GRAHAM CORPORATION
20 Florence Avenue
Batavia, New York 14020
Notice of Annual Meeting of Stockholders
to be held May 11, 1995
The Annual Meeting of Stockholders (the "Annual Meeting") of
Graham Corporation("Graham") will be held at the Industrial
Management Council, 930 East Avenue,Rochester, New York on
Thursday, May 11, 1995 at 11:00 a.m. for the following purposes:
1. To elect two directors to hold office until the Annual Meeting
of Stockholders in 1998;
2. To ratify the appointment of Deloitte & Touche as Graham's
independent accountants for the fiscal year ending December 31,
1995; and
3. To transact such other business as may properly come before the
meeting.
Stockholders of record at the close of business on March 24,
1995 are entitled to notice of, and to vote at, the Annual Meeting.
A complete list of stockholders entitled to be present and to
vote at the Annual Meeting will be open for examination by any
stockholder, for any purpose germane to the Annual Meeting, for a
period of ten days prior to the Annual Meeting, during ordinary
business hours, at Graham's offices at 20 Florence Avenue, Batavia,
New York 14020.
You are cordially invited to attend the Annual Meeting, but,
whether you plan to attend the meeting or not, please date and sign
the enclosed Proxy Card and mail it promptly in the enclosed return
envelope. No postage is required for mailing in the United States.
If you do attend, you may, of course, vote in person.
By Order of the Board of Directors
s\ Cornelius S. Van Rees
CORNELIUS S. VAN REES
Secretary
March 27, 1995
<PAGE>2
GRAHAM CORPORATION
20 Florence Avenue
Batavia, New York 14020
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
May 11, 1995
GENERAL INFORMATION
General
This Proxy Statement and accompanying Proxy Card are furnished in connection
with the solicitation by the Board of Directors of Graham Corporation ("Graham"
or the "Company") of proxies for use at the Annual Meeting of Stockholders (the
"Annual Meeting") to be held at the Industrial Management Council, 930 East
Avenue, Rochester, New York on Thursday, May 11, 1995 at 11:00 a.m., and at any
adjournment thereof, for the purposes set forth in the preceding Notice of
Annual Meeting of Stockholders. The approximate date of the initial mailing
of this Proxy Statement is March 27, 1995.
Record Date and Voting
At the close of business on March 1, 1995 there were 1,051,499 shares of
Graham's common stock outstanding. Stockholders of record at the close of
business on March 24, 1995 are entitled to notice of, and to vote at, the Annual
Meeting and at any adjournment or adjournments thereof. The holder of each
share of Graham's common stock outstanding at the close of business on
March 24, 1995 will be entitled to one vote for each share held of record at
the close of business on March 24, 1995 on each matter properly submitted at
the Annual Meeting and at any adjournment thereof. The minimum vote required
for election of a nominee for director is a plurality of the votes cast by
the holders of shares certified to vote at the meeting. The minimum vote
required for approval of any other matter before the meeting is a majority of
the votes cast by the holders of shares entitled to vote.
Proxy Cards
If Graham receives the enclosed Proxy Card, properly executed, in time to be
voted at the Annual Meeting, the shares represented thereby will be voted in
accordance with the instructions marked thereon. Executed Proxy Cards with no
instructions marked thereon will be voted FOR each of the nominees for election
as directors and FOR the ratification of appointment of auditors set forth in
the preceding Notice of Annual Meeting.
Revocability of Proxies
The presence of a stockholder at this Annual Meeting will not automatically
revoke such stockholder's proxy. However, a stockholder may revoke a Proxy
at any time prior to its exercise by (1) delivering to the Secretary of
Graham a written notice of revocation prior to the Annual Meeting,
(2) delivering to the Secretary of Graham a duly executed Proxy bearing a
later date, or (3) attending this Annual Meeting, filing a written notice of
revocation with the Secretary of the Annual Meeting, and voting in person.
Solicitation of Proxies
In addition to solicitation by mail, directors, officers and employees of
Graham and its subsidiaries may solicit proxies for this Annual Meeting from the
stockholders of Graham personally or by telephone or telegram without additional
remuneration therefor. Graham will also provide persons holding shares in their
<PAGE>3
names or in the names of nominees, which in either case are beneficially
owned by others, proxy material for transmittal to such beneficial owners and
will reimburse such record owners for their expenses in doing so. The cost of
soliciting proxies for the Annual Meeting will be borne by Graham. No funds
will be paid to any professional solicitor in connection with this Annual
Meeting.
PRINCIPAL STOCKHOLDERS
The following table sets forth information as to the beneficial ownership of
Graham's common stock of each person or group who, as of March 1, 1995, to the
knowledge of Graham based on information supplied by the holders involved,
beneficially owned more than 5% of Graham's outstanding common stock.
Amount Percent of
Name and Address of Beneficially Outstanding
Beneficial Owner Owned Shares
Frederick D. Berkeley(1) 241,378(3) 21.6%
Frederick D. Berkeley and
Alvin L. Snyder, Trustees under
an agreement dated September 3,
1985 for the Graham Retirement
Income Plan(1) 70,425(2) 6.3%
William Ehrman, Frederic
Greenberg, Frederick Ketcher,
Salvatore P. DiFranco, Jr., Jonas
Gerstl, EGS Associates, L.P.,
E.G.S. Partners, L.P.
and BEV Partners, L.P., Jonas
Partners, L.P.(4) 94,000 8.4%
FMR Corp.(5) 83,800 7.5%
Employee Stock Ownership Plan of
Graham Corporation(1) 87,454 7.8%
All directors and executive officers
as a group 291,761(6) 26.1%
(1) Address: c/o Graham Corporation, 20 Florence Avenue, Batavia, New York
14020.
(2) Messrs. Berkeley and Snyder share voting powers with respect to these shares
with each other and share dispositive power with respect to these shares
with members of Graham's Board of Directors.
(3) Includes the shares described in footnote (2). Also includes 10,800 shares
which Mr. Berkeley may acquire within 60 days upon exercise of stock options
and 732 shares held by Chemical Bank as trustee for the Employee Stock
Ownership Plan Trust ("ESOP Trustee") and allocated to Mr. Berkeley's
account as to which Mr. Berkeley has sole voting power but no dispositive
power except in limited circumstances. Excluded from Mr. Berkeley's
shareholdings as described in this table are 64,678 shares of common
stock held by the ESOP Trustee and not allocated to any individual's
account, as to which Mr. Berkeley shares voting power and limited
dispositive power with all other ESOP participants.
