Current Report Filing (8-k)
June 05 2017 - 5:56AM
Edgar (US Regulatory)
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): May 31, 2017
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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Registrants 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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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth
company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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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Fiscal 2018 Annual Stock-Based Long-Term Incentive Award Plan for Senior Executives
. On May 31, 2017, 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, 2018 (Fiscal 2018) and approved grants of time-vested restricted stock and performance-vested restricted stock thereunder in the amounts set forth below to the Companys named executive
officers. All grants were made under the Amended and Restated 2000 Graham Corporation Incentive Plan to Increase Shareholder Value (the Plan).
Time-vested restricted stock awards are designed to encourage the Companys named executive officers to remain employed by the Company.
The time-vested restricted stock granted to the Companys named executive officers vests 33 1/3% per year over three years and the time-vested restricted stock granted to the Companys Directors, as described below, vests on the first
anniversary of the date of grant.
Performance-vested restricted stock awards are designed to incent the Companys named executive
officers to focus on Company growth, align their compensation with the Companys business strategy and to create stockholder value. Awards of performance-vested restricted stock vest: (i) 50% based upon the Companys 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, 2017 and ending
March 31, 2020) (Relative TSR); and (i) 50% based on the EBITDA margin of Company for the fiscal year ending March 31, 2020 compared to the Baird Industrial Company Composite as of December 2019 (Relative
EBITDA). The threshold, target and maximum payout matrixes for the performance-vested restricted stock are set forth below:
Relative TSR
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Threshold
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25th percentile
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50% payout
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Target
(1)
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50th percentile
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100% payout
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Maximum
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75th percentile
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200% payout
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(1)
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If the Companys TSR is negative, maximum payout is Target.
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Relative EBITDA
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Threshold
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40th percentile
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50% payout
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Target
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60th percentile
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100% payout
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Maximum
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75th percentile
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200% payout
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The number of shares of time-vested restricted stock and performance-vested restricted stock
awarded to the Companys 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. On May 31, 2017, the Compensation
Committee set the L-T Percentage for each of the Companys named executive officers as follows: Mr. Lines 70%; Mr. Glajch 50%; Mr. Smith 50%; and Ms. Condame 35%. The number of shares of
time-vested restricted stock awarded were determined by multiplying 50% of each named executive officers base salary in effect on the date of grant by such officers L-T Percentage, and then dividing the product by the closing price of
the Companys 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 officers base salary in effect on the date of grant by such
officers L-T Percentage, and then dividing the product by the closing price of the Companys Common Stock on the NYSE on the date of grant. The number of shares of restricted stock awarded to each of the Companys Directors was
determined by dividing $25,000 by the closing price of the Companys Common Stock on the NYSE on the date of grant. The closing price of the Companys Common Stock on the NYSE on May 31, 2017 was $20.93.
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Named Executive Officer
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Number of Shares of
Time-Vested Restricted
Stock Granted (1)
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Number of Shares of
Performance-Vested
Restricted Stock Granted
(1)(2)(3)
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James R. Lines,
President and Chief Executive Officer
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7,274
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14,548
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Jeffrey Glajch,
Vice President of Finance and Administration and Chief Financial Officer
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3,226
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6,452
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Alan E. Smith,
Vice President of Operations
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2,879
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5,758
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Jennifer R. Condame
Controller and Chief Accounting Officer
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1,412
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2,824
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(1)
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In the event a named executive officers employment terminates prior to the conclusion of a vesting for reasons other than death or disability, such officers right to receive any unvested time-vested
restricted stock is forfeited.
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(2)
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The number of shares that will vest following the conclusion of Fiscal 2020 is based upon the Companys 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 2020, the actual number of shares to which each
named executive officer is entitled will be adjusted accordingly.
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(3)
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In the event a named executive officers employment terminates prior to the conclusion of Fiscal 2020 for reasons other than death or disability, such officers right to receive the performance-vested
restricted stock shall be forfeited.
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Annual Stock-Based Grant to Non-Employee Directors
. Also on May 31, 2017, the
Compensation Committee approved the grant of time-vested restricted stock under the Plan in the amounts set forth below to the Companys non-employee Directors.
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Director
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Number of Shares
of Time-Vested
Restricted Stock
Awarded
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James Barber
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1,194
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Alan Fortier
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1,194
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James Malvaso
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1,194
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Gerard Mazurkiewicz
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1,194
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Jonathan Painter
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1,194
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Lisa Schnorr
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1,194
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The Restricted Stock Bonus Program in effect for Fiscal 2017 is attached to this Current Report on Form
8K as Exhibit 99.1 and the above summary of the Restricted Stock Bonus Program is qualified in its entirety by reference to such Exhibit.
Fiscal 2017 Annual Executive Cash Bonus Program
. On May 31, 2017, the Compensation Committee renewed and amended the
Companys Annual Executive Cash Bonus Program (the Cash Bonus Program) for Fiscal 2018. The objective of the Cash Bonus Program is to motivate the Companys named executive officers to attain short-term objectives through an
annual cash bonus related both to Company and personal performance. On May 31, 2017, the Compensation Committee set target bonus levels under the Cash Bonus Program for Fiscal 2017 at 100% attainment of both Company and personal objectives, as
follows: Mr. Lines 70% of base salary; Mr. Glajch 50% of base salary; Mr. Smith 50% of base salary; and Ms. Condame 35% of base salary. Each named executive officer will be eligible to receive anywhere
from 0% to 200% of his or her target bonus level depending on the attainment of such objectives. A summary of the performance goal weightings for the Companys named executive officers for Fiscal 2018 is as follows:
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Named Executive Officer
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Consolidated
Net Income
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Consolidated
Bookings
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Personal
Goals
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James R. Lines
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40%
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40%
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20%
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Jeffrey Glajch
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40%
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40%
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20%
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Alan E. Smith
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40%
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40%
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20%
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Jennifer R. Condame
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40%
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40%
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20%
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The Cash Bonus Program in effect for Fiscal 2018 is attached to this Current Report on Form
8K as Exhibit 99.2 and the above summary of the Cash Bonus Program is qualified in its entirety by reference to such Exhibit.
Fiscal 2017 Named Executive Officer Bonuses
. On May 31, 2017, the Compensation Committee approved the payment of cash bonuses to
the Companys named executive officers, as set forth below. Such bonuses were approved in accordance with the Companys Annual Executive Cash Bonus Program in effect for the fiscal year ending March 31, 2017 (Fiscal 2017)
and were based on the Companys achievement during Fiscal 2017 of net income and profitability of executable backlog as well as the achievement of personal objectives by each named executive officer during such year.
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Named Executive Officer
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Total Fiscal
2017 Bonus
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James R. Lines
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$
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121,800
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Jeffrey Glajch
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$
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67,531
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Alan E. Smith
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$
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72,306
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Jennifer R. Condame
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$
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38,999
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Item 9.01.
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Financial Statements and Exhibits.
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(d) Exhibits.
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Exhibit
No.
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Description
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99.1
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Graham Corporation Annual Stock-Based Long-Term Incentive Award Plan for Senior Executives in effect for the fiscal year ending March 31, 2018.
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99.2
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Graham Corporation Annual Executive Cash Bonus Program in effect for the fiscal year ending March 31, 2018.
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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: June 5, 2017
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By:
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/s/ Jeffrey Glajch
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Jeffrey Glajch
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Vice President Finance & Administration and
Chief Financial Officer
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