As filed with the Securities and Exchange Commission
on March 20, 1997 REGISTRATION NO.
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
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GRAHAM CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 16-1194720
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER
ORGANIZATION) IDENTIFICATION NO.)
20 FLORENCE AVENUE
BATAVIA, NEW YORK 14020
(716) 343-2216
(ADDRESS, INCLUDING ZIP CODE, OF PRINCIPAL EXECUTIVE OFFICES)
---------------
1995 GRAHAM CORPORATION
INCENTIVE PLAN TO INCREASE SHAREHOLDER VALUE
(FULL TITLE OF THE PLAN)
---------------
William A. Smith, Jr.
General Counsel
Graham Corporation
20 Florence Avenue
Batavia, New York 14020
(716) 343-2216
Copy to:
W. Edward Bright, Esq.
Thacher Proffitt & Wood
Two World Trade Center - 39th Floor
New York, New York 10048
(212) 912-7400
(NAME AND ADDRESS, INCLUDING ZIP CODE, TELEPHONE NUMBER AND AREA CODE, OF
AGENT FOR SERVICE)
---------------
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
====================================================================================================================================
Title of Securities Amount to be Registered(1) Proposed Maximum Offering Proposed Maximum Amount of
to be Registered Price Per Share (2) Aggregate Offering Price (2) Registration Fee
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<S> <C> <C> <C> <C>
Common Stock, $0.10 par value 150,000 shares $14.9375 $2,001,968 $605
====================================================================================================================================
</TABLE>
(1) Based on the number of shares of common stock of Graham Corporation
("Graham") reserved for issuance upon exercise of options granted
pursuant to the 1995 Graham Corporation Incentive Plan to Increase
Shareholder Value ("Plan"). In addition to such shares, this
registration statement also covers an undetermined number of shares of
common stock of Graham that, by reason of certain events specified in
the Plan, may become issuable upon exercise of options through the use
of certain anti-dilution provisions.
(2) Estimated solely for purpose of calculating the registration fee in
accordance with Rule 457 of the Securities Act of 1933, pursuant to
which shares subject to outstanding options are deemed to be offered at
the prices at which such options may be exercised and shares that may
be acquired upon exercise of options granted in the future are deemed
to be offered at $14.9375 per share, the average of the daily high and
low sales prices of common stock of Graham on the American Stock
Exchange at the close of trading on March 14, 1997.
================================================================================
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION.
Not required to be filed with the Securities and Exchange
Commission (the "Commission").
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Not required to be filed with the Commission.
Note: The document containing the information specified in
this Part I will be sent or given to employees as specified by Rule 428(b)(1).
Such document need not be filed with the Commission either as part of this
registration statement or as prospectuses or prospectus supplements pursuant to
Rule 424. These documents and the documents incorporated by reference in this
registration statement pursuant to Item 3 of Part II of this form, taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act of 1933, as amended ("Securities Act").
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents and information heretofore filed with
the Commission by the Registrant are incorporated by reference in this
registration statement:
(1) the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995, which was filed with the
Commission pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act");
(2) the Registrant's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1996, June 30, 1996, and September
30, 1996, filed with the Commission pursuant to the Exchange
Act;
(3) the description of the Registrant's Common Stock (the "Common
Stock") contained in the Registrant's Registration Statement
on Form 8-A, as amended by Form 8, filed with the Commission
pursuant to the Exchange Act;
(4) the description of the Common Stock Purchase Rights (the
"Rights") issued by the Registrant pursuant to the Rights
Agreement dated as of February 23, 1990 (the "Rights
Agreement") between the Registrant and Chase Lincoln First
Bank N.A., (now known as Chase Manhattan Bank), contained in
the Registration
<PAGE>
Statement on Form 8-A, as amended by Form 8, filed with the
Commission on March 2, 1990, pursuant to which the Registrant
registered the Rights pursuant to Section 12(g) of the
Exchange Act; and
(5) the Graham Corporation Proxy Statement dated April 5, 1996 for
Annual Meeting of Shareholders held on May 9, 1996.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act after the date hereof and prior to the date of the
termination of the offering of the Common Stock offered hereby shall be deemed
to be incorporated by reference into this registration statement and to be a
part hereof from the date of filing of such documents. Any statement contained
herein or in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
registration statement to the extent that a statement contained herein or in any
document which is or is deemed to be incorporated by reference herein modifies
or supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
registration statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's authority to indemnify its officers and
directors is governed by the provisions of Section 145 of the Delaware General
Corporation Law, as amended, ("DGCL") and by the Certificate of Incorporation of
the Registrant.
Article Fourteenth of the Registrant's Certificate of
Incorporation requires the Registrant, among other things, to indemnify its
directors, officers, employees and agents to the fullest extent permitted by the
DGCL and provides that such rights of indemnification shall be in addition to
any rights to which any such director, officer, employee or agent may otherwise
be entitled to under any other statute, the Certificate of Incorporation or by
virtue of any agreement or vote of the shareholders or disinterested directors
or otherwise both as to action in his or her official capacity and as to action
in another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such person.
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<PAGE>
Article Fourteenth of the Certificate of Incorporation of the
Registrant also provides that to the fullest extent permitted by the DGCL, a
director shall not be liable to the Registrant or its shareholders for monetary
damages for breach of fiduciary duty as a director.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Registrant pursuant to the foregoing, the Registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
4.1 1995 Graham Corporation Incentive Plan to Increase
Shareholder Value.
4.2 Form of Stock Option Agreement Pursuant to the 1995
Graham Corporation Incentive Plan to Increase
Shareholder Value.
4.3 Certificate of Incorporation of Graham Corporation,
as amended, incorporated by reference to the
Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989 filed with the
Commission pursuant to the Exchange Act.
4.4 By-Laws of Graham Corporation, incorporated by
reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1995,
which was filed with the Commission pursuant to the
Exchange Act.
4.5 Shareholder Rights Plan of Graham Corporation
incorporated by reference to the Registrant's Current
Report on Form 8-K filed on February 26, 1991, as
amended by Amendment No. 1 filed on Form 8 dated June
1, 1991.
5. Opinion of Thacher Proffitt & Wood, counsel for
Registrant, as to the legality of the securities
being registered.
23.1 Consent of Thacher Proffitt & Wood (included in
Exhibit 5 hereof).
23.2 Consent of Deloitte & Touche LLP.
ITEM 9. UNDERTAKINGS.
A. RULE 415 OFFERING. The undersigned Registrant hereby
undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
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<PAGE>
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the registration statement is on Form S-3 or Form
S-8, and the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY
REFERENCE. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein and the offering of such
securities at that time shall be deemed to be the initial BONA FIDE offering
thereof.
C. INCORPORATED ANNUAL AND QUARTERLY REPORTS. The undersigned
Registrant hereby undertakes to deliver or cause to be delivered with the
prospectus, to each person to whom the prospectus is sent or given, the latest
annual report to security holders that is incorporated by reference in the
prospectus and furnished pursuant to and meeting the requirements of Rule 14a- 3
or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim
financial information required to be presented by Article 3 of Regulation S-X is
not set forth in the prospectus, to deliver, or cause to be delivered to each
person to whom the prospectus is sent or given, the latest quarterly report that
is specifically incorporated by reference in the prospectus to provide such
interim financial information.
D. FILING OF REGISTRATION ON FORM S-8. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons
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<PAGE>
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant for expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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<PAGE>
EXPLANATORY NOTE
This registration statement includes or is deemed to include two forms of
prospectus: one to be sent or given to certain participants (the "Participant
Prospectus") in the 1995 Graham Corporation Incentive Plan to Increase
Shareholder Value ("Plan") pursuant to Part I of Form S-8 and Rule 428(b)(1)
under the Securities Act of 1933, as amended ("Securities Act"), and one to be
used in connection with certain reoffers and resales (the "Resale Prospectus")
of shares of Common Stock, par value $0.10 per share, of Graham Corporation by
participants in the Plan as contemplated by Instruction C to Form S-8 under the
Securities Act. The form of Participant Prospectus has been omitted from this
registration statement as permitted by Part I of Form S-8. The form of Resale
Prospectus is included herein immediately following this page.
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<PAGE>
CROSS REFERENCE SHEET REQUIRED BY ITEM 501(b) OF REGULATION S-K
(Showing location of Information Requested by Form S-3)
ITEMS REQUIRED BY PART I OF FORM S-3
S-3 ITEM PROSPECTUS HEADING
1. Front of Registration Statement and Facing Page; Outside Front Cover
Outside Front Cover Page of Prospectus Page; this Cross-Reference Sheet
2. Inside Front and Outside Back Cover Available Information;
Pages of Prospectus Incorporation of Certain Documents
by Reference; Table of Contents
3. Summary Information, Risk Factors Risk Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Determination of Offering Price
6. Dilution Not Applicable
7. Selling Security Holders Selling Security Holders
8. Plan of Distribution Plan of Distribution
9. Description of Securities to be Not Applicable
Registered
10. Interests of Named Experts and Counsel Legal Opinions; Experts
11. Material Changes Not Applicable
12. Incorporation of Certain Documents by Incorporation of Certain Documents
Reference by Reference
13. Disclosure of Commission Position on Indemnification of Directors and
Indemnification for Securities Act Officers
Liabilities
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<PAGE>
PROSPECTUS
GRAHAM CORPORATION
150,000 SHARES OF COMMON STOCK
($0.10 PAR VALUE)
OFFERED OR TO BE OFFERED BY CERTAIN SELLING SHAREHOLDERS OF
GRAHAM CORPORATION FOLLOWING THEIR ACQUISITION UNDER
THE 1995 INCENTIVE PLAN TO INCREASE SHAREHOLDER VALUE
Certain holders of Graham Corporation Common Stock may offer,
from time to time, up to 150,000 shares of Graham Common Stock which they have
acquired under the 1995 Incentive Plan to Increase Shareholder Value ("Plan").
The shares may be sold directly by the holder to purchasers or may be given by
the holder to donees, such as members of the holder's family or charitable
organizations, and then sold by the donee to the purchasers. Sales may occur
through the facilities of the American Stock Exchange, on which the shares are
listed, or may occur privately.
This Prospectus relates to 150,000 authorized shares of Graham Common
Stock registered for purchase under the Plan. Such shares are, at the date
hereof, either unissued shares or are held as treasury stock by Graham
Corporation (the "Company"). It is suggested that this Prospectus be retained
for future reference. This Prospectus contains a discussion of material risks in
connection with the purchase of shares of the Company. See "Risk Factors"
beginning on page 3.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS ANY SUCH
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
The date of this prospectus is March 20, 1997
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended ("Exchange Act") and, in
accordance therewith, files reports and other information with the Securities
and Exchange Commission (the "Commission"). Information, as of particular dates,
concerning directors and officers, their remuneration, the principal holders of
Graham Common Stock, and any material interest of such persons in transactions
with the Company is disclosed in proxy statements distributed to shareholders of
the Company and filed with the Commission. Such reports, proxy statements, and
other information can be inspected and copied at the offices of the Commission
at Room 1024, Judiciary Plaza, 450 Fifth Street N.W., Washington, D.C. 20549; at
Public Reference Facilities in the Chicago Regional Office, 500 West Madison
Street, Chicago, Illinois 60661; and at the New York Regional Office in Seven
World Trade Center, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the Commission at 450 Fifth Street
N.W., Washington, D.C. 20549 at prescribed rates. Graham Common Stock is traded
on the American Stock Exchange. The Commission maintains a Web site
(http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission, such as the Company. Reports, proxy material and other information
concerning the Company may also be inspected at the offices of the American
Stock Exchange, 86 Trinity Place, New York, New York 10006.
The Company has filed with the Commission in Washington D.C.,
a Registration Statement under the Securities Act of 1933, as amended
("Securities Act"), with respect to the securities to which this prospectus
relates. As permitted by the rules and regulations of the Commission, this
prospectus does not contain all the information set forth in the Registration
Statement, including the exhibits thereto, which may be obtained from the Public
Reference Section of the Commission at 450 Fifth Street N.W., Washington, D.C.
