Exhibit 4.4
GRAHAM CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
1. Purpose of Plan
The purpose of the Plan is to provide employees of the Company with an opportunity to
purchase Common Stock at a discount through payroll deductions. The Plan is intended to qualify as
an employee stock purchase plan under Section 423 of the Code, and the provisions of the Plan shall
be construed consistent with such intention.
2. Definitions
As used in the Plan, the following terms shall have the meanings set forth below:
(a) Applicable Percentage means, with respect to an Offering Period, 85%, or
such other percentage from 85% to 100%, as determined by the Committee in its sole discretion for
that Offering Period and applicable to all Participants.
(b) Board means the Board of Directors of Graham.
(c) Code means the Internal Revenue Code of 1986, as amended from time to time,
and any regulations promulgated and other official guidance issued thereunder.
(d) Committee means the committee established pursuant to Section 4 to be
responsible for the general administration of the Plan.
(e) Common Stock means Grahams common stock, par value $0.10 per share.
(f) Company means Graham and each of its U.S. subsidiary corporations, as
defined by Section 424(f) of the Code.
(g) Eligible Compensation means the regular earnings of an Eligible Employee,
including salary, overtime, bonuses, and salary reduction contributions pursuant to elections under
a plan subject to Sections 125 or 401(k) of the Code.
(h) Eligible Employee means any employee of the Company that meets the
eligibility requirements of Section 5.
(i) Enrollment Form means the electronic or hardcopy form filed with the
Committee or its designated agent pursuant to Section 6.
(j) Fair Market Value of Common Stock on a given date means the closing sale
price of the Common Stock on the NYSE Amex, or if the NYSE Amex is not open for trading on such
date, then on the most recent preceding date when the NYSE Amex is open for trading.
(k) Graham means Graham Corporation, a Delaware corporation.
(l) Offering Commencement Date means, with respect to an Offering Period, the
first day of that Offering Period.
(m) Offering Period means a six-month period; provided, however, that the first
Offering Period shall commence on September 1, 2010 and shall end on December 31, 2010. Successive
Offering Periods shall commence on the day following the end of the preceding Offering Period
(i.e., January 1 or July 1) and shall end on the six-month anniversary of the commencement date
(i.e., June 30 or December 31).
(n) Participant means an Eligible Employee who elects to participate in the
Plan by filing an Enrollment Form pursuant to Section 6.
(o) Payroll Deduction Account means the account established for a Participant
to hold payroll deductions pursuant to Section 6.
(p) Plan means this Graham Corporation Employee Stock Purchase Plan, as set
forth herein and as amended from time to time.
(q) Purchase Date means, with respect to an Offering Period, the last day of that
Offering Period.
(r) Rule 16b-3 means Rule 16b-3 promulgated under the Securities Exchange Act
of 1934, as amended, or any successor rule thereto.
3. Shares Subject to the Plan
Subject to the provisions of Section 12, the total number of shares of Common Stock which
may be purchased by employees under the Plan shall not exceed 200,000. Shares subject to the Plan
may be either authorized but unissued shares or shares that were once issued and subsequently
reacquired by the Company.
4. Administration of the Plan
The Plan shall be administered by the Committee appointed by the Board, which shall be
comprised of two or more members of the Board, and each member of the Committee shall be a
non-employee director within the meaning of Rule 16b-3. The Committee shall be the Compensation
Committee of the Board unless the Board shall appoint another committee to administer the Plan.
Subject to the express provisions of the Plan, the Committee shall have the authority to
take any and all actions necessary to implement the Plan and to interpret the Plan, to prescribe,
amend and rescind rules and regulations relating to it, and to make all other determinations
necessary or advisable in administering the Plan. All of such determinations shall be final and
binding upon all persons. The Committee may request advice or assistance or employ such other
persons as are necessary for proper administration of the Plan.
5. Eligible Employees
Any employee of the Company shall be eligible to participate in the Plan, except an employee
who owns (or is considered as owning within the meaning of Section 424(d) of the Code) stock
possessing 5% or more of the total combined voting power or value of all classes of stock of the
Company. No director of the Company who is not an employee shall be eligible to participate in the
Plan.
6. Election to Participate
An Eligible Employee may become a Participant effective on the first day of any Offering
Period coincident with or following the date he or she becomes an Eligible Employee by filing with
the Committee or its designated agent an Enrollment Form authorizing specified regular payroll
deductions from his or her Eligible Compensation. Such regular payroll deductions shall be subject
to a maximum deduction of a maximum dollar amount specified by the Committee for such Offering
Period.
Payroll deductions for an Offering Period shall commence on the first payroll date occurring
on or after the applicable Offering Commencement Date and shall end on the last payroll date
occurring on or before the Purchase Date for that Offering Period. A Participants payroll
deductions shall be credited to the Payroll Deduction Account that the Company has established in
the name of the Participant.
