$	17,495	(1)	$	49,495
Jonathan P. May	$	40,704	$	17,495	(1)	$	58,199
Albert H. Small, Jr.	$	47,204	$	17,495	(1)	$	64,699

(1): The amount shown for Option Awards reflects the grant date fair value of options granted in fiscal 2013. For a discussion of the assumptions and methodologies used to calculate the amounts referred to above, please see the discussion of stock option awards contained in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K in Note 12 of the Notes to Consolidated Financial Statements.

The following table represents the number of outstanding and unexercised stock option awards held by each of the Non-Employee Directors as of November 30, 2013:

Director		Number of Shares Subject to Outstanding Options as of 11/30/13

Winston J. Churchill, Jr.			13,961
David M. Danziger			7,277
Thomas C. Israel			13,961
John J. Kirby, Jr.			3,730
Jonathan P. May			3,222
Albert H. Small, Jr.			9,026

Members of the Board of Directors who are not employees of Griffin receive $25,000 per year and $1,000 for each Board or Committee meeting they attend. A non-employee Chairman of the Board of Directors receives an annual fee of $15,000. The Chairmen of the Audit and Compensation Committees each receive an annual fee of $10,000 per year. The Nominating Committee Chairman receives an annual fee of $5,000 per year. Audit and Compensation Committee members, excluding the Chairmen, each receive $5,000 per year for their service on the Committees. Members of the Nominating Committee, excluding the Chairman, each receive $2,500 per year for their service on the Committee. Annual retainers are paid in quarterly installments. Upon the initial election of a Non-Employee Director to the Board of Directors, the Non-Employee Director is granted options exercisable for shares of common stock at an exercise price that is the fair market value of a share of common stock at the time of the grant. The number of shares subject to options granted to Non-Employee Directors at the time of initial election to the Board of Directors is equal to $60,000 divided by the fair market value per share of Griffin common stock at the time of grant. The 2009 Stock Option Plan also provides that Non-Employee Directors annually receive options exercisable for shares of common stock at an exercise price that is the fair market value of a share of common stock

at the time of grant. Under the 2009 Stock Option Plan, the number of shares, subject to options, granted to Non-Employee Directors upon their reelection to the Board of Directors, is equal to $40,000 divided by the fair market value per share of Griffin common stock at the time of grant. In 2013, Griffin granted Messrs. Churchill, David M. Danziger, Israel, Kirby, May and Small each options exercisable for 1,352 shares of Common Stock at the time of their reelection to the Board of Directors. Griffin expects to grant additional options to its Non-Employee Directors in 2014 consistent with the 2009 Stock Option Plan.

Compensation Committee Interlocks and Insider Participation

During fiscal 2013, Messrs. Israel, Churchill and Small served as members of Griffin's Compensation Committee. No member of the Compensation Committee has been an officer or employee of Griffin. None of Griffin's executive officers have served as a director or member of the compensation committee of any entity whose executive officers served as a director of Griffin or as a member of Griffin's Compensation Committee.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table lists the number of shares and options to purchase shares of Common Stock of Griffin beneficially owned or held by: (i) each person known by Griffin to beneficially own more than 5% of the outstanding shares of Common Stock; (ii) each director; (iii) the Named Executive Officers (as defined in Item 11); and (iv) all directors and executive officers of Griffin, collectively. Unless otherwise indicated, information is provided as of January 31, 2014.

Name and Address(1)

Cullman and Ernst Group (3)	2,469,020	46.7
Frederick M. Danziger (3)	258,045	4.9
David M. Danziger (3)	470,089	8.9
Michael S. Gamzon (3)	121,989	2.3
John J. Kirby, Jr. (3)	3,378	*
Winston J. Churchill, Jr. SCP Partners 1200 Liberty Ridge Drive, Suite 300 Wayne, PA 19087	25,971	*
Thomas C. Israel Ingleside Investors 12 East 49th Street New York, NY 10017	36,971	*
Jonathan P. May The CarbonNeutral Company 10 East 40 ^th Street New York, NY 10128	1,870	*
Albert H. Small, Jr. 7311 Arrowood Road Bethesda, MD 20817	5,987	*
Anthony J. Galici Griffin Land & Nurseries, Inc. 90 Salmon Brook Street Granby, CT 06035	32,690	*
Thomas M. Lescalleet Griffin Land, LLC 204 West Newberry Road Bloomfield, CT 06002	14,167	*
Scott Bosco Griffin Land, LLC 204 West Newberry Road Bloomfield, CT 06002	9,167	*
Gabelli Funds, LLC et al(4) Gabelli Funds, LLC One Corporate Center Rye, NY 10580	1,698,271	32.1
All directors and executive officers collectively, consisting of 12 persons (5)	930,574	17.6

*: Less than 1%

(1): Unless otherwise indicated, the address of each person named in the table is 641 Lexington Avenue, New York, NY 10022.
(2): This information reflects the definition of beneficial ownership adopted by the Securities and Exchange Commission (the "Commission"). Beneficial ownership reflects sole investment and voting power, unless otherwise indicated in the footnotes to this table. Where more than one person shares investment and voting power in the same shares, such shares may be shown more than once. Such shares are reflected only once, however, in the total for all directors and executive officers. Includes stock options granted pursuant to the Griffin Stock Option Plan, as amended, that are exercisable within 60 days of January 31, 2014 as follows: Frederick M. Danziger—23,333 options; David M. Danziger—4,238 options; Michael S. Gamzon—40,833 options; John J. Kirby, Jr.—2,378 options; Winston J. Churchill, Jr.—10,922 options; Thomas C. Israel—10,922 options; Jonathan P. May—1,870 options; Albert H. Small, Jr.—5,987 options; Anthony J. Galici—11,667 options; Thomas M. Lescalleet—11,667 options; and Scott Bosco—9,167 options.
(3): Based on a Schedule 13D/A filed with the Commission on February 15, 2012 on behalf of the Cullman and Ernst Group and Griffin's records. Included in the shares held by the Cullman and Ernst Group are the following: 1,131,101 shares beneficially owned by Susan R. Cullman, of which she has sole voting and dispositive power with respect to 71,439 shares and shared voting and dispositive power with respect to 1,059,662 shares; 729,670 shares beneficially owned by Edgar M. Cullman, Jr., of which he has sole voting and dispositive power with respect to 132,522 shares and shared voting and dispositive power with respect to 597,148 shares; 719,802 shares beneficially owned by Louise B. Cullman, of which she has sole voting and dispositive power with respect to 18,410 shares and shared voting power and dispositive power with respect to 701,392 shares; 494,746 shares beneficially owned by Lucy C. Danziger, of which she has sole voting and dispositive power with respect to 60,322 shares and shared voting and dispositive power with respect to 434,424 shares; 405,381 shares beneficially owned by John Ernst, of which he has sole voting and dispositive power with respect to 7,349 shares and shared voting and dispositive power with respect to 398,032 shares; 258,045 shares beneficially owned by Frederick M. Danziger, of which he has sole voting and dispositive power with respect to 86,867 shares and shared voting and dispositive power with respect to 171,178 shares; 259,394 shares beneficially owned by Elissa F. Cullman, of which she has sole voting and dispositive power with respect to 14,850 shares and shared voting and dispositive power with respect to 244,544 shares; 233,792 shares beneficially owned by B Bros. Realty, LLC (of which Susan R. Cullman is a member), of which it has sole voting and dispositive power with respect to all such shares; 186,546 shares beneficially owned by Carolyn Sicher, of which she has sole voting and dispositive power with respect to 21,422 shares and shared voting and dispositive power with respect to 165,124 shares; 116,037 shares beneficially owned by Carolyn S. Fabrici, of which she has shared voting and dispositive power with respect to all such shares; 470,089 shares beneficially owned by David M. Danziger, of which he has sole voting and dispositive power with respect to 31,715 shares and shared voting and dispositive power with respect to 438,374 shares; 121,989 shares held by Michael S. Gamzon, of which he has sole voting and dispositive power with respect to 40,833 shares and shared voting and dispositive power with respect to 81,156 shares; 391,952 shares beneficially owned by Rebecca D. Gamzon, of which she has sole voting and dispositive power with respect to 10,550 shares and shared voting and dispositive power with respect to 381,402 shares; 58,731 shares beneficially owned by Alexandra Ernst, of which she has sole voting and dispositive power with respect to 1,748 shares and shared voting and dispositive power with respect to 56,983 shares; 45,134 shares beneficially owned by Jessica P. Ernst, of which she has sole voting and dispositive power with respect to 1,250 shares and shared voting and dispositive power with respect to 43,884 shares; 5,176 shares beneficially owned by Matthew Ernst, of which he has sole voting and dispositive power with respect to 1,650 shares and shared voting and dispositive power with respect to 3,526 shares; 44,580 shares beneficially owned by Margot P. Ernst, of which she has shared voting and dispositive power with respect to all such shares; 16,669 shares beneficially owned by Edgar M. Cullman III, of which he has sole voting and dispositive power with respect to all such shares; 13,594 shares beneficially owned by Samuel B. Cullman, of which he has sole voting and dispositive power with respect to all such shares; 9,550 shares beneficially owned by Georgina D. Cullman, of which she has sole voting and dispositive power with respect to all such shares; 21,138 shares beneficially owned by the Estate of Edgar M. Cullman (for which Lucy C. Danziger and Susan R. Cullman are executors) of which it has sole voting power with respect to all such shares; and 3,378 shares beneficially owned by John J. Kirby, Jr., of which he has sole voting and dispositive power with respect to all such shares.

The Schedule 13D/A states that there is no formal agreement governing the Group's holding and voting of shares held by members of the Cullman and Ernst Group but that there is an informal

understanding that the persons and entities included in the group will hold and vote together with shares owned by each of them in each case subject to any applicable fiduciary responsibilities.

(4): Griffin has received a copy of Schedule 13D/A as filed with the Commission by Gabelli Funds, LLC et al, reporting ownership of these shares as of December 5, 2013. As reported in said Schedule 13D/A, Gabelli Funds, LLC reports sole dispositive power with respect to 558,850 shares, GAMCO Asset Management Inc. ("GAMCO") reports sole voting power with respect to 984,142 of these shares and sole dispositive power with respect to 1,041,232 of these shares and Teton Advisors, Inc. ("Teton Advisors") reports sole voting and dispositive power with respect to 98,189 of these shares. The securities have been acquired by GGCP, Inc. ("GGCP"), and certain of its direct and indirect subsidiaries, including GAMCO Investors, Inc. ("GBL"), on behalf of their investment advisory clients. Mario Gabelli, as the controlling stockholder, Chief Executive Officer and a director of GGCP, Chairman and Chief Executive Officer of GBL, and the controlling shareholder of Teton Advisors, is deemed to have beneficial ownership of the shares owned beneficially by Gabelli Funds, LLC, GAMCO and Teton Advisors. GBL and GGCP are deemed to have beneficial ownership of the shares beneficially owned by each of the foregoing persons other than Mario Gabelli and the Gabelli Foundation, Inc. For the shares held by Gabelli Funds, LLC, with respect to the 50,000 shares held by the Gabelli Capital Asset Fund, the 55,500 shares held by the Gabelli Equity Trust, the 104,000 shares held by the Gabelli Asset Fund, the 132,000 shares held by the Gabelli Value Fund, the 207,350 shares held by the Gabelli Small Cap Growth Fund, and the 10,000 shares held by the Gabelli Equity Income Fund, the proxy voting committee of each such fund has taken and exercises in its sole discretion the entire voting power with respect to the shares held by such funds.
(5): Excluding shares held by certain charitable foundations, the officers and/or directors of which include certain officers and directors of Griffin.

Equity Compensation Plan Information

Plan Category		Number of securities to be issued upon exercise of outstanding options (a)			Weighted average exercise price of outstanding options (b)			Number of securities remaining available for future issuance under the equity compensation plan (excluding securities reflected in column (a)) (c)

Equity compensation plan approved by security holders			239,677		$	30.35			259,745

Note: There are no equity compensation plans that were not approved by security holders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.

Review and Approval of Related Person Transactions

Griffin reviews any relationships and transactions in which Griffin and its directors and executive officers or their immediate family members are participants to determine whether such persons have a direct or indirect material interest. Griffin's corporate staff is primarily responsible for the development and implementation of processes and controls to obtain information from the directors and executive officers with respect to related person transactions and for then determining, based on the facts and circumstances, whether Griffin or a related person has a direct or indirect material interest in the transaction. As required under SEC rules, transactions that are determined to be directly or indirectly material to Griffin or a related person are disclosed in Griffin's Annual Report on Form 10-K and proxy statement.

Board Independence

Under NASDAQ rules, an "independent director" of a company means a person who is not an officer or employee of the company or its subsidiaries and, in the opinion of the company's board of directors, does not have a relationship with the company that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board has determined that Messrs. Churchill, Israel, May and Small qualify as independent directors under NASDAQ rules. All of the members of the Audit, Compensation and Nominating Committees are independent directors.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

The following is a summary of the fees incurred by Griffin for professional services rendered by McGladrey LLP for fiscal 2013 and fiscal 2012:

	Fiscal 2013 Fees		Fiscal 2012 Fees

Audit fees	$	692,384	$	673,006
Audit-related fees		20,150		35,409
Tax fees		64,250		64,250
All other		—		—


	$	776,784	$	772,665

Audit fees consist of fees incurred for professional services rendered for the audit of Griffin's consolidated financial statements and for the review of Griffin's interim consolidated financial statements. Audit-related fees include fees incurred for professional services rendered for the audit of Griffin's 401(k) Savings Plan by McGladrey LLP. Tax fees consist of fees incurred for professional services performed by McGladrey LLP relating to tax compliance, tax reporting and tax planning. There were no consulting fees paid to McGladrey LLP in fiscal 2013 or fiscal 2012.

The Audit Committee's policy is to pre-approve all audit, audit-related and tax services to be provided by the independent registered public accountants. During fiscal 2013, Griffin's Audit Committee pre-approved all audit, audit-related and tax services. The Audit Committee has considered the non-audit services provided by McGladrey LLP and determined that the services provided were compatible with maintaining the independence of McGladrey LLP.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.