<PAGE>4
(4) Address: 100 East 42nd Street, New York, New York 10017. The information
provided is based on a Schedule 13D filed with the Securities and Exchange
Commission, as amended.
(5) Address: 82 Devonshire Street, Boston, Massachusetts 02109. The
information provided is based on a Schedule 13G filed with the Securities
and Exchange Commission, as amended.
(6) Includes 35,750 shares which members of the group may acquire within 60 days
upon exercise of stock options.
ELECTION OF DIRECTORS
At the Annual Meeting two directors will be elected, each to hold office
until the 1998 Annual Meeting and thereafter until the election and
qualification of his successor. Unless otherwise instructed as provided on
the accompanying Proxy Card, the persons named therein will vote the shares
represented by the proxies received by them for the nominees listed below,
reserving, however, discretion to vote for the election of any substitute
nominated by the Board of Directors in the event any nominee is unable or
unwilling to serve.
Director Richard M. Armstrong has announced his retirement from the Board of
Directors upon the expiration of his current term.
The following table sets forth information with respect to the nominees and
those directors whose terms will continue after the Annual Meeting.
Nominees:
Number of
Years Shares Owned
Current Served Beneficially, Percent of
Principal Term as a as of Outstanding
Name Age Occupation(1) Expires Director(2) March 1, 1995 Shares
Jerald D.
Bidlack 59 President, 1995 10 5,500(3)*
Griffin
Automation,
Inc.; previously
Vice Chairman,
Moog Inc. and
President,
International
Group
Philip S.
Hill(4) 73 Partner,Hill, 1995 27 23,567(5) 2.11%
Ullman &
Erwin, Attorneys
<PAGE>5
Directors with Terms Continuing
After the 1995 Annual Meeting
Number of
Years Shares Owned
Current Served Beneficially, Percent of
Principal Term as a as of Outstanding
Name Age Occupation(1) Expires Director(2) March 1, 1995 Shares
Frederick 66 Chairman, 1997 40 241,378(6) 21.6%
D. Berkeley(4) President and
Chief Executive
Officer of
Graham (7)
Alvaro 51 President and 1997 2 9,798(8) *
Cadena Chief Operating
Officer, Graham
Manufacturing
Co., Inc.; Vice
President of
Graham
Robert L. 70 Chairman of 1996 14 4,200(3) *
Tarnow Goulds Pumps,
Inc.
Cornelius 65 Of Counsel to 1996 26 4,700(3) *
S. Van Rees Thacher
Proffitt &
Wood, Attorneys;
previously
partner in
Thacher Proffitt
& Wood
All Directors and 291,761(9)2 26.1%
executive officers
as a group
* Less than 1% of the outstanding shares of common stock.
(1) In addition, certain Graham directors presently serve on the boards of other
companies which have securities registered under Section 12 of the
Securities Exchange Act of 1934:
Mr. Bidlack: Bush Industries, Inc.
Mr. Tarnow: Bausch & Lomb, Goulds Pumps, Inc., Raymond Corp. and Utica
Mutual Insurance Company.
(2) Includes the number of years served as director of Graham Manufacturing Co.,
Inc., the predecessor of Graham.
(3) Includes 4,000 shares which may be acquired within 60 days upon exercise of
stock options.
(4) Messrs. Berkeley and Hill are brothers-in-law.
<PAGE>6
(5) Includes 4,000 shares which may be acquired within 60 days upon exercise of
stock options. Mr. Hill disclaims beneficial ownership with respect to
19,567 of these shares, which are owned by his wife.
(6) Includes 70,425 shares owned jointly as co-trustee with Mr. A. L. Snyder
under a trust agreement dated September 3, 1985 for the Graham Retirement
Income Plan as to which Mr. Berkeley shares voting power with Mr. Snyder and
dispositive power with members of Graham's Board of Directors, 10,800 shares
which may be acquired within 60 days upon exercise of stock options and 732
shares held by Chemical Bank as trustee for the Employee Stock Ownership
Plan Trust ("ESOP Trust") and allocated to Mr. Berkeley's account as to
which Mr. Berkeley has sole voting power but no dispositive power except
in limited circumstances. Excluded from Mr. Berkeley's shareholdings are
64,678 shares of common stock held by the ESOP Trustee and not allocated
to any individual's account, as to which Mr. Berkeley shares voting power
and limited dispositive power with all other ESOP participants.
(7) Mr. Berkeley served as Chairman, President and Chief Executive Officer of
Graham's predecessor, Graham Manufacturing Co., Inc., until 1983.
(8) Includes 7,350 shares that may be acquired within 60 days by exercising
stock options and 536 shares held by the ESOP Trustee as to which Mr.
Cadena has sole voting power but no dispositive power except in limited
circumstances.
(9) Includes 35,750 shares which may be acquired within 60 days upon exercise of
stock options and 1,359 shares held by Chemical Bank as trustee for the ESOP
Trustee and allocated to each individual's account as to which each
individual has sole voting power but no dispositive power except in limited
circumstances. Excluded from these shareholdings are 64,678 shares of
common stock held by the ESOP Trustee and not allocated to any individual's
account, as to which the ESOP participants have shared voting but no
dispositive power except in limited circumstances.
BOARD MEETINGS AND COMMITTEES OF THE BOARD
During 1994, the Board of Directors of Graham held a total of four
meetings. Graham's Board of Directors has four committees, as follows:
1. Executive Committee
Between meetings of the Board of Directors, the Executive Committee has all
of the powers of the Board to manage and direct all the business and affairs of
Graham, so far as such may be legally delegated and except as may be limited
from time to time by resolution of the Board. The members of the Executive
Committee are Messrs. Berkeley (Chairman), Hill and Van Rees. The Executive
Committee of Graham held seven meetings during 1994.
2. Audit Committee
It is the duty of the Audit Committee to recommend the auditors for Graham's
annual audit to the full Board of Directors, to meet and discuss directly with
Graham's auditors their audit work and related matters and to carry out such
investigations and make such reports to the Board of Directors with respect both
to the external and internal auditing procedures and affairs of Graham as the
Audit Committee deems necessary or advisable. The members of the Audit
Committee are Messrs. Armstrong (Chairman), Bidlack, Hill, Tarnow and Van Rees.
