Letter2

Andrew Shapiro 
President 
 
January 16, 2013 
By e-mail 
 
Mitch Solomon 
Lead Independent Director  
P&F Industries 
 
Dear Mitch: 
 
We just saw P&F Industries’ (“P&F” or the “Company”) 8-K filing, announcing that both Directors Dubofsky 
and Goldberg will complete their long-standing membership on P&F’s Board at this coming May 2013 Annual 
Meeting.  We thank both Bob and Alan for their past service and wish them well in the future.  
 
We appreciate the pace at which P&F’s Board addressed some of our lingering corporate governance concerns, 
most recently communicated in our January 8, 2013 letter to you.   
 
Has the Board determined whether it might seek one or more replacements to strengthen any perceived 
weaknesses in Board composition?  While we don’t know what the Board feels is needed, we have successfully 
found and nominated highly qualified and proven board members for both P&F [e.g. Howard Brownstein] and 
other Lawndale portfolio companies and could assist you with finding top quality new directors who are 
qualified, independent and engaged. 
 
While we appreciate the continued steps P&F has taken to move toward a “Best Practices” board composition, 
we hope the Board does not stop there, but will have further dialogue with Lawndale: 
 
• to implement additional corporate governance  improvements [e.g. Declassifying staggered board terms; 
establishing director stockownership requirements, consider term limits; eliminate the Shareholder 
Rights Plan/”Poison Pill”; Separate Board Chairmanship from CEO position, etc.] towards Best 
Practices; and 
 
• to improve Compensation Policy practices or transparency of improved practices [e.g. shorten duration 
of options grants; establish true “reach” performance thresholds for restricted stock grants and other 
incentive bonus compensation taking into account cyclical nature of P&F’s targeted market, etc.] 
 
While these remaining needed reforms do not carry the time sensitivity that Director nominations did, we hope 
that the Board would work with us toward implementing additional improvements prior to and as part of this 
May’s 2013 Annual Meeting.  We look forward to hearing from you.  
 
Best Regards, 
 
 
 
Andrew Shapiro 
President