A Participant may at any time withdraw from the Plan and cease to be a Participant following
the end of the Offering Period in which the election is made to discontinue participation. A
Participant may, to be effective as of the first day of the next following Offering Period,
increase or decrease his or her payroll deduction by filing a new Enrollment Form. Elections shall
last the entire Offering Period, or until the employee ceases to be a Participant, whichever is
longer.
Enrollment Forms must be filed with the Committee or its designated agent not less than ten
days before the beginning of an Offering Period to be effective for that Offering Period, unless a
shorter period
of time is prescribed by the Committee. An Enrollment Form not filed within the
prescribed filing period shall be effective the first day of the Offering Period following the
Offering Period in which it would otherwise become effective.
As a condition of participation in the Plan, each Participant agrees to notify the Company if
he or she sells or otherwise disposes of any Common Stock purchased by him or her under the Plan
within two years of the Purchase Date on which such shares were purchased.
7. Purchase of Shares
Each Participant having eligible funds in his or her Payroll Deduction Account on a Purchase
Date shall be deemed, without any further action, to have purchased the number of full shares of
Common Stock which the eligible funds in his or her Payroll Deduction Account could purchase on
that Purchase Date at a price per share that shall be the lesser of (a) the Applicable Percentage
of the Fair Market Value of such share on the Purchase Date, or (b) the Applicable Percentage of
the Fair Market Value of such share on the Offering Commencement Date. The Payroll Deduction
Account of each such Participant shall be charged for the amount of such purchase and shares shall
be issued to the Participant as of the Purchase Date. No fractional shares shall be purchased; any
funds in a Participants Payroll Deduction Account that are insufficient to purchase a full share
shall be retained in the Participants Payroll Deduction Account for the following Offering Period,
subject to earlier payment to the Participant pursuant to Section 13 or 15. Except for amounts not
expended because of the preceding sentence, any funds left over in a Participants Payroll
Deduction Account after a Purchase Date shall be returned to the Participant.
As soon as administratively practicable following each Purchase Date on which a purchase of
shares occurs, the Company shall arrange for the delivery to each Participant or his or her broker,
or a broker designated by the Committee, of the shares purchased by that Participant on that
Purchase Date.
8. Registration of Shares
Shares of Common Stock will be registered only in the name of the Participant or, if he or she
so indicates on his or her Enrollment Form, in the Participants name jointly with one other
person, with right of survivorship.
9. Limitation on Purchases
(a) During any one calendar year, no Participant shall have the right to purchase under the
Plan (and all other plans qualified under Section 423 of the Code) shares of Common Stock having a
Fair Market Value (determined as of an Offering Commencement Date) in excess of $25,000. The
purpose of this limitation is to comply with Section 423(b)(8) of the Code and shall be interpreted
accordingly.
(b) A Participants Payroll Deduction Account may not be used to purchase Common Stock on
any Purchase Date to the extent that after such purchase the Participant would own (or be
considered as owning within the meaning of Section 424(d) of the Code) stock possessing 5% or more
of the total combined voting power or value of all classes of stock of the Company. For this
purpose, stock which the Participant may purchase under any outstanding option shall be treated as
owned by such Participant. As of the first Purchase Date on which this Section 9(b) limits a
Participants ability to purchase Common Stock, the employee shall cease to be an Eligible Employee
and a Participant.
10. Rights as a Stockholder
None of the rights or privileges of a stockholder of Graham shall exist with respect to shares
of Common Stock purchased under the Plan until the date as of which such shares are delivered
pursuant to Section 7.
11. Rights Not Transferable
Except as expressly provided in Section 13, neither payroll deductions credited to a
Participants Payroll Deduction Account nor any rights with regard to participation in the Plan nor
the right to receive shares of Common Stock shall be transferable in any way by a Participant.
12. Change in Capital Structure
In the event of a stock dividend, stock split or combination of shares, recapitalization or
merger in which Graham is the surviving corporation or other change in Grahams capital stock
applicable to all stockholders generally, the number and kind of shares of stock or other
securities of Graham to be subject to the Plan, the maximum number of shares or other securities
which may be delivered under the Plan, and other relevant provisions shall be appropriately
adjusted by the Committee, whose determination shall be binding on all persons.
If Graham is a party to a consolidation or a merger in which Graham is not the surviving
corporation, a transaction that results in the acquisition of substantially all of Grahams
outstanding stock by a single person or entity, or a sale or transfer of substantially all of
Grahams assets, the Committee may take such actions with respect to the Plan as the Committee
deems appropriate.
Notwithstanding anything in the Plan to the contrary, the Committee may take the foregoing
actions without the consent of any Participant, and the Committees determination shall be
conclusive and binding on all persons for all purposes.