(a)(1)	Financial Statements of Griffin Land & Nurseries, Inc. See Item 8.
		Consolidated Balance Sheets as of November 30, 2013 and December 1, 2012	32
		Consolidated Statements of Operations for the Fiscal Years Ended November 30, 2013, December 1, 2012 and December 3, 2011	33
		Consolidated Statements of Comprehensive (Loss) Income for the Fiscal Years Ended November 30, 2013, December 1, 2012 and December 3, 2011	34
		Consolidated Statements of Changes in Stockholders' Equity for the Fiscal Years Ended November 30, 2013, December 1, 2012 and December 3, 2011	35
		Consolidated Statements of Cash Flows for the Fiscal Years Ended November 30, 2013, December 1, 2012 and December 3, 2011	36
		Notes to Consolidated Financial Statements	37
(a)(2)	Financial Statement Schedules
		II—Valuation and Qualifying Accounts and Reserves	S-1
		III—Real Estate and Accumulated Depreciation	S-2/S-3
(a)(3)	Exhibits

EXHIBIT INDEX

				Incorporated by Reference

Exhibit Number			Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed/ Furnished Herewith
	2.1		Asset Purchase Agreement, dated January 6, 2014, effective January 8, 2014, among Monrovia Connecticut LLC as Buyer, Monrovia Nursery Company as Guarantor, Imperial Nurseries, Inc. as Seller and Griffin Land & Nurseries, Inc. as Owner	8-K	001-12879	2.1	1/14/14
	2.2		Letter Agreement, dated January 6, 2014, among Imperial Nurseries, Inc., River Bend Holdings, LLC, Monrovia Connecticut LLC and Monrovia Nursery Company	8-K	001-12879	2.2	1/14/14
	3.1		Amended and Restated Certificate of Incorporation of Griffin Land & Nurseries, Inc.	10-Q	001-12879	3.1	10/10/13
	3.2		By-laws of Griffin Land & Nurseries, Inc.	10-Q	001-12879	3.2	10/10/13
	10.1	†	Form of 401(k) Plan of Griffin Land & Nurseries, Inc.	10	001-12879	10.7	4/8/97
	10.2	†	Griffin Land & Nurseries, Inc. 2009 Stock Option Plan						*
	10.3	†	Form of Stock Option Agreement under Griffin Land & Nurseries, Inc. 2009 Stock Option Plan						*
	10.4		Mortgage Deed, Security Agreement, Financing Statement and Fixture Filing with Absolute Assignment of Rents and Leases dated September 17, 2002 between Tradeport Development I, LLC and Farm Bureau Life Insurance Company	10-Q	001-12879	10.21	10/11/02
	10.5		Mortgage Deed and Security Agreement dated December 17, 2002 between Griffin Center Development IV, LLC and Webster Bank	10-K	001-12879	10.24	2/28/02

			Incorporated by Reference

Exhibit Number		Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed/ Furnished Herewith
	10.6	Secured Installment Note and First Amendment of Mortgage and Loan Documents dated April 16, 2004 among Tradeport Development I, LLC, and Griffin Land & Nurseries, Inc. and Farm Bureau Life Insurance Company	10-Q	001-12879	10.28	7/13/04
	10.7	Mortgage Deed Security Agreement, Fixture Filing, Financing Statement and Assignment of Leases and Rents dated July 6, 2005 by Tradeport Development II, LLC in favor of First Sunamerica Life Insurance Company	10-Q	001-12879	10.29	11/2/05
	10.8	Promissory Note dated July 6, 2005	10-Q	001-12879	10.30	11/2/05
	10.9	Guaranty Agreement as of July 6, 2005 by Griffin Land & Nurseries, Inc. in favor of Sunamerica Life Insurance Company	10-Q	001-12879	10.31	11/2/05
	10.10	Amended and Restated Mortgage Deed Security Agreement, Fixture Filing, Financing Statement and Assignment of Leases and Rents dated November 16, 2006 by Tradeport Development II, LLC in favor of First Sunamerica Life Insurance Company	10-K	001-12879	10.32	2/15/07
	10.11	Amended and Restated Promissory Note dated November 16, 2006	10-K	001-12879	10.33	2/15/07
	10.12	Guaranty Agreement as of November 16, 2006 by Griffin Land & Nurseries, Inc. in favor of Sunamerica Life Insurance Company	10-K	001-12879	10.34	2/15/07
	10.13	Construction Loan and Security Agreement dated February 6, 2009 by and between Tradeport Development III, LLC, Griffin Land & Nurseries, Inc., and Berkshire Bank	10-Q	001-12879	10.36	10/6/10
	10.14	$12,000,000 Construction Note dated February 6, 2009 (incorporated by reference to Form dated February 28, 2009, filed April 9, 2009)	10-Q	001-12879	10.37	4/9/09
	10.15	Loan and Security Agreement dated July 9, 2009 between Griffin Land & Nurseries, Inc. and People's United Bank	10-Q	001-12879	10.40	10/8/09

100

			Incorporated by Reference

Exhibit Number		Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed/ Furnished Herewith
	10.16	$10,500,000 Promissory Note dated July 9, 2009	10-Q	001-12879	10.41	10/8/09
	10.17	Mortgage and Security Agreement dated January 27, 2010 between Riverbend Crossings III Holdings, LLC and NewAlliance Bank	10-Q	001-12879	10.42	10/6/10
	10.18	$4,300,000 Promissory Note dated January 27, 2010	10-Q	001-12879	10.43	4/8/10
	10.19	First Modification of Promissory Note, Mortgage Deed and Security Agreement and Other Loan Documents between Riverbend Crossings III Holdings, LLC and New Alliance Bank dated October 27, 2010	10-K	001-12879	10.44	2/10/11
	10.20	Revolving Line of Credit Loan Agreement with Doral Bank, FSB dated April 28, 2011	10-Q	001-12879	10.45	7/7/11
	10.21	Open-End Mortgage and Security Agreement dated April 28, 2011 between Griffin Land & Nurseries, Inc., as Mortgagor and Doral Bank, FSB, as Mortgagee	10-Q	001-12879	10.46	7/7/11
	10.22	Open-End Mortgage and Security Agreement dated April 28, 2011 between Griffin Land & Nurseries, Inc., as Mortgagor and Doral Bank, FSB, as Mortgagee	10-Q	001-12879	10.47	7/7/11
	10.23	Third Modification Agreement between Griffin Center Development IV, LLC, Griffin Center Development V, LLC, Griffin Land & Nurseries, Inc. and Webster Bank, National Association dated June 15, 2012	8-K	001-12879	10.48	6/20/12
	10.24	Second Amendment to Mortgage Deed and Security Agreement and other Loan Documents between Riverbend Crossings III Holdings LLC and First Niagara Bank dated April 1, 2013	10-Q	001-12879	10.49	6/1/13
	10.25	Amended and Restated Term Note dated April 1, 2013	10-Q	001-12879	10.50	7/11/13

101

				Incorporated by Reference

Exhibit Number			Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed/ Furnished Herewith
	10.26		Revolving Line of Credit Loan Agreement with Webster Bank, N.A. dated April 24, 2013	10-Q	001-12879	10.51	6/1/13
	10.27		Revolving Line of Credit Note dated April 24, 2013	10-Q	001-12879	10.52	6/1/13
	10.28		Mortgage and Security Agreement between Riverbend Bethlehem Holdings I LLC and First Niagara Bank, N.A. effective August 28, 2013	10-Q	001-12879	10.53	10/10/13
	10.29		$9,100,000 Term Note effective August 28, 2013	10-Q	001-12879	10.54	10/10/13
	10.30	†	Amended and Restated Employment Agreement dated December 30, 2013 between Griffin Land & Nurseries, Inc., Imperial Nurseries, Inc. and Gregory Schaan	8-K	001-12879	10.55	1/2/14
	14		Griffin Land & Nurseries, Inc. Code of Ethics	10-K	001-12879	14	2/25/04
	21		Subsidiaries of Griffin Land & Nurseries, Inc.						*
	23.1		Consent of Independent Registered Public Accounting Firm						*
	31.1		Certifications of Chief Executive Officer Pursuant to Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended						*
	31.2		Certifications of Chief Financial Officer Pursuant to Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended						*
	32.1		Certifications of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350						**
	32.2		Certifications of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350						**
	101.INS		XBRL Instance Document						*
	101.SCH		XBRL Taxonomy Extension Schema Document						*
	101.CAL		XBRL Taxonomy Calculation Linkbase Document						*

102

			Incorporated by Reference

Exhibit Number		Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed/ Furnished Herewith
	101.LAB	XBRL Taxonomy Label Linkbase Document						*
	101.PRE	XBRL Taxonomy Presentation Linkbase Document						*
	101.DEF	XBRL Taxonomy Extension Definition Linkbase Document						*

†: A management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15(a)(3) of Form 10-K.
*: Filed herewith.
**: Furnished herewith.

103

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized as of February 13, 2014.


		GRIFFIN LAND & NURSERIES, INC.
		BY:		/s/ FREDERICK M. DANZIGER Frederick M. Danziger Chairman and Chief Executive Officer
		BY:		/s/ ANTHONY J. GALICI Anthony J. Galici Vice President, Chief Financial Officer and Secretary, Chief Accounting Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated as of February 13, 2014.

Name		Title


/s/ WINSTON J. CHURCHILL, JR. Winston J. Churchill, Jr.		Director
/s/ DAVID M. DANZIGER David M. Danziger		Director
/s/ FREDERICK M. DANZIGER Frederick M. Danziger		Chairman and Chief Executive Officer
/s/ ANTHONY J. GALICI Anthony J. Galici		Vice President, Chief Financial Officer and Secretary, Chief Accounting Officer
/s/ THOMAS C. ISRAEL Thomas C. Israel		Director
/s/ JOHN J. KIRBY, JR. John J. Kirby, Jr.		Director
/s/ JONATHAN P. MAY Jonathan P. May		Director
/s/ ALBERT H. SMALL, JR. Albert H. Small, Jr.		Director

104

Schedule II—Valuation and Qualifying Accounts and Reserves
(dollars in thousands)

Description	Balance at Beginning of Year							Balance at End of Year

For the fiscal year ended November 30, 2013
Reserves:
Uncollectible accounts—trade	$	128	37		13	44	(1)	$	134


Inventories	$	432	10,900		11	489	(2)	$	10,854


Valuation allowance on deferred tax assets	$	319	60		—	—		$	379


For the fiscal year ended December 1, 2012
Reserves:
Uncollectible accounts—trade	$	131	26		21	50	(1)	$	128


Inventories	$	1,242	380		55	1,245	(2)	$	432


Valuation allowance on deferred tax assets	$	290	29		—	—		$	319


For the fiscal year ended December 3, 2011
Reserves:
Uncollectible accounts—trade	$	148	1		13	31	(1)	$	131


Inventories	$	582	1,187		354	881	(2)	$	1,242


Valuation allowance on deferred tax assets	$	305	(15	)	—	—		$	290

Notes:

(1): Accounts receivable written off or reclassified.
(2): Inventories disposed.

S-1

Schedule III—Real Estate and Accumulated Depreciation

November 30, 2013

(dollars in thousands)

				Initial Cost				Cost Capitalized Subsequent to Acquisition Improvements		Gross Amount at November 30, 2013

Description	Encumbrances			Land		Bldg. & Improve.		Cost Capitalized Subsequent to Acquisition Improvements		Land		Land Improvements		Bldg. & Bldg. Improvements		Tenant Improvements		Development Cost		Total		Accumulated Depreciation			Date of Construction		Date of Acquisition		Depr. Life
Undeveloped Land	$	—		$	2,636	$	—	$	638	$	2,636	$	638	$	—	$	—	$	—	$	3,274	$	(215	)
New England Tradeport
Windsor/E. Granby, CT
Undeveloped portion		—			981		—		3,415		981		53		—		—		3,362		4,396		—
Industrial Buildings		7,869	(c)		8		—		4,582		8		492		3,748		342		—		4,590		(3,301	)		1978				40 yrs.
Industrial Building		—	(a)		4		1,722		891		4		751		1,835		27		—		2,617		(1,651	)		1982		1989		40 yrs.
Industrial Building		—	(a)		13		—		7,241		13		522		5,515		1,186		18		7,254		(1,516	)		2008				40 yrs.
Industrial Building		—			9		—		3,896		9		316		3,449		131		—		3,905		(1,831	)		1998				40 yrs.
Industrial Building		5,878			12		—		8,193		12		345		5,136		2,712		—		8,205		(5,190	)		1999				40 yrs.
Industrial Building			(a)		7		—		3,313		7		11		3,051		251		—		3,320		(1,334	)		2001				40 yrs.
Industrial Building		18,615			13		—		5,485		13		22		4,965		498		—		5,498		(1,909	)		2003				40 yrs.
Industrial Building		—	(a)		16		—		7,489		16		1		6,893		595		—		7,505		(2,315	)		2006				40 yrs.
Industrial Building		—	(a)		15		—		9,140		15		28		7,595		1,517		—		9,155		(3,654	)		2005				40 yrs.
Industrial Building		11,150			57		—		15,931		57		1,028		13,806		1,097		—		15,988		(2,251	)		2009				40 yrs.
Industrial Building		—			20		—		8,374		20		563		7,538		273		—		8,394		(1,566	)		2007				40 yrs.
Industrial Building		—			12		—		6,928		12		448		6,263		217		—		6,940		(1,393	)		2007				40 yrs.
Griffin Center
Windsor, CT
Undeveloped portion		—			333		—		889		333		—		—		—		889		1,222		—
Flex Building		3,603			19		—		8,202		19		145		8,057		—		—		8,221		(2,631	)		2001				40 yrs.
Restaurant Building		—			1		—		2,161		1		261		1,391		509		—		2,162		(1,296	)		1983				40 yrs.
Office Building		—	(b)		17		—		5,828		17		420		4,257		1,151		—		5,845		(2,551	)		2002				40 yrs.
Office Buildings		6,563	(c)		1,193		7,958		3,616		1,193		731		8,323		2,469		51		12,767		(4,508	)		1982/1987		2003		40 yrs.
Griffin Center South
Bloomfield, CT
Undeveloped portion		—			42		—		342		42		—		—		—		342		384		—
Office Building		—	(b)		5		—		3,938		5		576		2,801		560		1		3,943		(3,206	)		1977				40 yrs.
Office Building		—	(b)		4		—		2,771		4		263		1,962		546		—		2,775		(1,768	)		1985				40 yrs.
Office Building		—	(b)		2		—		1,980		2		384		1,466		130		—		1,982		(1,319	)		1988				40 yrs.
Office Building		—	(b)		2		—		1,534		2		189		1,345		—		—		1,536		(992	)		1989				40 yrs.
Industrial Building		—	(b)		1		—		765		1		86		679		—		—		766		(554	)		1988				40 yrs.
Office Buildings		—	(b)(d)		10		—		3,954		10		213		3,335		406		—		3,964		(2,147	)		1991				40 yrs.
Office Building		—	(b)		9		—		3,757		9		8		3,321		401		27		3,766		(1,467	)		2001				40 yrs.
Bloomfield, CT
Industrial Building		—			1,294		1,264		—		1,294		72		1,126		66		—		2,558		(280	)		1997		2007		40 yrs.
Breinigsville, PA
Industrial Building		3,961			832		4,560		—		832		349		3,990		221		—		5,392		(671	)				2010		40 yrs.
Lower Nazareth Township, PA
Industrial Building under construction		—			1,351		—		4,437		1,351		8		—		—		4,429		5,788		—
Industrial Building		9,069			721		9,209		1,974		721		1,359		9,003		821		—		11,904		(427	)		2012				40 yrs.
Hanover Township, PA
Undeveloped portion		—			7,360		—		439		7,360		—		—		—		439		7,799		—
Quincy, FL
Nursery Farm		—			279		—		9,484		279		4,089		5,395		—		—		9,763		(8,038	)				1959		20 yrs.
Simsbury, CT
Residential Development		—			201		—		6,354		201		—		—		—		6,354		6,555		—
Other		—			28		—		2,107		28		1,158		—		—		949		2,135		(1,097	)


Subtotal	$	66,708		$	17,507	$	24,713	$	150,048	$	17,507	$	15,529	$	126,245	$	16,126	$	16,861	$	192,268	$	(61,078	)

(a): Building included in mortgage listed on line above.
(b): Buildings included as collateral for a $12.5 million revolving line of credit.
(c): Includes two buildings.
(d): Includes three buildings.