20549, upon payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are incorporated by reference herein the Graham
Corporation Proxy Statement dated April 5, 1996, the Graham Corporation Annual
Report on 10-K for the year ended December 31, 1995 and the Registrant's
Quarterly Reports on Form 10-Q for the fiscal quarters ended March 30, 1996,
June 30, 1996, and September 30, 1996 filed with the Commission pursuant to the
Exchange Act. The description of the class of securities offered under the Plan
is described in the Registration Statement on Form 8-A, as amended, filed by the
Company with the Commission pursuant to the Exchange Act. Such descriptions are
incorporated by reference herein.
All documents filed by the Company pursuant to Sections 13,
14, or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the securities made hereby are
incorporated herein by reference, and such documents shall be deemed to be a
part hereof from the date of filing of such documents. Any statement contained
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a
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<PAGE>
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom
this Prospectus is delivered, upon request of any such person, a copy of any or
all of the foregoing documents incorporated herein by reference (other than
exhibits to such documents). Written requests shall be directed to Mr. William
A. Smith, Jr., General Counsel, Graham Corporation, 20 Florence Avenue, Batavia,
New York 10420. Telephone requests may be directed to (716) 343-2216.
The principal executive offices of the Company are located at
20 Florence Avenue, Batavia, New York 14020. The telephone number at such
offices is (716) 343-2216.
CERTAIN CONSIDERATIONS
RISK FACTORS
THE COMPANY. Graham Corporation was organized in 1983 as a Delaware
holding company and is the successor to Graham Manufacturing Co., Inc., now a
wholly owned subsidiary of the Company. Graham Manufacturing Co., Inc. was
organized in 1936 under the laws of the State of New York. The Company manages
the activities of various subsidiaries that are located in the United States and
the United Kingdom. The Company is primarily engaged in the custom manufacture
and design of vacuum and heat transfer equipment. The principal customers for
these products are large industrial corporations in the chemical, petrochemical,
petroleum refining and electric power generating industries. The Company's
products are sold through a combination of direct sales engineers and
independent sales representatives located in over 40 major cities in the United
States and abroad. Consolidated sales in 1995 were $49,480,000, resulting in net
income of $1,134,000 or $0.72 per share.
Graham's United States operation consists of one wholly-owned,
separately incorporated subsidiary, Graham Manufacturing Co., Inc. ("GMC")
located in Batavia, New York. GMC is a leading manufacturer of steam jet ejector
vacuum systems. In addition, GMC is a recognized manufacturer of surface
condensers for steam turbines, liquid ring vacuum pumps and various types of
heat exchangers such as Heliflow, plate and frame, and special types of nuclear
shell and tube heat exchangers. Graham's United Kingdom operation consists of
two subsidiaries, Graham Vacuum & Heat Transfer Limited and Graham Precision
Pumps Limited ("GPPL") in Congleton, Cheshire. U.K. sales were $5,494,000 in
1995 (converted at an exchange rate of $1.58 per British Pound Sterling).
CONCENTRATION OF CUSTOMERS IN CYCLICAL INDUSTRIES. Historically, almost
all of the Company's revenues have been derived from sales to corporations in
the chemical, petrochemical, petroleum refining and electrical power generating
industries. Corporations in these industries have historically experienced
cyclical periods of construction and expansion of their plants and facilities.
Currently, in the United States, these industries are experiencing a protracted
cycle of little expansion of existing facilities. For example, no new major
petroleum
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<PAGE>
refining facilities have been constructed in the United States in 20 years.
Demand for the Company's products has increasingly come from the construction of
new facilities outside the United States and from the upgrading of existing
facilities within the United States. While the Company believes that demand for
its products will increase, there can be no assurance that the Company will be
successful in its efforts to continue to derive a greater portion of revenues
from outside the United States or that the cyclical downturn in the Company's
customers' industries will not continue.
FLUCTUATION OF FINANCIAL RESULTS. The Company's revenues and operating
results could fluctuate significantly from period to period. Given the
relatively large sales price of the Company's products and variations in profit
margins between product lines, a limited number of product orders may account
for a substantial portion of revenues and profits in any particular period. As a
result of these and other factors, the Company could experience significant
fluctuations in revenues and operating results in future periods.
TECHNOLOGICAL OBSOLESCENCE. The Company believes that its future
success will depend in part upon its ability to enhance existing products and to
develop and manufacture new products that meet new demands from its customers.
The failure to introduce new or enhanced products on a timely and
cost-competitive basis could have a material adverse effect on the Company's
financial condition and results of operation.
COMPETITIVE MARKETPLACE. The markets in which the Company operates are
composed of other global and regional competitors, some of which may have
greater financial, engineering, manufacturing or other resources than the
Company. While the Company believes that in the manufacture of steam jet
ejectors it is a leading manufacturer, the Company gathers a small percentage of
the market share in its other product areas. There can be no assurance that the
Company will have sufficient resources to continue as a leading manufacturer of
steam jet ejectors or that it will be successful in capturing additional market
share.
INCREASED NUMBER OF REGISTERED SHARES. Public trading in the Company's
Common Stock may be characterized by a small trading volume. The addition of a
substantial number of additional shares eligible for public trading may have the
effect of creating an excess of the supply of shares for sale over the demand
for shares to be purchased, which may lead to a decline of the prevailing prices
at which shares of the Common Stock may trade.
ANTI-TAKEOVER PROVISIONS
CORPORATE STRUCTURE. The Company's Certificate of Incorporation (the
"Certificate of Incorporation") and By-laws contain certain provisions that may
discourage potential takeover attempts that are not negotiated with the
Company's Board of Directors. As a result, these provisions may have the effect
of precluding takeover attempts that shareholders deem to be in their best
interests, or in which shareholders might otherwise have received a substantial
premium for their shares over the then-current market price, as well as making
it more difficult for shareholders to acquire majority representation on the
Board of Directors.
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<PAGE>
These provisions provide, among other things: (1) that the Company's
Board of Directors be divided into three classes with staggered terms; (2) that
approval of the holders of 75% of the shares of stock entitled to vote, as well
as the approval of the majority of the holders of shares of stock entitled to
vote, if a corporation, person or other entity owns more than 50% of the shares
of stock entitled to vote, be obtained for consummation of certain business
combinations not approved in advance by the Company's Board of Directors (such
as the merger or dissolution of Company); (3) for the issuance of additional
shares of common stock or shares of preferred stock by the Company's Board of
Directors without the approval of the shareholders (including the issuance of
such shares in connection with a Shareholder Rights Plan); (4) that cumulative
voting shall not be permitted in connection with the election of directors; and
(5) that special meetings of shareholders may be called only by the Chairman of
the Board, the President or by two directors or more.
DELAWARE LAW. In general, Section 203 of the Delaware General
Corporation Law ("DGCL") prevents an "interested stockholder" (defined generally
as a person with 15% or more of a corporation's outstanding voting stock) from
engaging in a "business combination" (as defined in the DGCL) with a Delaware
corporation for three years following the date such person became an interested
stockholder.
The provision is not applicable when (i) prior to the date the
stockholder became an interested stockholder, the board of directors of the
corporation approved either the business combination or the transaction that
resulted in the stockholder becoming an interested stockholder, (ii) upon
consummation of the transaction that resulted in the stockholder becoming an
interested stockholder, the interested stockholder owned at least 85% of the
outstanding voting stock of the corporation, not including shares owned by
directors who are also officers and by certain employee stock plans or (iii) on
or subsequent to the date the stockholder becomes an interested stockholder, the
business combination is approved by the board of directors of the corporation
and authorized at a meeting of stockholders, and not by written consent, by the
affirmative vote of the holders of at least two-thirds of the outstanding voting
stock entitled to vote thereon, excluding shares owned by the interested
stockholder.
The DGCL's restrictions generally do not apply to business combinations
with an interested stockholder that are proposed subsequent to the public
announcement of, and prior to the consummation or abandonment of, certain
mergers, sales of a majority of the corporation's assets or tender offers for
50% or more of the corporation's voting stock.
The DGCL allows corporations to elect not to be subject to the
provisions of the DGCL. The Company has not so elected.
VOTING CONTROL OF EXECUTIVE OFFICERS AND DIRECTORS. Directors and
executive officers of the Company currently hold or control the voting of
approximately 21.2% of the outstanding shares of Graham Common Stock either
directly or through participation in employee benefit plans. Management's
potential voting control could, together with additional stockholder support,
defeat stockholder proposals requiring a super majority vote. As a result, these
provisions may preclude or render more difficult takeover attempts that certain
stockholders may deem to be in their best interest and may tend to perpetuate
existing management.
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<PAGE>
PROVISIONS OF REMUNERATION PLANS AND AGREEMENTS. Employment agreements
with certain management officials of the Company and certain provisions of the
Company's stock option plans may provide for benefits and cash payments in the
event of a change in control of the Company. These provisions may have the
effect of increasing the cost of acquiring the Company, thereby discouraging
future attempts to take over the Company.
POSSIBLE DILUTIVE EFFECT OF STOCK OPTIONS. Directors, officers and
employees of the Company have been granted options to purchase Graham Common
Stock and authorized but unissued shares have been reserved for issuance upon
exercise of such options. Such reserved shares amount to approximately 11.9% of
the outstanding Graham Common Stock. In addition, authorized but unissued shares
in an amount equal to approximately 7.0% of the outstanding Graham Common Stock
have been reserved for issuance pursuant to additional options that may be
granted pursuant to the Company's existing option plans. If all the options
granted but not exercised and which may be granted in the future were to be
exercised using authorized but unissued Graham Common Stock, the voting interest
of existing shareholders would be diluted by approximately 18.9%.
USE OF PROCEEDS
The shares will be offered by certain individuals who acquire
them upon exercise of options granted under the Plan for their personal
accounts. The proceeds from such sales will be used by them for their personal
benefit. The Company will not receive any portion of the payment for the shares.
DETERMINATION OF OFFERING PRICE
The purchase price of the shares offered hereby will be the
market price (plus customary or negotiated brokerage commissions) prevailing at
the time of the sale in the case of transactions on the American Stock Exchange
and negotiated prices related to market prices in private negotiated
transactions not on any securities exchange.
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<PAGE>
SELLING SHAREHOLDERS
The shares offered hereby have been issued to optionees under the Plan
or will be issued upon exercise of options or stock appreciation rights under
the Plan. Not all optionees under the Plan are affiliates of the Company. The
directors and executive officers of the Company to whom options or stock
appreciation rights have been granted under the Plan are:
<TABLE>
<CAPTION>
============================================================================================================================
OWNED OR TO
BE OWNED
UPON
EXERCISE OF NUMBER OF
OPTIONS NUMBER OF SHARES TO PERCENTAGE
NUMBER OF (WHETHER OR SHARES BE HELD OF CLASS TO
POSITION AT COMPANY OR SHARES NOT VESTED COVERED BY AFTER BE OWNED
SELLING AFFILIATES WITHIN THE PAST BENEFICIALLY ON MARCH 19, THIS OFFERING AFTER
SHAREHOLDER THREE YEARS OWNED(1) 1997) PROSPECTUS (2) OFFERING(3)
============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Frederick D. Berkeley Chairman of the Board, 213,297 23,250 0 213,297 13.4%
President and Chief Executive
Officer
- ----------------------------------------------------------------------------------------------------------------------------
Alvaro Cadena President and Chief Operating 4,208 14,700 0 4,208 (4)
Officer Graham
Manufacturing Co., Inc.
("GMC"), Vice President of
Graham; previously Executive
Vice President of GMC
- ----------------------------------------------------------------------------------------------------------------------------
J. Ronald Hansen Vice President of Finance and 709 9,490 2,100 709 (4)
Chief Financial Officer;
previously Vice President of
Finance and Chief Financial
Officer of Al Tech Specialty
Steel Corp.