The Audit Committee of Graham held two meetings during 1994.
<PAGE>7
3. Compensation Committee
The Compensation Committee has authority to (a) review and determine
annually salaries, bonuses and other forms of compensation paid to the Company's
executive officers and management; (b) construe the provisions of and administer
the 1981 Common Stock Incentive Plan; and (c) select recipients of awards of
incentive stock options and non-qualified stock options, establish the number
of shares and other terms applicable to such awards, and construe the provisions
of and generally administer the 1989 Stock Option and Appreciation Rights Plan.
The members of the Compensation Committee are Messrs. Bidlack (Chairman),
Armstrong, Hill, Tarnow and Van Rees. The Compensation Committee of Graham held
two meetings during 1994.
4. Employee Benefits Committee
The Employee Benefits Committee reviews the performance of the Plan
Administrator of Graham's Retirement Income Plan, Incentive Savings Plan, Group
Hospitalization Plan, Medical Plan, Major Medical Plan, Life Insurance Plan,
Long-Term Disability Plan, Employee Stock Ownership Plan and any other employee
benefit plan maintained by Graham for which a named fiduciary is designated.
The Committee reviews and reports to the Board on the performance of the
Incentive Savings Plan trustee and the Retirement Income Plan trustee in
investing, managing and controlling plan assets. It has authority to establish
a funding policy and method consistent with the objectives of the Retirement
Income Plan, to recommend changes in the plans, changes in any plan trustee or
administrator, and subject to the further action of the Board, to amend any of
the plans, other than the Retirement Income Plan and the Incentive Savings Plan.
The members of the Employee Benefits Committee are Messrs. Berkeley
(Chairman), Hill and Van Rees. The Employee Benefits Committee of Graham held
two meetings during 1994.
Other Committees
Graham's Board of Directors has no standing nominating committee. The Board
of Directors itself has performed the functions which would otherwise be
performed by a nominating committee. Stockholders may recommend individuals for
consideration by the Board as potential nominees by making any such
recommendation in writing to the Secretary of the Company, at the Company's
address, no later than February 1 preceding any year's Annual Meeting of
Stockholders.
Meeting Attendance
A total of seventeen meetings of the Board of Directors of Graham and of the
Committees of the Board were held on twelve dates during 1994 and all directors
attended all meetings of the Board and of Committees of which they were members.
Directors' Fees
No director who is an employee of Graham or a Graham subsidiary receives any
remuneration for services as a director.
Non-employee directors receive an annual fee of $7,600 for service on the
Board. They also receive a fee of $950 for each meeting attended of the Board or
of any Committee of the Board except that, if the meeting is held by telephone
conference call or by unanimous written consent, a $475 fee is paid, and if the
Board and/or one or more Committees meet on the same day, a full meeting fee is
paid for one meeting and one-half the normal fee is paid for each other
meeting. Each of the two non-employee directors who are members of the
Executive Committee also receive an annual fee of $7,600 for such service and
$950 for each Executive Committee meeting attended.
<PAGE>8
These fees reflect a reduction by 5% which, pursuant to action by the
Compensation Committee of the Board of Directors, will remain in force for as
long as Graham's 5% wage reduction for U.S. employees continues in effect.
Each director not residing within 50 miles of the place of any meeting is
entitled to receive reimbursement for reasonable expenses incurred in attending
a meeting.
Pursuant to the 1989 Stock Option and Appreciation Rights Plan of Graham
Corporation ("Option Plan"), each non-employee director of Graham is granted an
option to purchase 4,000 shares of Graham's common stock upon becoming a member
of the Board of Directors.
EXECUTIVE OFFICERS
The following table sets forth information regarding executive officers of
Graham as of March 1, 1995 and their beneficial ownership of Graham Common
Stock.
Principal Shares Owned Percent of
Occupation Years of Beneficially as Outstanding
Name Age Since 1990 Service of March 1, 1995 Shares
Frederick D. 66 Chairman, 44 241,378(1) 21.6%
Berkeley President and
Chief Executive
Officer
Alvaro Cadena 51 President & 25 9,798(2) *
Chief Operating
Officer,
Graham
Manufacturing
Co., Inc.;
Vice President
of Graham
J. Ronald 47 Chief Financial 2 2,618(3) *
Hansen Officer and
Vice President-
Finance/Human
Resources;
previously Vice
President-Finance
and Chief Financial
Officer of Al Tech
Specialty Steel Corp.
* Less than 1% of the outstanding shares of common stock.
(1) Includes 10,800 shares which may be acquired within 60 days upon exercise of
stock options, 732 shares held by Chemical Bank as trustee for the Employee
Stock Ownership Plan Trust ("ESOP Trustee") and allocated to Mr. Berkeley's
account as to which Mr. Berkeley has sole voting power but no investment
power except in limited circumstances, and 70,425 shares owned jointly as
co-trustee of the Graham Retirement Income Plan Trust. Excluded from Mr.
Berkeley's shareholdings are 64,678 shares of common stock held by the ESOP
Trustee and not allocated to any individual's account, as to which Mr.
Berkeley shares voting power and limited investment power with all other
ESOP participants.
<PAGE>9
(2) Includes 7,350 shares that may be acquired within 60 days by exercising
stock options and 536 shares held by the ESOP Trustee as to which Mr.
Cadena has sole voting power but no investment power except in limited
circumstances.
(3) Includes 1,600 shares that may be acquired within 60 days by exercising
stock options and 91 shares held by the ESOP Trustee as to which Mr. Hansen
has sole voting power but no investment power except in limited
circumstances.
The Company's directors, its executive officers, and any persons holding
more than ten percent of the Company's common stock are required to file reports
of their ownership of the Company's common stock with the Securities and
Exchange Commission (the "SEC"). One report for Mr. Cadena, relating to one
event, was filed two days following the date on which it was due. In making
this disclosure, the Company has relied solely on written representations of
its directors, executive officers and its ten percent holders and copies of the
reports that they have filed with the SEC.
COMPENSATION OF EXECUTIVE OFFICERS
The following table (the "Summary Compensation Table") sets forth the annual
compensation for services to Graham in all capacities for the past three years
for Graham's Chief Executive Officer and the most highly compensated executive
officers other than the CEO, whose total salary and bonus exceeded $100,000 and
who were serving as executive officers at December 31, 1994. Graham did not pay
to any of the named executive officers in 1992, 1993 or 1994 compensation
required to be disclosed in columns (e), (f), (g), or (h) of the Summary
Compensation Table pursuant to Item 402 of SEC Regulation S-K. Consequently,
those columns have been omitted.