S-2

Schedule III—Real Estate and Accumulated Depreciation (Continued)
(dollars in thousands)

Fiscal year ended November 30, 2013

	Cost			Reserve

Balance at beginning of year	$	180,671		$	(56,744	)
Changes during the year:
Additions to real estate assets		13,769			—
Additions to reserve charged to costs and expense		—			(5,545	)
Reclassification to real estate held for sale		(962	)		1
Writeoff of fully depreciated assets		(1,210	)		1,210


Balance at end of year	$	192,268		$	(61,078	)

Fiscal year ended December 1, 2012

	Cost			Reserve

Balance at beginning of year	$	168,160		$	(51,865	)
Changes during the year:
Additions to real estate assets		13,557			—
Additions to reserve charged to costs and expense		—			(5,237	)
Reclassification to real estate held for sale		(693	)		5
Writeoff of fully depreciated assets		(353	)		353


Balance at end of year	$	180,671		$	(56,744	)

Fiscal year ended December 3, 2011

	Cost			Reserve

Balance at beginning of year	$	178,995		$	(48,165	)
Changes during the year:
Additions to real estate assets		3,186			—
Additions to reserve charged to costs and expense		—			(5,632	)
Reclassification to real estate held for sale		(14,015	)		1,932
Cost of sales		(6	)		—


Balance at end of year	$	168,160		$	(51,865	)

S-3

Exhibit 10.2

GRIFFIN LAND & NURSERIES, INC.
2009 STOCK OPTION PLAN

ARTICLE 1.

PURPOSE

The purpose of the Griffin Land & Nurseries, Inc. 2009 Stock Option Plan (the “ Plan ”) is to promote the success and enhance the value of Griffin Land & Nurseries, Inc. (the “ Company ”) by linking the individual interests of the members of the Board, Employees, and Consultants to those of Company stockholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to Company stockholders. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of members of the Board, Employees, and Consultants upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent.

ARTICLE 2.

DEFINITIONS AND CONSTRUCTION

Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates.

2.1 “ Administrator ” shall mean the entity that conducts the general administration of the Plan as provided in Article 8. With reference to the duties of the Committee under the Plan which have been delegated to one or more persons pursuant to Section 8.6, or as to which the Board has assumed, the term “Administrator” shall refer to such person(s) unless the Committee or the Board has revoked such delegation or the Board has terminated the assumption of such duties.

2.2 “ Affiliate ” shall mean (a) a Subsidiary; and (b) any domestic eligible entity that is disregarded, under Treasury Regulation Section 301.7701-3, as an entity separate from either (i) the Company or (ii) any Subsidiary.

2.3 “ Annual Option ” shall mean an automatic Option to purchase shares of Stock granted to a Non-Employee Director who is reelected to the Board at any annual meeting of the Company’s stockholders, as provided in Section 5.6(a)(ii).

2.4 “ Award ” shall mean an Option which may be granted under the Plan.

2.5 “ Award Agreement ” shall mean any written notice, agreement, terms and conditions, contract or other instrument or document evidencing an Award, including through

electronic medium, which shall contain such terms and conditions with respect to an Award as the Administrator shall determine consistent with the Plan.

2.6 “ Award Limit ” shall mean the limit on Shares subject to Awards set forth in Section 3.3.

2.7 “ Board ” shall mean the Board of Directors of the Company.

2.8 “ Change in Control ” shall mean and includes each of the following:

(a) A transaction or series of transactions (other than an offering of Common Stock to the general public through a registration statement filed with the Securities and Exchange Commission) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its subsidiaries, an employee benefit plan maintained by the Company or any of its subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Company or the Cullman and Ernst Group) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of the Company’s securities outstanding immediately after such acquisition; or

(b) During any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new director(s) (other than a director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in Section 2.8(a) or Section 2.8(c)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or

(c) The consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Company’s assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:

(i) Which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such person, the “ Successor Entity ”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and

(ii) After which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided , however , that no person or group shall be treated for purposes of this Section 2.8(c)(ii) as beneficially owning 50% or more of combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction; or

(d) The Company’s stockholders approve a liquidation or dissolution of the Company.

In addition, if a Change in Control constitutes a payment event with respect to any Award which provides for the deferral of compensation and is subject to Section 409A of the Code, the transaction or event described in subsection (a), (b), (c) or (d) with respect to such Award must also constitute a “change in control event,” as defined in Treasury Regulation §1.409A-3(i)(5) to the extent required by Section 409A.

The Committee shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change in Control of the Company has occurred pursuant to the above definition, and the date of the occurrence of such Change in Control and any incidental matters relating thereto.

2.9 “ Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time, together with the regulations and official guidance promulgated thereunder.

2.10 “ Committee ” shall mean the Compensation Committee of the Board, or another committee or subcommittee of the Board, appointed as provided in Section 8.1.

2.11 “ Common Stock ” shall mean the common stock of the Company, par value $0.01 per share.

2.12 “ Company ” shall mean Griffin Land & Nurseries, Inc. , a Delaware corporation.

2.13 “ Consultant ” shall mean any consultant or adviser engaged to provide services to the Company or any Affiliate that qualifies as a consultant under the applicable rules of the Securities and Exchange Commission for registration of shares on a Form S-8 Registration Statement.

2.14 “ Covered Employee ” shall mean any Employee who is, or could be, a “covered employee” within the meaning of Section 162(m) of the Code.

2.15 “ Cullman and Ernst Group ” shall mean the group consisting of Edgar M. Cullman, Edgar M. Cullman, Jr., Susan R. Cullman, John L. Ernst, Frederick M. Danziger and the members of their families and trusts with respect to which they are the director or trustee, partnerships in which they own substantial interests and charitable foundations on whose boards of directors they sit.

2.16 “ Director ” shall mean a member of the Board, as constituted from time to time.

2.17 “ DRO ” shall mean a domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended from time to time, or the rules thereunder.

2.18 “ Effective Date ” shall mean the date the Plan is approved by the Board, subject to approval of the Plan by the Company’s stockholders.

2.19 “ Eligible Individual ” shall mean any person who is an Employee, a Consultant or a Non-Employee Director, as determined by the Committee.

2.20 “ Employee ” shall mean any officer or other employee (as determined in accordance with Section 3401(c) of the Code and the Treasury Regulations thereunder) of the Company or of any Affiliate.

2.21 “ Equity Restructuring ” shall mean a nonreciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the number or kind of shares of Common Stock (or other securities of the Company) or the share price of Common Stock (or other securities) and causes a change in the per share value of the Common Stock underlying outstanding Awards.

2.22 “ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended from time to time.

2.23 “ Fair Market Value ” shall mean, as of any given date, the value of a Share determined as follows:

(a) If the Common Stock is listed on any (i) established securities exchange (such as the New York Stock Exchange, the NASDAQ Global Market and the NASDAQ Global Select Market), (ii) national market system or (iii) automated quotation system on which the Shares are listed, quoted or traded, its Fair Market Value shall be the closing sales price for a share of Common Stock as quoted on such exchange or system for such date or, if there is no closing sales price for a share of Common Stock on the date in question, the closing sales price for a share of Common Stock on the last preceding date for which such quotation exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

(b) If the Common Stock is not listed on an established securities exchange, national market system or automated quotation system, but the Common Stock is regularly quoted by a recognized securities dealer, its Fair Market Value shall be the mean of the high bid and low asked prices for such date or, if there are no high bid and low asked prices for a share of Common Stock on such date, the high bid and low asked prices for a share of Common Stock on the last preceding date for which such information exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or

(c) If the Common Stock is neither listed on an established securities exchange, national market system or automated quotation system nor regularly quoted by a

recognized securities dealer, its Fair Market Value shall be established by the Administrator in good faith.

2.24 “ Greater Than 10% Stockholder” shall mean an individual then owning (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or any Affiliate corporation (as defined in Section 424(f) of the Code) or parent corporation thereof (as defined in Section 424(e) of the Code).

2.25 “ Holder ” shall mean a person who has been granted an Award.

2.26 “ Incentive Stock Option ” shall mean an Option that is intended to qualify as an incentive stock option and conforms to the applicable provisions of Section 422 of the Code.

2.27 “ Initial Option ” shall mean an automatic Option to purchase shares of Stock granted to a person who first becomes a Non-Employee Director, as provided in Section 5.6(a)(i).

2.28 “ Non-Employee Director ” shall mean a Director of the Company who is not an Employee.

2.29 “ Non-Qualified Stock Option ” shall mean an Option that is not an Incentive Stock Option.

2.30 “ Option ” shall mean a right to purchase Shares at a specified exercise price, granted under Article 5. An Option shall be either a Non-Qualified Stock Option or an Incentive Stock Option; provided , however , that Options granted to Non-Employee Directors and Consultants shall only be Non-Qualified Stock Options.

2.31 “ Permitted Transferee ” shall mean, with respect to a Holder, any “family member” of the Holder, as defined under the instructions to use of the Form S-8 Registration Statement under the Securities Act, after taking into account any state, federal, local or foreign tax and securities laws applicable to transferable Awards.

2.32 “ Plan ” shall mean this Griffin Land & Nurseries, Inc. 2009 Stock Option Plan, as it may be amended or restated from time to time.

2.33 “ Prior Plan ” shall mean the Griffin Land & Nurseries, Inc. 1997 Stock Option Plan, as it may be amended from time to time.

2.34 “ Program ” shall mean any program adopted by the Administrator pursuant to the Plan containing the terms and conditions intended to govern a specified type of Award granted under the Plan and pursuant to which such type of Award may be granted under the Plan.

2.35 “ Securities Act ” shall mean the Securities Act of 1933, as amended.

2.36 “ Shares ” shall mean shares of Common Stock.

2.37 “ Subsidiary ” shall mean any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities beginning with the Company if each of the entities other than the last entity in the unbroken chain beneficially owns, at the time of the determination, securities or interests representing more than fifty percent (50%) of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.

2.38 “ Substitute Award ” shall mean an Award granted under the Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by a company or other entity in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock; provided , however , that in no event shall the term “Substitute Award” be construed to refer to an award made in connection with the cancellation and repricing of an Option.

2.39 “ Termination of Service ” shall mean,

(a) As to a Consultant, the time when the engagement of a Holder as a Consultant to the Company or an Affiliate is terminated for any reason, with or without cause, including, without limitation, by resignation, discharge, death or retirement, but excluding terminations where the Consultant simultaneously commences or remains in employment or service with the Company or any Affiliate.

(b) As to a Non-Employee Director, the time when a Holder who is a Non-Employee Director ceases to be a Director for any reason, including, without limitation, a termination by resignation, failure to be elected, death or retirement, but excluding terminations where the Holder simultaneously commences or remains in employment or service with the Company or any Affiliate.

(c) As to an Employee, the time when the employee-employer relationship between a Holder and the Company or any Affiliate is terminated for any reason, including, without limitation, a termination by resignation, discharge, death, disability or retirement; but excluding terminations where the Holder simultaneously commences or remains in employment or service with the Company or any Affiliate.

The Administrator, in its sole discretion, shall determine the effect of all matters and questions relating to Terminations of Service, including, without limitation, the question of whether a Termination of Service resulted from a discharge for cause and all questions of whether particular leaves of absence constitute a Termination of Service; provided , however , that, with respect to Incentive Stock Options, unless the Administrator otherwise provides in the terms of the Program, the Award Agreement or otherwise, a leave of absence, change in status from an employee to an independent contractor or other change in the employee-employer relationship shall constitute a Termination of Service only if, and to the extent that, such leave of absence, change in status or other change interrupts employment for the purposes of Section 422(a)(2) of the Code and the then applicable regulations and revenue rulings under said Section. For purposes of the Plan, a Holder’s employee-employer relationship or consultancy relations shall be deemed to be terminated in the event that the Affiliate employing or contracting with

such Holder ceases to remain an Affiliate following any merger, sale of stock or other corporate transaction or event (including, without limitation, a spin-off).

ARTICLE 3.

SHARES SUBJECT TO THE PLAN

3.1 Number of Shares .

(a) Subject to Section 9.2 and Section 3.1(b), the aggregate number of Shares which may be issued or transferred pursuant to Awards under the Plan shall be the sum of: (i) 225,000 Shares and (ii) any Shares which as of the Effective Date are available for issuance under the Prior Plan and which following the Effective Date are not issued under the Prior Plan). Notwithstanding the foregoing, subject to Section 9.2 and Section 3.1(b), no more than 386,926 Shares may be delivered upon the exercise of Incentive Stock Options (which 386,926 Shares is equal to the sum of (A) 225,000 Shares and (B) 161,926 Shares (the number of Shares available for issuance and not subject to outstanding options under the Prior Plan as of the Effective Date)).

(b) To the extent that an Award terminates, expires, or lapses for any reason, or an Award is settled in cash without the delivery of shares to the Holder, then any Shares subject to the Award shall again be available for the grant of an Award pursuant to the Plan. To the extent permitted by applicable law or any exchange rule, Shares issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form of combination by the Company or any Affiliate shall not be counted against Shares available for grant pursuant to the Plan. Notwithstanding the provisions of this Section 3.1(b), no Shares may again be optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to qualify as an incentive stock option under Section 422 of the Code.

3.2 Stock Distributed . Any Shares distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Common Stock, treasury Common Stock or Common Stock purchased on the open market.

3.3 Limitation on Number of Shares Subject to Awards . Notwithstanding any provision in the Plan to the contrary, and subject to Section 8.2, the maximum aggregate number of Shares with respect to one or more Awards that may be granted to any one person during any fiscal year shall be 50,000.

ARTICLE 4.

GRANTING OF AWARDS

4.1 Participation. The Administrator may, from time to time, select from among all Eligible Individuals, those to whom an Award shall be granted and shall determine the nature and amount of each Award, which shall not be inconsistent with the requirements of the Plan. Except as provided in Section 5.6 regarding the automatic grant of options to Non-Employee

Directors, no Eligible Individual shall have any right to be granted an Award pursuant to the Plan.

4.2 Award Agreement . Each Award shall be evidenced by an Award Agreement. Award Agreements evidencing Incentive Stock Options shall contain such terms and conditions as may be necessary to meet the applicable provisions of Section 422 of the Code.

4.3 Limitations Applicable to Section 16 Persons . Notwithstanding any other provision of the Plan, the Plan, and any Award granted or awarded to any individual who is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including Rule 16b-3 of the Exchange Act and any amendments thereto) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

4.4 At-Will Employment . Nothing in the Plan or in any Program or Award Agreement hereunder shall confer upon any Holder any right to continue in the employ of, or as a Director or Consultant for, the Company or any Affiliate, or shall interfere with or restrict in any way the rights of the Company and any Affiliate, which rights are hereby expressly reserved, to discharge any Holder at any time for any reason whatsoever, with or without cause, and with or without notice, or to terminate or change all other terms and conditions of employment or engagement, except to the extent expressly provided otherwise in a written agreement between the Holder and the Company or any Affiliate.

4.5 Foreign Holders . Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in other countries in which the Company and its Subsidiaries may operate or have Employees, Non-Employee Directors or Consultants, or in order to comply with the requirements of any foreign securities exchange, the Administrator, in its sole discretion, shall have the power and authority to: (a) determine which Subsidiaries shall be covered by the Plan; (b) determine which Eligible Individuals outside the United States are eligible to participate in the Plan; (c) modify the terms and conditions of any Award granted to Eligible Individuals outside the United States to comply with applicable foreign laws or listing requirements of any such foreign securities exchange; (d) establish subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable (any such subplans and/or modifications shall be attached to the Plan as appendices); provided , however , that no such subplans and/or modifications shall increase the share limitations contained in Sections 3.1 and 3.3; and (e) take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals or listing requirements of any such foreign securities exchange. Notwithstanding the foregoing, the Administrator may not take any actions hereunder, and no Awards shall be granted, that would violate the Code, the Exchange Act, the Securities Act, any other securities law or governing statute, the rules of the securities exchange or automated quotation system on which the Shares are listed, quoted or traded or any other applicable law.

ARTICLE 5.