- ----------------------------------------------------------------------------------------------------------------------------
Joseph P. Gorman Vice President-Sales of GMC 1,530 10,500 2,100 1,530 (4)
- ----------------------------------------------------------------------------------------------------------------------------
Stephen P. Northrup Vice President-Engineering of 813 10,500 2,100 813 (4)
GMC
- ----------------------------------------------------------------------------------------------------------------------------
H. Russel Lemcke Director 10,000 10,500 4,500 10,000 (4)
- ----------------------------------------------------------------------------------------------------------------------------
Jerald D. Bidlack Director 2,250 10,500 4,500 2,250 (4)
- ----------------------------------------------------------------------------------------------------------------------------
Philip S. Hill Director 0 10,500 4,500 0 0
- ----------------------------------------------------------------------------------------------------------------------------
Robert L. Tarnow Director 300 10,500 4,500 300 (4)
- ----------------------------------------------------------------------------------------------------------------------------
Cornelius S. Van Rees Director 1,050 10,500 4,500 1,050 (4)
============================================================================================================================
</TABLE>
(1) Beneficial ownership in this table includes the number of
shares of Company common stock which such person has the right
to acquire within 60 days after March 19, 1997 by the exercise
of options under the Plan.
(2) Assumes that all shares acquired or to be acquired upon
exercise of options under the Plan are sold.
(3) Percentage with respect to each person has been calculated on
the basis of the number of shares of Company Common Stock
outstanding as of March 19, 1997, without regard to the number
of shares of Company Common Stock which such person or any
person has the right to acquire by the exercise of stock
options.
(4) Less than 1%.
- 7 -
<PAGE>
PLAN FOR DISTRIBUTION
The shares may be offered for sale on the American Stock
Exchange where they are listed. They may be offered from time to time in private
transactions. The Company does not expect to bear the expense of such sales.
LEGAL OPINIONS
The legal status of the shares of Graham Common Stock offered
hereby will be passed upon for the Company by Thacher Proffitt & Wood, New York,
New York.
EXPERTS
The consolidated financial statements and the related
consolidated financial statement schedules incorporated in this prospectus by
reference from the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 have been audited by Deloitte & Touche, LLP, independent
auditors, as stated in their reports, which are incorporated herein by
reference, and have been so incorporated in reliance upon the reports of such
firm given upon their authority as experts in accounting and auditing.
SHAREHOLDER RIGHTS PLAN
The Company has adopted a Shareholder Rights Plan whereby one
share Purchase Right is attached to each outstanding share of Common Stock. Each
Purchase Right entitles the holder to purchase from the Company an additional
share of Common Stock for $46.67 per share, subject to adjustment. The Purchase
Rights become exercisable upon (i) the acquisition by a person or group of
persons of 20% or more of the Common Stock; or (ii) if a person or group of
persons commences a tentative offer for 30% or more of the Company's outstanding
Common Stock. The Company has the right to redeem the Purchase Rights for $0.10
per Purchase Right at any time prior to the close of business on the date the
Purchase Rights become exercisable.
After the Purchase Rights become exercisable, if the Company
is acquired in a business combination, or if at least half of the Company's
assets or earning power are sold, the Purchase Right would entitle its holder to
purchase stock of the acquirer (or Graham, if it were the surviving company) at
a discount of 50%. The number of shares that each Purchase Right would entitle
its holder to acquire at a discount would be the number of shares having a
market value equal to twice the exercise price of the Purchase Right.
The issuance of the Purchase Rights, while providing
flexibility in connection with a possible acquisition, could adversely affect,
among other things, the rights of existing shareholders, or could have the
effect of deferring, delaying or preventing a change in control of the Company,
without further action by the shareholders. The Company has no current plans to
redeem the Purchase Rights.
- 8 -
<PAGE>
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law ("DGCL") empowers a
Delaware corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding (other than an action by or in the right of the corporation)
by reason of the fact that such person is or was a director, officer, employee
or agent of a corporation or other enterprise, against expenses (including
attorney's fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interest of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. Similar indemnity is authorized for such person against expenses
(including attorney's fees) actually and reasonably incurred in connection with
the defense or settlement of any such threatened, pending or completed action or
suit if such person acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation, and provided
further that (unless a court of competent jurisdiction otherwise provides) such
person shall not have been adjudged liable to the corporation. Any such
indemnification may be made only as authorized in each specific case upon a
determination by the shareholders or disinterested directors or by independent
legal counsel in a written opinion that indemnification is proper because the
indemnitee has met the applicable standard of conduct.
Section 145 of the DGCL further authorizes a corporation to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation or enterprise, against liability asserted against him, and incurred
by him in any such capacity, or arising out of his status as such, whether or
not the corporation would otherwise have the power to indemnify him under
Section 145 of the DGCL.
Article Fourteen of the Certificate of Incorporation of Graham
Corporation provides that a director shall not be liable for monetary damages
for breach of fiduciary duty to the fullest extent permitted by the Delaware
General Corporation Law, as amended. In addition, directors and officers of the
corporation are indemnified against any liabilities incurred, including expenses
incurred in defending a proceeding in advance of its final disposition, in his
capacity as a director or officer to the fullest extent permitted by the
Delaware General Corporation Law. The rights granted pursuant to the Certificate
of Incorporation are not exclusive of any rights granted by statute, agreement,
vote of shareholder or disinterested directors.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is therefore unenforceable.
- 9 -
<PAGE>
No person has been authorized to give
any information or to make any
representation not contained in this GRAHAM
Prospectus in connection with the offer CORPORATION
made by this Prospectus, and, if given
or made, such information or
representation must not be relied upon 150,000 SHARES
as having been authorized by Graham
Corporation. Prospectus nor any sale COMMON STOCK
made hereunder shall under any
circumstances create an implication ($0.10 PAR VALUE)
that there has been no change in the
affairs of Graham Corporation since
the date hereof or that the Offered or to be Offered by
information contained in this Certain Selling Shareholders of Graham
Prospectus is correct as of any date Corporation Following Their Acquisition
subsequent to the date of this under the 1995 Incentive Plan to Increase
Prospectus. This Prospectus does not Shareholder Value
constitute an offer or a solicitation
of an offer to buy any of the
securities offered hereby in any
jurisdiction to any person to whom
it is unlawful to make such offer
in such jurisdiction.
TABLE OF CONTENTS
AVAILABLE INFORMATION..........2
INCORPORATION OF
CERTAIN DOCUMENTS
BY REFERENCE...................2
CERTAIN CONSIDERATIONS.........3
USE OF PROCEEDS................6 PROSPECTUS
DETERMINATION OF
OFFERING PRICE.................6
SELLING SHAREHOLDERS.......... 7
PLAN FOR DISTRIBUTION .........8
LEGAL OPINIONS.................8
EXPERTS........................8
SHAREHOLDER RIGHTS PLAN........8
INDEMNIFICATION OF DATED: March 20, 1997
DIRECTORS AND OFFICERS.........9
- 10 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Batavia, State of New York on the 19th day of March,
1997.
GRAHAM CORPORATION
(Registrant)
By: /s/ Frederick D. Berkeley, III
------------------------------------
Frederick D. Berkeley, III
Chairman of the Board and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Frederick D. Berkeley, III Chairman of the Board and March 19, 1997
- --------------------------------- Chief Executive
Frederick D. Berkeley, III Officer/Director
/s/ Alvaro Cadena President and Chief March 19, 1997
- --------------------------------- Operating Officer/Director
Alvaro Cadena
/s/ J. Ronald Hansen Vice President - Finance March 19, 1997
- --------------------------------- and Chief Financial Officer
J. Ronald Hansen
/s/ H. Russel Lemcke Director March 19, 1997
- ---------------------------------
H. Russel Lemcke
/s/ Jerald D. Bidlack Director March 18, 1997
- ---------------------------------
Jerald D. Bidlack
/s/ Philip S. Hill Director March 18, 1997
- ---------------------------------
Philip S. Hill
/s/ Robert L. Tarnow Director March 19, 1997
- ---------------------------------
Robert L. Tarnow
/s/ Cornelius S. Van Rees Secretary/Director March 18, 1997
- ---------------------------------
Cornelius S. Van Rees
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION PAGE NO.
- ------ ----------- --------
4.1 1995 Graham Corporation Incentive Plan to Increase
Shareholder Value.................................................
4.2 Form of Option Agreement under the Plan for Employees
and Directors.....................................................
4.3 Certificate of Incorporation of Graham Corporation, as
amended, incorporated by reference to the Registrant's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1989 filed with the Commission pursuant
to the Exchange Act...............................................
4.4 By-laws of Graham Corporation, incorporated by
reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1995,
which was filed with the Commission pursuant to the
Exchange Act......................................................
4.5 Shareholder Rights Plan of Graham Corporation
incorporated by reference to the Registrant's Current
Report on Form 8-K filed on February 26, 1991, as
amended by Amendment No. 1 filed on Form 8 dated June
1, 1991...........................................................
5. Opinion of Thacher Proffitt & Wood, counsel for
Registrant, as to the legality of the securities being
registered........................................................
23.1 Consent of Thacher Proffitt & Wood (included in
Exhibit 5 hereof).................................................
23.2 Consent of Deloitte & Touche LLP..................................
EXHIBIT 4.1
-----------
1995 Graham Corporation Incentive Plan to Increase Shareholder Value
<PAGE>
1995 GRAHAM CORPORATION INCENTIVE PLAN TO
INCREASE SHAREHOLDER VALUE
<PAGE>
Page
----
TABLE OF CONTENTS
ARTICLE I
PURPOSE
Section 1.1 GENERAL PURPOSE OF THE PLAN............................... 1
ARTICLE II
DEFINITIONS
Section 2.1 AMENDMENT................................................. 1
Section 2.2 BOARD..................................................... 1
Section 2.3 CHANGE IN CONTROL OF GRAHAM CORPORATION................... 1
Section 2.4 CODE...................................................... 2
Section 2.5 COMMITTEE................................................. 2
Section 2.6 CORPORATION............................................... 2
Section 2.7 DISABILITY................................................ 2
Section 2.8 DISINTERESTED BOARD MEMBER................................ 2
Section 2.9 EFFECTIVE DATE............................................ 2
Section 2.10 ELIGIBLE INDIVIDUAL....................................... 2
Section 2.11 ELIGIBLE OUTSIDE DIRECTOR................................. 3
Section 2.12 EXERCISE PRICE............................................ 3
Section 2.13 FAIR MARKET VALUE......................................... 3
Section 2.14 GRAHAM CORPORATION........................................ 3
Section 2.15 INCENTIVE STOCK OPTION.................................... 3
Section 2.16 NON-QUALIFIED STOCK OPTION................................ 3
Section 2.17 OPTION.................................................... 3
Section 2.18 OPTION PERIOD............................................. 3
Section 2.19 PERSON.................................................... 3
Section 2.20 PLAN...................................................... 4
Section 2.21 SHARE..................................................... 4
Section 2.22 TENDER OFFER.............................................. 4
ARTICLE III
ADMINISTRATION
Section 3.1 COMMITTEE................................................. 4
Section 3.2 COMMITTEE ACTION.......................................... 4
Section 3.3 COMMITTEE RESPONSIBILITIES................................ 5
i
<PAGE>
Page
----
ARTICLE IV
STOCK OPTIONS
Section 4.1 IN GENERAL................................................ 5
Section 4.2 AVAILABLE SHARES - ELIGIBLE INDIVIDUALS................... 6
Section 4.3 AVAILABLE SHARES - ELIGIBLE OUTSIDE DIRECTORS............. 6
Section 4.4 SIZE OF OPTION............................................ 7
Section 4.5 EXERCISE PRICE............................................ 7
Section 4.6 OPTION PERIOD............................................. 7
Section 4.7 OPTIONS GRANTED TO ELIGIBLE OUTSIDE DIRECTORS............. 8
Section 4.8 METHOD OF EXERCISE........................................ 9
Section 4.9 LIMITATIONS ON OPTIONS.................................... 10
Section 4.10 ADDITIONAL RESTRICTIONS ON INCENTIVE STOCK OPTIONS........ 10
ARTICLE V
NO APPRECIATION RIGHTS TO BE GRANTED
Section 5.1 IN GENERAL................................................ 11
ARTICLE VI
AMENDMENT AND TERMINATION
Section 6.1 TERMINATION............................................... 11
Section 6.2 AMENDMENT................................................. 11
Section 6.3 ADJUSTMENTS IN THE EVENT OF A BUSINESS REORGANIZATION..... 11
ARTICLE VII
MISCELLANEOUS
Section 7.1 STATUS AS AN EMPLOYEE BENEFIT PLAN........................ 12
Section 7.2 NO RIGHT TO A CONTINUATION OF SERVICE..................... 12
Section 7.3 CONSTRUCTION OF LANGUAGE.................................. 12
Section 7.4 GOVERNING LAW............................................. 12
Section 7.5 HEADINGS.................................................. 13
Section 7.6 NON-ALIENATION OF BENEFITS................................ 13
Section 7.7 TAXES..................................................... 13
Section 7.8 APPROVAL OF STOCKHOLDERS.................................. 13
Section 7.9 NOTICES................................................... 13
ii
<PAGE>
1995 GRAHAM CORPORATION INCENTIVE PLAN TO
INCREASE SHAREHOLDER VALUE
ARTICLE I
PURPOSE
Section 1.1 GENERAL PURPOSE OF THE PLAN.