SUMMARY COMPENSATION TABLE
Annual Compensation
(a) (b) (c) (d) (i)
Name
and
Principal All Other
Position Year Salary ($) Bonus ($) Compensation($)
Frederick D.
Berkeley 1994 192,760 -0- 68,245(1)
Chairman,
President 1993 197,793 15,184(2) 78,656(3)
and Chief 1992 201,676 -0- 49,124
Executive
Officer
Alvaro Cadena 1994 134,285 -0- 14,751(4)
President & 1993 137,810 26,118(2) 19,878(5)
Chief Operating 1992 141,978 -0- 4,407
Officer, Graham
Manufacturing
Co., Inc.
<PAGE>10
(1) Includes $67,000 in premiums paid on term life insurance policies and $1,245
representing the valuation of the shares allocated to the named executive in
1994 pursuant to Graham's ESOP.
(2) Non-cash bonus: 1993 bonus amounts payable to Mr. Berkeley and Mr. Cadena,
as well as to all other officers of Graham and its subsidiaries in the U.S.
eligible to participate in Graham's Executive Bonus Plan, were paid in
Graham common stock, after deduction of the amount withheld for tax, based
on the closing price of the stock on the American Stock Exchange on
March 15, 1994.
(3) Includes $5,756 paid to the named executive's 401(k) account; $67,000 in
premiums paid on term life insurance policies and $5,900 representing the
valuation of the shares allocated to the named executive in 1993 pursuant to
Graham's ESOP.
(4) Includes a $10,924 premium paid on a term life insurance policy, $1,245
representing the valuation of the shares allocated to the named executive in
1994 pursuant to Graham's ESOP, and $2,582 paid as a 25-year long-term
service award.
(5) Includes $5,292 paid to the named executive's 401(k) account; a $10,924
premium paid on a term life insurance policy and $3,662 representing the
valuation of the shares allocated to the named executive in 1993 pursuant to
Graham's ESOP.
STOCK OPTIONS
No stock options or stock appreciation rights were granted to any named
executive officer in 1994.
The following table indicates the total number of exercisable and
unexercisable stock options held by each executive officer listed below on
December 31, 1994, the last day of fiscal year 1994. No options to purchase
Common Stock were exercised during 1994 and no stock appreciation rights were
granted or outstanding during 1994.
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
Value of Unexercised
Number of Unexercised Options In-the-Money Options
at Year-End at Year-End
Name Exercisable Unexercisable Exercisable Unexercisable
Frederick D.
Berkeley 10,800 -0- -0- -0-
Alvaro
Cadena 7,350 -0- $2,438 -0-
<PAGE>11
PENSION PLANS
U.S. Retirement Plan Table
Years of Service
Remuneration ($) 15 20 25 30 35
75,000 18,750 24,998 31,253 37,500 37,500
100,000 25,000 33,333 41,670 50,000 50,000
125,000 31,250 41,662 52,088 62,500 62,500
150,000 37,500 49,995 62,505 75,000 75,000
175,000(1) 43,750 58,378 72,923 87,500 87,500
200,000(1) 50,000 66,666 83,333 100,000 100,000
225,000(1) 56,250 74,993 93,758 112,500 112,500
250,000(1) 62,500 83,333 104,167 125,000(2) 125,000(2)
(1) These figures are illustrative only. Under applicable law, $150,000 is the
maximum amount of compensation that may be used as the basis for determining
pension benefits in calendar year 1994.
(2) These figures are illustrative only. Under applicable law, $118,800 is the
maximum that may be paid as an annual pension amount in calendar year 1994.
The compensation covered by the Retirement Income Plan of Graham
Corporation, a defined benefit pension plan for the benefit of eligible domestic
employees of Graham and its United States subsidiaries ("U.S. Retirement Plan"),
is base salary only, as reported, in the case of Graham Executive Officers, in
column (a) of the Summary Compensation Table on page 9.
The approximate years of creditable service as of December 31, 1994 of each
of the individuals named in the Cash Compensation Table who is eligible to
participate in the U.S. Retirement Plan are: Mr. Berkeley, 44 years and Mr.
Cadena, 25 years.
The U.S. Retirement Plan Table sets forth straight life annuity amounts
without regard to reduction for Social Security benefits; benefits listed in the
Table are subject to a deduction of 50% of the eligible employee's estimated
primary Social Security benefit.
Employment Contracts
Mr. Berkeley and Mr. Cadena each have employment contracts with Graham for
three-year terms renewable by mutual consent for additional periods. The
contracts each have termination provisions which, in certain circumstances,
would entitle each of them to payments in amounts exceeding $100,000 upon
termination of employment. In some cases, all or a portion of an individual's
bonus is payable after termination of employment, depending on contract terms.
During 1994, Mr. Berkeley accrued interest on deferred bonus amounts which are
payable after termination of employment. At December 31, 1994, the amount of
deferred bonus payable to Mr. Berkeley after termination of employment totaled
$158,067.
Senior Executive Severance Agreements
Graham has entered into Senior Executive Severance Agreements with certain
of its officers. Among them are the named executive officers, Messrs. Berkeley
and Cadena. These agreements, as amended to date, provide that in the event a
third person effects a change of control of Graham (defined generally as an
acquisition of 25% or more of the outstanding voting shares or a change in the
majority of the Board of Directors without the approval of the event causing the
<PAGE>12
change by the Board in office immediately prior to the change), termination of
the individual's employment within two years of such a change of control
entitles the executive to one dollar less than three years' compensation
including bonuses, payable on a monthly basis over three years.
Compensation Committee Interlocks and Insider Participation
The members of Graham's Compensation Committee who served during the fiscal
year ending December 31, 1994 were Directors Armstrong, Bidlack, Hill, Tarnow
and Van Rees. Director Cornelius S. Van Rees is Secretary of Graham but receives
no compensation for his service as Secretary; Mr. Van Rees participated in the
Board's deliberations regarding compensation of all compensated officers of
Graham. During fiscal year 1994, Mr. Van Rees was Of Counsel to the law firm
Thacher Proffitt & Wood, which provided legal services to Graham in 1994.