GRANTING OF OPTIONS

5.1 Granting of Options to Eligible Individuals . The Administrator is authorized to grant Options to Eligible Individuals from time to time, in its sole discretion, on such terms and conditions as it may determine which shall not be inconsistent with the Plan.

5.2 Qualification of Incentive Stock Options . No Incentive Stock Option shall be granted to any person who is not an Employee of the Company or any Affiliate corporation of the Company (as defined in Section 424(f) of the Code). No person who qualifies as a Greater Than 10% Stockholder may be granted an Incentive Stock Option unless such Incentive Stock Option conforms to the applicable provisions of Section 422 of the Code. Any Incentive Stock Option granted under the Plan may be modified by the Administrator, with the consent of the Holder, to disqualify such Option from treatment as an “incentive stock option” under Section 422 of the Code. To the extent that the aggregate fair market value of stock with respect to which “incentive stock options” (within the meaning of Section 422 of the Code, but without regard to Section 422(d) of the Code) are exercisable for the first time by a Holder during any calendar year under the Plan, and all other plans of the Company and any Affiliate or parent corporation thereof (each as defined in Section 424(f) and (e) of the Code, respectively), exceeds $100,000, the Options shall be treated as Non-Qualified Stock Options to the extent required by Section 422 of the Code. The rule set forth in the preceding sentence shall be applied by taking Options and other “incentive stock options” into account in the order in which they were granted and the Fair Market Value of stock shall be determined as of the time the respective options were granted.

5.3 Option Exercise Price . The exercise price per Share subject to each Option shall be set by the Administrator, but shall not be less than 100% of the Fair Market Value of a Share on the date the Option is granted (or, as to Incentive Stock Options, on the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code). In addition, in the case of Incentive Stock Options granted to a Greater Than 10% Stockholder, such price shall not be less than 110% of the Fair Market Value of a Share on the date the Option is granted (or the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code).

5.4 Option Term . The term of each Option shall be set by the Administrator in its sole discretion; provided , however , that the term shall not be more than ten (10) years from the date the Option is granted, or five (5) years from the date an Incentive Stock Option is granted to a Greater Than 10% Stockholder. The Administrator shall determine the time period, including the time period following a Termination of Service, during which the Holder has the right to exercise the vested Options, which time period may not extend beyond the term of the Option term. Except as limited by the requirements of Section 409A or Section 422 of the Code and regulations and rulings thereunder, the Administrator may extend the term of any outstanding Option, and may extend the time period during which vested Options may be exercised, in connection with any Termination of Service of the Holder, and may amend any other term or condition of such Option relating to such a Termination of Service.

5.5 Option Vesting .

(a) The period during which the right to exercise, in whole or in part, an Option vests in the Holder shall be set by the Administrator and the Administrator may determine that an Option may not be exercised in whole or in part for a specified period after it is granted. Such vesting may be based on service with the Company or any Affiliate or any other criteria selected by the Administrator. At any time after grant of an Option, the Administrator may, in its sole discretion and subject to whatever terms and conditions it selects, accelerate the period during which an Option vests.

(b) No portion of an Option which is unexercisable at a Holder’s Termination of Service shall thereafter become exercisable, except as may be otherwise provided by the Administrator either in the Program, the Award Agreement or by action of the Administrator following the grant of the Option.

5.6 Automatic Grants to Non-Employee Directors .

(a) During the term of the Plan, (i) a person who first becomes a Non-Employee Director following the Effective Date automatically shall be granted an Option to purchase that number (rounded down to the nearest whole number) of shares of Stock (subject to adjustment as provided in Section 7.3 of the Prior Plan) equal to the ratio of (A) $60,000 to (B) the Fair Market Value per share of Stock as of the date of such initial election or appointment (an “ Initial Option ”) and (ii) each Non-Employee Director who is reelected to the Board at any annual meeting of the Company’s stockholders following the Effective Date shall, as of the date of the applicable annual meeting, automatically be granted an Option to purchase that number (rounded down to the nearest whole number) of shares of Stock (subject to adjustment as provided in Section 7.3 of the Prior Plan) equal to the ratio of (A) $40,000 to (B) the Fair Market Value per share of Stock as of the date of such annual meeting (an “ Annual Option ”), provided , he or she continues to serve as a member of the Board as of such date. Members of the Board who are Employees of the Company who subsequently retire from the Company and remain on the Board will not receive an Initial Option grant but to the extent they are otherwise eligible, will receive, at each annual meeting of stockholders after his or her retirement from employment with the Company, an Annual Option grant.

(b) Options granted to Non-Employee Directors shall be Non-Qualified Stock Options. The exercise price per share of Stock subject to each Option granted to a Non-Employee Director shall equal 100% of the Fair Market Value of a share of common Stock on the date the Option is granted. Initial Options shall become fully exercisable upon the date of grant. Annual Options shall become fully exercisable upon the second anniversary of the date of grant. The term of each Option granted to a Non-Employee Director shall be 10 years from the date the Option is granted. Upon a Non-Employee Director’s termination of membership on the Board by reason of the Non-Employee Director’s death or permanent and total disability (within the meaning of Section 22(e)(3) of the Code), his or her Option granted under Section 5.6(a) shall remain exercisable for 12 months following his or her termination of membership on the Board. Upon a Non-Employee Director’s termination of membership on the Board for any reason other than the Independent’s death or by reason of his or her permanent and total

disability, his or her Option granted under Section 5.6(a) shall remain exercisable for 3 months following his or her termination of membership on the Board. Unless otherwise determined by the Board on or after the date of grant of such Option, no portion of an Option granted under Section 5.6(a) which is unexercisable at the time of a Non-Employee Director’s termination of membership on the Board shall thereafter become exercisable.

5.7 Substitute Awards . Notwithstanding the foregoing provisions of this Article 5 to the contrary, in the case of an Option that is a Substitute Award, the price per share of the shares subject to such Option may be less than the Fair Market Value per share on the date of grant, provided , that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate exercise price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Administrator) of the shares of the predecessor entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate exercise price of such shares.

ARTICLE 6.

EXERCISE OF OPTIONS

6.1 Partial Exercise . An exercisable Option may be exercised in whole or in part. However, an Option shall not be exercisable with respect to fractional shares and the Administrator may require that, by the terms of the Option, a partial exercise must be with respect to a minimum number of shares.

6.2 Manner of Exercise . All or a portion of an exercisable Option shall be deemed exercised upon delivery of all of the following to the Secretary of the Company, or such other person or entity designated by the Administrator, or his, her or its office, as applicable:

(a) A written or electronic notice complying with the applicable rules established by the Administrator stating that the Option, or a portion thereof, is exercised. The notice shall be signed by the Holder or other person then entitled to exercise the Option or such portion of the Option;

(b) Such representations and documents as the Administrator, in its sole discretion, deems necessary or advisable to effect compliance with all applicable provisions of the Securities Act and any other federal, state or foreign securities laws or regulations, the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded or any other applicable law. The Administrator may, in its sole discretion, also take whatever additional actions it deems appropriate to effect such compliance including, without limitation, placing legends on share certificates and issuing stop-transfer notices to agents and registrars;

(c) In the event that the Option shall be exercised pursuant to Section 7.3 by any person or persons other than the Holder, appropriate proof of the right of such person or persons to exercise the Option, as determined in the sole discretion of the Administrator; and

(d) Full payment of the exercise price and applicable withholding taxes to the stock administrator of the Company for the shares with respect to which the Option, or portion thereof, is exercised, in a manner permitted by Section 7.1 and 7.2.

6.3 Notification Regarding Disposition . The Holder shall give the Company prompt written or electronic notice of any disposition of shares of Common Stock acquired by exercise of an Incentive Stock Option which occurs within (a) two years from the date of granting (including the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code) such Option to such Holder, or (b) one year after the transfer of such shares to such Holder.

ARTICLE 7.

ADDITIONAL TERMS OF AWARDS

7.1 Payment . The Administrator shall determine the methods by which payments by any Holder with respect to any Awards granted under the Plan shall be made, including, without limitation: (a) cash or check, (b) Shares (including, in the case of payment of the exercise price of an Award, Shares issuable pursuant to the exercise of the Award) or shares of Common Stock held for such period of time as may be required by the Administrator in order to avoid adverse accounting consequences, in each case, having a Fair Market Value on the date of delivery equal to the aggregate payments required, (c) delivery of a written or electronic notice that the Holder has placed a market sell order with a broker with respect to Shares then issuable upon exercise or vesting of an Award, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate payments required; provided , that payment of such proceeds is then made to the Company upon settlement of such sale, or (d) other form of legal consideration acceptable to the Administrator. The Administrator shall also determine the methods by which Shares shall be delivered or deemed to be delivered to Holders. Notwithstanding any other provision of the Plan to the contrary, no Holder who is a Director or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to make payment with respect to any Awards granted under the Plan, or continue any extension of credit with respect to such payment with a loan from the Company or a loan arranged by the Company in violation of Section 13(k) of the Exchange Act.

7.2 Tax Withholding . The Company or any Affiliate shall have the authority and the right to deduct or withhold, or require a Holder to remit to the Company, an amount sufficient to satisfy federal, state, local and foreign taxes (including the Holder’s FICA or employment tax obligation) required by law to be withheld with respect to any taxable event concerning a Holder arising as a result of the Plan. The Administrator may in its sole discretion and in satisfaction of the foregoing requirement allow a Holder to elect to have the Company withhold Shares otherwise issuable under an Award (or allow the surrender of

Shares). The number of Shares which may be so withheld or surrendered shall be limited to the number of shares which have a fair market value on the date of withholding or repurchase equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such supplemental taxable income. The Administrator shall determine the fair market value of the Shares, consistent with applicable provisions of the Code, for tax withholding obligations due in connection with a broker-assisted cashless Option exercise involving the sale of shares to pay the Option exercise price or any tax withholding obligation.

7.3 Transferability of Awards .

(a) Except as otherwise provided in Section 7.3(b):

(i) No Award under the Plan may be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution or, subject to the consent of the Administrator, pursuant to a DRO, unless and until such Award has been exercised, or the shares underlying such Award have been issued, and all restrictions applicable to such shares have lapsed;

(ii) No Award or interest or right therein shall be liable for the debts, contracts or engagements of the Holder or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence; and

(iii) During the lifetime of the Holder, only the Holder may exercise an Award (or any portion thereof) granted to him under the Plan, unless it has been disposed of pursuant to a DRO; after the death of the Holder, any exercisable portion of an Award may, prior to the time when such portion becomes unexercisable under the Plan or the applicable Program or Award Agreement, be exercised by his personal representative or by any person empowered to do so under the deceased Holder’s will or under the then applicable laws of descent and distribution.

(b) Notwithstanding Section 7.3(a), the Administrator, in its sole discretion, may determine to permit a Holder to transfer an Award other than an Incentive Stock Option to any one or more Permitted Transferees (as defined below), subject to the following terms and conditions: (i) an Award transferred to a Permitted Transferee shall not be assignable or transferable by the Permitted Transferee other than by will or the laws of descent and distribution; (ii) an Award transferred to a Permitted Transferee shall continue to be subject to all the terms and conditions of the Award as applicable to the original Holder (other than the ability to further transfer the Award); and (iii) the Holder and the Permitted Transferee shall execute any and all documents requested by the Administrator, including, without limitation documents to (A) confirm the status of the transferee as a Permitted Transferee, (B) satisfy any requirements

for an exemption for the transfer under applicable federal, state and foreign securities laws and (C) evidence the transfer.

(c) Notwithstanding Section 7.3(a), a Holder may, in the manner determined by the Administrator, designate a beneficiary to exercise the rights of the Holder and to receive any distribution with respect to any Award upon the Holder’s death. A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Program or Award Agreement applicable to the Holder, except to the extent the Plan, the Program and the Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Administrator. If the Holder is married and resides in a community property state, a designation of a person other than the Holder’s spouse as his or her beneficiary with respect to more than 50% of the Holder’s interest in the Award shall not be effective without the prior written or electronic consent of the Holder’s spouse. If no beneficiary has been designated or survives the Holder, payment shall be made to the person entitled thereto pursuant to the Holder’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Holder at any time provided the change or revocation is filed with the Administrator prior to the Holder’s death.

7.4 Conditions to Issuance of Shares .

(a) Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates or make any book entries evidencing Shares pursuant to the exercise of any Award, unless and until the Board or the Committee has determined, with advice of counsel, that the issuance of such shares is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the Shares are listed or traded, and the Shares are covered by an effective registration statement or applicable exemption from registration. In addition to the terms and conditions provided herein, the Board or the Committee may require that a Holder make such reasonable covenants, agreements, and representations as the Board or the Committee, in its discretion, deems advisable in order to comply with any such laws, regulations, or requirements.

(b) All Share certificates delivered pursuant to the Plan and all shares issued pursuant to book entry procedures are subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with federal, state, or foreign securities or other laws, rules and regulations and the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted, or traded. The Administrator may place legends on any Share certificate or book entry to reference restrictions applicable to the Shares.

(c) The Administrator shall have the right to require any Holder to comply with any timing or other restrictions with respect to the settlement, distribution or exercise of any Award, including a window-period limitation, as may be imposed in the sole discretion of the Administrator.

(d) No fractional Shares shall be issued and the Administrator shall determine, in its sole discretion, whether cash shall be given in lieu of fractional shares or whether such fractional shares shall be eliminated by rounding down.

(e) Notwithstanding any other provision of the Plan, unless otherwise determined by the Administrator or required by any applicable law, rule or regulation, the Company shall, in its discretion, either (i) deliver to any Holder certificates evidencing Shares issued in connection with any Award, or (ii) record such Shares in the books of the Company (or, as applicable, its transfer agent or stock plan administrator).

7.5 Forfeiture Provisions . Pursuant to its general authority to determine the terms and conditions applicable to Awards under the Plan, the Administrator shall have the right to provide, in the terms of Awards made under the Plan, or to require a Holder to agree by separate written or electronic instrument, that: (a)(i) any proceeds, gains or other economic benefit actually or constructively received by the Holder upon any receipt or exercise of the Award, or upon the receipt or resale of any Shares underlying the Award, must be paid to the Company, and (ii) the Award shall terminate and any unexercised portion of the Award (whether or not vested) shall be forfeited, if (b)(i) a Termination of Service occurs prior to a specified date, or within a specified time period following receipt or exercise of the Award, or (ii) the Holder at any time, or during a specified time period, engages in any activity in competition with the Company, or which is inimical, contrary or harmful to the interests of the Company, as further defined by the Administrator or (iii) the Holder incurs a Termination of Service for “cause” (as such term is defined in the sole discretion of the Administrator, or as set forth in a written agreement relating to such Award between the Company and the Holder).

7.6 Prohibition on Repricing . Subject to Section 9.2, the Administrator shall not, without the approval of the stockholders of the Company, (i) authorize the amendment of any outstanding Option to reduce its price per share, or (ii) cancel any Option in exchange for cash or another Award when the Option price per share exceeds the Fair Market Value of the underlying Shares. Subject to Section 9.2, the Administrator shall have the authority, without the approval of the stockholders of the Company, to amend any outstanding award to increase the price per share or to cancel and replace an Award with the grant of an Award having a price per share that is greater than or equal to the price per share of the original Award.

ARTICLE 8.