The purpose of the Plan is to increase shareholder value by promoting
the growth and profitability of the Corporation; to provide certain directors
and key executives of the Corporation with an incentive to achieve corporate
objectives; to attract and retain directors and key executives of outstanding
competence; and to provide such directors and executives with an equity interest
in the Corporation.
ARTICLE II
DEFINITIONS
The following definitions shall apply for the purposes of this Plan,
unless a different meaning is plainly indicated by the context:
Section 2.1 AMENDMENT means amendment of this Plan pursuant to section
6.
Section 2.2 BOARD means the board of directors of Graham Corporation.
Section 2.3 CHANGE IN CONTROL OF GRAHAM CORPORATION means any of the
following events:
(a) the reorganization, merger or consolidation of Graham
Corporation with one or more other Persons, other than a transaction
following which at least 51% of the ownership interests of the
institution resulting from such transaction are owned by Persons who,
immediately prior to such transaction, owned at least 51% of the
outstanding voting shares of Graham Corporation;
(b) the acquisition of substantially all of the assets of
Graham Corporation or more than 25% of the voting shares of Graham
Corporation by any Person or by any Persons acting in concert; or
(c) the occurrence of any event if, immediately following such
event, at least 50% of the members of the Board do not belong to any of
the following groups:
<PAGE>
(i) individuals who were members of the Board on
the Effective Date: or
(ii) individuals who first became members of the
Board after the Effective Date either:
(A) upon election to serve as a member of the Board
by affirmative vote of a majority of the members of the Board,
or a nominating committee thereof, in office at the time of
such first election; or
(B) upon election by the stockholders of Graham
Corporation to serve as a member of the Board, but only if
nominated for election by affirmative vote of a majority of
the members of the Board, or a nominating committee thereof,
in office at the time of such first nomination;
provided, however, that no benefit conferred under the Plan, or under the terms
of any Option granted under the Plan, solely as a result of the occurrence of a
Change in Control of Graham Corporation shall be conferred upon any Person, or
any member of the group of Persons, who makes an acquisition described in
section 2.3(b) and for purposes of this proviso, the term Change in Control of
Graham Corporation as applied to such a Person shall not include any acquisition
made by such Person or by any group of Persons of which he is a member.
Section 2.4 CODE means the Internal Revenue Code of 1986 (including the
corresponding provisions of any succeeding law).
Section 2.5 COMMITTEE means the Compensation Committee as described in,
and subject to the qualifications of, section 3.1.
Section 2.6 CORPORATION means Graham Corporation and any successor
thereto, and, with the prior approval of the Board and subject to such terms and
conditions as may be imposed by the Board, any other corporation or other
business organization.
Section 2.7 DISABILITY means a condition of total incapacity, mental or
physical, for further performance of duty with the Corporation which the
Committee shall have determined, on the basis of competent medical evidence, is
likely to be permanent.
Section 2.8 DISINTERESTED BOARD MEMBER means a member of the Board who
is not currently and has not at any time during the immediately preceding
one-year period been an Eligible Individual.
Section 2.9 EFFECTIVE DATE means October 26, 1995.
Section 2.10 ELIGIBLE INDIVIDUAL means any individual whom the
Committee may determine to be a key employee or director of the Corporation and
selected to receive a grant of an Option pursuant to the Plan; provided,
however, that no Eligible Outside Director shall be identified as an Eligible
Individual.
2
<PAGE>
Section 2.11 ELIGIBLE OUTSIDE DIRECTOR means a member of the board of
directors of the Corporation who is not an employee of the Corporation.
Section 2.12 EXERCISE PRICE means the price per Share at which Shares
subject to an Option may be purchased upon exercise of the Option, determined in
accordance with section 4.5 (in the case of Options granted to Eligible
Individuals) or section 4.7 (in the case of Options granted to Eligible Outside
Directors).
Section 2.13 FAIR MARKET VALUE means with respect to a Share on a
specified date:
(a) the final quoted sales price on the date in question (or,
if there is no reported sale on such date, on the last preceding date
on which any reported sale occurred) as reported in the principal
consolidated reporting system with respect to securities listed or
admitted to trading on the principal United States securities exchange
on which the Shares are listed or admitted to trading; or
(b) if the Shares are not listed or admitted to trading on any
such exchange, the closing bid quotation with respect to a Share on
such date on the National Association of Securities Dealers Automated
Quotations System, or, if no such quotation is provided, on another
similar system, selected by the Committee, then in use; or
(c) if sections 2.13(a) and (b) are not applicable, the
fair market value of a Share as the committee may determine.
Section 2.14 GRAHAM CORPORATION means Graham Corporation, a corporation
organized and existing under the laws of the State of Delaware, and any
successor thereto.
Section 2.15 INCENTIVE STOCK OPTION means a right to purchase Shares
that is granted pursuant to section 4.1, that is designated by the Committee to
be an Incentive Stock Option and that is intended to satisfy the requirements of
section 422 of the Code.
Section 2.16 NON-QUALIFIED STOCK OPTION means a right to purchase
Shares (a) that is granted pursuant to section 4.1, that is designated by the
Committee to be a Non-Qualified Stock Option and that is not intended to satisfy
the requirements of section 422 of the Code, or (b) that is granted pursuant to
section 4.7.
Section 2.17 OPTION means either an Incentive Stock Option or a
Non-Qualified Stock Option.
Section 2.18 OPTION PERIOD means the period during which an Option may
be exercised, determined in accordance with section 4.6 (in the case of Options
granted to Eligible Individuals) or section 4.7 (in the case of Options granted
to Eligible Outside Directors).
Section 2.19 PERSON means an individual, a corporation, a partnership,
an association, a joint-stock company, a trust, an estate, an unincorporated
organization and any other business organization.
3
<PAGE>
Section 2.20 PLAN means the 1995 Graham Corporation Incentive Plan
to Increase Shareholder Value, as amended from time to time. The Plan may be
referred to as the "1995 Graham Corporation Incentive Plan to Increase
Shareholder Value."
Section 2.21 SHARE means a share of common stock of Graham Corporation.
Section 2.22 TENDER OFFER shall have the meaning given to such term
under section 14 of the Securities Exchange Act of 1934, as amended; provided,
however, that an offer to purchase Shares made directly to the holder of such
Shares by any Person, or by any Persons acting in concert, shall not constitute
a Tender Offer within the meaning of this section 2.22 unless such offer, if
successful, would result in a Change in Control of Graham Corporation; and
provided, further, that no benefit conferred under the Plan, or under the terms
of any Option granted under the Plan, solely as a result of the commencement of
a Tender Offer to purchase Shares shall be conferred upon any Person, or any
member of the group of Persons, who makes a Tender Offer to purchase Shares and
for purposes of the proviso, the term Tender Offer as applied to such a Person
shall not include any offer to purchase Shares made by such Person or by any
group of Persons of which he is a member.
ARTICLE III
ADMINISTRATION
Section 3.1 COMMITTEE.
The Plan shall be administered by the Compensation Committee of the
Board (or any successor committee of the Board), provided that all of the
members of the Compensation Committee are Disinterested Board Members. No
members of the Compensation Committee other than Disinterested Board Members
shall participate in the administration of this Plan.
Section 3.2 COMMITTEE ACTION.
The Committee shall hold meetings, at least annually, and may make such
administrative rules and regulations as it may deem proper. A majority of the
members of the Committee shall constitute a quorum, and the action of a majority
of the members of the Committee present at a meeting at which a quorum is
present, as well as actions taken pursuant to the unanimous written consent of
all of the members of the Committee without holding a meeting, shall be deemed
to be actions of the Committee. All actions of the Committee shall be final and
conclusive and shall be binding upon the Corporation and all other interested
parties. Any Person dealing with the Committee shall be fully protected in
relying upon any written notice, instruction, direction or other communication
signed by the secretary of the Committee and one member of the Committee, by two
members of the Committee or by a representative of the Committee authorized to
sign the same in its behalf.
4
<PAGE>
Section 3.3 COMMITTEE RESPONSIBILITIES.
Subject to the terms and conditions of the Plan and such limitations as
may be imposed from time to time by the Board, the Committee shall be
responsible for the overall management and administration of the Plan and shall
have such authority as shall be necessary or appropriate in order to carry out
its responsibilities, including, without limitation, the authority:
(a) to interpret and construe the Plan, and to determine all
questions that may arise under the Plan as to eligibility for
participation in the Plan, the number of Shares subject to the Options
to be granted, and the terms and conditions thereof;
(b) to adopt rules and regulations and to prescribe forms
for the operation and administration of the Plan; and
(c) to take any other action not inconsistent with the
provisions of the Plan that it may deem necessary or appropriate.
ARTICLE IV
STOCK OPTIONS
Section 4.1 IN GENERAL.
Subject to the limitations of the Plan, the Committee may, in its
discretion, grant to an Eligible Individual an Option to purchase Shares. Each
Eligible Outside Director shall be granted an Option to purchase Shares in
Accordance with section 4.7. Any such Option shall be evidenced by a written
document which shall:
(a) designate the Option as either an Incentive Stock
Option or a Non- Qualified Stock Option;
(b) specify the number of Shares subject to the Option;
(c) specify the Exercise Price, determined in accordance with
section 4.5 (in the case of Options granted to Eligible Individuals or
section 4.7 (in the case of Options granted to Eligible Outside
Directors), for the Shares subject to the Option;
(d) specify the Option Period determined in accordance with
section 4.6 (in the case of Options granted to Eligible Individuals) or
section 4.7 (in the case of Options granted to Outside Directors);
(e) set forth specifically or incorporate by reference
the applicable provisions of the Plan; and
5
<PAGE>
(f) contain such other terms and conditions not inconsistent
with the Plan as the Committee may, in its discretion, prescribe with
respect to an Option granted to an Eligible Individual.
Section 4.2 AVAILABLE SHARES - ELIGIBLE INDIVIDUALS.
Subject to section 6.3, the maximum aggregate number of Shares with
respect to which Options may be granted to Eligible Individuals at any time
shall be equal to the excess of:
(a) 150,000 Shares; over
(b) the sum of:
(i) the number of Shares with respect to which
Options previously granted to Eligible Individuals under this
Plan may then or may in the future be exercised; plus
(ii) the number of Shares with respect to which
Options previously granted to Eligible Individuals under this
Plan have been exercised.