Board Compensation Committee Report on Executive Compensation
The duty of Graham's Compensation Committee is to establish levels of cash
compensation and forms and amounts of non-cash compensation for the executive
officers of Graham Corporation and subsidiaries. In exercising these functions
in 1994, the Committee has continued to follow the principles it established in
the first year of its operation:
to provide a reasonable level of compensation sufficient to attract and
retain executive personnel best suited by training, ability, and other
relevant criteria for the management requirements of the Company;
to balance base compensation and incentive compensation for the purpose of
motivating executive personnel;
to determine the extent and method of aligning the financial interest of the
Company's executive personnel with the interest of the Company's
stockholders in the appreciation of their investment.
For the second consecutive year, the Committee granted no increases in base
salaries for Graham's Chief Executive Officer or other executive officers.
Also, the Committee maintained the temporary 5% wage reduction for the CEO and
other executive officers that became effective July 1, 1993. In leaving base
compensation for this group unchanged, the factor weighted most heavily by the
Committee was the desirability of holding down operating costs in 1994.
Traditionally, Graham's base salaries for the CEO and executive officers
have been set somewhat below the mid-range of competitive levels. After two
years without base salary increases and more than eighteen months of a reduction
in base salary by 5%, base compensation for the CEO and executive officers is
now significantly below the median compensation levels for similarly situated
executive officers in the industry and region.
In reaching its decisions regarding executive compensation in 1994, the
Committee reviewed a report prepared by an independent consulting firm reviewing
and comparing compensation levels of senior management personnel in
manufacturing industries in western New York. In addition, the Committee
considered information as to compensation levels for officers and senior
managers of comparable scope and responsibility in an industry group of
comparably sized companies selected by Graham management in consultations with
the independent consultants. This industry group included, and the report of
the outside consultants referred to compensation paid by, several of the
companies in the peer group referred to in the Performance Graph on page 12 of
this proxy statement ("Performance Graph Peer Group"). However, the Committee
accorded no greater weight to compensation data for Performance Graph Peer Group
companies than to data for any other companies in the industry group.
<PAGE>13
The Committee took into account the need for the Company to offer
compensation within a competitive range, the need to attract management level
recruits to the Batavia, New York area and to retain them, as well as
management's commitment to the long-term success of the Company. However, these
factors, which together with the information provided by the independent
consultant were accorded approximately comparable weight in evaluating executive
officer compensation, were considered by the Committee to be outweighed by the
immediate need to continue to hold down operating costs.
The Committee determines bonus awards in accordance with the 1989 Executive
Bonus Plan of Graham Corporation ("Bonus Plan"). Pursuant to this plan, a
target bonus for each eligible officer, representing a percentage of base
salary, is recommended to the Committee annually by the CEO; a target bonus for
the CEO is determined by the Committee. The actual amount of bonus earned, if
any, depends upon the degree of attainment of goals established by the Committee
for each year in the following areas: corporate earnings per share, subsidiary
return on capital employed and an individual performance goal for each officer
("Adjustment Factors"). For 1994 the Committee established the minimum pre-tax
earnings goal at 15% of equity; it established the goal for minimum subsidiary
return on capital employed at 20% for Graham Manufacturing Co., Inc. and 15% for
Graham Precision Pumps Limited. These determinations were based on the
Committee's review of pertinent data in the outside consultant's report, with
additional reference to literature in the field and to industry practices for
comparably sized companies. The Committee also weighted the Adjustment Factors
for 1994 at 40% to 50% for corporate earnings, 30% to 40% for subsidiary
earnings and 20% for individual performance goals. Corporate earnings are
weighted for the CEO at 100%. This continues the policy of heavier weighting of
corporate earnings as compared to prior years and reflects the Committee's
desire to emphasize the importance of consolidated corporate results and to
provide additional incentive for executive officers for the improvement of
corporate-wide performance.
No bonuses for the CEO or executive officers were paid for 1994.
No stock options, stock appreciation rights or equity compensation in other
forms were granted in 1994.
This report is furnished by the members of Graham's Compensation Committee:
Richard M. Armstrong
Jerald D. Bidlack, Chairman
Philip S. Hill
Robert L. Tarnow
Cornelius S. Van Rees
COMPARATIVE PERFORMANCE BY THE COMPANY
This section provides a comparison of the cumulative total stockholder
return on the Company's Common Stock with the cumulative total stockholder
return of (i) a broad equity market index and (ii) a published industry index or
peer group over five years. The following chart compares the Common Stock of
Graham with (i) the American Stock Exchange Market Value Index (the "AMEX Index)
and (ii) a group of public companies, each of which shares a Standardized
Industrial Classification code ("SIC Code") with Graham and each of which either
competes with Graham as to one or more product lines or one or more market
segments ("Selected Peer Group Manufacturers"). The chart assumes an investment
of $100 on December 31, 1989 in each of the Common Stock, the stocks comprising
the AMEX Index and the stocks of the Selected Peer Group Manufacturers.
<PAGE>14
Comparison of Five Year Cumulative Total Return Among Graham Corporation
Common Stock, AMEX Market Value Index and Selected Peer Group
Manufacturers(1),(2),(3)
Comparison of Five Year Cumulative Total Return*
Index Index Index Index Index Index
at at at at at at
12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94
Graham Corp.: $100 $ 48 $ 57 $ 63 $ 48 $ 46
American Stock
Exchange Market
Value Index: $100 $ 81 $102 $106 $126 $115
Peer Group: $100 $108 $121 $130 $128 $143
* All returns reflect reinvestment of dividends
(1) The total return for each of the Company's Common Stock, the Index and the
Selected Peer Group Manufacturers assumes the reinvestment of dividends.
(2) The AMEX Index tracks the aggregate price performance of equity securities
of companies traded on the American Stock Exchange. The Company's Common
Stock is traded on the AMEX.
(3) The Selected Peer Group Manufacturers consists of the following
manufacturing companies: American Precision Industries, Duriron Co., Inc.,
Paul Mueller Co., and Selas Corp. of America.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed, subject to ratification by the
stockholders, Deloitte & Touche LLP as auditors of Graham for the fiscal year
ending December 31, 1995. The appointment was made upon the recommendation and
approval of the Audit Committee. The Board of Directors recommends that the
stockholders vote "FOR" such ratification.
A representative of Deloitte & Touche LLP is expected to attend the meeting
and be available to answer appropriate questions and will have an opportunity to
make a statement if he so desires.