ADMINISTRATION

8.1 Administrator . The Compensation Committee (or another committee or a subcommittee of the Board assuming the functions of the Committee under the Plan) shall administer the Plan (except as otherwise permitted herein) and, unless otherwise determined by the Board, shall consist solely of two or more Non-Employee Directors appointed by and holding office at the pleasure of the Board, each of whom is intended to qualify as both a “non-employee director” as defined by Rule 16b-3 of the Exchange Act or any successor rule, an “outside director” for purposes of Section 162(m) of the Code and an “independent director” under the rules of any securities exchange or automated quotation system on which the Shares

are listed, quoted or traded; provided , that any action taken by the Committee shall be valid and effective, whether or not members of the Committee at the time of such action are later determined not to have satisfied the requirements for membership set forth in this Section 8.l or otherwise provided in any charter of the Committee. Except as may otherwise be provided in any charter of the Committee, appointment of Committee members shall be effective upon acceptance of appointment. Committee members may resign at any time by delivering written or electronic notice to the Board. Vacancies in the Committee may only be filled by the Board. Notwithstanding the foregoing, (a) the full Board, acting by a majority of its members in office, shall conduct the general administration of the Plan with respect to Awards granted to Non-Employee Directors and (b) the Board or Committee may delegate its authority hereunder to the extent permitted by Section 8.6.

8.2 Duties and Powers of Committee . It shall be the duty of the Committee to conduct the general administration of the Plan in accordance with its provisions. The Committee shall have the power to interpret the Plan, the Program and the Award Agreement, and to adopt such rules for the administration, interpretation and application of the Plan as are not inconsistent therewith, to interpret, amend or revoke any such rules and to amend any Program or Award Agreement provided that the rights or obligations of the Holder of the Award that is the subject of any such Program or Award Agreement are not affected adversely by such amendment, unless the consent of the Holder is obtained or such amendment is otherwise permitted under Section 9.10. Any such grant or award under the Plan need not be the same with respect to each Holder. Any such interpretations and rules with respect to Incentive Stock Options shall be consistent with the provisions of Section 422 of the Code. In its sole discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan except with respect to matters which under Rule 16b-3 under the Exchange Act or any successor rule, or Section 162(m) of the Code, or any regulations or rules issued thereunder, or the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded are required to be determined in the sole discretion of the Committee.

8.3 Action by the Committee . Unless otherwise established by the Board or in any charter of the Committee, a majority of the Committee shall constitute a quorum and the acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing by all members of the Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Affiliate, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.

8.4 Authority of Administrator . Subject to any specific designation in the Plan, the Administrator has the exclusive power, authority and sole discretion to:

(a) Designate Eligible Individuals to receive Awards;

(b) Determine the type or types of Awards to be granted to each Eligible Individual;

(d) Determine the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, or purchase price, any performance criteria, any reload provision, any restrictions or limitations on the Award, any schedule for vesting, lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, and any provisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as the Administrator in its sole discretion determines;

(e) Determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered;

(f) Prescribe the form of each Award Agreement, which need not be identical for each Holder;

(g) Decide all other matters that must be determined in connection with an Award;

(h) Establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan;

(i) Interpret the terms of, and any matter arising pursuant to, the Plan, any Program or any Award Agreement; and

(j) Make all other decisions and determinations that may be required pursuant to the Plan or as the Administrator deems necessary or advisable to administer the Plan.

8.5 Decisions Binding . The Administrator’s interpretation of the Plan, any Awards granted pursuant to the Plan, any Program, any Award Agreement and all decisions and determinations by the Administrator with respect to the Plan are final, binding, and conclusive on all parties.

8.6 Delegation of Authority . To the extent permitted by applicable law or the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded, the Board or Committee may from time to time delegate to a committee of one or more members of the Board or one or more officers of the Company the authority to grant or amend Awards or to take other administrative actions pursuant to Article 8; provided , however , that in no event shall an officer of the Company be delegated the authority to grant

awards to, or amend awards held by, the following individuals: (a) individuals who are subject to Section 16 of the Exchange Act, (b) Covered Employees, or (c) officers of the Company (or Directors) to whom authority to grant or amend Awards has been delegated hereunder; provided further , that any delegation of administrative authority shall only be permitted to the extent it is permissible under Section 162(m) of the Code and applicable securities laws or the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded. Any delegation hereunder shall be subject to the restrictions and limits that the Board or Committee specifies at the time of such delegation, and the Board may at any time rescind the authority so delegated or appoint a new delegatee. At all times, the delegatee appointed under this Section 8.6 shall serve in such capacity at the pleasure of the Board and the Committee.

ARTICLE 9.

MISCELLANEOUS PROVISIONS

9.1 Amendment, Suspension or Termination of the Plan . Except as otherwise provided in this Section 9.1, the Plan may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Board or the Committee. However, without approval of the Company’s stockholders given within twelve (12) months before or after the action by the Administrator, no action of the Administrator may, except as provided in Section 9.2, (i) increase the limits imposed in Section 3.1 on the maximum number of shares which may be issued under the Plan, or (ii) reduce the price per share of any outstanding Option granted under the Plan, or (iii) cancel any Option in exchange for cash or another Award when the Option price per share exceeds the Fair Market Value of the underlying Shares. Except as provided in Section 9.10, no amendment, suspension or termination of the Plan shall, without the consent of the Holder, impair any rights or obligations under any Award theretofore granted or awarded, unless the Award itself otherwise expressly so provides. No Awards may be granted or awarded during any period of suspension or after termination of the Plan, and in no event may any Award be granted under the Plan after the tenth (10 th ) anniversary of the Effective Date.

9.2 Changes in Common Stock or Assets of the Company, Acquisition or Liquidation of the Company and Other Corporate Events .

(a) In the event of any stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of the Company’s stock or the share price of the Company’s stock other than an Equity Restructuring, the Administrator shall make equitable adjustments, if any, to reflect such change with respect to (i) the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Section 3.1 on the maximum number and kind of shares which may be issued under the Plan and adjustments of the Award Limit); (ii) the number and kind of shares of Common Stock (or other securities or property) subject to outstanding Awards; (iii) the number and kind of shares of Common Stock (or other securities or property) for which automatic grants are subsequently to be made to new and continuing Non-Employee

Directors pursuant to Section 5.6; (iv) the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto); and (v) the grant or exercise price per share for any outstanding Awards under the Plan.

(b) In the event of any transaction or event described in Section 9.2(a) or any unusual or nonrecurring transactions or events affecting the Company, any Affiliate of the Company, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations or accounting principles, the Administrator, in its sole discretion, and on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event and either automatically or upon the Holder’s request, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any Award under the Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles:

(i) To provide for either (A) termination of any such Award in exchange for an amount of cash, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Holder’s rights (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction or event described in this Section 9.2 the Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Holder’s rights, then such Award may be terminated by the Company without payment) or (B) the replacement of such Award with other rights or property selected by the Administrator in its sole discretion having an aggregate value not exceeding the amount that could have been attained upon the exercise of such Award or realization of the Holder’s rights had such Award been currently exercisable or payable or fully vested;

(ii) To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices;

(iii) To make adjustments in the number and type of shares of the Company’s stock (or other securities or property) subject to outstanding Awards and Awards which may be granted in the future;

(iv) To provide that such Award shall be exercisable or payable or fully vested with respect to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the applicable Program or Award Agreement; and

(v) To provide that the Award cannot vest, be exercised or become payable after such event.

(c) In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in Sections 9.2(a) and 9.2(b):

(i) The number and type of securities subject to each outstanding Award and the exercise price or grant price thereof, if applicable, shall be equitably adjusted; and/or

(ii) The Administrator shall make such equitable adjustments, if any, as the Administrator in its discretion may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Section 3.1 on the maximum number and kind of shares which may be issued under the Plan and adjustments of the Award Limit. ) The adjustments provided under this Section 9.2(c) shall be nondiscretionary and shall be final and binding on the affected Holder and the Company.

(d) Notwithstanding any other provision of the Plan, in the event of a Change in Control, each outstanding Award shall be assumed or an equivalent Award substituted by the successor corporation or a parent or subsidiary of the successor corporation. In the event an Award is assumed or an equivalent Award substituted, and a Holder has a Termination of Service upon or within twelve (12) months following the Change in Control, then such Holder shall be fully vested in such assumed or substituted Award.

(e) In the event that the successor corporation in a Change in Control refuses to assume or substitute for the Award, the Administrator may cause any or all of such Awards to become fully exercisable immediately prior to the consummation of such transaction and all forfeiture restrictions on any or all of such Awards to lapse. If an Award is exercisable in lieu of assumption or substitution in the event of a Change in Control, the Administrator shall notify the Holder that the Award shall be fully exercisable for a period of fifteen (15) days from the date of such notice, contingent upon the occurrence of the Change in Control, and the Award shall terminate upon the expiration of such period.

(f) For the purposes of this Section 9.2, an Award shall be considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for each share of Common Stock subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) received in the Change in Control by holders of Common Stock for each share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided , however , that if such consideration received in the Change in Control was not solely common stock of the successor corporation or its parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Award, for each share of Common Stock subject to an Award, to be solely common stock of the successor corporation or its parent equal in fair market value to the per share consideration received by holders of Common Stock in the Change in Control.

(g) The Administrator may, in its sole discretion, include such further provisions and limitations in any Award, agreement or certificate, as it may deem equitable and in the best interests of the Company that are not inconsistent with the provisions of the Plan.

(h) No adjustment or action described in this Section 9.2 or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause the Plan to violate Section 422(b)(1) of the Code. Furthermore, no such adjustment or action shall be authorized to the extent such adjustment or action would result in short-swing profits liability under Section 16 or violate the exemptive conditions of Rule 16b-3 unless the Administrator determines that the Award is not to comply with such exemptive conditions.

(i) The existence of the Plan, the Program, the Award Agreement and the Awards granted hereunder shall not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

(j) No action shall be taken under this Section 9.2 which shall cause an Award to fail to comply with Section 409A of the Code or the Treasury Regulations thereunder, to the extent applicable to such Award.

(k) In the event of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of Common Stock or the share price of the Common Stock including any Equity Restructuring, for reasons of administrative convenience, the Company in its sole discretion may refuse to permit the exercise of any Award during a period of thirty (30) days prior to the consummation of any such transaction.

9.3 Approval of Plan by Stockholders . The Plan will be submitted for the approval of the Company’s stockholders within twelve (12) months after the date of the Board’s initial adoption of the Plan. Awards may be granted or awarded prior to such stockholder approval, provided that such Awards shall not be exercisable, shall not vest and the restrictions thereon shall not lapse and no shares of Common Stock shall be issued pursuant thereto prior to the time when the Plan is approved by the stockholders, and provided further that if such approval has not been obtained at the end of said twelve (12) month period, all Awards previously granted or awarded under the Plan shall thereupon be canceled and become null and void.

9.4 No Stockholders Rights . Except as otherwise provided herein, a Holder shall have none of the rights of a stockholder with respect to shares of Common Stock covered by any Award until the Holder becomes the record owner of such shares of Common Stock.

9.5 Paperless Administration . In the event that the Company establishes, for itself or using the services of a third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Holder may be permitted through the use of such an automated system.

9.6 Effect of Plan upon Other Compensation Plans . The adoption of the Plan shall not affect any other compensation or incentive plans in effect for the Company or any Affiliate. Nothing in the Plan shall be construed to limit the right of the Company or any Affiliate: (a) to establish any other forms of incentives or compensation for Employees, Directors or Consultants of the Company or any Affiliate, or (b) to grant or assume options or other rights or awards otherwise than under the Plan in connection with any proper corporate purpose including without limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation, partnership, limited liability company, firm or association.

9.7 Compliance with Laws . The Plan, the granting and vesting of Awards under the Plan and the issuance and delivery of Shares and the payment of money under the Plan or under Awards granted or awarded hereunder are subject to compliance with all applicable federal, state, local and foreign laws, rules and regulations (including but not limited to state, federal and foreign securities law and margin requirements), the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded, and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. Any securities delivered under the Plan shall be subject to such restrictions, and the person acquiring such securities shall, if requested by the Company, provide such assurances and representations to the Company as the Company may deem necessary or desirable to assure compliance with all applicable legal requirements. To the extent permitted by applicable law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

9.8 Titles and Headings, References to Sections of the Code or Exchange Act . The titles and headings of the Sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control. References to sections of the Code or the Exchange Act shall include any amendment or successor thereto.

9.9 Governing Law . The Plan and any agreements hereunder shall be administered, interpreted and enforced under the internal laws of the State of Delaware without regard to conflicts of laws thereof.

9.10 Section 409A . To the extent that the Administrator determines that any Award granted under the Plan is subject to Section 409A of the Code, the Program pursuant to which such Award is granted and the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A of the Code. To the extent applicable, the Plan, the Program and any Award Agreements shall be interpreted in accordance with Section 409A

of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event that following the Effective Date the Administrator determines that any Award may be subject to Section 409A of the Code and related Department of Treasury guidance (including such Department of Treasury guidance as may be issued after the Effective Date), the Administrator may adopt such amendments to the Plan and the applicable Program and Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance and thereby avoid the application of any penalty taxes under such Section.

9.11 No Rights to Awards . No Eligible Individual or other person shall have any claim to be granted any Award pursuant to the Plan, and neither the Company nor the Administrator is obligated to treat Eligible Individuals, Holders or any other persons uniformly.

9.12 Indemnification . To the extent allowable pursuant to applicable law, each member of the Committee or of the Board shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

9.13 Relationship to other Benefits . No payment pursuant to the Plan shall be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Affiliate except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.

9.14 Expenses . The expenses of administering the Plan shall be borne by the Company and its Subsidiaries.

* * * * *

I hereby certify that the foregoing Plan was duly adopted by the Board of Directors of Griffin Land & Nurseries, Inc. on April 3, 2009.

* * * * *

I hereby certify that the foregoing Plan was approved by the stockholders of Griffin Land & Nurseries, Inc. on May 12, 2009.

Executed on this 12th day of May, 2009.

	/s/ Anthony J. Galici
	Anthony J. Galici
	Corporate Secretary

Exhibit 10.3

Forms of Stock Option Agreement under Griffin Land & Nurseries, Inc. 2009 Stock Option Plan

FORM OF STOCK OPTION AGREEMENT - INCENTIVE STOCK OPTION AGREEMENT

THIS AGREEMENT, dated is made by and between Griffin Land & Nurseries, Inc., a Delaware corporation hereinafter referred to as “Company,” and , an employee of the Company or a Subsidiary of the Company, hereinafter referred to as “Employee”:

WHEREAS, the Company wishes to afford the Employee the opportunity to purchase shares of its $.01 par value Common Stock; and

WHEREAS, the Company wishes to carry out the Plan (the terms of which are hereby incorporated by reference and made a part of this Agreement); and

WHEREAS, the Committee, appointed to administer the Plan, has determined that it would be to the advantage and best interest of the Company and its shareholders to grant the Incentive Stock Option provided for herein to the Employee as an inducement to enter into or remain in the service of the Company or its Subsidiaries and as an incentive for increased efforts during such service, and has advised the Company thereof and instructed the undersigned officers to issue said Option;

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto do hereby agree as follows:

ARTICLE I

DEFINITIONS

Whenever the following terms are used in this Agreement, they shall have the meaning specified below unless the context clearly indicates to the contrary. The masculine pronoun shall include the feminine and neuter, and the singular the plural, where the context so indicates. All capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Plan.

Section 1.1 - Board

“Board” shall mean the Board of Directors of the Company.

Section 1.2 - Code

“Code” shall mean the Internal Revenue Code of 1986, as amended.

Section 1.3 - Committee

“Committee” shall mean the Compensation Committee of the Board, or another committee of the Board, appointed as provided in Section 6.1 of the Plan.

Section 1.4 - Company

“Company” shall mean Griffin Land & Nurseries, Inc. a Delaware corporation.