For purposes of this section 4.2, an Option shall not be considered as having
been exercised to the extent that such Option terminates by reason other than
the purchase of the related Shares. The Shares reserved under this section 4.2
shall be in addition to, and not inclusive of, the Shares reserved under section
4.3.
Section 4.3 AVAILABLE SHARES - ELIGIBLE OUTSIDE DIRECTORS.
Subject to section 6.3, the maximum aggregate number of Shares with
respect to which Options may be granted to Eligible Outside Directors at any
time shall be equal to the excess of:
(a) 42,000 Shares; over
(b) the sum of:
(i) the number of Shares with respect to which
Options previously granted to Eligible Outside Directors under
this Plan may then or may in the future be exercised; plus
(ii) the number of Shares with respect to which
Options previously granted to Eligible Outside Directors under
this Plan have been exercised.
For purposes of this section 4.3, an Option shall not be considered as having
been exercised to the extent that such Option terminates by reason other than
the purchase of the related Shares. The Shares reserved under this section 4.3
shall be in addition to, and not inclusive of, the Shares reserved under section
4.2.
6
<PAGE>
Section 4.4 SIZE OF OPTION.
Subject to section 4.2 and such limitations as the Board may from time
to time impose, the number of Shares as to which an Eligible Individual may be
granted Options shall be determined by the Committee, in its discretion. The
number of Shares as to which an Eligible Outside Director will be granted
Options shall be determined in accordance with section 4.7.
Section 4.5 EXERCISE PRICE.
The price per Share at which an Option granted to an Eligible
Individual may be exercised shall be determined by the Committee, in its
discretion; provided, however, that in the case of an Incentive Stock Option,
the Exercise Price per Share shall in no event be less than:
(a) if, at the time an Incentive Stock Option is granted, the
Person to whom it is granted owns more than 10% of the total combined
voting power of all outstanding stock of all classes issued by Graham
Corporation or any parent or subsidiary thereof, 110% of the Fair
Market Value of a Share on the date the Option is granted, and
(b) in all other cases, 100% of the Fair Market Value of a
Share on the date the Option is granted. The price per share at which
an Option granted to an Eligible Outside Director may be exercised
shall be determined in accordance with section 4.7.
Section 4.6 OPTION PERIOD.
The Option Period during which an Option granted to an Eligible
Individual may be exercised shall commence on the date specified by the
Committee in the document evidencing the Option and shall expire on the earliest
of:
(a) the date specified by the Committee in the document
evidencing the Option;
(b) in the case of an Incentive Stock Option, the last
day of the three-month period commencing on the date of the Option
holder's termination of employment with the Corporation other than on
account of death or Disability;
(c) in the case of an Incentive Stock Option, the last
day of the one-year period commencing on the date of the Option
holder's death or Disability;
(d) in the case of an Incentive Stock Option granted to a
Person who, on the date the Option was granted, owned more than 10% of
the total combined voting power of all outstanding stock of all classes
issued by Graham Corporation or any parent or subsidiary thereof, the
last day of the five-year period commencing on the date the Option was
granted; and
(e) the last day of the ten-year period commencing on the date
on which the Option was granted; provided, however, that in the event
of a tender Offer or a Change in Control of Graham Corporation while
there is outstanding any Option granted to an
7
<PAGE>
Eligible Individual with respect to which an Option Period has not
commenced, such Option Period shall automatically commence on the
earliest date on which the Tender Offer or Change in Control of Graham
Corporation is deemed to have occurred. The Option Period during which
an Option granted to an Eligible Outside Director may be exercised
shall be determined in accordance with section 4.7.
Section 4.7 OPTIONS GRANTED TO ELIGIBLE OUTSIDE DIRECTORS.
(a) As of the Effective Date and on each of the first, second
and third anniversaries of the Effective Date, each person who is then
an Eligible Outside Director of Graham Corporation shall be granted a
Non-Qualified Stock Option to purchase 2,250 Shares. As of the
Effective Date, each person who is then an Eligible Outside Director of
a Corporation other than Graham Corporation shall be granted a
Non-Qualified Stock Option to purchase 1,500 Shares. An individual who
becomes an Eligible Outside Director of Graham Corporation subsequent
to the Effective Date shall be granted, as of the first day of the
month following the month in which such individual becomes an Eligible
Outside Director and on each of the first, second and third
anniversaries of such date, a Non-Qualified Stock Option to purchase a
number of Shares equal to the excess, if any, of (i) 2,250 over (ii)
the sum of (A) the number of Shares with respect to which such
individual had previously been granted options to purchase Shares as an
officer or employee of the Corporation, plus (B) the number of Shares
with respect to which such individual had previously been granted
options to purchase Shares as an Eligible Outside Director. An
individual who becomes an Eligible Outside Director of a Corporation
other than Graham Corporation subsequent to the Effective Date shall be
granted, as of the first day of the month following the month in which
such individual becomes an Eligible Outside Director, a Non-Qualified
Stock Option to purchase a number of Shares equal to the excess, if
any, of (i) 1,500 over (ii) the sum of (A) the number of Shares with
respect to which such individual had previously been granted options to
purchase Shares as an officer or employee of the Corporation, plus (B)
the number of Shares with respect to which such individual had
previously been granted options to purchase Shares as an Eligible
Outside Director. No Option shall be granted under this section 4.7 at
a time when the number of Shares available under section 4.3 is less
than the number of Shares to be subject to the Option.
(b) The price per Share at which an Option granted to an
Eligible Outside Director under this section 4.7 may be exercised shall
be the Fair Market Value of a Share on the date on which the Option is
granted.
(c) The Option Period during which an Option granted to an
Eligible Outside Director under this section 4.7 may be exercised shall
commence on the date the Option was granted and shall expire on the
earliest of:
(i) the last day of the one-year period commencing on
the date the Eligible Outside Director ceases to be a member
of the Board for reasons other than on account of death,
Disability or retirement as a member of the Board after age
65;
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<PAGE>
(ii) the last day of the three-year period commencing
on the date the Eligible Outside Director ceases to be a
member of the Board on account of death, Disability or
retirement as a member of the Board after age 65; or
(iii) the last day of the ten-year period
commencing on the date on which the Option was granted.
Section 4.8 METHOD OF EXERCISE.
(a) Subject to the limitations of the Plan and the document
evidencing an Option, an Option holder may, at any time during the
Option Period, exercise his right to purchase all or any part of the
Shares to which the Option relates; provided, however, that the minimum
number of Shares which may be purchased shall be 100, or, if less, the
total number of Shares relating to the Options which remain
unpurchased. An Option holder shall exercise an Option to purchase
Shares by:
(i) giving written notice to the Committee, in
such form and manner as the Committee may prescribe, of his
intent to exercise the Option;
(ii) delivering to the Committee full payment for
the Shares as to which the Option is to be exercised; and
(iii) satisfying such other conditions as may be
prescribed in the document evidencing the Option. Payment
shall be made in (A) United States dollars in cash or by
certified check, money order or bank draft drawn payable to
the order of Graham Corporation, (B) Shares duly endorsed
for transfer and with all necessary stock transfer tax
stamps attached, already owned by the Option holder and
having a fair market value equal to the Exercise Price, such
fair market value to be determined in such manner as may be
provided by the Committee or as may be required in order to
comply with or conform to the requirements of any applicable
laws or regulations, or (C) a combination of United States
dollars and such Shares. The date of exercise shall be the
date specified in the notice referred to in section
4.8(a)(i), or if no date is specified, the date on which
such notice is delivered to the Committee.
(b) When the requirements of section 4.8(a) have been
satisfied, the Committee shall take such action as is necessary to
cause the issuance of a stock certificate evidencing the Option
holder's ownership of such Shares. The Person exercising the Option
shall have no right to vote or to receive dividends, nor have any other
rights with respect to the Shares, prior to the date as of which such
Shares are transferred to such Person on the stock transfer records of
Graham Corporation, and no adjustments shall be made for any dividends
or other rights for which the record date is prior to the date as of
which such transfer is effected, except as may be required under
section 6.3.
9
<PAGE>
Section 4.9 LIMITATIONS ON OPTIONS.
(a) No Eligible Individual shall be granted an Option unless,
at the time the Option is granted, each member of the Committee is a
Disinterested Board Member.
(b) An Option by its terms shall not be transferable by the
Option holder other than by will or by the laws of descent and
distribution, and shall be exercisable, during the lifetime of the
Option holder, only by the Option holder.
(c) Graham Corporation's obligation to deliver Shares with
respect to an Option shall, if the committee so requests, be
conditioned upon the receipt of a representation as to the investment
intention of the Person to whom such Shares are to be delivered, in
such form as the Committee shall determine to be necessary or advisable
to comply with the provisions of applicable federal, state or local
law. It may be provided that any such representation shall become
inoperative upon a registration of the Shares or upon the occurrence of
any other event eliminating the necessity of such representation.
Graham Corporation shall not be required to deliver any Shares under
the Plan prior to (i) the admission of such Shares to listing on any
stock exchange on which Shares may then be listed, or (ii) the
completion of such registration or other qualification under any state
or federal law, rule or regulation as the Committee shall determine to
be necessary or advisable.
Section 4.10 ADDITIONAL RESTRICTIONS ON INCENTIVE STOCK OPTIONS.
In addition to the limitations of section 4.9, an Option designated by
the Committee to be an Incentive Stock Option shall be subject to the following
limitations:
(a) no Incentive Stock Option shall provide any individual
with a right to purchase Shares if that right first becomes exercisable
during a prescribed calendar year and if the sum of:
(i) The Fair Market Value (determined as of the date
of the grant) of the Shares subject to such Incentive Stock
Option which first becomes available for purchase during such
calendar year; plus
(ii) the Fair Market Value (determined as of the date
of grant) of all Shares subject to the Incentive Stock Options
previously granted to such individual which first become
available for purchase during such calendar year; exceeds
$100,000; and
(b) except with the prior written approval of the Committee,
no individual shall dispose of Shares acquired pursuant to the exercise
of an Incentive Stock Option until after the later of (i) the second
anniversary of the date on which the Incentive Stock Option was
granted, or (ii) the first anniversary of the date on which the Shares
were acquired.
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<PAGE>
ARTICLE V
NO APPRECIATION RIGHTS TO BE GRANTED
Section 5.1 IN GENERAL.
No stock appreciation rights may be granted pursuant to this Plan.
ARTICLE VI
AMENDMENT AND TERMINATION
Section 6.1 TERMINATION.
The Board may suspend or terminate the Plan in whole or in part at any
time prior to the tenth anniversary of the Effective Date by giving written
notice of such suspension or termination to the Committee. Unless sooner
terminated, the Plan shall terminate automatically on the day preceding the
tenth anniversary of the Effective Date.
Section 6.2 AMENDMENT.
The Board may amend or revise the Plan in whole or in part at any time;
provided, however, that if and to the extent required by any law, rule or
regulation of any governmental unit having jurisdiction over Graham Corporation,
or by any private or quasi-governmental body to whose jurisdiction Graham
Corporation has chosen to subject itself, the effectiveness of any amendment or
revision shall be conditioned on the approval thereof by the stockholders of
Graham Corporation.
Section 6.3 ADJUSTMENTS IN THE EVENT OF A BUSINESS REORGANIZATION.
(a) In the event of any merger, consolidation or other
business reorganization in which Graham Corporation is the surviving
entity, and in the event of any stock split, stock dividend or other
event generally affecting the number of Shares held by each Person who
is then a holder of record of Shares, the number of Shares covered by
each outstanding Option shall be adjusted to account for such event.
Such adjustment shall be effected by multiplying such number of Shares
by an amount equal to the number of Shares that would be owned after
such event by a Person who, immediately prior to such event, was the
holder of record of one Share, and the Exercise Price shall be adjusted
by dividing the Exercise Price by such number of Shares; provided,
however, that the Committee may, in its discretion, establish another
appropriate method of adjustment.