OTHER MATTERS
Management does not intend to bring any business before the Meeting other
than those matters set forth in the preceding Notice of Annual Meeting of
Stockholders. Management knows of no other matters to be brought before the
Meeting. However, if any other matters should properly come before the Annual
Meeting, or at any adjournment thereof, it is the intention of the persons named
in the accompanying form of Proxy, as the Proxies for the shares represented
thereby, to vote on such matters as they, in their discretion, may determine.
<PAGE>15
STOCKHOLDER PROPOSALS
Any stockholder wishing to have a proposal considered for inclusion in
Graham's Proxy Statement and form of Proxy relating to the 1996 Annual Meeting
of Stockholders must, in addition to satisfying other applicable requirements,
set forth such proposal in writing and file it with the Secretary of Graham on
or before January 12, 1996.
ANNUAL REPORT
A copy of the Annual Report of Graham containing financial statements for
the year ended December 31, 1994, prepared in conformity with generally accepted
accounting principles, accompanies this Proxy Statement.
A copy of Graham's Annual Report on form 10-K is available upon request to
the Company.
The executive offices of Graham are located at 20 Florence Avenue, Batavia,
New York 14020.
By Order of the Board of Directors
s\ Cornelius S. Van Rees
Cornelius S. Van Rees
Secretary
<PAGE>16
ATTACHMENT A - FORM OF PROXY
PROXY 1995
GRAHAM CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Cornelius S. Van Rees and Robert L. Tarnow,
or either of them, each with power of substitution, as proxies to attend the
Annual Meeting of Stockholders of Graham Corporation to be held at the
Industrial Management Council, 930 East Avenue, Rochester, New York on Thursday,
May 11, 1995 at 11:00 a.m., and any adjournment thereof, and to vote in
accordance with the following instructions the number of shares the undersigned
would be entitled to vote if personally present at such meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
NOMINEES AND FOR RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
1. Election of Directors from the nominees listed below.
FOR AGAINST
Jerald D. Bidlack
to serve until 1998
Philip S. Hill
to serve until 1998
2. Ratification of the appointment of Deloitte & Touche as independent
accountants for the fiscal year ending December 31, 1995.
FOR AGAINST ABSTAIN
3. In their discretion, to vote upon all other matters as may be properly
brought before the meeting.
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this Proxy will
be voted FOR the election of the nominees and for ratification of the
appointment of auditors.
Date: , 1995
(Signature or Signatures)
Please sign exactly as name(s) appears on this proxy and return it promptly
whether you plan to attend the meeting or not. If you do attend, you may, of
course, vote in person. The space below may be used for any questions or
comments you may have.
To help our preparation for the meeting, please check here if
you plan to attend.
<PAGE>17
ATTACHMENT B - FORM OF FOLLOW-UP LETTER
IF YOU HAVE ALREADY SENT IN YOUR PROXY
PLEASE DISREGARD THIS LETTER
TO THE STOCKHOLDERS OF
GRAHAM CORPORATION
A REMINDER
On March 27, 1995, we sent you proxy materials for the Annual Meeting of
Stockholders to be held at the Industrial Management Council, 930 East Avenue,
Rochester, New York on Thursday, May 11, 1995, at 11:00 a.m.
According to our latest records, we have not yet received your Proxy. If you
sent it recently, it may cross this reminder in the mails and you should
disregard this letter.
If you have not yet sent us your Proxy, we believe you would like to have your
vote cast and therefore enclose a duplicate of the Proxy previously sent to you.
For your convenience, we also enclose a postpaid, self-addressed envelope.
Thank you for your cooperation.
Sincerely,
s\ F.D. Berkeley
F.D. BERKELEY
Chairman and Chief
Executive Officer
<PAGE>18
ATTACHMENT C - VOTING INSTRUCTION FORM FOR EMPLOYEE STOCK OWNERSHIP PLAN
AND INCENTIVE SAVINGS PLAN
GRAHAM CORPORATION CONFIDENTIAL VOTING INSTRUCTION
This Instruction is solicited by the Employee Benefits Committee
of Graham Corporation
as a named fiduciary for each of the
EMPLOYEE STOCK OWNERSHIP PLAN OF GRAHAM CORPORATION
and the
INCENTIVE SAVINGS PLAN OF GRAHAM CORPORATION
(together, the "Plans")
For the Annual Meeting of Stockholders to be held on May 11, 1995
The undersigned Participant, Former Participant or Beneficiary of
a deceased Former Participant in one or both of the Plans (the
"Instructor") hereby provides the voting instructions hereinafter
specified to the Employee Benefits Committee of Graham Corporation (the
"Committee"), which instructions shall be taken into account in
directing the respective Trustees of the Plans to vote, in person, by
limited or general power of attorney, or by proxy, the shares and
fractional shares of common stock (the "Shares") of Graham Corporation
(the "Corporation") which are held by the respective Trustees of the
Plans, in their capacities as Trustees, as of March 24, 1995 (the
"Record Date") at the Annual Meeting of Stockholders of the Corporation
(the "Annual Meeting") to be held at the Industrial Management Council,
930 East Avenue, Rochester, New York on May 11, 1995 at 11:00 a.m., or
at any adjournment thereof.
As to the nominees and the proposals listed on the reverse side
hereof and as more particularly described in the Corporation's Proxy
Statement dated March 27, 1995, the Committee will give voting
directions to the Trustees of the Plans. Such directions will reflect
the voting instructions filed by the Instructor on this Confidential
Voting Instruction, in the manner described in the accompanying letter
from the Committee dated April 7, 1994.
As to other matters which may properly come before the Annual
Meeting, the Trustees will be instructed to vote upon such matters in
its discretion, or cause such matters to be voted upon in the discretion
of the individuals named in any proxies executed by it.
The instructions set forth on the reverse side hereof will be taken
into account as described above in directing the respective Trustees of
the Plans how to vote the Shares of the Corporation held by them as of
the Record Date in their capacities as Trustees, provided this card is
received by William M. Mercer, Inc. by April 28, 1995.
Please mark, sign and date this voting instruction card on the
reverse side and return it in the enclosed envelope.
<PAGE>19
IF THIS VOTING INSTRUCTION IS SIGNED BUT NO DIRECTION IS GIVEN, THIS
VOTING INSTRUCTION CARD WILL BE DEEMED TO INSTRUCT VOTES "FOR" THE
ELECTION OF THE NOMINEES AND "FOR" PROPOSAL 2.