Section 1.5 - Director

“Director” shall mean a member of the Board.

Section 1.6 - Exchange Act

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

Section 1.7 - Option

“Option” shall mean the incentive stock option to purchase Common Stock of the Company granted under this Agreement.

Section 1.8 - Plan

“Plan” shall mean the Griffin Land & Nurseries, Inc. 2009 Stock Option Plan.

Section 1.9 - Rule 16b-3

“Rule 16b-3” shall mean that certain Rule 16b-3 under the Exchange Act, as such Rule may be amended from time to time.

Section 1.10 - Secretary

“Secretary” shall mean the Secretary of the Company.

Section 1.11 - Securities Act

“Securities Act” shall mean the Securities Act of 1933, as amended.

Section 1.12 - Subsidiary

“Subsidiary” shall mean any corporation in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain then owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one (1) of the other corporations in such chain.

Section 1.13 - Termination of Employment

“Termination of Employment” shall mean the time when the employee-employer relationship between the Employee and the Company or any Subsidiary is terminated for any reason, with or without cause, including, but not by way of limitation, a termination by resignation, discharge, death, disability or retirement; but excluding (i) terminations where there is a simultaneous reemployment or continuing employment of the Employee by the Company or any Subsidiary, (ii) at the discretion of the Committee, terminations which result in a temporary severance of the employee-employer relationship, and (iii) at the discretion of the Committee, terminations which are followed by the simultaneous establishment of a consulting relationship by the Company or a Subsidiary with the former employee. The Committee, in its absolute discretion, shall determine the effect of all matters and questions relating to Termination of Employment, including, but not by way of limitation, the question of whether a Termination of Employment resulted from a discharge for good cause, and all questions of whether particular leaves of absence constitute Terminations of Employment; provided , however , that, unless otherwise determined by the Committee in its discretion, a leave of absence, change in status from an employee to an independent contractor or other change in the employee-employer relationship shall constitute a Termination of Employment if, and to the extent that, such leave of absence, change in status or other change interrupts employment for the purposes of Section 422(a)(2) of the Code and the then applicable regulations and revenue rulings under said Section. Notwithstanding any other provision of this Agreement or of the Plan, the Company or any Subsidiary has an absolute and unrestricted right to terminate the Employee’s employment at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in writing.

ARTICLE II

GRANT OF OPTION

Section 2.1 - Grant of Option

In consideration of the Employee’s agreement to remain in the employ of the Company or its Subsidiaries and for other good and valuable consideration, on the date hereof the Company irrevocably grants to the Employee the option to purchase any part or all of an aggregate of shares of its $.01 par value Common Stock upon the terms and conditions set forth in this Agreement.

Section 2.2 - Purchase Price

The purchase price of the shares of stock covered by the Option shall be $ per share without commission or other charge.

Section 2.3 - Consideration to Company

In consideration of the granting of this Option by the Company, the Employee agrees to render faithful and efficient services to the Company or a Subsidiary, with such duties and responsibilities as the Company shall from time to time prescribe, for a period of at least one (1) year from the date this Option is granted. Nothing in this Agreement or in the Plan shall confer upon the Employee any right to continue in the employ of the Company or any Subsidiary, or as a director of the Company, or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which are hereby expressly reserved, to discharge the Employee at any time for any reason whatsoever, with or without cause.

Section 2.4 - Adjustments in Option

The Committee shall make adjustments with respect to the Option in accordance with the provisions of Section 7.3 of the Plan; provided , however , that each such adjustment shall be made in such manner as not to constitute a “modification” within the meaning of Section 424(h)(3) of the Code, unless the Optionee consents to an adjustment which would constitute such a “modification.”

ARTICLE III

PERIOD OF EXERCISABILITY

Section 3.1 - Commencement of Exercisability

(a) Subject to subsection (b), Sections 3.4, 3.5 and 5.6, the Option shall become exercisable in three (3) cumulative annual installments as follows:

(i) The first installment shall consist of of the shares covered by the Option and shall become exercisable on the third anniversary of the date the Option is granted.

(ii) The second installment shall consist of of the shares covered by the Option and shall become exercisable on the fourth anniversary of the date the Option is granted.

(iii) The third installment shall consist of of the shares covered by the Option and shall become exercisable on the fifth anniversary of the date the Option is granted.

(b) No portion of the Option which is unexercisable at Termination of Employment shall thereafter become exercisable.

Section 3.2 - Duration of Exercisability

The installments provided for in Section 3.1 are cumulative. Each such installment which becomes exercisable pursuant to Section 3.1 shall remain exercisable until it becomes unexercisable under Section 3.3.

Section 3.3 - Expiration of Option

The Option may not be exercised to any extent by anyone after the first to occur of the following events:

(a) The expiration of ten (10) years from the date the Option was granted; or

(b) If the Employee owned (within the meaning of Section 424(d) of the Code), at the time the Option was granted, more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Subsidiary or parent corporation thereof (within the meaning of Section 422 of the Code), the expiration of five (5) years from the date the Option was granted; or

(c) The time of the Employee’s Termination of Employment unless such Termination of Employment results from his death, his retirement, his disability (within the meaning of Section 22(e)(3) of the Code) or his being discharged not for good cause; or

(d) The expiration of three (3) months from the date of the Employee’s Termination of Employment by reason of his retirement or his being discharged not for good cause, unless the Employee dies within said three-month period; or

(e) The expiration of one (1) year from the date of the Employee’s Termination of Employment by reason of his disability (within the meaning of Section 22(e)(3) of the Code); or

(f) The expiration of one (1) year from the date of the Employee’s death; or

(g) The effective date of either the merger or consolidation of the Company with or into another corporation, or the exchange of all or substantially all of the assets of the Company for the securities of another corporation, or the acquisition by another corporation or person of all or substantially all of the Company’s assets or eighty percent (80%) or more of the Company’s then outstanding voting stock, or the liquidation or dissolution of the Company, unless the Option is, in connection with such transaction, to be assumed by the successor or survivor corporation (or a parent or subsidiary thereof) or unless the Committee waives this provision in connection with such transaction. At least ten (10) days prior to the effective date of such merger, consolidation, exchange, acquisition, liquidation or dissolution, the Committee shall give the Employee notice of such event if the Option has then neither been fully exercised nor become unexercisable under this Section 3.3.

Section 3.4 - Acceleration of Exercisability

In the event of the merger or consolidation of the Company with or into another corporation, or the exchange of all or substantially all of the assets of the Company for the securities of another corporation, or the acquisition by another corporation or person of all or substantially all of the Company’s assets or eighty percent (80%) or more of the Company’s then outstanding voting stock, or the liquidation or dissolution of the Company, the Committee may, in its absolute discretion and upon such terms and conditions as it deems appropriate, provide by resolution, adopted prior to such event and incorporated in the notice referred to in Section 3.3(g), that at some time prior to the effective date of such event this Option shall be exercisable as to all the shares covered hereby, notwithstanding that this Option may not yet have become fully exercisable under Section 3.1(a); provided , however , that this acceleration of exercisability shall not take place if:

(a) This Option becomes unexercisable under Section 3.3 prior to said effective date; or

(b) In connection with such an event, provision is made for an assumption of this Option or a substitution therefor of a new option by an employer corporation, or a parent or subsidiary of such corporation, so that such assumption or substitution complies with the provisions of Section 424(a) of the Code; and

provided , further , that nothing in this Section 3.4 shall make this Option exercisable if it is otherwise unexercisable by reason of Section 5.6.

The Committee may make such determinations and adopt such rules and conditions as it, in its absolute discretion, deems appropriate in connection with such acceleration of exercisability, including, but not by way of limitation, provisions to ensure that any such acceleration and resulting exercise shall be conditioned upon the consummation of the contemplated corporate transaction, and determinations regarding whether provisions for assumption or substitution have been made as defined in subsection (b) above.

Section 3.5 - Special Tax Consequences

The Employee acknowledges that, to the extent that the aggregate Fair Market Value of stock with respect to which “incentive stock options” (within the meaning of Section 422 of the Code, but without regard to Section 422(d) of the Code), including the Option, are exercisable for the first time by the Employee during any calendar year (under the Plan and all other incentive stock option plans of the Company, any Subsidiary and any parent corporation thereof (within the meaning of Section 422 of the Code)) exceeds $100,000, such options shall be treated as Non-Qualified Options to the extent required by Section 422 of the Code. The Employee further acknowledges that the rule set forth in the preceding sentence shall be applied by taking options into account in the order in which they were granted. For purposes of these rules, the Fair Market Value of stock shall be determined as of the time the option with respect to such stock is granted.

ARTICLE IV

EXERCISE OF OPTION

Section 4.1 - Person Eligible to Exercise

During the lifetime of the Employee, only he may exercise the Option or any portion thereof. After the death of the Employee, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be exercised by his personal representative or by any person empowered to do so under the deceased Employee’s will or under the then applicable laws of descent and distribution.

Section 4.2 - Partial Exercise

Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.3; provided , however , that each partial exercise shall be for not less than one hundred (100) shares (or the minimum installment set forth in Section 3.1, if a smaller number of shares) and shall be for whole shares only.

Section 4.3 - Manner of Exercise

The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary or his office of all of the following prior to the time when the Option or such portion becomes unexercisable under Section 3.3:

(a) A written notice complying with the applicable rules established by the Committee stating that the Option, or a portion thereof, is exercised. The notice shall be signed by the Employee or other person then entitled to exercise the Option or such portion; and

(b) (i) Full cash payment to the Secretary of the Company for the shares with respect to which such Option or portion is exercised; or

(ii) With the consent of the Committee, (A) shares of the Company’s Common Stock owned by the Employee, duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option or exercised portion thereof, or (B) shares of the Company’s Common Stock issuable to the Employee upon exercise of the Option, with a Fair Market Value on the date of exercise of the Option or any portion thereof equal to the aggregate exercise price of the Option or exercised portion thereof; or

(iii) With the consent of the Committee, a full recourse promissory note bearing interest (at no less than such rate as shall then preclude the imputation of interest under the Code or successor provision) and payable upon such terms as may be prescribed by the Committee. The Committee may also prescribe the form of such note and the security to be given for such note. The Option may not be exercised, however, by delivery of a promissory note or by a loan from the Company when or where such loan or other extension of credit is prohibited by law; or

(iv) With the consent of the Committee, property of any kind which constitutes good and valuable consideration; or

(v) With the consent of the Committee, a notice that the Employee has placed a market sell order with a broker with respect to shares of the Company’s Common Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price; or

(vi) With the consent of the Committee, any combination of the consideration provided in the foregoing subparagraphs (i), (ii), (iii), (iv) and (v); and

(c) A bona fide written representation and agreement, in a form satisfactory to the Committee, signed by the Employee or other person then entitled to exercise such Option or portion, stating that the shares of stock are being acquired for his own account, for investment and without any present intention of distributing or reselling said shares or any of them except as may be permitted under the Securities Act and then applicable rules and regulations thereunder, and that the Employee or other person then entitled to exercise such Option or portion will indemnify the Company against and hold it free and harmless from any loss, damage, expense or liability resulting to the Company if any sale or distribution of the shares by such person is contrary to the representation and agreement referred to above. The Committee may, in its absolute discretion, take whatever additional actions it deems appropriate to insure the observance and performance of such representation and agreement and to effect compliance with the Securities Act and any other federal or state securities laws or regulations. Without limiting the generality of the foregoing, the Committee may require an opinion of counsel acceptable to it to the effect that any subsequent transfer of shares acquired on an Option exercise does not violate the Securities Act, and may issue stop-transfer orders covering such shares. Share certificates evidencing stock issued on exercise of this Option shall bear an appropriate legend referring to the provisions of this subsection (c) and the agreements herein. The written representation and agreement referred to in the first sentence of this subsection (c) shall, however, not be required if the shares to be issued pursuant to such exercise have been registered under the Securities Act, and such registration is then effective in respect of such shares;

(d) Full payment to the Company (or other employer corporation) of all amounts which, under federal, state or local tax law, it is required to withhold upon exercise of the Option; with the consent of the Committee, (i) shares of the Company’s Common Stock owned by the Employee, duly endorsed for transfer, with a Fair Market Value on the date of delivery equal to the sums required to be withheld, or (ii) shares of the Company’s Common Stock issuable to the Employee upon exercise of the Option with a Fair Market Value on the date of exercise of the Option or any portion thereof equal to the sums required to be withheld, may be used to make all or part of such payment; and

(e) In the event the Option or portion shall be exercised pursuant to Section 4.1 by any person or persons other than the Employee, appropriate proof of the right of such person or persons to exercise the Option.

Section 4.4 - Conditions to Issuance of Stock Certificates

The shares of stock deliverable upon the exercise of the Option, or any portion thereof, may be either previously authorized but unissued shares or issued shares which have then been reacquired by the Company. Such shares shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any certificate or certificates for shares of stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions:

(a) The admission of such shares to listing on all stock exchanges on which such class of stock is then listed; and

(b) The completion of any registration or other qualification of such shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Committee shall, in its absolute discretion, deem necessary or advisable; and

(c) The obtaining of any approval or other clearance from any state or federal governmental agency which the Committee shall, in its absolute discretion, determine to be necessary or advisable; and

(d) The receipt by the Company of full payment for such shares, including payment of all amounts which, under federal, state or local tax law, the Company (or other employer corporation) is required to withhold upon exercise of the Option; and

(e) The lapse of such reasonable period of time following the exercise of the Option as the Committee may from time to time establish for reasons of administrative convenience.

Section 4.5 - Rights as Shareholder

The holder of the Option shall not be, nor have any of the rights or privileges of, a shareholder of the Company in respect of any shares purchasable upon the exercise of any part of the Option unless and until certificates representing such shares shall have been issued by the Company to such holder.

ARTICLE V

OTHER PROVISIONS

Section 5.1 - Administration

The Committee shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee in good faith shall be final and binding upon the Employee, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or the Option. Any such interpretations and rules with respect to incentive stock options shall be consistent with the provisions of Section 422 of the Code. In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan and this Agreement except with respect to matters which under Rule 16b-3 or Section 162(m) of the Code, or any regulations or rules issued thereunder, are required to be determined in the sole discretion of the Committee.

Section 5.2 - Option Not Transferable

Neither the Option nor any interest or right therein or part thereof shall be sold, pledged, assigned, or transferred in any manner other than by will or the laws of descent and distribution, unless and until such Option has been exercised, or the shares underlying such Option have been issued, and all restrictions applicable to such shares have lapsed. Neither the Option nor any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Employee or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.

Section 5.3 - Shares to Be Reserved

The Company shall at all times during the term of the Option reserve and keep available such number of shares of stock as will be sufficient to satisfy the requirements of this Agreement.

Section 5.4 - Notices

Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of its Secretary, and any notice to be given to the Employee shall be addressed to him at the address given beneath his signature hereto. By a notice given pursuant to this Section 5.4, either party may hereafter designate a different address for notices to be given to him. Any notice which is required to be given to the Employee shall, if the Employee is then deceased, be given to the Employee’s personal representative if such representative has previously informed the Company of his status and address by written notice under this Section 5.4. Any notice shall be deemed duly given when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service; provided , however , that any notice to be given by the Optionee relating to the exercise of the Option or any portion thereof shall be deemed duly given upon receipt by the Secretary or his office.

Section 5.5 - Titles

Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

Section 5.6 - Notification of Disposition

The Employee shall give prompt notice to the Company of any disposition or other transfer of any shares of stock acquired under this Agreement if such disposition or transfer is made (a) within two (2) years from the date of granting the Option with respect to such shares or (b) within one (1) year after the transfer of such shares to him. Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by the Employee in such disposition or other transfer.