(b) In the event of any merger, consolidation, or other
business reorganization in which Graham Corporation is not the
surviving entity:
11
<PAGE>
(i) any Options granted under the Plan which remain
outstanding may be cancelled as of the effective date of such
merger, consolidation, business reorganization, liquidation or
sale by the Board upon 30 days' written notice to each Option
holder in advance of the effective date of such event; and
(ii) any Option which is not cancelled pursuant to
section 6.3(b)(i) shall be adjusted in such manner as the
Committee shall deem appropriate to account for such merger,
consolidation or other business reorganization.
ARTICLE VII
MISCELLANEOUS
Section 7.1 STATUS AS AN EMPLOYEE BENEFIT PLAN.
This Plan is not intended to satisfy the requirements for qualification
under section 401(a) of the Code or to satisfy the definitional requirements for
an "employee benefit plan" under section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended. It is intended to be a non-qualified incentive
compensation program that is exempt from the regulatory requirements of the
Employee Retirement Income Security Act of 1974, as amended. The Plan shall be
construed and administered so as to effectuate this intent.
Section 7.2 NO RIGHT TO A CONTINUATION OF SERVICE.
Neither the establishment of the Plan nor any provisions of the Plan
nor any action of the Board or the Committee with respect to the Plan shall be
held or construed to confer upon any member of the Board any right to a
continuation of membership on the board of directors of the corporation or any
subsidiary or affiliate thereof or upon any employee any right to a continuation
of employment by the Corporation or any subsidiary or affiliate thereof. The
continuation of service of any member of the board of directors and the
continued employment of any employee shall be subject to the same terms and
conditions that would apply from time to time if the Plan had not been adopted.
Section 7.3 CONSTRUCTION OF LANGUAGE.
Whenever appropriate in the Plan, words used in the singular may be
read in the plural, words used in the plural may be read in the singular, and
words importing the masculine gender may be read as referring equally to the
feminine or the neuter. Any reference to an Article or section number shall
refer to an Article or section of this Plan unless otherwise indicated.
Section 7.4 GOVERNING LAW.
The Plan shall be construed, administered and enforced according to the
laws of the State of New York without giving effect to the conflict of laws
principles thereof, except to the extent that such laws are preempted by federal
law.
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<PAGE>
Section 7.5 HEADINGS.
The headings of Articles and sections are included solely for
convenience of reference. If there is any conflict between such headings and the
text of the Plan, the text shall control.
Section 7.6 NON-ALIENATION OF BENEFITS.
The right to receive a benefit under the Plan shall not be subject in
any manner to anticipation, alienation or assignment, nor shall such right be
liable for or subject to debts, contracts, liabilities, engagements or torts.
Section 7.7 TAXES.
The Corporation shall have the right to deduct from all amounts paid by
the Corporation in cash with respect to an Option under the Plan any taxes
required by law to be withheld with respect to such Option. Where any Person is
entitled to receive Shares pursuant to the exercise of an Option, the
Corporation shall have the right to require such Person to pay the Corporation
the amount of any tax which the Corporation is required to withhold with respect
to such Shares, or, in lieu thereof, to retain, or to sell without notice, a
sufficient number of Shares to cover the amount required to be withheld.
Section 7.8 APPROVAL OF STOCKHOLDERS.
All Options granted pursuant to Article IV of the Plan shall be
conditioned on the approval of the Plan by the stockholders of Graham
Corporation on or prior to the date of the first annual meeting of such
stockholders. No Option granted under the Plan shall be effective, nor shall any
such Option be exercised or any Shares issued or purchased upon exercise, prior
to such approval.
Section 7.9 NOTICES.
Any communication required or permitted to be given under the Plan,
including any notice, direction, designation, comment, instruction, objection or
waiver, shall be in writing and shall be deemed to have been given at such time
as it is delivered personally or five days after mailing if mailed, postage
prepaid, by registered or certified mail, return receipt requested, addressed to
such party at the address listed below, or at such other address as one such
party may by written notice specify to the other party:
(a) If to the Compensation Committee:
Graham Corporation
20 Florence Avenue
Batavia, New York 14020
Attention: GENERAL COUNSEL
---------------
(b) If to an Option holder, to the Option holder's
address as shown in the Corporation's personnel records.
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EXHIBIT 4.2
-----------
Forms of Stock Option Agreements for Employees and Directors
<PAGE>
NON-QUALIFIED STOCK OPTION AGREEMENT (EMPLOYEES)
This NON-QUALIFIED STOCK OPTION AGREEMENT ("Agreement") is
made and entered into as of the [Date], by and between Graham Corporation, a
corporation organized and existing under the laws of the State of Delaware and
having an office at 20 Florence Avenue, Batavia, New York 14020 ("Company") and
[Name] ("Option Holder").
W I T N E S S E T H :
WHEREAS, by action of its Board of Directors ("Board"), the
Company has adopted the 1995 Graham Corporation Incentive Plan to Increase
Shareholder Value ("Plan"), pursuant to which Non-Qualified Stock Options with
respect to shares of common stock of the Company ("Shares") may be granted to
the Company's eligible officers and employees; and
WHEREAS, pursuant to Article III of the Plan, a Compensation
Committee ("Committee") has been appointed to select the individuals to whom
Non-Qualified Stock Options shall be granted and to prescribe the terms and
conditions of such grants; and
WHEREAS, the Committee has determined that the Option Holder
is eligible to be granted a Non-Qualified Stock Option and desires to grant a
Non-Qualified Stock Option to the Option Holder, and the Option Holder desires
to accept such grant, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, the Company and the Option Holder hereby agree
as follows:
Section 1. GRANT OF NON-QUALIFIED STOCK OPTION. The Company
hereby grants, and the Option Holder hereby accepts the Company's grant of, a
Non-Qualified Stock Option to purchase [Number] Shares ("Optioned Shares"), on
the terms and conditions hereinafter set forth.
Section 2. OPTION PERIOD. Subject to the limitations of
section 4, the Option Holder shall have the right to purchase all or any portion
of the Optioned Shares at any time during a period ("Option Period") which shall
commence on the date first above written and shall end on the earliest to occur
of the following dates:
(a) the tenth anniversary of the date first above written;
(b) the second anniversary of the Option Holder's
termination of employment with the Company due to his death, Disability
or retirement; and
<PAGE>
(c) the first anniversary of the date of the Option Holder's
termination of employment with the Company for any reason not described
in section 2(b).
Section 3. EXERCISE PRICE. The Option Holder shall have the
right to purchase all or any portion of the Optioned Shares at a price per Share
equal to [Price] ("Exercise Price") payable (a) in United States dollars in cash
or by certified check, money order or bank draft payable to the order of Graham
Corporation, (b) in Shares duly endorsed for transfer and with all necessary
stock transfer tax stamps attached, already owned by the Option Holder and
having a fair market value equal to the Exercise Price, such fair market value
to be determined in such manner as may be provided by the Committee or as may be
required in order to comply with or conform to the requirements of any
applicable laws or regulations, or (c) in a combination of United States dollars
and such Shares.
Section 4. LIMITATIONS ON EXERCISE. There shall be no
limitations on exercise of the Optioned Shares other than those provided in
Section 2.
Section 5. METHOD OF EXERCISE. The Option Holder may, at any
time during the Option Period, exercise his right to purchase all or any part of
the Optioned Shares then available for purchase; provided, however, that the
minimum number of Optioned Shares which may be purchased shall be one hundred
(100) or, if less, the total number of Optioned Shares then available for
purchase. The Option Holder shall exercise such right by:
(a) giving written notice to the Committee, in the form
attached hereto as Exhibit A; and
(b) delivering to the Committee full payment of the
Exercise Price for the Optioned Shares to be purchased.
As soon as is practicable following the date on which the Option Holder has
satisfied the requirements of this section 5, the Committee shall take such
action as is necessary to cause the Company to issue a stock certificate
evidencing the Option Holder's ownership (or the ownership of such other person
as the Option Holder may, by written notice to the Committee, designate) of the
Optioned Shares that have been purchased. The Option Holder or other person
shall have no right to vote or to receive dividends, nor have any other rights
with respect to Optioned Shares, prior to the date as of which such Optioned
Shares are transferred to him on the stock transfer records of the Company, and
no adjustments shall be made for any dividends or other rights for which the
record date is prior to the date as of which such transfer is effected, except
as may be required under section 8.
Section 6. REGISTRATION AND DELIVERY OF OPTIONED SHARES. The
Company's obligation to deliver Shares under this Agreement shall, if the
Committee so requests, be conditioned upon the receipt of a representation as to
the investment intention of the Option Holder to whom such Shares are to be
delivered, in such form as the Committee shall determine to be necessary or
advisable to comply with the provisions of applicable federal, state or local
2
<PAGE>
law. It may be provided that any such representation shall become inoperative
upon a registration of the Shares or upon the occurrence of any other event
eliminating the necessity of such representation. The Company shall not be
required to deliver any Shares under this Agreement prior to (a) the admission
of such Shares to listing on any stock exchange on which Shares may then be
listed, or (b) the completion of such registration or other qualification under
any state or federal law, rule or regulations as the Committee shall determine
to be necessary or advisable.
Section 7. EFFECT OF EXERCISE OF APPRECIATION RIGHT. In the
event that the Option Holder shall be granted an Appreciation Right with respect
to all or any portion of the Optioned Shares, the exercise of such Appreciation
Right shall automatically result in a reduction of the number of Optioned Shares
available for purchase hereunder by the number of Shares as to which such
Appreciation Right is exercised.
Section 8. ADJUSTMENTS IN THE EVENT OF REORGANIZATION.
(a) In the event of any merger, consolidation, or other
business reorganization in which the Company is the surviving entity,
and in the event of any stock split, stock dividend or other event
generally affecting the number of Shares held by each person who is
then a shareholder of record, the number of Optioned Shares shall be
adjusted to account for such event. Such adjustment shall be effected
by multiplying:
(i) such number of Optioned Shares by
(ii) an amount equal to the number of Shares that
would be owned after such event by a person who, immediately
prior to such event, was the holder of record of one Share
and the Exercise Price shall be adjusted by dividing the Exercise Price by the
amount determined under section 8(a)(ii); provided, however, that the Committee
may, in its discretion, establish another appropriate method of adjustment.
(b) In the event of any merger, consolidation, or other
business reorganization in which the Company is not the surviving
entity:
(i) Any Non-Qualified Stock Options granted under
this Agreement that remain outstanding may be cancelled by the
Board upon at least thirty days' written notice to each Option
Holder in advance of the effective date of such merger,
consolidation, business reorganization, liquidation or sale;
and
(ii) Any Non-Qualified Stock Option which is not
cancelled pursuant to section 8(b)(i) shall be adjusted in
such manner as the Committee shall deem appropriate to account
for such merger, consolidation or other business
reorganization.
3
<PAGE>
Section 9. NO RIGHT TO CONTINUED EMPLOYMENT. Nothing in this
Agreement nor any action of the Board or Committee with respect to this
Agreement shall be held or construed to confer upon the Option Holder any right
to a continuation of employment by the Company or any of its affiliates which
employ the Option Holder. The Option Holder may be dismissed or otherwise dealt
with as though this Agreement had not been entered into.
Section 10. TAXES. Where any person is entitled to receive
Shares pursuant to the exercise of the Non-Qualified Stock Option granted
hereunder, the Employer shall have the right to require such person to pay to
the Employer the amount of any tax which the Employer is required to withhold
with respect to such Shares, or, in lieu thereof, to retain, or to sell without
notice, a sufficient number of Shares to cover the amount required to be
withheld.
Section 11. NO ASSIGNMENT. The Non-Qualified Stock Option
granted hereunder shall not be subject in any manner to anticipation, alienation
or assignment, nor shall such NonQualified Stock Option be liable for or subject
to debts, contracts, liabilities, engagements or torts, nor shall it be
transferable by the Option Holder other than by will or by the laws of descent
and distribution. During the lifetime of the Option Holder, the Non-Qualified
Stock Option granted hereunder shall be exercisable only by him.