ESOP COMMON ISP COMMON PLEASE MARK YOUR CHOICE LIKE
(as of 3/24/95) (as of 3/31/95) THIS X IN BLUE OR BLACK INK.
The Board of Directors Recommends a Vote "For" the election of nominees
and "For" proposal 2.
1. Election of Directors: 2. Ratification of the appointment
FOR AGAINST of Deloitte & Touche LLP, as
independent accountants for the
Jerald D. Bidlack fiscal year ending December 31,
1995.
Philip S. Hill
FOR AGAINST ABSTAIN*
3. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Annual Meeting or any
adjournment thereof.
The undersigned hereby instructs the Committee
to direct the Trustees of the respective Plans
to vote in accordance with the voting
instructions indicated above and hereby
acknowledges receipt of the letter from the
Committee dated April 7, 1995, a Notice of
Annual Meeting of Stockholders of Graham
Corporation and a Proxy Statement for the
Annual Meeting.
Date
Signature
Signature
Please sign exactly as your name appears on
this instruction. Each owner of shares held
jointly must sign this voting instruction. If
signing as attorney, executor, administrator,
trustee or guardian, please include your full
title. Corporate proxies must be signed by an
authorized officer.
* For purposes of your Incentive Savings Plan
Account and the unallocated Shares held by
the Employee Stock Ownership Plan,
abstention is equivalent to not voting.
<PAGE>20
ATTACHMENT D - VOTING INSTRUCTION FORM FOR EMPLOYEE STOCK OWNERSHIP PLAN
GRAHAM CORPORATION CONFIDENTIAL VOTING INSTRUCTION
This Instruction is solicited by the Employee Benefits Committee
of Graham Corporation
as a named fiduciary for each of the
EMPLOYEE STOCK OWNERSHIP PLAN OF GRAHAM CORPORATION ("Plan)
For the Annual Meeting of Stockholders to be held on May 11, 1995
The undersigned Participant, Former Participant or Beneficiary of
a deceased Former Participant in one or both of the Plans (the
"Instructor") hereby provides the voting instructions hereinafter
specified to the Employee Benefits Committee of Graham Corporation (the
"Committee"), which instructions shall be taken into account in
directing the respective Trustees of the Plans to vote, in person, by
limited or general power of attorney, or by proxy, the shares and
fractional shares of common stock (the "Shares") of Graham Corporation
(the "Corporation") which are held by the respective Trustees of the
Plans, in their capacities as Trustees, as of March 24, 1995 (the
"Record Date") at the Annual Meeting of Stockholders of the Corporation
(the "Annual Meeting") to be held at the Industrial Management Council,
930 East Avenue, Rochester, New York on May 11, 1995 at 11:00 a.m., or
at any adjournment thereof.
As to the nominees and the proposals listed on the reverse side
hereof and as more particularly described in the Corporation's Proxy
Statement dated March 27, 1995, the Committee will give voting
directions to the Trustees of the Plans. Such directions will reflect
the voting instructions filed by the Instructor on this Confidential
Voting Instruction, in the manner described in the accompanying letter
from the Committee dated April 7, 1994.
As to other matters which may properly come before the Annual
Meeting, the Trustees will be instructed to vote upon such matters in
its discretion, or cause such matters to be voted upon in the discretion
of the individuals named in any proxies executed by it.
The instructions set forth on the reverse side hereof will be taken
into account as described above in directing the respective Trustees of
the Plans how to vote the Shares of the Corporation held by them as of
the Record Date in their capacities as Trustees, provided this card is
received by William M. Mercer, Inc. by April 28, 1995.
Please mark, sign and date this voting instruction card on the
reverse side and return it in the enclosed envelope.
<PAGE>21
IF THIS VOTING INSTRUCTION IS SIGNED BUT NO DIRECTION IS GIVEN, THIS
VOTING INSTRUCTION CARD WILL BE DEEMED TO INSTRUCT VOTES "FOR" THE
ELECTION OF THE NOMINEES AND "FOR" PROPOSAL 2.
ESOP COMMON ISP COMMON PLEASE MARK YOUR CHOICE LIKE
(as of 3/24/95) (as of 3/31/95) THIS X IN BLUE OR BLACK INK.
The Board of Directors Recommends a Vote "For" the election of nominees
and "For" proposal 2.
1. Election of Directors: 2. Ratification of the appointment
FOR AGAINST of Deloitte & Touche LLP, as
independent accountants for the
Jerald D. Bidlack fiscal year ending December 31,
1995.
Philip S. Hill
FOR AGAINST ABSTAIN*
3. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Annual Meeting or any
adjournment thereof.
The undersigned hereby instructs the Committee
to direct the Trustees of the respective Plans
to vote in accordance with the voting
instructions indicated above and hereby
acknowledges receipt of the letter from the
Committee dated April 7, 1995, a Notice of
Annual Meeting of Stockholders of Graham
Corporation and a Proxy Statement for the
Annual Meeting.
Date
Signature
Signature
Please sign exactly as your name appears on
this instruction. Each owner of shares held
jointly must sign this voting instruction. If
signing as attorney, executor, administrator,
trustee or guardian, please include your full
title. Corporate proxies must be signed by an
authorized officer.
* For purposes of your Incentive Savings Plan
Account and the unallocated Shares held by
the Employee Stock Ownership Plan,
abstention is equivalent to not voting.
<PAGE>22
ATTACHMENT E - LETTER TO EMPLOYEE STOCK OWNERSHIP PLAN AND INCENTIVE
SAVINGS PLAN ACCOUNTHOLDERS
Employee Benefits Committee
April 7, 1995
Dear Plan Accountholder:
The Employee Stock Ownership Plan of Graham Corporation
("ESOP") and the Incentive Savings Plan of Graham Corporation
("ISP") have related trusts (the "ESOP Trust" and the "ISP Trust,"
respectively) which own common stock of Graham Corporation
("Graham"). Chemical Bank, as trustee of the ESOP ("ESOP Trustee")
and Manufacturers and Traders Trust Company, as trustee of the ISP
("ISP Trustee") are stockholders of Graham and may vote on matters
presented for stockholder action at Graham's 1995 Annual Meeting of
Stockholders scheduled to be held on May 11, 1995 ("Annual Meeting").