Section 5.7 - Construction

This Agreement shall be administered, interpreted and enforced under the internal laws of the State of Delaware without regard to conflicts of laws thereof.

Section 5.8 - Conformity to Securities Laws

The Employee acknowledges that the Plan is intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, including, without limitation, the applicable exemptive conditions of Rule 16b-3. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Option is granted and may be exercised, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

Section 5.9 - Amendments

This Agreement and the Plan may be amended without the consent of the Optionee, provided that no amendment of this Agreement shall, without the consent of the Optionee, impair any rights of the Optionee under this Agreement.

[signature page follows]

IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto.

		GRIFFIN LAND & NURSERIES, INC.


	By



Employee




Address


Employee’s Taxpayer
Identification Number:

FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT —EXECUTIVE OFFICERS

THIS AGREEMENT, dated , is made by and between Griffin Land & Nurseries, Inc., a Delaware corporation hereinafter referred to as “Company,” and , an employee of the Company or a Subsidiary of the Company, hereinafter referred to as “Optionee”:

WHEREAS, the Company wishes to afford the Optionee the opportunity to purchase shares of its $0.01 par value Common Stock; and

WHEREAS, the Company wishes to carry out the Plan (the terms of which are hereby incorporated by reference and made a part of this Agreement); and

WHEREAS, the Committee, appointed to administer the Plan, has determined that it would be to the advantage and best interest of the Company and its shareholders to grant the Non-Qualified Option provided for herein to the Optionee as an inducement to enter into or remain in the service of the Company or its Subsidiaries and as an incentive for increased efforts during such service, and has advised the Company thereof and instructed the undersigned officers to issue said Option;

ARTICLE I

DEFINITIONS

Section 1.1 - Board

“Board” shall mean the Board of Directors of the Company.

Section 1.2 - Code

“Code” shall mean the Internal Revenue Code of 1986, as amended.

Section 1.3 - Committee

“Committee” shall mean the Compensation Committee of the Board, or another committee of the Board, appointed as provided in Section 6.1 of the Plan.

Section 1.4 — Company

“Company” shall mean Griffin Land & Nurseries, Inc., a Delaware corporation .

Section 1.5 Cullman Group

“Cullman Group” shall mean the group consisting of Edgar M. Cullman, Edgar M. Cullman, Jr., Susan R. Cullman, John L. Ernst, Frederick M. Danziger and the members of their families and trusts for their benefit, partnerships in which they own substantial interests and charitable foundations on whose boards of directors they sit.

Section 1.6 - Director

“Director” shall mean a member of the Board.

Section 1.7 - Exchange Act

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

Section 1.8 - Option

“Option” shall mean the non-qualified options to purchase Common Stock of the Company granted under this Agreement.

Section 1.9 - Plan

“Plan” shall mean the Griffin Land & Nurseries, Inc. 2009 Stock Option Plan in each case as in effect on the date of grant of the options incorporated herein.

Section 1.10 - Rule 16b-3

“Rule 16b-3” shall mean that certain Rule 16b-3 under the Exchange Act, as such Rule may be amended from time to time.

Section 1.11 - Secretary

“Secretary” shall mean the Secretary of the Company.

Section 1.12 - Securities Act

“Securities Act” shall mean the Securities Act of 1933, as amended.

Section 1.13 — Subsidiary

“Subsidiary” shall mean any corporation in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain then owns stock possessing fifty percent (50%) or more of other total combined voting power of all classes of stock in one (1) of the other corporations in such chain.

Section 1.14 — Termination of Employment

“Termination of Employment” shall mean the time when the employee-employer relationship between the Optionee and the Company or any Subsidiary is terminated for any reason, with or without case, including, but not by way of limitation, a termination by resignation, discharge, death, disability or retirement; but excluding (i) terminations where there is a simultaneous reemployment or continuing employment of the Optionee by the Company or any Subsidiary, (ii) at the discretion of the Committee, terminations which result in a temporary severance of the employee-employer relationship, and (iii) at the discretion of the Committee, terminations which are followed by the simultaneous establishment of a consulting relationship by the Company or a Subsidiary with the former employee. The Committee, in its absolute discretion, shall determine the effect of all matters and questions relating to Termination of Employment, including, but not by way of limitation, the question of whether a Termination of Employment resulted from a discharge for good cause, and all questions of whether particular leaves of absence constitute Terminations of Employment. Notwithstanding any other provision of this agreement or of the Plan, the Company or any Subsidiary has an absolute and unrestricted right to terminate the Optionee’s employment at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in writing.

ARTICLE II

GRANT OF OPTION

Section 2.1 - Grant of Option

In consideration of the Optionee’s agreement to remain in the employ of the Company or its Subsidiaries and for other good and valuable consideration, on the date hereof the Company irrevocably grants to the Optionee the option to purchase any part or all of an aggregate of shares of its $0.01 par value Common Stock upon the terms and conditions set forth in this Agreement.

Section 2.2 - Purchase Price

The purchase price of the shares of stock covered by this Option shall be $ per share without commission or other charge.

Section 2.3 - Consideration to Company

In consideration of the granting of this Option by the Company, the Optionee agrees to render faithful and efficient services to the Company, with such duties and responsibilities as the Company shall from time to time prescribe, for a period of at least one (1) year from the date this Option is granted. Nothing in this Agreement or in the Plan shall confer upon the Optionee any right to continue in the employ of the Company or any Subsidiary, or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which are hereby expressly reserved, to discharge the Optionee at any time for any reason whatsoever, with or without cause.

Section 2.4 - Adjustments in Option

The Committee shall make adjustments with respect to the Option in accordance with the provisions of Section 7.3 of the Plan.

ARTICLE III

PERIOD OF EXERCISABILITY

Section 3.1 - Commencement of Exercisability

(a) Subject to subsection (b), Section 3.4 and Section 5.6, the Option shall become exercisable in three (3) cumulative annual installments as follows:

(i) The first installment shall consist of of the shares covered by the Option and shall become exercisable on the third anniversary of the date the Option is granted.

(ii) The second installment shall consist of of the shares covered by the Option and shall become exercisable on the fourth anniversary of the date the Option is granted.

(iii) The third installment shall consist of of the shares covered by the Option and shall become exercisable on the fifth anniversary of the date the Option is granted.

(b) No portion of the Options which are unexercisable at Termination of Employment shall thereafter become exercisable.

Section 3.2 - Duration of Exercisability

Section 3.3 - Expiration of Option

The Option may not be exercised to any extent by anyone after the first to occur of the following events:

(a) The expiration of ten (10) years from the date each Option was granted; or

(b) The time of the Optionee’s Termination of Employment unless such Termination of Employment by reason of his retirement or his being discharged not for good cause, unless the Optionee dies within said three-month period; or

(c) The expiration of three (3) months from the date of the Optionee’s Termination of Employment by reason of his retirement or his being discharged for not good cause, unless the Optioneed dies within said three-month period; or

(d) The expiration of one (1) year from the date of the Optionee’s Termination of Employment by reason of his disability; or

(e) The expiration of one (1) year from the date of the Optionee’s death; or

(f) The effective date of either the merger or consolidation of the Company with or into another corporation, or the exchange of all or substantially all of the assets of the Company for the securities of another corporation, or the acquisition by another corporation or person of all or substantially all of the Company’s assets or eighty percent (80%) or more of the Company’s then outstanding voting stock, or the liquidation or dissolution of the Company, unless the Option is, in connection with such transaction, to be assumed by the successor or survivor corporation (or a parent or subsidiary thereof) or unless the Committee waives this provision in connection with such transaction. At least ten (10) days prior to the effective date of such merger, consolidation, exchange, acquisition, liquidation or dissolution, the Committee shall give the Optionee notice of such event if the Option has then neither been fully exercised nor become unexercisable under this Section 3.3.

Section 3.4 - Acceleration of Exercisability

In the event of the merger or consolidation of the Company with or into another corporation, or the exchange of all or substantially all of the assets of the Company for the securities of another corporation, or the acquisition by another corporation or person of all or substantially all of the Company’s assets or eighty percent (80%) or more of the Company’s then outstanding voting stock, or the liquidation or dissolution of the Company, the Committee may, in its absolute discretion and upon such terms and conditions as it deems appropriate, provide by resolution, adopted prior to such event and incorporated in the notice referred to in Section 3.3(f), that at some time prior to the effective date of such event this Option shall be exercisable as to all the shares covered hereby, notwithstanding that this Option may not yet have become fully exercisable under Section 3.1(a); provided , however , that this acceleration of exercisability shall not take place if:

(a) This Option becomes unexercisable under Section 3.3 prior to said effective date; or

(b) In connection with such an event, provision is made for an assumption of this Option or a substitution therefor of a new option by any successor corporation or a parent or subsidiary of such corporation; and provided , further , that nothing in this Section 3.4 shall make this Option exercisable if it is otherwise unexercisable by reason of Section 5.6.

ARTICLE IV

EXERCISE OF OPTION

Section 4.1 - Person Eligible to Exercise

During the lifetime of the Optionee, only he may exercise the Option or any portion thereof. After the death of the Optionee, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be exercised by his personal representative or by any person empowered to do so under the deceased Optionee’s will or under the then applicable laws of descent and distribution.

Section 4.2 - Partial Exercise

Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when each Option or portion thereof becomes unexercisable under Section 3.3; provided , however , that each partial exercise shall be for not less than One hundred (100) shares and shall be for whole shares only.

Section 4.3 - Manner of Exercise

Each Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary or his office of all of the following prior to the time when the Option or such portion becomes unexercisable under Section 3.3:

(a) A written notice complying with the applicable rules established by the Committee stating that the Option, or a portion thereof, is exercised. The notice shall be signed by the Optionee or other person then entitled to exercise the Option or such portion; and

(b) (i) Full cash payment to the Secretary of the Company for the shares with respect to which such Option or portion is exercised; or

(ii) With the consent of the Committee, (A) shares of the Company’s Common Stock owned by the Optionee, duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option or exercised portion thereof, or (B) shares of the Company’s Common Stock issuable to the Optionee upon exercise of the Option, with a Fair Market Value on the date of exercise of the Option or any portion thereof equal to the aggregate exercise price of the Option or exercised portion thereof; or

(iv) With the consent of the Committee, property of any kind which constitutes good and valuable consideration; or

(v) With the consent of the Committee, a notice that the Optionee has placed a market sell order with a broker with respect to shares of the Company’s Common Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price; or

(vi) With the consent of the Board, any combination of the consideration provided in the foregoing subparagraphs (i), (ii), (iii), (iv) and (v); or

(c) A bona fide written representation and agreement, in a form satisfactory to the Board, signed by the Optionee or other person then entitled to exercise such Option or portion, stating that the shares of stock are being acquired for his own account, for investment and without any present intention of distributing or reselling said shares or any of them except as may be permitted under the Securities Act and then applicable rules and regulations thereunder, and that the Optionee or other person then entitled to exercise such Option or portion will indemnify the Company against and hold it free and harmless from any loss, damage, expense or liability resulting to the Company if any sale or distribution of the shares by such person is contrary to the representation and agreement referred to above. The Committee may, in its absolute discretion, take whatever additional actions it deems appropriate to insure the observance and performance of such representation and agreement and to effect compliance with the Securities Act and any other federal or state securities laws or regulations. Without limiting the generality of the foregoing, the Committee may require an opinion of counsel acceptable to it to the effect that any subsequent transfer of shares acquired on an Option exercise does not violate the Securities Act, and may issue stop-transfer orders covering such shares. Share certificates evidencing stock issued on exercise of this Option shall bear an appropriate legend referring to the provisions of this subsection (c) and the agreements herein. The written representation and agreement referred to in the first sentence of this subsection (c) shall, however, not be required if the shares to be issued pursuant to such exercise have been registered under the Securities Act, and such registration is then effective in respect of such shares; and

(d) Full payment to the Company (or other employer corporation) of all amounts which, under federal, state or local tax law, it is required to withhold upon exercise of the Option; with the consent of the Committee, (i) shares of the Company’s Common Stock owned by the Optionee, duly endorsed for transfer, with a Fair Market Value on the date of delivery equal to the sums required to be withheld, or (ii) shares of the Company’s Common Stock issuable to the Optionee upon exercise of the Option with a Fair Market Value on the date of exercise of the Option or any portion thereof equal to the sums required to be withheld, may be used to make all or part of such payment; and

(e) In the event the Option or portion shall be exercised pursuant to Section 4.1 by any person or persons other than the Optionee, appropriate proof of the right of such person or persons to exercise the Option.

Section 4.4 - Conditions to Issuance of Stock Certificates

(a) The admission of such shares to listing on all stock exchanges on which such class of stock is then listed; and

(b) The completion of any registration or other qualification of such shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Board shall, in its absolute discretion, deem necessary or advisable; and

(c) The obtaining of any approval or other clearance from any state or federal governmental agency which the Committee shall, in its absolute discretion, determine to be necessary or advisable; and

(d) The receipt by the Company of full payment for such shares, including payment of all amounts which, under federal, state or local tax law, the Company is required to withhold upon exercise of the Option; and

(e) The lapse of such reasonable period of time following the exercise of the Option as the Committee may from time to time establish for reasons of administrative convenience.

Section 4.5 - Rights as Shareholder

ARTICLE V

OTHER PROVISIONS

Section 5.1 - Administration

The Committee shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee in good faith shall be final and binding upon the Optionee, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or the Option. In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan and this Agreement except with respect to matters which under Rule 16b-3 or Section 162(m) of the Code, or any regulations or rules issued thereunder, are required to be determined in the sole discretion of the Committee.

Section 5.2 - Option Not Transferable

Neither the Option nor any interest or right therein or part thereof shall be sold, pledged, assigned, or transferred in any manner other than by will or the laws of descent and distribution, unless and until such Option has been exercised, or the shares underlying such Option have been issued, and all restrictions applicable to such shares have lapsed. Neither the Option nor any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Optionee or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.

Section 5.3 - Shares to Be Reserved

The Company shall at all times during the term of the Option reserve and keep available such number of shares of stock as will be sufficient to satisfy the requirements of this Agreement.

Section 5.4 — Notices

Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of its Secretary, and any notice to be given to the Optionee shall be addressed to him at the address given beneath his signature hereto. By a notice given pursuant to this Section 5.4, either party may hereafter designate a different address for notices to be given to him. Any notice which is required to be given to the Optionee shall, if the Optionee is then deceased, be given to the Optionee’s personal representative if such representative has previously informed the Company of his status and address by written notice under this Section 5.4. Any notice shall be deemed duly given when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service; provided , however , that any notice to be given by the Optionee relating to the exercise of the Option or any portion thereof shall be deemed duly given upon receipt by the Secretary or his office.

Section 5.5 - Titles

Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

Section 5.6 — Shareholder Approval

The Plan will be submitted for approval by the Company’s shareholders within twelve (12) months after the date the Plan was initially adopted by the Board. This Option may not be exercised to any extent by anyone prior to the time when the Plan is approved by the shareholders, and if such approval has not been obtained by the end of said twelve-month period, this Option shall thereupon be cancelled and become null and void.

Section 5.7 - Construction

This Agreement shall be administered, interpreted and enforced under the internal laws of the State of Delaware without regard to conflicts of laws thereof.

Section 5.8 - Conformity to Securities Laws

The Optionee acknowledges that the Plan is intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, including, without limitation, the applicable exemptive conditions of Rule 16b-3. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Option is granted and may be exercised, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

Section 5.9 - Amendments

[signature page follows]

IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto.