Section 12. NOTICES. Any communication required or permitted
to be given under the Plan, including any notice, direction, designation,
comment, instruction, objection or waiver, shall be in writing and shall be
deemed to have been given at such time as it is delivered personally or five (5)
days after mailing if mailed, postage prepaid, by registered or certified mail,
return receipt requested, addressed to such party at the address listed below,
or at such other address as one such party may by written notice specify to the
other party:
(a) If to the Committee:
Graham Corporation
20 Florence Avenue
Batavia, New York 14020
Attention: GENERAL COUNSEL
---------------
(b) If to the Option Holder, to the Option Holder's then
current residential address.
Section 13. SUCCESSORS AND ASSIGNS. This Agreement shall inure
to the benefit of and shall be binding upon the Company and the Option Holder
and their respective heirs, successors and assigns.
Section 14. CONSTRUCTION OF LANGUAGE. Whenever appropriate in
the Agreement, words used in the singular may be read in the plural, words used
in the plural may be read in the singular, and words importing the masculine
gender may be read as referring equally to the feminine or the neuter. Any
reference to a section shall be a reference to a section of this
4
<PAGE>
Agreement, unless the context clearly indicates otherwise. Capitalized terms not
specifically defined herein shall have the meanings assigned to them under the
Plan.
Section 15. GOVERNING LAW. This Agreement shall be construed,
administered and enforced according to the laws of the State of New York without
giving effect to the conflict of laws principles thereof, except to the extent
that such laws are preempted by the federal law.
Section 16. AMENDMENT. This Agreement may be amended, in
whole or in part and in any manner not inconsistent with the provisions of the
Plan, at any time and from time to time by written agreement between the Company
and the Option Holder.
Section 17. PLAN PROVISIONS CONTROL. This Agreement and the
rights and obligations created hereunder shall be subject to all of the terms
and conditions of the Plan. In the event of any conflict between the provisions
of the Plan and the provisions of this Agreement, the terms of the Plan, which
are incorporated herein by reference, shall control. By signing this Agreement,
the Option Holder acknowledges receipt of a copy of the Plan.
Section 18. ACCEPTANCE BY OPTION HOLDER. By executing this
Agreement and returning a fully executed copy hereof to the Committee at the
address specified in section 12, the Option Holder signifies his acceptance of
the terms and conditions of this Non-Qualified Stock Option. If a fully executed
copy of this Agreement is not received by the Committee within forty-five (45)
days after the date when it is presented to the Option Holder, the Committee may
revoke the Non-Qualified Stock Option granted, and thereby avoid all
obligations, hereunder.
5
<PAGE>
IN WITNESS WHEREOF, the Option Holder has executed, and the
Company has caused its duly authorized representative to execute, this Agreement
as of the date first above written.
GRAHAM CORPORATION
By:
------------------
F. D. Berkeley
Chairman and Chief Executive Officer
ATTEST:
- ------------------
Secretary
[SEAL] OPTION HOLDER
------------------
[Name]
6
<PAGE>
EXHIBIT A TO NON-QUALIFIED STOCK OPTION AGREEMENT (EMPLOYEES)
1995 GRAHAM CORPORATION INCENTIVE PLAN TO INCREASE SHAREHOLDER VALUE
INSTRUCTIONS. Use this Notice to inform the Compensation Committee of
Graham Corporation ("Company") that you are exercising your right to purchase
shares of common stock ("Shares") of the Company pursuant to a non-qualified
stock option ("Option") granted under the 1995 Graham Corporation Incentive Plan
to Increase Shareholder Value ("Plan"). If you are not the person to whom the
Option was granted ("Option Holder"), you must attach to this Notice proof of
your right to exercise the Option granted under the Non-Qualified Stock Option
Agreement entered into between the Company and the Option Holder ("Agreement").
This Notice should be personally delivered or mailed by certified mail, return
receipt requested, to: Compensation Committee, Graham Corporation, 20 Florence
Avenue, Batavia, New York 14020, Attention: General Counsel. The effective date
of the exercise of the Option shall be the date this Notice is personally
delivered or post marked by the United States Post Office if mailed. Except as
specifically provided to the contrary herein, capitalized terms shall have the
meanings assigned to them under the Plan. This Notice is subject to all of the
terms and conditions of the Plan and the Agreement.
Graham Corporation
20 Florence Avenue
Batavia, NY 14020
Attention: General Counsel
Re: NOTICE OF EXERCISE OF NON-QUALIFIED STOCK OPTION (EMPLOYEES)
Dear Sirs:
This shall constitute my irrevocable direction and authorization to
exercise options with respect to ________ shares of Graham Corporation stock
previously granted to me under the 1995 Graham Corporation Incentive Plan to
Increase Shareholder Value ("Plan") at $[Price] per share. I further authorize
you to issue my shares in my name and deliver them to _________________________
("Broker") for my account.
By copy of this letter, I authorize to the Broker to issue a check from
my account maintained with the Broker payable to Graham Corporation in the
amount of $ _____________________.
I represent that the above shares are not subject to any encumbrance or
other claim and that you, the Broker, and Graham Corporation's transfer agent
("Transfer Agent") may rely upon this exercise notice as a representation and
authorization for this purpose.
<PAGE>
By copy of this letter, I further authorize the Broker to:
Exercise and Sell
Exercise and Hold
You are hereby directed and instructed to issue _________ shares of
common stock in my name for my account maintained with the Broker. Please:
(a) Arrange for electronic transfer of the shares on this
date via the Depository Trust to the Broker, whose DTC Number is ________; or
(b) Expedite the overnight delivery of said certificate
by express mail to:
Broker Name
--------------------------
Address
--------------------------
I understand that the difference between the Fair Market Value of the
Shares to be issued to me pursuant to this Notice and the Exercise Price of such
Shares will be taxable income to me, and that I must consult with my own tax
advisor regarding when such income will be reportable. I understand that, under
the Plan and Agreement, I am responsible for the amount of any federal, state
and local taxes that are required to be paid with respect to the Shares to be
issued pursuant to this Notice.
I have been advised by my legal counsel that my acquisition of shares
pursuant to this notice and my sale of the shares so acquired is not a
transaction to which Section 16(b) of the Securities Exchange Act of 1934
("short swing profit rule") applies. I acknowledge that under the short swing
profit rule I may be liable to the Corporation in the event of a sale occasioned
by a margin deficiency in my account.
I understand that I must rely on, and consult with, my own legal
counsel (and not the Company) regarding the application of all laws --
particularly tax and securities laws -- to the transactions to be effected
pursuant to this Notice.
Date
------------------ ---------------------------------
[Name]
---------------------------------
---------------------------------
Address
2
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NON-QUALIFIED STOCK OPTION AGREEMENT (DIRECTORS)
This NON-QUALIFIED STOCK OPTION AGREEMENT ("Agreement") is
made and entered into as of the [Date] by and between Graham Corporation, a
corporation organized and existing under the laws of the State of Delaware and
having an office at 20 Florence Avenue, Batavia, New York 14020 ("Company") and
[Name] ("Option Holder").
W I T N E S S E T H :
WHEREAS, by action of its Board of Directors ("Board"), the
Company has adopted the 1995 Graham Corporation Incentive Plan to Increase
Shareholder Value ("Plan"), pursuant to which Non-Qualified Stock Options with
respect to shares of common stock of the Company ("Shares") may be granted to
the Company's eligible officers, employees and directors; and
WHEREAS, pursuant to Article IV of the Plan, each person who
is an Eligible Outside Director shall be granted a Non-Qualified Stock Option to
purchase [Number] Shares as of the date first written above or, if such person
becomes an Eligible Outside Director subsequent to the date first written above,
the first day of the month following the month in which such person becomes an
Eligible Outside Director; and
WHEREAS, the Option Holder is an Eligible Outside Director and
therefore is eligible to be granted a Non-Qualified Stock Option and the Option
Holder desires to accept such grant on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, the Company and the Option Holder hereby agree
as follows:
Section 1. GRANT OF NON-QUALIFIED STOCK OPTION. The Company
hereby grants, and the Option Holder hereby accepts the Company's grant of, a
Non-Qualified Stock Option to purchase [Number] Shares ("Optioned Shares"), on
the terms and conditions hereinafter set forth.
Section 2. OPTION PERIOD. Subject to the limitations of
section 4, the Option Holder shall have the right to purchase all or any portion
of the Optioned Shares at any time during a period ("Option Period") which shall
commence on the date first above written and shall end on the earliest of:
(a) the last day of the one-year period commencing on the date
the Eligible Outside Director ceases to be a member of the Board for
reasons other than on account of death, Disability or retirement as a
member of the Board after age 65;
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(b) the last day of the three-year period commencing on the
date the Eligible Outside Director ceases to be a member of the Board
on account of death, Disability or retirement as a member of the Board
after age 65; or
(c) the last day of the ten year period commencing on the date
on which the Option was granted.
Section 3. EXERCISE PRICE. The Option Holder shall have the
right to purchase all or any portion of the Optioned Shares at a price per Share
equal to [Price] ("Exercise Price") payable (a) in United States dollars in cash
or by certified check, money order or bank draft payable to the order of Graham
Corporation, (b) in Shares duly endorsed for transfer and with all necessary
stock transfer tax stamps attached, already owned by the Option Holder and
having a fair market value equal to the Exercise Price, such fair market value
to be determined in such manner as may be provided by the Committee or as may be
required in order to comply with or conform to the requirements of any
applicable laws or regulations, or (c) in a combination of United States dollars
and such Shares.
Section 4. LIMITATIONS ON EXERCISE. There shall be no
limitations on exercise of the Optioned Shares other than those provided in
Section 2.
Section 5. METHOD OF EXERCISE. The Option Holder may, at any
time during the Option Period, exercise his right to purchase all or any part of
the Optioned Shares then available for purchase; provided, however, that the
minimum number of Optioned Shares which may be purchased shall be one hundred
(100) or, if less, the total number of Optioned Shares then available for
purchase. The Option Holder shall exercise such right by:
(a) giving written notice to the Compensation Committee
of the Board of Directors of Graham Corporation ("Committee"), in the
form attached hereto as Exhibit A; and
(b) delivering to the Committee full payment of the
Exercise Price for the Optioned Shares to be purchased.
As soon as is practicable following the date on which the Option Holder has
satisfied the requirements of this section 5, the Committee shall take such
action as is necessary to cause the Company to issue a stock certificate
evidencing the Option Holder's ownership (or the ownership of such other person
as the Option Holder may, by written notice to the Committee, designate) of the
Optioned Shares that have been purchased. The Option Holder or other person
shall have no right to vote or to receive dividends, nor have any other rights
with respect to Optioned Shares, prior to the date as of which such Optioned
Shares are transferred to him on the stock transfer records of the Company, and
no adjustments shall be made for any dividends or other rights for which the
record date is prior to the date as of which such transfer is effected, except
as may be required under section 8.
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Section 6. REGISTRATION AND DELIVERY OF OPTIONED SHARES. The
Company's obligation to deliver Shares under this Agreement shall, if the
Committee so requests, be conditioned upon the receipt of a representation as to
the investment intention of the Option Holder to whom such Shares are to be
delivered, in such form as the Committee shall determine to be necessary or
advisable to comply with the provisions of applicable federal, state or local
law. It may be provided that any such representation shall become inoperative
upon a registration of the Shares or upon the occurrence of any other event
eliminating the necessity of such representation. The Company shall not be
required to deliver any Shares under this Agreement prior to (a) the admission
of such Shares to listing on any stock exchange on which Shares may then be
listed, or (b) the completion of such registration or other qualification under
any state or federal law, rule or regulations as the Committee shall determine
to be necessary or advisable.
Section 7. EFFECT OF EXERCISE OF APPRECIATION RIGHT. In the
event that the Option Holder shall be granted an Appreciation Right with respect
to all or any portion of the Optioned Shares, the exercise of such Appreciation
Right shall automatically result in a reduction of the number of Optioned Shares
available for purchase hereunder by the number of Shares as to which such
Appreciation Right is exercised.
