UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
December 31, 2008
Graham Corporation
(Exact name of Registrant as specified in its charter)
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Delaware
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1-8462
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16-1194720
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(State or other jurisdiction of
incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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20 Florence Avenue, Batavia, New York
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14020
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code:
(585) 343-2216
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the Registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item 5.02.
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Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
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Amendment to Employment Agreement with James R. Lines
. On December 31, 2008, Graham
Corporation (the “Company”) entered into an Amendment to Employment Agreement (the “Lines
Amendment”) with James R. Lines, the Company’s President and Chief Executive Officer. The Lines
Amendment amends Mr. Lines’ Employment Agreement with the Company executed on July 27, 2006 for the
purpose of bringing such Employment Agreement into compliance with Section 409A of the Internal
Revenue Code of 1986 (“Section 409A”). Section 409A imposes an excise tax penalty on an officer’s
nonqualified deferred compensation arrangement that does not comply with its provisions. The Lines
Amendment amends such Employment Agreement to incorporate the 409A definition of “separation from
service” and provides that Mr. Lines must wait six months prior to receiving separation pay if and
only to the extent as may be required under Section 409A. In order to comply with Section 409A, the
Lines Amendment also: (i) requires that in order for Mr. Lines to receive post-change in control
termination benefits, he must be terminated within two years of a change in control of the Company
(as compared to three years under the Employment Agreement); and (ii) modifies the definition of
change in control under his Employment Agreement to require the acquisition by any person of 30%
voting control of the Company (as compared to 25% under the Employment Agreement) in order for a change of control
to be triggered under such Agreement. No other material changes to Mr. Lines’ Employment Agreement
were effected by the Lines Amendment.
Amendment to Employment Agreement with Alan E. Smith
. On December 31, 2008, the Company also
entered into an Amendment to Employment Agreement (the “Smith Amendment”) with Alan E. Smith, the
Company’s Vice President of Operations. The Smith Amendment amends Mr. Smith’s Employment Agreement
with the Company executed on August 1, 2007 for the purpose of bringing such Employment Agreement
into compliance with Section 409A. The Smith Amendment amends such Employment Agreement to
incorporate the 409A definition of “separation from service” and provides that Mr. Smith must wait
six months prior to receiving separation pay if and only to the extent as may be required under
Section 409A. No other material changes to Mr. Smith’s Employment Agreement were effected by the
Amendment.
General
. The foregoing descriptions of the Lines Amendment and the Smith Amendment,
respectively, do not purport to be complete and are qualified in their entirety by reference to the
full texts of such Amendments, copies of which are attached hereto as Exhibits 99.1 and 99.2,
respectively, and are incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit No.
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Description
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99.1
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Amendment to Employment Agreement dated as of December 31,
2008 by and between Graham Corporation and James R. Lines
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99.2
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Amendment to Employment Agreement dated as of December 31,
2008 by and between Graham Corporation and Alan E. Smith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
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Graham Corporation
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Date: January 6, 2009
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By:
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/s/ James R. Lines
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James R. Lines
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President and
Chief Executive Officer
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Exhibit 99.1
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”) is made and entered into as of
December 31, 2008 by and between Graham Corporation, a Delaware corporation with its principal
place of business at 20 Florence Avenue, Batavia, New York 14020 (the “Company”) and James R.
Lines, currently residing at 11 Hillside Parkway, Lancaster, New York (the “Executive”).
WHEREAS, the Company and the Executive entered into the Employment Agreement, effective August
1, 2006 (the “Agreement”); and
WHEREAS, Section 15 of the Agreement provides that the Agreement may be amended by a written
agreement signed by the parties thereto; and
WHEREAS, Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the
Treasury Regulations and other official guidance issued thereunder (collectively, “Section 409A”),
require that the Company’s compensation and benefit arrangements be in documentary compliance with
Section 409A on or before December 31, 2008, and such compliance requires amendments to the
Agreement as set forth more fully below.
NOW, THEREFORE, the Company and the Executive hereby agree as follows:
1. The last sentence of the first paragraph of Section 8(c) of the Agreement is amended and
restated in its entirety to read as follows:
In the event that the Company dismisses the Executive other than for cause, or if
the Executive resigns because of a material breach of this Agreement by the
Company (which Executive may do only if such breach remains materially uncured
after the Executive has provided 30 days prior written notice to the Board), and
the Executive’s dismissal or resignation qualifies as a “separation from service”
for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, and
the Treasury Regulations and other official guidance issued thereunder
(collectively, “Section 409A”), then the Company shall provide to the Executive:
2. Section 8(c)(ii) of the Agreement is amended and restated in its entirety to read as follows:
continuation of the Executive’s salary for nine months following the effective
date of the termination of the Executive’s employment at the higher of the rate
specified in Section 4 or the highest salary rate in effect for the Executive
during the one-year period preceding the termination of his employment, which
salary continuation shall be paid monthly in accordance with the Company’s regular
payroll practices;
3. Section 8(c)(v) of the Agreement is amended and restated in its entirety to read as follows:
payment of, or in the Executive’s sole discretion, reimbursement of the Executive
for, outplacement services of the Executive’s choice until the earlier of (1) the
Executive’s commencement of employment with another employer or (2) 36 months
following the effective date of the termination of the Executive’s employment, to
be paid as soon as administratively practicable after the six-month anniversary of
the effective date of the termination of the Executive’s employment; provided,
however, that the Company’s obligation under this Section 8(c)(v) shall not exceed
a total amount of $40,000 and applies only to the extent that such reimbursement
would not be includible in the Executive’s gross income;
4. Section 8(c) of the Agreement is amended to add the following non-designated paragraph after
paragraph 8(c)(vi):
Notwithstanding anything to the contrary, to the extent that any payments under
Section 8(c) are subject to a six-month waiting period under Section 409A, any
such payments that would be payable before the expiration of six months following
the Executive’s separation from service but for the operation of this sentence
shall be made during the seventh month following the Executive’s separation from
service.