		GRIFFIN LAND & NURSERIES, INC.


	By



Optionee




Address


Optionee’s Taxpayer
Identification Number:

FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT - DIRECTORS

THIS NON-QUALIFIED STOCK OPTION AGREEMENT (the “ Agreement ”), dated (the “ Grant Date ”), is made by and between Griffin Land & Nurseries, Inc., a Delaware corporation hereinafter referred to as “ Company ,” and , a Non-Employee Director of the Company, hereinafter referred to as “ Optionee ”:

WHEREAS, the Company wishes to afford the Optionee the opportunity to purchase shares of its $0.01 par value Common Stock; and

WHEREAS, the Company wishes to carry out the Plan; and

WHEREAS, the Board has determined that it would be to the advantage and best interest of the Company and its shareholders to grant the Non-Qualified Stock Option provided for herein to the Optionee as an inducement to enter into or remain in service as a Director of the Company and as an incentive for increased efforts during such service, and has advised the Company thereof and instructed the undersigned officers to issue said Non-Qualified Stock Option; and

ARTICLE I

DEFINITIONS

Section 1.1 “ Administrator ” shall mean the Board, which pursuant to Section 8.1 of the Plan is responsible for conducting the general administration of the Plan with respect to awards granted to Non-Employee Directors.

Section 1.2 “ Board ” shall mean the Board of Directors of the Company.

Section 1.3 “ Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time, together with the regulations and official guidance promulgated thereunder.

Section 1.4 “ Company ” shall mean Griffin Land & Nurseries, Inc., a Delaware corporation.

Section 1.5 “ Director ” shall mean a member of the Board, as constituted from time to time.

Section 1.6 “ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended from time to time.

Section 1.7 “ Non-Employee Director ” shall mean a Director of the Company who is not an Employee.

Section 1.8 “ Option ” shall mean the Non-Qualified Stock Option to purchase shares of Common Stock of the Company granted under this Agreement.

Section 1.9 “ Plan ” shall mean the Griffin Land & Nurseries, Inc. 2009 Stock Option Plan, as it may be amended or restated from time to time.

Section 1.10 “ Rule 16b-3 ” shall mean that certain Rule 16b-3 under the Exchange Act, as such Rule may be amended from time to time.

Section 1.11 “ Secretary ” shall mean the Secretary of the Company.

Section 1.12 “ Securities Act ” shall mean the Securities Act of 1933, as amended.

Section 1.13 “ Termination of Directorship ” shall mean the time when an Optionee who is a Non-Employee Director ceases to be a Director for any reason, including, without limitation, a termination by resignation, failure to be elected, death or retirement, but excluding terminations where the Optionee simultaneously commences or remains in employment or service with the Company or any Affiliate. The Administrator, in its sole and absolute discretion, shall determine the effect of all matters and questions relating to Termination of Directorship with respect to Non-Employee Directors.

Section 1.14 Incorporation of Terms of Plan . The Option is subject to the terms and conditions of the Plan which are incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control.

ARTICLE II

GRANT OF OPTION

Section 2.1 Grant of Option. On the Grant Date, in consideration of the Optionee’s agreement to serve as a Non-Employee Director and for other good and valuable consideration, the Company irrevocably granted to the Optionee the option to purchase any part or all of an aggregate of shares of its $0.01 par value Common Stock upon the terms and conditions set forth in this Agreement.

Section 2.2 Purchase Price . The purchase price of the shares of stock covered by this Option is $ per share of Common Stock without commission or other charge, which is not less than 100% of the Fair Market Value of a share of Common Stock on the Grant Date.

Section 2.3 Consideration to Company . In consideration of the granting of this Option by the Company, the Optionee agrees to render faithful and efficient services as a Director of the Company, until the next following annual meeting of the Company’s stockholders. Nothing in this Agreement or in the Plan shall confer upon the Optionee any right to continue serving as a director of the Company, or shall interfere with or restrict in any way the rights of the Company or its stockholders, which are hereby expressly reserved, to discharge the Optionee at any time for any reason whatsoever, with or without cause.

Section 2.4 Adjustments in Options . The Committee shall make adjustments with respect to the Option in accordance with the provisions of Section 9.2 of the Plan.

ARTICLE III

PERIOD OF EXERCISABILITY

Section 3.1 Commencement of Exercisability . The Option shall become exercisable on November 13, 2012.

Section 3.2 Duration of Exercisability . The Option which becomes exercisable as per Section 3.1 shall remain exercisable until it becomes unexercisable under Section 3.3.

Section 3.3 Expiration of Option . The Option may not be exercised to any extent by anyone after the first to occur of the following events:

(a) The expiration of ten (10) years from the date the Option was granted; or

(b) The expiration of three (3) months from the date of the Optionee’s Termination of Directorship by any reason other than his death or permanent and total disability, unless the Optionee dies within said three-month period; or

(c) The expiration of one (1) year from the date of the Optionee’s Termination of Directorship by reason of his permanent and total disability (within the meaning of Section 22(e)(3) of the Code), or

(d) The expiration of one (1) year from the date of the Optionee’s death; or

(e) The effective date of either the merger or consolidation of the Company with or into another corporation, or the exchange of all or substantially all of the assets of the Company for the securities of another corporation, or the acquisition by another corporation or person of all or substantially all of the Company’s assets or eighty percent (80%) or more of the Company’s then outstanding voting stock, or the liquidation or dissolution of the Company, unless the Option is, in connection with such transaction, to be assumed by the successor or survivor corporation (or a parent or subsidiary thereof) or unless the Board waives this provision in connection with such transaction. At least ten (10) days prior to the effective date of such merger, consolidation, exchange, acquisition, liquidation or dissolution, the Board shall give the Optionee notice of such event if the Option has then neither been fully exercised nor become unexercisable under this Section 3.3.

ARTICLE IV

EXERCISE OF OPTION

Section 4.1 Person Eligible to Exercise . During the lifetime of the Optionee, only he may exercise the Option or any portion thereof. After the death of the Optionee, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be exercised by his personal representative or by any person empowered to do so under the deceased Optionee’s will or under the then applicable laws of descent and distribution.

Section 4.2 Partial Exercise . Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when each Option or portion thereof becomes unexercisable under Section 3.3; provided , however , that each partial exercise shall be for not less than one hundred (100) shares and shall be for whole shares only.

Section 4.3 Manner of Exercise . The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary of the Company (or any third party administrator or other person or entity designated by the Company), during regular business hours, of all of the following prior to the time when the Option or such portion thereof becomes unexercisable under Section 3.3 hereof:

(a) A written or electronic notice complying with the applicable rules established by the Administrator stating that the Option, or a portion thereof, is exercised. The notice shall be signed by the Optionee or other person then entitled to exercise the Option or such portion of the Option;

without limitation, placing legends on share certificates and issuing stop-transfer notices to agents and registrars;

(c) In the event that the Option shall be exercised pursuant to Section 4.1 by any person or persons other than the Optionee, appropriate proof of the right of such person or persons to exercise the Option, as determined in the sole discretion of the Administrator; and

Section 4.4 Method of Payment . Payment of the exercise price shall be by any of the following, or a combination thereof, at the election of the Optionee:

(a) Cash or check;

(b) Shares (including, in the case of payment of the exercise price of an Award, Shares issuable pursuant to the exercise of the Award) or shares of Common Stock held for such period of time as may be required by the Administrator in order to avoid adverse accounting consequences, in each case, having a Fair Market Value on the date of delivery equal to the aggregate payments required; or

(c) Delivery of a written or electronic notice that the Optionee has placed a market sell order with a broker with respect to Shares then issuable upon exercise or vesting of an Award, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate payments required; provided , that payment of such proceeds is then made to the Company upon settlement of such sale; or

(d) Other form of legal consideration acceptable to the Administrator.

Section 4.5 Conditions to Issuance of Stock . The shares of stock deliverable upon the exercise of the Option, or any portion thereof, may be either previously authorized but unissued shares or issued shares which have then been reacquired by the Company. Such shares shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any shares of stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions:

(a) The admission of such shares to listing on all stock exchanges on which such class of stock is then listed; and

(b) The completion of any registration or other qualification of such shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable; and

(c) The obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its absolute discretion, determine to be necessary or advisable; and

(e) The lapse of such reasonable period of time following the exercise of the Option as the Board may from time to time establish for reasons of administrative convenience.

Section 4.6 Rights as Shareholder . The holder of the Option shall not be, nor have any of the rights or privileges of, a shareholder of the Company in respect of any shares purchasable upon the exercise of any part of the Option unless and until such shares of Common Stock shall have been issued by the Company and held of record by such holder (as evidenced by certificates representing such shares that have been issued by the Company to such holder, or the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).

ARTICLE V

OTHER PROVISIONS

Section 5.1 Administration . The Compensation Committee of the Board (the “ Committee ”) (or another committee or a sub-committee of the Board assuming the functions of the Committee) shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Board in good faith shall be final and binding upon the Optionee, the Company and all other interested persons. No member of the Board shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or the Option.

Section 5.2 Option Not Transferable . Neither the Option nor any interest or right therein or part thereof shall be sold, pledged, assigned, or transferred in any manner other than by will or the laws of descent and distribution, unless and until such Option has been exercised, or the shares underlying such Option have been issued, and all restrictions applicable to such shares have lapsed. Neither the Option nor any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Optionee or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.

Section 5.3 Shares to Be Reserved . The Company shall at all times during the term of the Option reserve and keep available such number of shares of stock as will be sufficient to satisfy the requirements of this Agreement.

Section 5.4 Notices . Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of its Secretary, and any notice to be given to the Optionee shall be addressed to him at the address given beneath his signature hereto. By a notice given pursuant to this Section 5.4, either party may hereafter designate a different address for notices to be given to him. Any notice that is required to be given to the Optionee shall, if the Optionee is then deceased, be given to the Optionee’s personal representative if such representative has previously informed the Company of his status and address by written notice under this Section 5.4. Any notice shall be deemed duly given when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service; provided , however , that any notice to be given by the Optionee relating to the exercise of the Option or any portion thereof shall be deemed duly given upon receipt by the Secretary or his office.

Section 5.5 Titles . Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

Section 5.6 Construction . This Agreement shall be administered, interpreted and enforced under the internal laws of the State of Delaware without regard to conflicts of laws thereof.

Section 5.7 Conformity to Securities Laws . The Optionee acknowledges that the Plan is intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, including, without limitation, the applicable exemptive conditions of Rule 16b-3. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Option is granted and may be exercised, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

Section 5.8 Amendment, Suspension and Termination . To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Board or the Committee; provided that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall adversely affect the Option in any material way without the prior written consent of the Optionee.

Section 5.9 Successors and Assigns . The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth in Section 5.2 hereof, this Agreement shall be binding upon the Optionee and his or her heirs, executors, administrators, successors and assigns.

Section 5.10 Limitations Applicable to Section 16 Persons . Notwithstanding any other provision of the Plan or this Agreement, if the Optionee is subject to Section 16 of the Exchange Act, the Plan, the Option and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

Section 5.11 Entire Agreement . The Plan and this Agreement constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and the Optionee with respect to the subject matter hereof.

Section 5.12 Section 409A . This Option is not intended to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof, “ Section 409A ”). However, notwithstanding any other provision of the Plan or this Agreement, if at any time the Administrator determines that the Option (or any portion thereof) may be subject to Section 409A, the Administrator shall have the right in its sole discretion (without any obligation to do so or to indemnify Optionee or any other person for failure to do so) to adopt such amendments to the Plan or this Agreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate either for the Option to be exempt from the application of Section 409A or to comply with the requirements of Section 409A.

(signature page follows)

IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto.

		GRIFFIN LAND & NURSERIES, INC.


	By



Optionee




Address


Optionee’s Taxpayer
Identification Number:

Exhibit 21

Subsidiaries of the Registrant

Imperial Nurseries, Inc. — incorporated in Delaware

Griffin Center Development I, LLC — organized in Connecticut

Griffin Center Development II, LLC — organized in Connecticut

Griffin Center Development III, LLC — organized in Connecticut

Griffin Center Development IV, LLC — organized in Connecticut

Griffin Center Development V, LLC — organized in Connecticut

Tradeport Development I, LLC — organized in Connecticut

Tradeport Development II, LLC — organized in Connecticut

Tradeport Development III, LLC — organized in Connecticut

Tradeport Development IV, LLC — organized in Connecticut

825 Prospect Hill Road, LLC — organized in Connecticut

WA II, LLC — organized in Connecticut

Riverbend Hanover Properties, LLC — organized in Pennsylvania

Riverbend Lehigh Valley Holdings I, LLC — organized in Delaware

Riverbend Lehigh Valley Holdings II, LLC— organized in Delaware

Riverbend Lehigh Valley Holdings III, LLC— organized in Delaware

Riverbend Crossings III Holdings, LLC - organized in Pennsylvania

Riverbend Bethlehem Holdings I, LLC - organized in Pennsylvania

Riverbend Bethlehem Holdings II, LLC - organized in Pennsylvania

Stratton Farms I, LLC — organized in Connecticut

Griffin Land, LLC — organized in Connecticut

River Bend Holdings, LLC — organized in Connecticut

River Bend Development CT, LLC — organized in Connecticut

Griffin Land Development MA, LLC — organized in Massachusetts

GLNCM, LLC — organized in Connecticut

RB Hoskins, LLC — organized in Connecticut

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Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in Registration Statements (No. 333-30639 filed on July 2, 1997 and No. 333-170857 filed on November 29, 2010) on Form S-8 of Griffin Land & Nurseries, Inc. of our reports dated February 13, 2014, relating to our audits of the consolidated financial statements and the financial statement schedules and internal control over financial reporting, which appear in this Annual Report on Form 10-K of Griffin Land & Nurseries, Inc. for the year ended November 30, 2013.

New Haven, Connecticut
February 13, 2014

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Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

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Exhibit 31.1

I, Frederick M. Danziger, certify that:

1.

I have reviewed this annual report on Form 10-K of Griffin Land & Nurseries, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a): Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b): Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c): Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d): Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a): All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b): Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: February 13, 2014		/s/ FREDERICK M. DANZIGER Frederick M. Danziger Chairman and Chief Executive Officer

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Exhibit 31.1

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Exhibit 31.2

I, Anthony J. Galici, certify that:

1.

I have reviewed this annual report on Form 10-K of Griffin Land & Nurseries, Inc.;

2.

3.

4.

a): Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b): Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c): Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d): Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

a): All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b): Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: February 13, 2014		/s/ ANTHONY J. GALICI Anthony J. Galici Vice President, Chief Financial Officer and Secretary

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Exhibit 31.2

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Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 UNITED STATES CODE SS. 1350

In connection with the Annual Report of Griffin Land & Nurseries, Inc. (the "Company") on Form 10-K for the year ended November 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the "Periodic Report"), I, Frederick M. Danziger, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.: The Periodic Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
2.: The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


		/s/ FREDERICK M. DANZIGER Frederick M. Danziger Chairman and Chief Executive Officer

February 13, 2014

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Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 UNITED STATES CODE SS. 1350

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Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 UNITED STATES CODE SS. 1350

In connection with the Annual Report of Griffin Land & Nurseries, Inc. (the "Company") on Form 10-K for the year ended November 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the "Periodic Report"), I, Anthony J. Galici, Vice President, Chief Financial Officer and Secretary of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.: The Periodic Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
2.: The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


		/s/ ANTHONY J. GALICI Anthony J. Galici Vice President, Chief Financial Officer and Secretary

February 13, 2014

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Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 UNITED STATES CODE SS. 1350