The ESOP Trust and the ISP Trust provide that in casting their
votes at the 1995 Annual Meeting, the ESOP Trustee and the ISP
Trustee are to follow directions given by Graham's Employee
Benefits Committee ("Committee"). The Committee in turn follows
instructions provided by participants, former participants and
beneficiaries of deceased former participants with respect to the
Graham common stock allocated to their accounts in the ESOP as of
March 24, 1995 and the Company Stock Fund of the ISP ("Company
Stock Fund") as of March 31, 1995.
The records for the ESOP and the ISP indicate that you are
among the individuals who may give voting instructions. You may
give your instructions by completing and signing the enclosed
Confidential Voting Instruction Card ("Instruction Card") and
returning it in the envelope provided to William M. Mercer, Inc.
The Instruction Card lets you give instructions for each matter
expected to be presented for stockholder action at the Annual
Meeting. The Committee expects William M. Mercer, Inc. to tabulate
the instructions given on a confidential basis and to provide the
Committee with only the final results of the tabulation. The final
results will be used in directing the ESOP Trustee and the ISP
Trustee.
The voting of the common stock held by the ESOP Trust and the
ISP Trust is subject to legal requirements under the Employee
Retirement Income Security Act of 1974, as amended. The Committee,
in consultation with its legal advisors, considers these
requirements in establishing voting instruction procedures and
directing the ESOP Trustee and the ISP Trustee how to vote. The
remainder of this letter describes the voting procedures which the
Committee expects to follow for the 1995 Annual Meeting.
How your voting instructions counts depends on whether it was
anticipated that the matter being voted upon would be presented for
stockholder action at the Annual Meeting; whether you had an
interest in the ESOP Trust or the Company Stock Fund on the proper
date; and how large your interest was, as follows:
<PAGE>23
Anticipated Proposals
If Graham Common Stock Was Allocated to Your Account Under the
ESOP Trust as of March 24, 1995.
(a) Allocated Common Stock. In general, the ESOP Trustee will
be directed to vote the number of shares of Graham common stock (if
any) held by the ESOP Trust and allocated as of March 24, 1995 to
your individual account under the ESOP according to the
instructions specified on the reverse side of the Instruction
Card. The Instruction Card shows the number of shares of Graham
common stock allocated to your individual account under the ESOP
Trust as of March 24, 1995. If you do not file the Instruction
Card by April 28, 1995 you will be deemed to have instructed the
ESOP Trustee to ABSTAIN as to all proposals.
(b) Unallocated Common Stock. The ESOP Trust holds certain
shares of Graham common stock that are not allocated to any
individual's account. In general, the ESOP Trustee will be
directed to vote the Graham common stock held by the ESOP Trust and
not allocated to any individual's account by casting votes FOR or
AGAINST each proposal identified on the reverse side of the
Instruction Card, in the same proportions as instructions to cast
votes FOR or AGAINST such proposal are given with respect to
allocated Graham common stock. For purposes of the ESOP, if you do
not file the Instruction Card by April 28, 1995 or if you ABSTAIN
as to a proposal, your instructions will not count in voting
unallocated Graham common stock. Each individual's instructions
are weighted according to the number of shares of Graham common
stock allocated to all individuals' accounts as of March 24, 1995.
If You Had an Interest in the Company Stock Fund as of March
31, 1995.
In general, the ISP Trustee will be directed to vote the
Graham common stock held by the Company Stock Fund by casting votes
FOR and AGAINST each proposal specified on the reverse side of the
Instruction Card in the same proportions as instructions to cast
votes FOR and AGAINST such proposal are given by the individuals
who are entitled, under the ISP, to give instructions. The
instructions given by each individual are weighted according to the
value of his respective interest in the Company Stock Fund as of
March 31, 1995. The Instruction Card shows the approximate number
of shares of Graham common stock (if any) -- and thus the
approximate number of votes -- represented by your interest in the
Company Stock Fund as of March 31, 1995. For purposes of the ISP,
if you do not file the Instruction Card by April 28, 1995 or if you
ABSTAIN as to a proposal, your instructions will not count.
Unanticipated Proposals
It is possible, although very unlikely, that proposals other
than those specified on the Instruction Card will be presented for
stockholder action at the 1995 Annual Meeting. If this should
happen, the ESOP Trustee and the ISP Trustee will be instructed to
vote upon such matters in their discretion, or to cause such
matters to be voted upon in the discretion of the individuals named
in any proxies executed by them.
<PAGE>24
Your interest in the ESOP Trust or in the ISP Trust offers you
the opportunity to participate, as do Graham's stockholders, in
decisions that affect Graham's future, and we encourage you to take
advantage of it. To help you decide how to complete the
Instruction Card, enclosed is a copy of the Proxy Statement that
is being furnished to all holders of Graham common stock in
connection with the 1995 Annual Meeting. Please complete, sign and
return your Instruction Card today. Your instructions are
important regardless of the size of your interest in the ESOP Trust
or in the Company Stock Fund.
If you have questions regarding the terms of the ESOP or the
ISP, or how to complete the Instruction Card, please call J. Ronald
Hansen, Vice President-Finance/Human Resources at (716) 343-2216.
Sincerely,
EMPLOYEE BENEFITS COMMITTEE
OF GRAHAM CORPORATION
Enclosure
<PAGE>25
ATTACHMENT F - FORM OF CERTIFICATE EVIDENCING A BENEFICIAL INTEREST
IN THE EMPLOYEE STOCK OWNERSHIP PLAN
EMPLOYEE STOCK OWNERSHIP PLAN
OF
GRAHAM CORPORATION
AN EMPLOYEE BENEFIT PLAN FOR EMPLOYEES OF GRAHAM CORPORATION
AND ITS AFFILIATES
This Certifies that
is the beneficial owner of
fully paid and non-assessable Shares, par value $.10 per share,
of the COMMON STOCK of
GRAHAM CORPORATION
A CORPORATION INCORPORATED UNDER THE LAWS OF THE
STATE OF DELAWARE
held for the named individual's benefit by Chemical Bank, as
Trustee of the Employee Stock Ownership Plan of Graham Corporation.
s\Cornelius S. Van Rees s\F.D. Berkeley
Cornelius S. Van Rees F.D. Berkeley
Secretary President
This Certificate is not a Certificate of Stock issued by Graham
Corporation. A Certificate of Stock representing the Shares
described herein has been issued to the Trustee. This Certificate
and the interest in Shares represented hereby may not be
transferred or assigned by the named individual.