Section 8. ADJUSTMENTS IN THE EVENT OF REORGANIZATION.
(a) In the event of any merger, consolidation, or other
business reorganization in which the Company is the surviving entity,
and in the event of any stock split, stock dividend or other event
generally affecting the number of Shares held by each person who is
then a shareholder of record, the number of Optioned Shares shall be
adjusted to account for such event. Such adjustment shall be effected
by multiplying:
(i) such number of Optioned Shares by
(ii) an amount equal to the number of Shares that
would be owned after such event by a person who, immediately
prior to such event, was the holder of record of one Share;
and the Exercise Price shall be adjusted by dividing the Exercise Price by the
amount determined under section 8(a)(ii); provided, however, that the Committee
may, in its discretion, establish another appropriate method of adjustment.
(b) In the event of any merger, consolidation, or other
business reorganization in which the Company is not the surviving
entity:
(i) Any Non-Qualified Stock Options granted under
this Agreement that remain outstanding may be cancelled by the
Board upon at least thirty days' written notice to each Option
Holder in advance of the effective date of such
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merger, consolidation, business reorganization, liquidation or
sale; and
(ii) Any Non-Qualified Stock Option which is not
cancelled pursuant to section 8(b)(i) shall be adjusted in
such manner as the Committee shall deem appropriate to account
for such merger, consolidation or other business
reorganization.
Section 9. NO RIGHT TO CONTINUED BOARD MEMBERSHIP. Nothing in
this Agreement, nor any action of the Board or Committee with respect to this
Agreement, shall be held or construed to confer upon the Option Holder any right
to a continuation of membership on the Board of the Company or any of its
affiliates. The Option Holder may be dealt with in the same manner as if this
Agreement had not been entered into.
Section 10. TAXES. Where any person is entitled to receive
Shares pursuant to the exercise of the Non-Qualified Stock Option granted
hereunder, the Company shall have the right to require such person to pay to the
Company the amount of any tax which the Company is required to withhold with
respect to such Shares, or, in lieu thereof, to retain, or to sell without
notice, a sufficient number of Shares to cover the amount required to be
withheld.
Section 11. NO ASSIGNMENT. The Non-Qualified Stock Option
granted hereunder shall not be subject in any manner to anticipation, alienation
or assignment, nor shall such Non-Qualified Stock Option be liable for or
subject to debts, contracts, liabilities, engagements or torts, nor shall it be
transferable by the Option Holder other than by will or by the laws of descent
and distribution. During the lifetime of the Option Holder, the NonQualified
Stock Option granted hereunder shall be exercisable only by him.
Section 12. NOTICES. Any communication required or permitted
to be given under the Plan, including any notice, direction, designation,
comment, instruction, objection or waiver, shall be in writing and shall be
deemed to have been given at such time as it is delivered personally or five (5)
days after mailing if mailed, postage prepaid, by registered or certified mail,
return receipt requested, addressed to such party at the address listed below,
or at such other address as one such party may by written notice specify to the
other party:
(a) If to the Committee:
Graham Corporation
20 Florence Avenue
Batavia, New York 14020
Attention: GENERAL COUNSEL
---------------
(b) If to the Option Holder, to the Option Holder's then
current residential address.
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Section 13. SUCCESSORS AND ASSIGNS. This Agreement shall inure
to the benefit of and shall be binding upon the Company and the Option Holder
and their respective heirs, successors and assigns.
Section 14. CONSTRUCTION OF LANGUAGE. Whenever appropriate in
the Agreement, words used in the singular may be read in the plural, words used
in the plural may be read in the singular, and words importing the masculine
gender may be read as referring equally to the feminine or the neuter. Any
reference to a section shall be a reference to a section of this Agreement,
unless the context clearly indicates otherwise. Capitalized terms not
specifically defined herein shall have the meanings assigned to them under the
Plan.
Section 15. GOVERNING LAW. This Agreement shall be construed,
administered and enforced according to the laws of the State of New York without
giving effect to the conflict of laws principles thereof, except to the extent
that such laws are preempted by federal law.
Section 16. AMENDMENT. This Agreement may be amended, in
whole or in part and in any manner not inconsistent with the provisions of the
Plan, at any time and from time to time by written agreement between the Company
and the Option Holder.
Section 17. PLAN PROVISIONS CONTROL. This Agreement and the
rights and obligations created hereunder shall be subject to all of the terms
and conditions of the Plan. In the event of any conflict between the provisions
of the Plan and the provisions of this Agreement, the terms of the Plan, which
are incorporated herein by reference, shall control. By signing this Agreement,
the Option Holder acknowledges receipt of a copy of the Plan.
Section 18. ACCEPTANCE BY OPTION HOLDER. By executing this
Agreement and returning a fully executed copy hereof to the Committee at the
address specified in section 12, the Option Holder signifies his acceptance of
the terms and conditions of this Non-Qualified Stock Option. If a fully executed
copy of this Agreement is not received by the Committee within forty-five days
after the date when it is presented to the Option Holder, the Committee may
revoke the Non-Qualified Stock Option granted, and thereby avoid all
obligations, hereunder.
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IN WITNESS WHEREOF, the Option Holder has executed, and the
Company has caused its duly authorized representative to execute, this Agreement
as of the date first above written.
GRAHAM CORPORATION
By:
------------------------------------
F. D. Berkeley
Chairman and Chief Executive Officer
Date:
-------------------------------
ATTEST:
- ------------------------------------
Secretary
[SEAL]
[Name]
------------------------------------
Signature
Date:
--------------------------------
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EXHIBIT A TO NON-QUALIFIED STOCK OPTION AGREEMENT (DIRECTORS)
1995 GRAHAM CORPORATION INCENTIVE PLAN TO INCREASE SHAREHOLDER VALUE
INSTRUCTIONS. Use this Notice to inform the Compensation Committee of
Graham Corporation ("Company") that you are exercising your right to purchase
shares of common stock ("Shares") of the Company pursuant to a non-qualified
stock option ("Option") granted under the 1995 Graham Corporation Incentive Plan
to Increase Shareholder Value ("Plan"). If you are not the person to whom the
Option was granted ("Option Holder"), you must attach to this Notice proof of
your right to exercise the Option granted under the Non-Qualified Stock Option
Agreement entered into between the Company and the Option Holder ("Agreement").
This Notice should be personally delivered or mailed by certified mail, return
receipt requested, to: Compensation Committee, Graham Corporation, 20 Florence
Avenue, Batavia, New York 14020, Attention: General Counsel. The effective date
of the exercise of the Option shall be the date this Notice is personally
delivered or post marked by the United States Post Office if mailed. Except as
specifically provided to the contrary herein, capitalized terms shall have the
meanings assigned to them under the Plan. This Notice is subject to all of the
terms and conditions of the Plan and the Agreement.
Graham Corporation
20 Florence Avenue
Batavia, NY 14020
Attention: General Counsel
Re: NOTICE OF EXERCISE OF NON-QUALIFIED STOCK OPTION (DIRECTORS)
Dear Sirs:
This shall constitute my irrevocable direction and authorization to
exercise options with respect to ____________ shares of Graham Corporation stock
previously granted to me under the 1995 Graham Corporation Incentive Plan to
Increase Shareholder Value ("Plan") at $[Price] per share. I further authorize
you to issue my shares in my name and deliver them to___________________________
_______________________________________________("Broker") for my account.
By copy of this letter, I authorize the Broker to issue a check from my
account maintained with the Broker payable to Graham Corporation in the amount
of $ _____________________________.
I represent that the above shares are not subject to any encumbrance or
other claim and that you, the Broker, and Graham Corporation's transfer agent
("Transfer Agent") may rely upon this exercise notice as a representation and
authorization for this purpose.
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By copy of this letter, I further authorize the Broker to:
Exercise and Sell
Exercise and Hold
You are hereby directed and instructed to issue _______________ shares
of common stock in my name for my account maintained with the Broker. Please:
(a) Arrange for electronic transfer of the shares on this
date via the Depository Trust to the Broker, whose DTC Number is ___________; or
(b) Expedite the overnight delivery of said certificate
by express mail to:
Broker Name
-----------------------------
Address
-----------------------------
I understand that the difference between the Fair Market Value of the
Shares to be issued to me pursuant to this Notice and the Exercise Price of such
Shares will be taxable income to me, and that I must consult with my own tax
advisor regarding when such income will be reportable. I understand that, under
the Plan and Agreement, I am responsible for the amount of any federal, state
and local taxes that are required to be paid with respect to the Shares to be
issued pursuant to this Notice.
I have been advised by my legal counsel that my acquisition of shares
pursuant to this notice and my sale of the shares so acquired is not a
transaction to which Section 16(b) of the Securities Exchange Act of 1934
("short swing profit rule") applies. I acknowledge that under the short swing
profit rule I may be liable to the Corporation in the event of a sale occasioned
by a margin deficiency in my account.
I understand that I must rely on, and consult with, my own legal
counsel (and not the Company) regarding the application of all laws
- -particularly tax and securities laws -- to the transactions to be effected
pursuant to this Notice.
Date _____________________________ _____________________________
[Name]
_____________________________
_____________________________
Address
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EXHIBIT 5 /EXHIBIT 23.1
-----------------------
Opinion of Thacher Proffitt & Wood, counsel for Registrant,
as to the legality of the securities being registered
Consent of Thacher Proffitt & Wood
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[OPINION LETTERHEAD OF THACHER PROFFITT & WOOD]
Writer's Direct Dial
(212) 912-7435
March 20, 1997
Graham Corporation
20 Florence Avenue
P.O. Box 719
Batavia, New York 14020
Re: 1995 Graham Corporation Incentive Plan
To Increase Shareholder Value
--------------------------------------
Dear Sirs:
We have acted as counsel for Graham Corporation, a Delaware
corporation ("Corporation"), in connection with the filing of a registration
statement on Form S-8 under the Securities Act of 1933, as amended
("Registration Statement") with respect to 150,000 shares of its common stock,
par value $.10 per share ("Shares"), which may be issued pursuant to the 1995
Graham Corporation Incentive Plan To Increase Shareholder Value ("Plan"). In
rendering the opinion set forth below, we do not express any opinion concerning
law other than the federal law of the United States and the corporate law of the
States of New York and Delaware.
We have examined originals or copies, certified or otherwise
identified, of such documents, corporate records and other instruments as we
have deemed necessary or advisable for purposes of this opinion. As to matters
of fact, we have examined and relied upon the Plan described above and, where we
have deemed appropriate, representations or certificates of officers of the
Corporation or public officials. We have assumed the authenticity of all
documents submitted to us as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents submitted to us as copies.
Based on the foregoing, we are of the opinion that the Shares
which are being registered pursuant to the Registration Statement have been duly
authorized and, when issued and paid for in accordance with the terms of the
Plan, such Shares will be validly issued, fully paid and non-assessable.
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Graham Corporation
March 20, 1997 Page 2.
In rendering the opinion set forth above, we have not passed
upon and do not purport to pass upon the application of "doing business" or
securities or "blue-sky" laws of any jurisdiction (except federal securities
law).
This opinion is given solely for the benefit of the
Corporation and purchasers of shares under the Plan, and no other person or
entity is entitled to rely hereon without express written consent.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the references to our Firm's name therein.
Very truly yours,
THACHER PROFFITT & WOOD
By /s/ W. Edward Bright
-------------------------------
W. Edward Bright
EXHIBIT 23.2
------------
Consent of Deloitte & Touche
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INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this
Registration Statement of Graham Corporation on Form S-8 of
our reports dated February 22, 1996, appearing in and
incorporated by reference in the Annual Report on Form 10-K
of Graham Corporation for the year ended December 31, 1995
and to the reference to us under the heading "Experts" in
the Prospectus, which is part of this Registration
Statement.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Rochester, New York
March 19, 1997