13. Retirement, Termination and Death
In the event of a Participants death or retirement or termination of employment for any
reason, or in the event that a Participant ceases to be such, then no further purchase of shares
shall be made by him or her under the Plan. In such event, the amount remaining in the employees
Payroll Deduction Account shall be refunded to him or her without interest. In the event of a
Participants death, the amount in his or her Payroll Deduction Account shall be delivered without
interest to the beneficiary designated by the Participant in a writing filed with the Company. If
no beneficiary has been designated, or if the designated beneficiary does not survive the
Participant, such amount shall be delivered to the employees estate without interest.
14. Amendment of the Plan
The Board may at any time, or from time to time, amend the Plan in any respect; provided,
however, that the stockholders of Graham must approve any amendment that would materially
(a) increase the benefits accruing to Participants under the Plan, (b) increase (other than
pursuant to Section 12) the number of securities that may be issued under the Plan, or (c) modify
the requirements as to eligibility for participation in the Plan.
15. Termination of the Plan
The Plan and all rights of employees hereunder shall terminate on the earlier of: (a) the
Purchase Date that Participants become entitled to purchase a number of shares greater than the
number of shares remaining available for purchase under the Plan; or (b) a date specified by the
Board in its sole discretion. In the event that the Plan terminates under circumstances described
in clause (a) of this Section, the shares remaining as of the termination date shall be purchased
by Participants on a pro-rata basis. Upon termination of the Plan, all amounts in an employees
Payroll Deduction Account that are not used to purchase Common Stock will be refunded to such
employee.
16. General Provisions
(a) Term of Plan. The Plan shall become effective upon (a) due approval of the Plan
by the stockholders of the Company within 12 months after its adoption by the Board, and (b) the
effectiveness of a Registration Statement on Form S-8 under the Securities Act, as amended,
covering the shares of Common Stock subject to the Plan. Once effective, the Plan shall continue in
effect until all of the shares of Common Stock available under the Plan, as increased or adjusted
from time to time, have been issued under the Plan, unless sooner terminated by the Board.
(b) Use of Funds. All payroll deductions received or held by the Company under the
Plan shall be general corporate funds, and as such, may be used by the Company for any corporate
purpose, and the Company shall not be obligated to segregate payroll deductions or pay interest
thereon.
(c) No Limit on Other Compensation Plans or Arrangements. Nothing contained in the
Plan shall prevent the Company from adopting or continuing in effect other or additional
compensation plans or
arrangements, and such plans or arrangements may be either generally
applicable or applicable only in specific cases.
(d) No Right to Employment. Participation in the Plan shall not be construed as
giving a Participant the right to be retained as an employee of the Company, nor will it affect in
any way the right of the Company to terminate a Participants employment at any time, with or
without cause.
(e) No Guarantee of Tax Consequences. No person connected with the Plan in any
capacity, including, but not limited to, the Company and its directors, officers, agents and
employees, makes any representation, commitment, or guarantee that any tax treatment, including,
but not limited to, federal, state and local income tax treatment, will be applicable, or that such
tax treatment will apply to or be available to a Participant on account of participation in the
Plan.
(f) Government and Other Regulations. The Plan, and the grant and exercise of the
rights to purchase shares hereunder, and the Companys obligation to sell and deliver shares upon
the exercise of rights to purchase shares, shall be subject to all applicable federal, state and
foreign laws, rules and regulations, and to such approvals by any regulatory or government agency
as may, in the opinion of counsel for the Company, be required.
(g) Indemnification. The Company shall indemnify and hold harmless each member of the
Board or the Committee and other persons connected with the Plan in any capacity, including, but
not limited to, the employees and directors of the Company performing services on behalf of the
Committee, against any liability, cost or expense arising as a result of any claim asserted by any
person or entity with respect to any action or failure to act of such individuals taken in
connection with this Plan, except claims or liabilities arising on account of the willful
misconduct or bad faith of such Board member, Committee member or individual.
(h) Governing Law; Venue. The validity and construction of the Plan and all
determinations made and actions taken pursuant hereto, to the extent that federal laws do not
control, will be governed by the laws of the State of New York, without giving effect to the
principles of conflicts of laws. Any action arising under or related to the Plan shall be subject
to the jurisdiction and venue of the courts located in Monroe County, New York.
(i) Severability. If any provision of the Plan is, becomes or is deemed to be
invalid, illegal or unenforceable in any jurisdiction, or would disqualify the Plan under any law
deemed applicable by the Committee, then such provision shall be construed or deemed amended to
conform to applicable laws, or if it cannot be so construed or deemed amended without, in the
determination of the Committee, materially altering the purpose or intent of the Plan, such
provision shall be stricken as to such jurisdiction, and the remainder of the Plan shall remain in
full force and effect.
(j) References. Unless otherwise indicated, all references to Sections contained
herein are references to Sections of this Plan.
(k) Headings. Headings are given to the Sections and subsections of the Plan solely
as a convenience to facilitate reference. Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of the Plan or any provision thereof.
(l) Gender and Number. As used herein, and as appropriate to the context, the
masculine pronoun shall include the feminine and the neuter, and the single shall include the
plural.