5. The first paragraph of Section 9(b) of the Agreement is amended and restated in its entirety to
read as follows:
In addition to the benefits otherwise payable to the Executive (other than
Sections 8(c)(ii) and (iii)) pursuant to this Agreement, upon the event of a
Termination (as hereinafter defined) of the Executive’s employment with the
Company within two years after a Change in Control:
6. Section 9(c)(i)(1) of the Agreement is amended and restated in its entirety to read as follows:
any “person” within the meaning of Section 14(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), other than the Company, a subsidiary, or
any employee benefit plan(s) sponsored by the Company or any subsidiary, acquires
(or has acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) 30 percent or more of the combined voting
power of the outstanding securities of the Company ordinarily having the right to
vote at the election of directors;
7. The first paragraph of Section 9(c)(ii) of the Agreement is amended and restated in its entirety
to read as follows:
For the purposes of this Section 9, the term “Termination” shall mean termination
by the Company of the employment of the Executive with the Company (including its
subsidiaries) for any reason other than death, disability or cause (as defined
below), or resignation of the Executive, that qualifies as a “separation from
service” for purposes of Section 409A, upon the occurrence of either of the
following events:
8. Section 9 of the Agreement is amended to add a new subsection (e), which provides as follows:
Notwithstanding anything to the contrary, to the extent that any payments under
Section 9 are subject to a six-month waiting period under Section 409A, any such
payments that would be payable before the expiration of six months following the
Executive’s separation from service but for the operation of this sentence shall
be made during the seventh month following the Executive’s separation from
service.
9. Section 19 of the Agreement is amended and restated in its entirety to read as follows:
It is intended that the payments and benefits provided for by this Agreement
either comply with or are exempt from the requirements of Section 409A, and this
Agreement shall be administered and interpreted to the extent possible in a manner
consistent with that intent.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the day and
year first above written.
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GRAHAM CORPORATION
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By:
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Name:
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Title:
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James R. Lines
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Exhibit 99.2
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”) is made and entered into as of
December 31, 2008 by and between Graham Corporation, a Delaware corporation with its principal
place of business at 20 Florence Avenue, Batavia, New York 14020 (the “Company”) and Alan E. Smith
(the “Executive”).
WHEREAS, the Company and the Executive entered into the Employment Agreement, effective July
30, 2007 (the “Agreement”); and
WHEREAS, Section 15 of the Agreement provides that the Agreement may be amended by a written
agreement signed by the parties thereto; and
WHEREAS, Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the
Treasury Regulations and other official guidance issued thereunder (collectively, “Section 409A”),
require that the Company’s compensation and benefit arrangements be in documentary compliance with
Section 409A on or before December 31, 2008, and such compliance requires amendments to the
Agreement as set forth more fully below.
NOW, THEREFORE, the Company and the Executive hereby agree as follows:
1. The last sentence of the first paragraph of Section 8(c) of the Agreement is amended and
restated in its entirety to read as follows:
In the event that the Company dismisses the Executive other than for cause, or if
the Executive resigns because of a material breach of this Agreement by the
Company (which Executive may do only if such breach remains materially uncured
after the Executive has provided 30 days prior written notice to the Board), and
the Executive’s dismissal or resignation qualifies as a “separation from service”
for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, and
the Treasury Regulations and other official guidance issued thereunder
(collectively, “Section 409A”), then the Company shall provide to the Executive:
2. Section 8(c) of the Agreement is amended to add the following non-designated paragraph after
paragraph 8(c)(iii):
Notwithstanding anything to the contrary, to the extent that any payments under
Section 8(c) are subject to a six-month waiting period under Section 409A, any
such payments that would be payable before the expiration of six months following
the Executive’s separation from service but for the operation of this sentence
shall be made during the seventh month following the Executive’s separation from
service.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the
day and year first above written.
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GRAHAM CORPORATION
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By:
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Name:
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Title:
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Alan E. Smith
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[Signature Page to the Amendment of the Employment Agreement of Alan E. Smith]