UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Fiscal 2022 Annual Stock-Based Long-Term Incentive Award Plan for Senior Executives. On May 26, 2021, the Compensation Committee of the Board of Directors (the “Compensation Committee”) of Graham Corporation (the “Company”) renewed and amended its Annual Stock-Based Long-Term Incentive Award Plan for Senior Executives (the “Restricted Stock Bonus Program”) for the fiscal year ending March 31, 2022 (“Fiscal 2022”) and approved grants of time-vested restricted stock and performance-vested restricted stock thereunder in the amounts set forth below to the Company’s named executive officers. All grants were made under the 2020 Graham Corporation Equity Incentive Plan (the “Plan”) as of June 1, 2021.
Time-vested restricted stock awards are designed to encourage the Company’s named executive officers to remain employed by the Company. The time-vested restricted stock granted to the Company’s named executive officers vests 331/3% per year over three years and the time-vested restricted stock granted to the Company’s Directors, as described below, vests on the first anniversary of the date of grant.
Performance-vested restricted stock awards are designed to incent the Company’s named executive officers to focus on Company growth, align their compensation with the Company’s business strategy and to create stockholder value. Awards of performance-vested restricted stock vest based upon the Company’s achievement over a three-year period of Total Shareholder Return compared to the Russell 2000 Capital Goods and Energy Composite Ranking (using a 20-day price average at the start and end of the three-year period commencing April 1, 2021 and ending March 31, 2024) (“Relative TSR”). The threshold, target and maximum payout matrixes for the performance-vested restricted stock are set forth below:
Relative TSR
| Threshold | 25th percentile | 50% payout | ||
| Target (1) | 50th percentile | 100% payout | ||
| Maximum | 75th percentile | 200% payout |
| (1) | If the Company’s Relative TSR is negative, maximum payout is Target. |
The number of shares of time-vested restricted stock and performance-vested restricted stock awarded to the Company’s named executive officers under the Restricted Stock Bonus Program were determined using a Long-Term Incentive Percentage (the “L-T Percentage”) for each such officer. The Compensation Committee set the L-T Percentage for each of the Company’s named executive officers as follows: James R. Lines – 80%; Daniel Thoren – 50%; Matthew Malone – 50%; Jeffrey F. Glajch – 50%; Alan E. Smith – 50%; and Jennifer R. Condame – 35%. The number of shares of time-vested restricted stock awarded were determined by multiplying 50% of each named executive officer’s base salary in effect on the date of grant by such officer’s L-T Percentage, and then dividing the product by the closing price of the Company’s Common Stock on the NYSE on the date of grant. The number of shares of performance-vested restricted stock was determined by multiplying 50% of each named executive officer’s base salary in effect on the date of grant by such officer’s L-T Percentage, and then dividing the product by the closing price
of the Company’s Common Stock on the NYSE on the date of grant. The number of shares of restricted stock awarded to each of the Company’s Directors was determined by dividing $50,000 by the closing price of the Company’s Common Stock on the NYSE on the date of grant. The closing price of the Company’s Common Stock on the NYSE on June 1, 2021 was $15.31.
| Named Executive Officer |
Number of Shares of Time-Vested Restricted Stock Granted (1) |
Number of Shares of Performance-Vested Restricted Stock Granted (2)(3) | ||||||||
| James R. Lines Chief Executive Officer |
13,063 | 26,126 | ||||||||
| Daniel Thoren President and Chief Operating Officer |
5,960 | 11,920 | ||||||||
| Matthew Malone Vice President and General Manager of Barber-Nichols |
4,082 | 8,164 | ||||||||
| Jeffrey Glajch Vice President of Finance and Administration and Chief Financial Officer |
5,466 | 10,932 | ||||||||
| Alan E. Smith Vice President of Operations |
4,332 | 8,664 | ||||||||
| Jennifer R. Condame Controller and Chief Accounting Officer |
2,124 | 4,248 | ||||||||
| (1) | In the event a named executive officer’s employment terminates prior to the conclusion of a vesting for reasons other than death or disability, such officer’s right to receive any unvested time-vested restricted stock is forfeited. |
| (2) | The number of shares that will vest following the conclusion of the fiscal year ending March 31, 2024 (“Fiscal 2024”) is based upon the Company’s achievement of performance criteria. The number of shares set forth above assumes the maximum achievement of such performance criteria. If maximum achievement is not realized, any unearned shares will be forfeited back to the Company. Once the achievement of the performance measures are determined for Fiscal 2024, the actual number of shares to which each named executive officer is entitled will be adjusted accordingly. |
| (3) | In the event a named executive officer’s employment terminates prior to the conclusion of Fiscal 2024 for reasons other than death or disability, such officer’s right to receive the performance-vested restricted stock shall be forfeited. |
The foregoing description of the Restricted Stock Bonus Program in effect for Fiscal 2022 does not purport to be complete and is qualified in its entirety by the Restricted Stock Bonus Program, a copy of which is attached to this Current Report on Form 8–K as Exhibit 99.1 and is incorporated herein by reference.
Annual Stock-Based Grant to Non-Employee Directors. The Compensation Committee also approved the June 1, 2021 grant of time-vested restricted stock under the Plan in the amounts set forth below to the Company’s non-employee Directors.
| Director |
Number of Shares of Time-Vested Restricted Stock Awarded | |
| James Barber |
3,265 | |
| Alan Fortier |
3,265 | |
| James Malvaso |
3,265 | |
| Gerard Mazurkiewicz |
3,265 | |
| Jonathan Painter |
3,265 | |
| Lisa Schnorr |
3,265 | |
Fiscal 2021 Named Executive Officer Bonuses. On May 26, 2021, the Compensation Committee approved the payment of cash bonuses to certain of the Company’s named executive officers, as set forth below. Such bonuses were approved in accordance with the Company’s Annual Executive Cash Bonus Program in effect for the fiscal year ending March 31, 2021 (“Fiscal 2021”) and were based on the Company’s achievement during Fiscal 2021 of personal objectives by each named executive officer listed below during such year.
| Named Executive Officer |
Total Fiscal 2021 Bonus | |||
| James R. Lines |
$ | 652,800 | ||
| Jeffrey F. Glajch |
$ | 265,200 | ||
| Alan E. Smith |
$ | 196,518 | ||
| Jennifer R. Condame |
$ | 103,051 | ||
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits. |
| Exhibit No. | Description | |
| 99.1 | Graham Corporation Annual Stock-Based Long-Term Incentive Award Plan for Senior Executives in effect for the fiscal year ending March 31, 2022. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
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.
| Graham Corporation | ||||||
| Date: June 2, 2021 | By: | /s/ Jeffrey Glajch | ||||
| Jeffrey Glajch | ||||||
| Vice President – Finance & Administration and | ||||||
| Chief Financial Officer | ||||||